As filed with the Securities and Exchange Commission on April 16, 2001
Registration No. 333-___/811-07342
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U.S. Securities and Exchange Commission
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___ Post-Effective Amendment No.___
(Check appropriate box or boxes)
Exact Name of Registrant as Specified in Charter:
J.P. MORGAN INSTITUTIONAL FUNDS
Area Code and Telephone Number:
(617) 557-0700
Address of Principal Executive Offices:
60 State Street, Suite 1300
Boston, Massachusetts 02109
Name and Address of Agent for Service:
Margaret W. Chambers
c/o Fund Distributors, Inc.
60 State Street, Suite 1300
Boston, Massachusetts 02109
Copies to:
JOSEPH J. BERTINI, ESQ. SARAH E. COGAN, ESQ. JOHN E. BAUMGARDNER, JR.
PETER B. ELDRIDGE, ESQ. Simpson Thacher & Bartlett JR. ESQ.
J.P. Morgan Fleming Asset 425 Lexington Avenue Sullivan & Cromwell
Management (USA) Inc. New York, NY 10017-3954 125 Broad Street
522 Fifth Avenue New York, NY 10004
New York, NY 10036
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Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective under the Securities Act of 1933.
It is proposed that this filing will become effective on May 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. 033-54642/811-07342) 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 October 31, 2000 was filed on February 22,
2001. Pursuant to Rule 429, this Registration Statement relates to the aforesaid
Registration Statement on Form N-1A.
JPMORGAN INTERMEDIATE BOND FUND
(FORMERLY, CHASE VISTA INTERMEDIATE BOND FUND),
A SERIES OF MUTUAL FUND SELECT GROUP
1211 AVENUE OF THE AMERICAS, 41ST FLOOR
NEW YORK, NEW YORK 10036
May 16, 2001
Dear Shareholder:
A special meeting of the shareholders of JPMorgan Intermediate Bond Fund
(formerly, Chase Vista Intermediate Bond Fund) (the "Merging Fund"), a series of
Mutual Fund Select Group ("MFSG"), 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, The Chase Manhattan Corporation, the former corporate
parent of the Merging Fund's investment adviser, recently completed a merger
with J.P. Morgan & Co. Incorporated to form J.P. Morgan Chase & Co. ("JPMC"). As
a result of this merger, JPMC is seeking to reorganize parts of its investment
management business and funds advised by its subsidiaries. At the special
meeting (the "Meeting"), shareholders will be asked to consider and vote upon
the proposed reorganization of the Merging Fund into J.P. Morgan Institutional
Bond Fund (the "Surviving Fund"), a series of J.P. Morgan Institutional Funds
("JPMF") (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
Bond Fund."
After the proposed Reorganization, your investment will be in a larger
combined fund with similar investment policies.
The Surviving Fund has also entered into agreements and plans of
reorganization with JPMorgan Bond Fund II (formerly, Chase Vista Bond Fund), a
series of MFSG with similar investment objectives and policies to the Merging
Fund (the "Bond Fund Reorganization"), and two other mutual funds whose assets
are managed by J.P. Morgan Investment Management Inc. ("JPMIM") with identical
investment objectives and policies to the Surviving Fund (the "Feeder
Reorganizations" and, together with the Bond Fund Reorganization, the
"Concurrent Reorganizations"). If the Concurrent Reorganizations are approved by
the shareholders of these other funds and certain other conditions are met,
these other funds will be reorganized into the Surviving Fund. The consummation
of the Reorganization is contingent upon the consummation of the Feeder
Reorganizations.
At the Meeting, you will also be asked to consider and vote upon the
election of Trustees of MFSG.
The investment adviser for the Merging Fund is J.P. Morgan Fleming Asset
Management (USA) Inc. The investment adviser for the assets of the Surviving
Fund is JPMIM. After the
Reorganization, JPMIM, 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
Reorganizations and a comparison of the Merging Fund and MFSG to the Surviving
Fund and JPMF. The cost and expenses associated with the Reorganization,
including costs of soliciting proxies, will be borne by JPMC and not by the
Merging Fund, MFSG, the Surviving Fund, JPMF 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
MFSG, which has approved the Proposals.
THE BOARD OF TRUSTEES OF MFSG UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
EACH OF THE PROPOSALS.
Following this letter is a list of commonly asked questions. If you have
any additional questions on voting of proxies and/or the meeting agenda, please
call us at 1-800-348-4782.
A proxy card is enclosed for your use in the shareholder meeting. This
card represents shares you held as of the record date, April 6, 2001. IT IS
IMPORTANT THAT YOU COMPLETE, SIGN, AND RETURN YOUR PROXY CARD IN THE ENVELOPE
PROVIDED 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,
Fergus Reid
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 a more diversified fund and in better service for shareholders,
including a wider variety of investment options.
IF THE REORGANIZATION IS APPROVED, WHAT WILL HAPPEN?
In connection with the Reorganization, the Merging Fund will transfer all of its
assets and liabilities to the Surviving Fund and will receive, in exchange,
shares of the Surviving Fund. The Merging Fund will then be liquidated and those
shares of the Surviving Fund will be distributed to shareholders such as you.
After the Reorganization, you will own shares in the Surviving Fund rather than
the Merging Fund.
WHAT WILL BE THE EFFECT ON THE INVESTMENT STRATEGIES ASSOCIATED WITH MY
INVESTMENT IF THE PROPOSED CHANGES ARE APPROVED?
The Surviving Fund generally has similar investment objectives and policies to
those of the Merging Fund. The principal differences are as follows:
SURVIVING FUND MERGING FUND
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- Investment objective is to - Investment objective is to
provide high total return seek as high a level of
consistent with moderate risk income as possible as is
of capital and maintenance of consistent with reasonable
liquidity. risk.
- May invest up to 25% of its - Generally does not invest
total assets in debt in securities rated below
securities with a B or BB investment grade.
rating (sometimes called "junk
bonds").
- May not invest more than - Not limited to a certain
25% of its total assets in percentage of investments in
foreign securities (including foreign securities.
20% in debt securities
denominated in foreign
currencies of developed
countries).
The Reorganization is not intended to have any immediate significant impact on
the investment strategy implemented in respect of your investment. However,
because the Surviving Fund invests in junk bonds, some risks associated with
your investment may increase.
HOW WILL THE FEES AND EXPENSES ASSOCIATED WITH MY INVESTMENT BE AFFECTED?
As a result of the Reorganization, the contractual (or pre-waiver) and
actual (or post-waiver) total expense ratios are expected to be the same or less
for your shares in the Surviving Fund than they are for your shares in the
Merging Fund. If an increase does occur, Morgan
Guaranty Trust Company of New York 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 one year after the Reorganization.
WILL THERE BE ANY CHANGE IN WHO MANAGES MY INVESTMENT?
Yes. JPMIM, the investment adviser that currently manages the assets 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 REORGANIZATIONS AFFECT MY INVESTMENT IF THEY
ARE APPROVED BY THE SHAREHOLDERS OF THE OTHER FUNDS?
If the Concurrent Reorganizations are approved and certain other conditions are
met, the assets and liabilities of these 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 Feeder
Reorganizations.
WHY AM I BEING ASKED TO VOTE ON THE ELECTION OF TRUSTEES FOR MFSG IF AFTER THE
REORGANIZATION I WILL OWN SHARES IN THE SURVIVING FUND, A SERIES OF JPMF?
Even if the Reorganization is approved, other mutual funds that are series of
MFSG will continue to exist and operate. All shareholders of any series of MFSG
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 MFSG, you are entitled to vote on this proposal. Shareholders of
JPMF are being asked to approve the same Trustees that are proposed for MFSG.
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.
JPMORGAN INTERMEDIATE BOND FUND
(FORMERLY, CHASE VISTA INTERMEDIATE BOND FUND),
A SERIES OF MUTUAL FUND SELECT GROUP
1211 AVENUE OF THE AMERICAS, 41ST FLOOR
NEW YORK, NEW YORK 10036
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 3, 2001
To the Shareholders of
JPMorgan Intermediate Bond Fund (formerly, Chase Vista Intermediate Bond
Fund):
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the shareholders
("Shareholders") of JPMorgan Intermediate Bond Fund (formerly, Chase Vista
Intermediate Bond Fund) (the "Merging Fund"), a series of Mutual Fund Select
Group ("MFSG"), 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 MFSG, on behalf of the Merging Fund, J.P. Morgan
Institutional Funds ("JPMF"), on behalf of JPMorgan
Institutional Bond 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 (i) Class A Shares of the Surviving Fund
(the "Class A Shares") and (ii) Select Class shares of the
Surviving Fund ("Select Class Shares" and together with the
Class A Shares the "Surviving Fund Shares"), as applicable;
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 MFSG.
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 MFSG. 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.
Lisa Hurley
Secretary
May 16, 2001
COMBINED PROSPECTUS/PROXY STATEMENT
DATED MAY 16, 2001
ACQUISITION OF THE ASSETS AND LIABILITIES OF
JPMORGAN INTERMEDIATE BOND FUND
(FORMERLY, CHASE VISTA INTERMEDIATE BOND FUND),
A SERIES OF MUTUAL FUND SELECT GROUP
1211 AVENUE OF THE AMERICAS, 41ST FLOOR
NEW YORK, NEW YORK 10036
(800) ____________
BY AND IN EXCHANGE FOR SHARES OF
J.P. MORGAN INSTITUTIONAL BOND FUND,
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
(617) 557-0700
This Combined Prospectus/Proxy Statement relates to the proposed
reorganization of JPMorgan Intermediate Bond Fund (formerly, Chase Vista
Intermediate Bond Fund) (the "Merging Fund"), a series of Mutual Fund Select
Group ("MFSG"), into J.P. Morgan Institutional Bond Fund (the "Surviving Fund"),
a series of J.P. Morgan Institutional Funds ("JPMF"). 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"). MFSG and JPMF are both
open-end management investment companies offering shares in several portfolios.
In connection with the Reorganization, the J.P. Morgan Institutional Bond Fund
will be renamed "JPMorgan Bond Fund."
In connection with the proposed Reorganization, each Merging Fund
Shareholder will receive shares (the "Surviving Fund Shares") of the Surviving
Fund with a value equal to such Merging Fund Shareholder's holdings in the
Merging Fund. Merging Fund Shareholders will not pay a sales charge on Surviving
Fund Shares received in the Reorganization. In connection with the
Reorganization, the Surviving Fund will implement a new multi-class structure
under which it will offer Class A, Class B, Select Class, Institutional Class
and Agency Class shares. Holders of Class A shares of the Merging Fund will
receive Class A shares (the "Class A Shares") of the Surviving Fund and holders
of Institutional Class shares of the Merging Fund will receive Select Class
Shares (the "Select Class Shares") of the Surviving Fund.
At the Meeting, you also will be asked to consider and vote upon the
election of Trustees of MFSG.
The terms and conditions of these transactions are more fully described in
this Combined Prospectus/Proxy Statement and in the Agreement and Plan of
Reorganization (the "Reorganization Plan") among MFSG, on behalf of the Merging
Fund, JPMF, on behalf of the Surviving Fund and J.P. Morgan Chase & Co.,
attached to this Combined Prospectus/Proxy Statement as Appendix A.
The Board of Trustees for MFSG is soliciting proxies in connection with a
Special Meeting (the "Meeting") of Shareholders to be held on July 3, 2001 at
9:00 a.m., Eastern time, at the offices of J.P. Morgan Chase & Co., 1211 Avenue
of the Americas, 41st Floor, New York, NY, at which meeting shareholders in the
Merging Fund will be asked to consider and approve the proposed Reorganization
Plan, certain transactions contemplated by the Reorganization Plan and certain
other proposals. This Combined Prospectus/Proxy Statement constitutes the proxy
statement of the Merging Fund for the meeting of its Shareholders and also
constitutes JPMF'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 MFSG and JPMF that
an investor should know before voting on the proposals. The current
Prospectuses, Statements of Additional Information and Annual Reports for the
Merging Fund and the Surviving Fund (including the Annual Report of The U.S.
Fixed Income Portfolio) are incorporated herein by reference, and the current
Prospectus and Annual Report for the Surviving Fund (including the Annual Report
of The U.S. Fixed Income Portfolio) are enclosed with this Combined
Prospectus/Proxy Statement. A Statement of Additional Information relating to
this Combined Prospectus/Proxy Statement containing additional information about
MFSG and JPMF has been filed with the Commission and is incorporated by
reference into this Combined Prospectus/Proxy Statement. A copy of the Statement
of Additional Information as well as the Prospectus, Statement of Additional
Information and Annual Report of the Merging Fund may be obtained without charge
by writing to JPMF at its address noted above or by calling 1-800-348-4782.
This Combined Prospectus/Proxy Statement is expected to first be sent to
shareholders on or about May 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 MFSG OR JPMF.
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INVESTMENTS IN THE SURVIVING FUND ARE SUBJECT TO RISK--INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL. NO SHARES IN THE SURVIVING FUND ARE BANK DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK AND ARE NOT FEDERALLY
INSURED BY, OBLIGATIONS OF, OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY.
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TABLE OF CONTENTS
PAGE
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INTRODUCTION.................................................................1
PROPOSAL 1: REORGANIZATION PLAN.............................................1
SUMMARY......................................................................2
COMPARATIVE FEE AND EXPENSE TABLES...........................................6
RISK FACTORS.................................................................9
INFORMATION RELATING TO THE PROPOSED REORGANIZATION.........................11
INVESTMENT POLICIES.........................................................15
PURCHASES, REDEMPTIONS AND EXCHANGES........................................22
DISTRIBUTIONS AND TAXES.....................................................26
COMPARISON OF THE MERGING FUND'S AND THE SURVIVING FUND'S
ORGANIZATION STRUCTURE .....................................................27
INFORMATION RELATING TO THE ADVISORY CONTRACTS AND
OTHER SERVICES..............................................................29
PROPOSAL 2: ELECTION OF TRUSTEES............................................32
INFORMATION RELATING TO VOTING MATTERS......................................36
ADDITIONAL INFORMATION ABOUT MFSG...........................................39
ADDITIONAL INFORMATION ABOUT JPMF...........................................39
FINANCIAL STATEMENTS AND EXPERTS............................................40
OTHER BUSINESS..............................................................40
LITIGATION..................................................................40
SHAREHOLDER INQUIRIES.......................................................40
APPENDIX A AGREEMENT AND PLAN OF REORGANIZATION.............................1
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INTRODUCTION
GENERAL
This Combined Prospectus/Proxy Statement is being furnished to the
shareholders of the Merging Fund, an open-end management investment company, in
connection with the solicitation by the Board of Trustees of MFSG of proxies to
be used at a Special Meeting of Shareholders of the Merging Fund to be held on
July 3, 2001 at 9:00 a.m., Eastern time, at the offices of J.P. Morgan Chase &
Co., 1211 Avenue of the Americas, 41st Floor, New York, NY (together with any
adjournments thereof, the "Meeting"). It is expected that the mailing of this
Combined Prospectus/Proxy Statement will be made on or about May 12, 2001.
PROPOSAL 1: REORGANIZATION PLAN
As you may be aware, The Chase Manhattan Corporation, the former corporate
parent of the Merging Fund's investment adviser, recently completed a merger
with J.P. Morgan & Co. Incorporated 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 MFSG, on behalf of the Merging
Fund, JPMF, on behalf of the Surviving Fund (the Merging Fund and the Surviving
Fund are collectively defined as the "Funds"), and JPMC, pursuant to which all
of the assets and liabilities of the Merging Fund will be transferred to the
Surviving Fund in exchange for Surviving Fund Shares. As a result of the
Reorganization, Merging Fund Shareholders will become shareholders of the
Surviving Fund and will receive Surviving Fund Shares equal in value to their
holdings in the Merging Fund on the date of the Reorganization. In connection
with the Reorganization, the Surviving Fund will be renamed "JPMorgan Bond
Fund." Further information relating to the Surviving Fund is set forth herein,
and the Surviving Fund's Prospectus and Annual Report (including the Annual
Report of the U.S. Fixed Income Portfolio) is enclosed with this Combined
Prospectus/Proxy Statement.
THE MFSG 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 MFSG Board will
consider other appropriate courses of action.
SUMMARY
The following is a summary of certain information relating to the proposed
Reorganization, the parties thereto and the transactions contemplated thereby,
and is qualified by reference to the more complete information contained
elsewhere in this Combined Prospectus/Proxy Statement, the Prospectus, Statement
of Additional Information and Annual Report to Shareholders in respect of each
of the Surviving Fund (including the Annual Report of The U.S. Fixed Income
Portfolio) and the Merging 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 Surviving Fund Shares 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. Holders of Class A Shares of the
Merging Fund will receive Class A Shares of the Surviving Fund and holders of
Institutional Class Shares of the Merging Fund will receive Select Class Shares
of the Surviving Fund. Therefore, following the proposed Reorganization, Merging
Fund Shareholders will be Surviving Fund Shareholders. Merging Fund Shareholders
will not pay a sales load 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. In addition, following the Reorganization
the Surviving Fund will have substantially similar purchase, redemption and
dividend policies as 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 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 MFSG Board and the JPMF Board,
including a majority of each Board's members who are not "interested persons"
within the meaning of the Investment Company Act of 1940, as amended (the "1940
Act"), have each determined that the proposed Reorganization is in the best
interests of each Fund and its respective shareholders and that the interests of
such shareholders will not be diluted as a result of such Reorganization.
REASONS FOR THE REORGANIZATION
The Reorganization is being proposed because each Fund's board believes it
is in the best interests of shareholders to combine funds that have similar
investment objectives and policies and each board believes that the
Reorganization should result in a more
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diversified fund and in better service for shareholders, including a wider
variety of investment options.
CONCURRENT REORGANIZATIONS
The Surviving Fund currently invests all of its investable assets in The
U.S. Fixed Income Portfolio (the "Master Portfolio"), which has identical
investment objectives and policies as the Surviving Fund and which is advised by
J.P. Morgan Investment Management Inc. ("JPMIM"). J.P. Morgan Bond Fund, a
series of J.P. Morgan Funds with identical investment objectives and policies
as the Surviving Fund, and J.P. Morgan Institutional Bond Fund - Ultra, a series
of JPMF with identical investment objectives and policies as the Surviving 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 (i) JPMorgan
Bond Fund II (formerly, Chase Vista Bond Fund), a series of MFSG with similar
investment objectives and policies as the Merging Fund (the "Bond Fund
Reorganization") and (ii) each Feeder Portfolio (the "Feeder Reorganizations"
and, together with the Bond Fund Reorganization, the "Concurrent
Reorganizations").
If each of the Reorganization and the Concurrent Reorganizations is
approved by the shareholders of the respective funds and certain other
conditions are met, the Merging Fund, JPMorgan Bond Fund II (formerly, Chase
Vista Bond Fund) and the Feeder Portfolios will be reorganized into the
Surviving Fund, and the Surviving Fund will commence investing its assets
directly in portfolio securities rather than in the Master Portfolio. The
consummation of each of the Reorganization and the Bond Fund Reorganization is
contingent upon the consummation of the Feeder Reorganizations.
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 the 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 Merging Fund is J.P. Morgan Fleming
Asset Management (USA) Inc. ("JPMFAM"). The investment adviser for the
Master Portfolio (and therefore the assets of the Surviving Fund and the
Feeder Portfolios) is JPMIM. JPMFAM and JPMIM are each wholly-owned
subsidiaries of JPMC. JPMIM will
-3-
continue to serve as investment adviser for the Surviving Fund following the
Reorganization.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of the Surviving Fund is to provide high total
return consistent with moderate risk of capital and maintenance of liquidity.
The investment objective of the Merging Fund is to seek as high a level of
income as possible as is consistent with reasonable risk. See "Risk Factors" and
"Investment Policies."
The investment policies of the Surviving Fund generally are similar to
those of the Merging Fund. However, there are certain important differences.
Under normal market conditions, the Surviving Fund invests primarily in
investment grade debt securities, at least 65% of which must be rated A or
better. However, it may invest up to 25% of its total assets in debt securities
rated B or BB, which are below investment grade and are sometimes referred to as
"junk bonds." Under normal market conditions, the Merging Fund will invest at
least 65% of its total assets in investment grade debt securities, including
debt securities issued by the U.S. government and its agencies and authorities,
investment grade corporate bonds and other fixed income securities. The Merging
Fund generally will not invest in securities rated below investment grade.
The Surviving Fund may invest up to 25% of its total assets in foreign
securities, including 20% in debt securities denominated in foreign currencies
of developed countries. The Merging Fund is not limited in its foreign
investments, and may make substantial investments in foreign debt securities,
including securities of issuers in developing countries.
There is no restriction on the maturity of the Surviving Fund's portfolio.
The Merging Fund's dollar-weighted average maturity is between three and 10
years.
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
debt securities. In particular, the value of shares of the Surviving Fund will
be influenced by the performance of the securities selected for its portfolio.
The value of fixed-income securities tends to fall when prevailing interest
rates rise. This drop in value could be worse if a fund is investing in debt
securities with longer maturities. Investments in mortgage-related securities
could lead the value of a fund to change more often and to a greater degree than
if the fund did not buy mortgage-related securities. In addition, the Surviving
Fund may invest up to 25% of its total assets in foreign investments and up to
25% of its total assets in securities rated below investment grade, both of
which are subject to certain special risks. See "Risk Factors."
-4-
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS
ADVISORY SERVICES
The investment adviser for the Surviving Fund is JPMIM. JPMIM oversees the
asset management of the Surviving Fund. As compensation for its services, JPMIM
receives a management fee indirectly from the Surviving Fund at an annual rate
of 0.30% of average daily net assets. The Merging Fund currently pays JPMFAM a
management fee at an annual rate of 0.30% of average daily net assets. Following
the Reorganization, JPMIM will manage the Surviving Fund's assets and will
receive a fee at an annual rate of 0.30% of average daily net assets.
OTHER SERVICES
J.P. Morgan Fund Distributors, Inc. (the "Distributor") is the distributor
for the Surviving Fund. Morgan Guaranty Trust Company of New York ("Morgan")
currently serves as administrator and shareholder servicing agent and an
affiliate of the Distributor currently serves as sub-administrator. It is
anticipated that prior to the consummation of the Reorganization, Morgan will
merge with The Chase Manhattan Bank ("Chase") which will become the Surviving
Fund's administrator and shareholder servicing agent. The Bank of New York
("BONY") currently serves as fund accountant and custodian, and DST Systems,
Inc. ("DST") currently serves as transfer agent and dividend disbursing agent
for the Surviving Fund. It is anticipated that prior to the consummation of the
Reorganization, Chase will become the Surviving Fund's fund accountant and
custodian. PricewaterhouseCoopers LLP serves as the Surviving Fund's independent
accountants.
ADMINISTRATOR
In connection with the Reorganization, the administration fee paid to
Morgan will increase to 0.15% of average daily net assets on the first $26
billion of complex wide non-money market assets and 0.075% on complex wide
non-money market assets in excess of $26 billion.
ORGANIZATION
Each of MFSG and JPMF is organized as a Massachusetts business trust. The
Merging Fund is organized as a series of MFSG and the Surviving Fund is
organized as a series of JPMF.
PURCHASES, REDEMPTIONS AND EXCHANGES
After the Reorganization, the procedures for making purchases, redemptions
and exchanges of shares of the Surviving Fund will be similar to those with
respect to shares of the Merging Fund, as described in this Combined
Prospectus/Proxy Statement and the Surviving Fund's Prospectus and Statement of
Additional Information.
-5-
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; (ii) estimated fees and expenses on a pro forma basis for the
Surviving Fund after giving effect to the proposed Reorganization and the Feeder
Reorganizations but not the Bond Fund Reorganization; and (iii) estimated fees
and expenses on a pro forma basis for the Surviving Fund after giving effect to
the proposed Reorganization and the Concurrent Reorganizations. Under the
proposed Reorganization, holders of Class A Shares of the Merging Fund will
receive Class A Shares of the Surviving Fund and holders of Institutional Class
Shares of the Merging Fund will receive Select Class Shares of the Surviving
Fund. SHAREHOLDERS WILL NOT PAY A SALES LOAD ON SURVIVING FUND SHARES RECEIVED
IN THE REORGANIZATION. Please note that the Surviving Fund currently has one
class of shares. In connection with the Reorganization and Concurrent
Reorganizations, this class will be re-named "Institutional Class" and the Class
A, Class B, Select Class and Agency Class share classes will be introduced.
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, Morgan has agreed to waive certain fees and/or reimburse certain
expenses to ensure that actual total operating expenses do not increase for at
least one year.
THE SURVIVING
THE MERGING FUND THE MERGING FUND FUND
-------------------------- ------------------ ----------------
INSTITUTIONAL CLASS SHARES CLASS A 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 4.50% None
Maximum Deferred Sales Charge
(Load) shown as lower of original purchase price or
redemption proceeds................................. None None None
ANNUAL FUND OPERATING EXPENSES (EXPENSES
THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees....................................... 0.30% 0.30% 0.30%
Distribution (12b-1) Fees None 0.25% None
Other Expenses........................................ 0.45%# 0.85% 0.19%
Total Annual Fund Operating Expenses.................. 0.75%# 1.40% 0.49%
====== ======
Contractual Fee Waivers and Expense Reimbursement(a).. 0.50%
-----
Net Expenses.......................................... 0.90%
=====
(a) The actual Distribution fees for Class A Shares of The Merging Fund are
expected to be 0.00%, the actual Other Expenses for Class A Shares are
expected to be 0.60% and Total Annual Fund Operating Expenses for Class A
Shares are not expected to exceed 0.90%. That is because Chase and some of
the other service providers have contractually agreed not to collect a
portion of their fees and to reimburse others for one year after the
Reorganization. Chase and these other service providers may terminate this
arrangement after the one-year period expires.
# Restated from the most recent fiscal year to reflect current expense
arrangements.
The table does not reflect charges or credits which you might incur if you
invest through a financial institution.
-6-
THE SURVIVING FUND THE SURVIVING FUND
----------------------------- --------------------------------
PRO FORMA WITH REORGANIZATION PRO FORMA WITH REORGANIZATION
AND FEEDER REORGANIZATION AND FEEDER REORGANIZATION
----------------------------- --------------------------------
SELECT CLASS SHARES CLASS A SHARES
----------------------------- --------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT) - Maximum Sales Charge (Load) when you buy
shares, shown as % of the offering price................... None 4.50%
Maximum Deferred Sales Charge (Load) Shown as lower of
original purchase price or redemption proceeds............. None None
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT
ARE DEDUCTED FROM FUND ASSETS)
Management Fees............................................... 0.30% 0.30%
Distribution (12b-1) Fees..................................... None 0.25%
Other Expenses................................................ 0.43% 0.60%
Total Annual Fund Operating Expenses.......................... 0.73% 1.15%
Fee Waivers and Expense Reimbursements(1)..................... 0.13% 0.40%
Net Expenses.................................................. 0.60% 0.75%
(1) Reflects an agreement by Morgan, an affiliate of JPMC, to reimburse the
fund to the extent that operating expenses (which exclude interest, taxes,
and extraordinary expenses) exceed 0.60% of average daily net assets with
respect to Select Class Shares for the first year after Reorganization and
0.69% of average daily net assets with respect to Select Class Shares for the
following two years after the Reorganization and 0.75% of A Shares of average
daily net assets for one year after the Reorganization.
-7-
THE SURVIVING FUND
-----------------------------------------
PRO FORMA WITH CONCURRENT REORGANIZATIONS
-----------------------------------------
SELECT CLASS CLASS A
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 4.50%
Maximum Deferred Sales Charge (Load) Shown as lower of
original purchase price or redemption proceeds............ None
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT
ARE DEDUCTED FROM FUND ASSETS)
Management Fees.............................................. 0.30% 0.30%
Distribution (12b-1) Fees.................................... None 0.25%
Other Expenses............................................... 0.43% 0.60%
Total Annual Fund Operating Expenses......................... 0.73% 1.15%
Contractual Fee Waivers and Expense Reimbursements........... 0.13% 0.40%
Net Expenses................................................. 0.60% 0.75%
(1) Reflects an agreement by Morgan, an affiliate of JPMC, to reimburse the
fund to the extent that operating expenses (which exclude interest, taxes,
and extraordinary expenses) exceed 0.60% of average daily net assets with
respect to Select Class Shares, for the first year after Reorganization and
0.69% of average daily net assets with respect to Select Class Shares for
year 2 and year 3 after the Reorganization and 0.75% of A Shares of average
daily net assets for one year 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 one year after the
Reorganization for Class A Shares and for three years after the
Reorganization for Select Class Shares, as described above, and unwaived
for the period thereafter, and remain the same as shown above.
-8-
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
Institutional Shares.................. $ 77 $ 240 $ 417 $ 930
A Shares*............................. 538 828 1,140 2,026
The Surviving Fund.................... 50 157 274 616
PRO FORMA J.P. MORGAN INSTITUTIONAL BOND
FUND WITH REORGANIZATION AND FEEDER
REORGANIZATION
Select................................ 61 212 385 888
A Shares*............................. 523 762 1,018 1,751
PRO FORMA J.P. MORGAN INSTITUTIONAL BOND
FUND WITH CONCURRENT
REORGANIZATIONS
Select................................ 61 212 385 888
A Shares*............................. 523 761 1018 1751
* Assumes sales charge is deducted when shares are purchased
RISK FACTORS
The following discussion highlights the principal risk factors associated
with an investment in the Surviving Fund. The Surviving Fund generally has
investment policies and investment restrictions similar to those of the Merging
Fund. Therefore, there should be similarities between the risk factors
associated with the Surviving Fund and the Merging Fund. This discussion is
qualified in its entirety by the more extensive discussion of risk factors set
forth in the Prospectus and Statement of Additional Information of the Surviving
Fund, which are incorporated herein by reference.
All mutual funds carry a certain amount of risk. You may lose money on
your investment in the Surviving Fund. The Surviving Fund may not achieve its
objective if JPMIM's expectations regarding particular securities or markets are
not met. In addition, the Surviving Fund's share price, yield and total return
will vary in response to changes in interest rates and bond market movements.
The value of most bonds will fall when interest rates rise, and the longer a
bond's maturity and the lower its credit quality, the
-9-
more its value typically falls. How well the Surviving Fund's performance
compares to that of similar fixed income funds will depend on the success of the
investment process.
To the extent that the Surviving Fund seeks higher returns by investing in
non-investment-grade bonds (those rated BB/Ba or lower and often called "junk
bonds"), it takes on additional risks. The Surviving Fund may invest up to 25%
of its assets in securities rated B or BB. These bonds are more sensitive to
economic news, their issuers have a less secure financial position and they have
a higher risk of default, tend to be less liquid, and may be more difficult to
value. THE MERGING FUND GENERALLY DOES NOT INVEST IN JUNK BONDS.
The Surviving Fund may invest up to 25% of its assets in foreign
securities, including 20% in debt securities denominated in foreign currencies
of developed countries. If the Surviving Fund invests in foreign securities, it
could lose money because of foreign government actions, political instability,
currency fluctuation or lack of adequate and accurate information. Currency and
investment risks tend to be higher in emerging markets. THE MERGING FUND IS NOT
LIMITED IN THE AMOUNT OF ITS ASSETS IT MAY INVEST IN FOREIGN SECURITIES.
The Surviving Fund's mortgage-backed investments involve risk of losses
due to default or prepayments that occur earlier or later than expected. The
Surviving Fund may engage in active and frequent trading, leading to increased
portfolio turnover and the possibility of increased capital gains.
Adverse market conditions may from time to time cause the Surviving Fund
to take temporary defensive positions that are inconsistent with its principal
investment strategies and may hinder the Surviving Fund from achieving its
investment objective.
The Surviving Fund may use derivatives to help manage duration, yield
curve exposure, and credit and spread volatility. Derivatives such as futures,
options, swaps and forward foreign currency contracts that are used for hedging
the portfolio or specific securities may not fully offset the underlying
positions and this could result in losses to the fund that would not have
otherwise occurred. Derivatives used for risk management may not have the
intended effects and may result in losses or missed opportunities. The
counterparty to a derivatives contract could default. Certain types of
derivatives involve costs that can reduce returns. Derivatives that involve
leverage could magnify losses.
The Surviving Fund may lend some of its portfolio securities in order to
earn income. When the Surviving Fund lends a security, there is a risk that the
loaned securities may not be returned if the borrower defaults. The collateral
the Surviving Fund receives from the borrower will be subject to the risks of
the securities in which it is invested.
An investment in the Surviving Fund is not a deposit of any bank and is
not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. You could lose money if you sell when the Surviving
Fund's share price is lower than when you invested.
-10-
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
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, JPMF will issue at the Effective Time of the
Reorganization full and fractional (a) Class A Shares of the Surviving Fund
equal in aggregate dollar value to the aggregate net asset value of full and
fractional outstanding Class A Shares of the Merging Fund and (b) Select
Class Shares of the Surviving Fund equal in aggregate dollar value to the
aggregate net asset value of full and fractional outstanding Institutional
Class Shares of the Merging Fund, in each case 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 Class A Shares or Select
Class Shares, as the case may be, with a total net asset value equal to the net
asset value of their Merging Fund Shares plus the right to receive any dividends
or distributions which were declared before the Effective Time of the
Reorganization but that remained unpaid at that time with respect to the shares
of the Merging Fund.
The Surviving Fund expects to maintain most of the portfolio investments
of the Merging Fund in light of the similar investment policies of the Merging
Fund and the Surviving Fund.
After the Reorganization all of the issued and outstanding shares of the
Merging Fund shall be canceled on the books of the Merging Fund and the stock
transfer books of the Merging Fund will be permanently closed.
-11-
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 each of the Reorganization and the Bond
Fund Reorganization is contingent upon the consummation of the Feeder
Reorganizations.
The expenses of the Funds in connection with the Reorganization will be
borne by JPMC.
The Reorganization Plan and the Reorganization described herein may be
abandoned at any time prior to the Effective Time of the Reorganization by
either party if a material condition to the performance of such party under the
Reorganization Plan or a material covenant of the other party is not fulfilled
by the date specified in the Reorganization Plan or if there is a material
default or material breach of the Reorganization Plan by the other party. In
addition, either party may terminate the Reorganization Plan if its trustees
determine that proceeding with the Reorganization Plan is not in the best
interests of their Fund's shareholders.
BOARD CONSIDERATIONS
The JPMF Board met on March 26 and 27, 2001 and the MFSG Board met on
April 12, 2001, and each considered and discussed the proposed Reorganization.
The Trustees of each Board discussed the advantages of reorganizing the Merging
Fund into the Surviving Fund.
The Board of each trust has determined that it is in the best interests of
the Fund's shareholders to combine the Merging Fund with the Surviving Fund.
This Reorganization is part of the general integration of the J.P. Morgan and
former Chase Vista funds into a single mutual fund complex. In reaching the
conclusion that the Reorganization is in the best interests of Fund
shareholders, each Board considered a number of factors including, among others:
the terms of the Reorganization Plan; a comparison of each Fund's historical and
projected expense ratios; the comparative investment performance of the Merging
Fund and the Surviving Fund; the anticipated effect of such Reorganization on
the relevant Fund and its shareholders; the investment advisory services
supplied by the Surviving Fund's investment adviser; the management and other
fees payable by the Surviving Fund; the similarities and differences in the
investment objectives and policies of the Merging Fund and the Surviving Fund;
and the recommendations of the relevant Fund's current investment adviser with
respect to the proposed Reorganization.
-12-
Each Board determined that the Funds have generally similar investment
objectives and policies. They noted that the Reorganization could permit the
shareholders of the Merging Fund to pursue similar investment goals in a larger
fund that has generally had better historical performance. A larger fund should
enhance the ability of the investment adviser to effect portfolio transactions
on more favorable terms and provide greater flexibility and the ability to
select a larger number of portfolio securities. This could result in increased
diversification for shareholders. In addition, the larger aggregate asset base
could, over time, result in lower overall expense ratios for shareholders
through the spreading of both fixed and variable costs of operations over a
larger asset base. As a general rule, economies of scale may be realized with
respect to fixed expenses, such as costs of printing and fees for professional
services, although expenses that are based on the value of assets or the number
of shareholder accounts, such as custody fees, would be largely unaffected by
the Reorganization.
Each Board also considered benefits expected to arise as a result of the
Reorganization. Among these benefits, the Board noted that Surviving Fund
Shareholders would be able to exchange into a larger number and greater variety
of funds and the Surviving Fund would also benefit from the administrator's
overall intent to enhance its ability effectively to monitor and oversee the
quality of all service providers to the fund, including the investment adviser.
Finally, the Board considered the expenses related to the Reorganization.
The Board noted the administrator's undertaking to waive fees or reimburse the
Surviving Fund's expenses so that the total expense ratio of each share class of
the Merging Fund does not increase during the period specified in the expense
table. Additional important factors were that all costs and expenses of the
Reorganization would be borne by JPMC and the fact that the Board was advised
that Reorganization would constitute a tax-free reorganization.
After considering the foregoing factors, together with such information as
it believed to be relevant, and in light of its fiduciary duties under federal
and state law, each Board determined that the proposed Reorganization is in the
best interests of the applicable Fund and its shareholders, determined the
interests of the shareholders would not be diluted as a result of the
Reorganization, approved the Reorganization Plan and directed that the
Reorganization Plan be submitted to the Merging Fund Shareholders for approval.
THE MFSG BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
PROPOSAL.
The MFSG 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.
-13-
INFORMATION RELATING TO CONCURRENT REORGANIZATIONS
The terms and conditions under which the Concurrent Reorganizations may be
consummated are set forth in reorganization plans which are substantially
similar to the Reorganization Plan you are considering. Concurrent with the
Reorganization and the Concurrent Reorganizations, the Surviving Fund and the
Feeder Portfolios will no longer invest their assets in the Master Portfolio.
The consummation of each of the Reorganization and the Bond Fund Reorganization
is contingent upon the consummation of the Feeder Reorganizations.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the Reorganization is subject to the condition that MFSG
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.
MFSG 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.
-14-
CAPITALIZATION
Because the Merging Fund will be combined with the Surviving Fund in
the Reorganization as well as several other funds as a result of the
Concurrent Reorganizations, the total capitalization of the Surviving Fund
after the Reorganization and the Concurrent Reorganizations is expected to be
greater than the current capitalization of the Merging Fund. The following
table sets forth as of October 31, 2000: (i) the capitalization of the
Merging Fund; (ii) the capitalization of the Surviving Fund; (iii) the pro
forma capitalization of the Surviving Fund as adjusted to give effect to the
Reorganization and the Feeder Reorganization and (iv) the pro forma
capitalization of the Surviving Fund as adjusted to give effect to the
Reorganization and the Concurrent Reorganizations. There is, of course, no
assurance that the Reorganization and the Concurrent Reorganizations will be
consummated. Moreover, if consummated, the capitalizations of the Surviving
Fund and the Merging Fund are likely to be different at the Effective Time of
the Reorganization as a result of fluctuations in the value of portfolio
securities of each Fund and daily share purchase and redemption activity in
each Fund. Please note that the Surviving Fund currently has one class of
shares. In connection with the Reorganization and the Concurrent
Reorganizations, this class will be renamed "Institutional Class" and the
Class A, Class B, Select Class and Agency Class share classes will be
introduced.
CAPITALIZATION(3)
PRO FORMA FEEDER REORGANIZATION WITH JPMORGAN INTERMEDIATE BOND FUND(1)
(Amounts in Thousands, except per share amounts)
BENEFICIAL NET ASSET
INTEREST SHARES VALUE PER
OUTSTANDING OUTSTANDING NET ASSETS SHARE
------------- ------------- ------------- -------------
THE U.S. FIXED INCOME PORTFOLIO
J.P. Morgan Bond Fund 24,290 - $240,180 9.89
J.P. Morgan Institutional Bond Fund 96,271 - 907,411 9.43
J.P. Morgan Institutional Bond Fund - 48,475 - 466,026 9.61
Ultra
JPMORGAN INTERMEDIATE BOND 40,050 387,065 9.66
FUND(1) (Merging Fund)
PRO FORMA COMBINED JPMORGAN
BOND FUND
Select - 66,541 627,245 9.43
Institutional - 96,271 907,411 9.43
Agency - 49,443 466,026 9.43
-15-
CAPITALIZATION(3)
PRO FORMA WITH CONCURRENT REORGANIZATIONS
(Amounts in Thousands, except per share amounts)
BENEFICIAL NET ASSET
INTEREST SHARES VALUE PER
OUTSTANDING OUTSTANDING NET ASSETS SHARE
------------- ------------- ------------- -------------
THE U.S. FIXED INCOME PORTFOLIO
J.P. Morgan Bond Fund 24,290 - $240,180 9.89
J.P. Morgan Institutional Bond Fund 96,271 - 907,411 9.43
J.P. Morgan Institutional Bond Fund - 48,475 - 466,026 9.61
Ultra
JPMORGAN BOND FUND II (2) 15,449 587,369 38.02
JPMORGAN INTERMEDIATE BOND 40,050 387,065 9.66
FUND(1) (Merging Fund)
PRO FORMA COMBINED JPMORGAN
BOND FUND
Select - 128,863 1,214,614 9.43
Institutional - 96,271 907,411 9.43
Agency - 49,443 466,026 9.43
(1) Formerly Chase Vista Select Intermediate Bond Fund
(2) Formerly Chase Vista Select Bond Fund
(3) As the Chase Income Fund and the Chase Vista Bond Fund merged into the
JPMorgan Bond Fund II (formerly the Chase Vista Select Bond Fund) and the
Chase Intermeditate Term Bond Fund merged into the JPMorgan Intermediate
Bond Fund (formerly the Chase Vista Select Intermediate Bond Fund) on March
2, 2001 and February 16, 2001, respectively, their net assets are not included
in the pro forma net assets as of October 31, 2000. Such net assets are less
than 10% of pro forma combined net assets. The net assets of Class A and
Class B shares of JPMorgan Bond Fund II and JPMorgan Intermeditate Bond Fund
will become Class A and Class B shares in the Surviving Fund as applicable.
The pro forma net asset value per share of Class A and Class B shares would be
$9.43 each, similar to all other classes, if 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 seeks to provide investors with high total return
consistent with moderate risk of capital and maintenance of liquidity. THE
MERGING FUND SEEKS AS HIGH A LEVEL OF INCOME AS POSSIBLE AS IS CONSISTENT WITH
REASONABLE RISK. Each Fund may change its objective without shareholder
approval.
MAIN INVESTMENT STRATEGIES
The Surviving Fund invests primarily in fixed income securities, including
U.S. government and agency securities, corporate bonds, private placements,
asset-backed and mortgage-backed securities, that it believes have the potential
to provide a high total return over time. These securities may be of any
maturity, but under normal market conditions the management team will keep the
Surviving Fund duration within one year of that of the Salomon Smith Barney
Broad Investment Grade Bond Index (currently above five years). Duration
measures the average time needed to receive the present value of all principal
and interest payments with respect to securities in a fund's portfolio.
Up to 25% of the Surviving Fund's assets may be invested in foreign
securities, including 20% in debt securities denominated in foreign currencies
of developed countries. THE MERGING FUND IS NOT LIMITED IN THE AMOUNT OF ITS
ASSETS IT CAN INVEST IN FOREIGN
-16-
SECURITIES. The Surviving Fund typically hedges its non-dollar investments back
to the U.S. dollar. At least 75% of the Surviving Fund's assets must be invested
in securities that, at the time of purchase, are rated investment-grade (BBB/Baa
or better) or are the unrated equivalent, including at least 65% rated A or
better. No more than 25% of assets may be invested in securities rated B or BB.
THE MERGING FUND NORMALLY INVESTS AT LEAST 65% OF ITS TOTAL ASSETS IN INVESTMENT
GRADE DEBT SECURITIES. THE MERGING FUND MAY INVEST IN SECURITIES RATED BELOW
BAA3/BBB-, BUT GENERALLY DOES NOT DO SO.
Under normal circumstances the Surviving Fund plans to remain fully
invested in bonds and other fixed income securities. The Surviving Fund seeks to
limit risk and enhance total return or yields through careful management, sector
allocation, individual securities selection, and duration management. During
severe market downturns, the fund has the option of investing up to 100% of
assets in investment-grade short-term securities. JPMIM monitors interest rate
trends, as well as geographic and demographic information related to
mortgage-backed securities and mortgage prepayments.
The Surviving Fund maintains its own policies for balancing credit quality
against potential yields and gains in light of its investment goals. JPMIM
develops its own ratings of unrated securities and makes a credit quality
determination for unrated securities.
Foreign bonds may be a significant investment for the Surviving Fund. To
the extent that the fund invests in foreign bonds, it typically hedges all or a
portion of its foreign currency exposure into the U.S. dollar; these currency
management techniques may not be available for certain emerging markets
investments.
JPMIM focuses its active management on those areas where it believes its
commitment to research can most enhance returns and manage risks in a consistent
way.
The Surviving Fund uses derivatives, such as futures, options, swaps and
forward foreign currency contracts, for hedging and for risk management (i.e.,
to adjust duration or yield curve exposure, and credit and spread volatility or
to establish or adjust exposure to particular securities, markets, or
currencies); risk management may include management of the fund's exposure
relative to its benchmark. The fund only establishes hedges that JPMIM expects
will be highly correlated with underlying positions. While the fund may use
derivatives that incidentally involve leverage, it does not use them for the
specific purpose of leveraging its portfolio.
JPMIM maintains a list of approved borrowers for securities lending. The
fund receives collateral equal to at least 100% of the current value of
securities loaned and the lending agents indemnify the fund against borrower
default. JPMIM's collateral investment guidelines limit the quality and duration
of collateral investment to minimize losses. Upon recall, the borrower must
return the securities loaned within the normal settlement period. While both the
Surviving Fund and the Merging Fund may engage in securities lending, neither
generally does so.
The Surviving Fund may not invest more than 15% of net assets in illiquid
holdings. To maintain adequate liquidity to meet redemptions, the Surviving Fund
may
-17-
hold investment-grade short-term securities (including repurchase agreements
and reverse repurchase agreements) and, for temporary or extraordinary purposes,
may borrow from banks up to 33-1/3% of the value of its total assets.
The Surviving Fund uses segregated accounts to offset leverage risk.
The Surviving Fund may use short-term trading to take advantage of
attractive or unexpected opportunities or to meet demands generated by
shareholder activity. The turnover rate for the Fund for its most recent fiscal
year end (10/31/00) was 531%.
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.
-18-
- --------------------------------------------------------------------------------
SURVIVING FUND MERGING FUND
- --------------------------------------------------------------------------------
The Surviving Fund may not make any While the Merging Fund is also
investment inconsistent with its diversified under the 1940 Act, it is
classification as a diversified not subject to a similar fundamental
investment company under the 1940 restriction.
Act.
- --------------------------------------------------------------------------------
The Surviving Fund may not purchase The Merging Fund may not purchase the
any security which would cause it to securities of any issuer (other than
concentrate its investments in the securities issued or guaranteed by
securities of issuers primarily the U.S. government or any of its
engaged in any particular industry agencies or instrumentalities, or
except as permitted by the repurchase agreements secured
Commission. thereby) if, as a result, more than
25% of the Merging Fund's total
assets would be invested in the
securities of companies whose
principal business activities are in
the same industry. Notwithstanding
the foregoing, with respect to the
Merging 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.
- --------------------------------------------------------------------------------
The Surviving Fund may not borrow The Merging Fund may not borrow
money, except to the extent permitted money, except for temporary or
by applicable law. emergency purposes, or by engaging in
reverse repurchase transactions, in
an amount not exceeding 33-1/3% of
the value of its total assets at the
time when the loan is made and may
pledge, mortgage or hypothecate no
more than 1/3 of its net assets to
secure such borrowings. Any
borrowings representing more than 5%
of the Merging Fund's total assets
must be repaid before the Merging
Fund may make additional investments.
- --------------------------------------------------------------------------------
The Surviving Fund may not purchase The Merging Fund may not purchase or
or sell commodities or commodity sell physical commodities unless
contracts unless acquired as a result acquired as a result of ownership of
of ownership of securities or other securities or other instruments but
instruments issued by persons that this shall not prevent the Fund from
purchase or sell commodities or (i) purchasing or selling options and
commodities contracts; but this shall futures contracts or from investing
not prevent the Surviving Fund from in securities or other instruments
purchasing, selling and entering into backed by physical commodities or
(ii) engaging in
- --------------------------------------------------------------------------------
-19-
- --------------------------------------------------------------------------------
financial futures contracts forward purchases or sales of foreign
(including futures contracts on currencies or securities.
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 make loans to The Merging Fund may not make loans,
other persons, in accordance with the except that the Merging Fund may: (i)
Fund's investment objective and purchase and hold debt instruments
policies and to the extent permitted (including without limitation, bonds,
by applicable law. notes, debentures or other
obligations and 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.
- --------------------------------------------------------------------------------
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 Merging
Fund, real estate limited partnerships), except that, to the extent permitted by
applicable law, each Fund may (a) invest in securities or other instruments
directly or indirectly secured by real estate, (b) invest in securities or other
instruments issued by issuers that invest in real estate and (c) with respect to
the Surviving Fund, make direct investments in mortgages.
Notwithstanding any other investment policy or restriction, the Merging
Fund may seek to achieve its investment objective by investing all of its
assets in another investment company having substantially the same investment
objective and policies as the Merging Fund. The Surviving Fund is not subject
to a similar fundamental restriction. Although, the Surviving Fund currently
invests all of its assets in the Surviving Fund Master Portfolio, following
the Reorganization, the Surviving Fund will invest directly in portfolio
securities.
-20-
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 acquire The Merging Fund may not invest more
any illiquid securities, such as than 15% of its net assets in
repurchase agreements with more than illiquid securities.
seven days to maturity or fixed time
deposits with a duration of over
seven calendar days, if as a result
thereof, more than 15% of the market
value of the Surviving Fund's net
assets would be in investments which
are illiquid.
- --------------------------------------------------------------------------------
The Surviving Fund may not purchase The Merging Fund may not make short
securities on margin, make short sales of securities, other than short
sales of securities, or maintain a sales "against the box," or purchase
short position, provided that this securities on margin except for
restriction shall not be deemed to be short-term credits necessary for
applicable to the purchase or sale of clearance of portfolio transactions,
when-issued or delayed delivery provided that this restriction will
securities, or to short sales that not be applied to limit the use of
are covered in accordance with options, futures contracts and
Commission rules. related options, in the manner
otherwise permitted by the investment
restrictions, policies and investment
program of the Fund. The Merging Fund
does not have the current intention
of making short sales against the
box.
- --------------------------------------------------------------------------------
The Surviving Fund may not acquire Except as otherwise specified herein,
securities of other investment the Merging Fund may invest in
companies, except as permitted by the securities of other investment
1940 Act or any order pursuant companies to the extent permitted by
thereto. the applicable federal securities
law.
- --------------------------------------------------------------------------------
The Surviving Fund is not subject to The Merging Fund may not, with
a similar non-fundamental respect to 75% of its assets, hold
restriction. more than 10% of the outstanding
voting securities of any issuer or
invest more than 5% of its assets in
the securities of any one issuer
(other than obligations of the U.S.
Government, its agencies and
instrumentalities).
- --------------------------------------------------------------------------------
The Surviving Fund is not subject to The Merging Fund may not purchase or
a similar non-fundamental sell interests in oil, gas or mineral
restriction. leases.
- --------------------------------------------------------------------------------
-21-
- --------------------------------------------------------------------------------
The Surviving Fund is not subject to The Merging Fund may not write,
a similar non-fundamental purchase or sell any put or call
restriction. option or any combination thereof,
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 Merging 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.
- --------------------------------------------------------------------------------
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 of the Surviving Fund will be similar to those of the
Merging Fund. Please note that the Surviving Fund currently has one class of
shares. In connection with the Reorganization and Concurrent Reorganizations,
this class will be renamed "Institutional Class" and the Class A, Class B,
Select Class and Agency Class share classes will be introduced. The following
discussion reflects the new class structure. 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 normally a sales charge (sometimes called a "load") to buy Class
A Shares of the Surviving Fund. Following the Reorganization, the schedules of
loads for the Surviving Fund will be identical to those for the Merging Fund.
The Merging Fund Shareholders holding Class A Shares will receive Class A Shares
in the Reorganization but will not have to pay a sales charge. There are also
ongoing charges that holders of Class A Shares pay as long as they own their
shares, as more fully explained below. There is no sales charge to buy or sell
Select Class Shares.
12b-1 FEES
The Distributor is the distributor for the Surviving Fund. The Surviving
Fund will adopt a Rule 12b-1 distribution plan for Class A Shares under which it
will pay annual distribution fees of up to 0.25% of the average daily net assets
attributable to Class A
-22-
Shares. A similar 12b-1 distribution plan (with annual distribution fees of up
to 0.25%) is currently in effect for Class A Shares of the Merging Fund.
This payment covers such things as compensation for services provided by
broker-dealers and expenses connected with the sale of shares. Payments are not
tied to actual expenses incurred.
Because 12b-1 expenses are paid out of the Surviving Fund's assets on an
ongoing basis, over time these fees will increase the cost of a shareholder's
investment and may cost more than other types of sales charges used by other
mutual funds.
There is no Rule 12b-1 distribution plan for Select Class Shares of the
Surviving Fund.
BUYING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF THE SURVIVING FUND SHARES
THAT YOU MIGHT MAKE AFTER THE REORGANIZATION AND REFLECTS THE NEW CLASS
STRUCTURE.
The price shareholders pay for their shares is the net asset value per
share (NAV), plus any applicable sales charge. NAV is the value of everything
the Surviving Fund owns, minus everything it owes, divided by the number of
shares held by investors. The Surviving Fund generally values its assets at fair
market values but may use fair value if market prices are unavailable.
The NAV of each class of the Surviving Fund's shares is generally
calculated once each day at the close of regular trading on the New York Stock
Exchange. A shareholder will pay the next NAV calculated after the JPMorgan
Funds Service Center (the "Center") receives that shareholder's order in proper
form. An order is in proper form only after payment is converted into federal
funds.
The Center accepts purchase orders on any business day that the New York
Stock Exchange is open. If an order is received in proper form by the close of
regular trading on the New York Stock Exchange, it will be processed at that
day's price and the purchaser will be entitled to all dividends declared on that
day. If an order is received after the close of regular trading on the New York
Stock Exchange, it will generally be processed at the next day's price. If a
purchaser pays by check for Surviving Fund shares before the close of regular
trading on the New York Stock Exchange, it will generally be processed the next
day the Surviving Fund is open for business.
If a shareholder buys through an agent and not directly from the Center,
the agent could set earlier cut-off times. Each shareholder must provide a
Social Security Number or Taxpayer Identification Number when opening an
account.
The Surviving Fund has the right to reject any purchase order for any
reason.
-23-
The investment minimum for Select Class Shares is $1,000,000. However,
shareholders who receive Select Class Shares as a result of the Reorganization
may purchase new Select Class Shares in the Surviving Fund or in other JPMorgan
Funds without regard to such investment minimum. All purchases of Select Class
Shares of the Surviving Fund must be paid for by federal funds wire. Generally,
they may be purchased only through financial service firms, such as
broker-dealers and banks that have an agreement with the Surviving Fund or the
Surviving Fund's distributor.
For Class A Shares, checks should be made out to JPMorgan Funds in U.S.
dollars. Credit cards, cash, or checks from a third party will not be accepted.
Shares bought by check may not be sold for 15 calendar days. Shares bought
through an automated clearing house cannot be sold until the payment clears.
This could take more than seven business days. Purchase orders will be canceled
if a check does not clear and the investor will be responsible for any expenses
and losses to the Surviving Fund. Orders by wire will be canceled if the Center
does not receive payment by 4:00 p.m., Eastern time, on the day the shareholder
buys.
Shareholders seeking to buy Class A 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 Class A Shares.
SELLING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO SALES OF THE SURVIVING FUND SHARES
THAT YOU MIGHT MAKE AFTER THE REORGANIZATION AND REFLECTS THE NEW CLASS
STRUCTURE.
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 less any applicable deferred sales
charge.
Under normal circumstances, if a request is received before the close of
regular trading on the New York Stock Exchange, the Surviving Fund will send the
proceeds the next business day. An order to sell shares will not be accepted if
the Surviving Fund has not collected payment for the shares. The Surviving Fund
may stop accepting orders to sell and may postpone payments for more than seven
days, as federal securities laws permit.
Generally, proceeds are sent by check, electronic transfer or wire for
Class A Shares and by wire only for Select Class Shares. However, for Class A,
if a shareholder's address of record has changed within the 30 days prior to the
sale request or if more than $25,000 of shares is sold by phone, proceeds will
be sent by electronic transfer or wire only to the bank account on the Surviving
Fund's records.
-24-
For Class A 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 in
the case of Select Class Shares, 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.
Class A shareholders may call 1-800-521-5411 while Select Class Shareholders may
call 1-800-________.
A systematic withdrawal plan is available for Class A Shares.
EXCHANGING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF THE SURVIVING FUND SHARES
THAT YOU MIGHT MAKE AFTER THE REORGANIZATION.
Shares of the Surviving Fund may be exchanged for shares of the same class
in certain other JPMorgan Funds.
For tax purposes, an exchange is treated as a sale of those shares.
Shareholders should carefully read the prospectus of the fund into which they
want to exchange. Except for Shareholders who receive Select Class Shares as a
result of the Reorganization, Class A and Class B 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 Class A Shares, the Surviving Fund may close an account if the balance
falls below $500. 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. For Select Class Shares, the Surviving Fund may close an
account if the balance falls below $_______ because the investor has sold
shares. 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
-25-
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 Surviving
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.
JPMF, on behalf of the Surviving Fund, has entered into agreements with
certain shareholder servicing agents (including Chase) under which the
shareholder servicing agents agree to provide certain support services to their
customers. For performing these services, each shareholder servicing agent will
receive an annual fee of up to 0.25% of the average daily net assets of the
Class A and Select Shares held by investors serviced by the shareholder
servicing agent. The Merging Fund likewise has similar arrangements with respect
to its Class A and Institutional Class Shares.
JPMIM and/or the Distributor may, at their own expense, make additional
payments to certain selected dealers or other shareholder servicing agents for
performing administrative services for their customers.
The Surviving Fund will issue multiple classes of shares. Each class may
have different requirements for who may invest, and may have different sales
charges and expense levels. A person who gets compensated for selling Surviving
Fund shares may receive a different amount for each class.
DISTRIBUTIONS AND TAXES
Each Fund can earn income and realize capital gain. The Surviving Fund
will deduct from these earnings any expenses and then pay to shareholders the
distributions.
The Surviving Fund distributes any net investment income at least monthly.
Net capital gain is distributed annually. You have three options for your
Surviving Fund distributions. You may:
- reinvest all of them in additional Fund shares;
- take distributions of net investment income in cash or as a deposit in
a pre-assigned bank account and reinvest distributions of net capital
gain in additional shares; or
-26-
- 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. The state or municipality where you live
may not charge you state and local taxes on tax-exempt interest earned on
certain bonds.
Dividends earned on bonds issued by the U.S. government and its agencies
may also be exempt from some types of state and local taxes.
If you receive distributions of net capital gain, the tax rate will be
based on how long the Surviving Fund held a particular asset, not on how long
you have owned your shares. If you buy shares just before a distribution, you
will pay tax on the entire amount of the taxable distribution you receive, even
though the NAV will be higher on that date because it includes the distribution
amount.
The Surviving Fund expects that its distributions will consist primarily
of ordinary income.
Early in each calendar year, the Surviving Fund will send its shareholders
a notice showing the amount of distributions received in the preceding year and
the tax status of those distributions.
The above is only a general summary of tax implications of investing in
the Surviving Fund. Shareholders should consult their tax advisors to see how
investing in the Surviving Fund will affect their own tax situation.
COMPARISON OF THE MERGING FUND'S
AND THE SURVIVING FUND'S ORGANIZATION STRUCTURE
There are no material differences in the organizational structure of the
Merging Fund and the Surviving Fund. Set forth below are descriptions of the
structure, voting rights, shareholder liability and the liability of Trustees.
STRUCTURE OF THE MERGING FUND
The Merging Fund is organized as a series of MFSG, which is organized
under the law of the Commonwealth of Massachusetts. As a Massachusetts business
trust, MFSG's operations are governed by MFSG'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.
-27-
STRUCTURE OF THE SURVIVING FUND
The Surviving Fund is organized as a series of JPMF, which is organized
under the law of the Commonwealth of Massachusetts. As a Massachusetts business
trust, JPMF's operations are governed by JPMF's Declaration of Trust and By-Laws
and applicable Massachusetts law. The operations of the 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 MFSG's Trustees and the business of the Surviving
Fund is managed by JPMF'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 MFSG and JPMF
is set forth in the Funds' respective Statements of Additional Information,
which are incorporated herein by reference.
SHARES OF FUNDS
Each of MFSG and JPMF is a trust with an unlimited number of authorized
series 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
series. 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 MFSG or JPMF
participate equally in the earnings, dividends and assets of the particular
series or class. Fractional shares have proportionate rights to full shares.
Expenses of MFSG or JPMF that are not attributable to a specific series or class
will be allocated to all the series of that trust in a manner believed by its
board to be fair and equitable. Generally, shares of each series will be voted
separately, for example, to approve an investment advisory agreement. Likewise,
shares of each class of each series will be voted separately, for example, to
approve a distribution plan, but shares of all series and classes vote together,
to the extent required by the 1940 Act, including for the election of Trustees.
Neither MFSG nor JPMF is required to hold regular annual meetings of
shareholders, but may hold special meetings from time to time. There are no
conversion or preemptive rights in connection with shares of either MFSG or
JPMF.
SHAREHOLDER VOTING RIGHTS
A vacancy in the Board of either MFSG or JPMF resulting from the
resignation of a Trustee or otherwise may be filled similarly by a vote of a
majority of the remaining Trustees then in office, subject to the 1940 Act. In
addition, Trustees may be removed from office by a vote of holders of shares
representing two-thirds of the outstanding shares of each portfolio of that
trust. A meeting of shareholders shall be held upon the written request of the
holders of shares representing not less than 10% of the outstanding shares
entitled to vote on the matters specified in the written request. Except as set
forth above, the Trustees may continue to hold office and may appoint successor
Trustees.
-28-
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders of either MFSG or JPMF could, under
certain circumstances, be held personally liable as partners for the obligations
of that trust. However, the Declaration of Trust of each of MFSG and JPMF
disclaims shareholder liability for acts or obligations of that trust and
provides for indemnification and reimbursement of expenses out of trust property
for any shareholder held personally liable for the obligations of that trust.
Each of MFSG and JPMF may maintain appropriate insurance (for example, fidelity
bonding and errors and omissions insurance) for the protection of that trust,
its shareholders, Trustees, officers, employees and agents covering possible
tort and other liabilities. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability generally is limited to circumstances
in which both inadequate insurance existed and the trust itself was unable to
meet its obligations.
LIABILITY OF DIRECTORS AND TRUSTEES
Under the Declaration of Trust of each of MFSG and JPMF, the Trustees of
that trust are personally liable only for bad faith, willful misfeasance, gross
negligence or reckless disregard of their duties as Trustees. Under the
Declaration of Trust of each of MFSG and JPMF, a Trustee or officer will
generally be indemnified against all liability and against all expenses
reasonably incurred or paid by such person in connection with any claim, action,
suit or proceeding in which such person becomes involved as a party or otherwise
by virtue of such person being or having been a Trustee or officer and against
amounts paid or incurred by such person in the settlement thereof.
The foregoing is only a summary of certain organizational and governing
documents and Massachusetts business trust law. It is not a complete
description. Shareholders should refer to the provisions of these documents and
state law directly for a more thorough comparison. Copies of the Declaration of
Trust and By-Laws of each of MFSG and JPMF are available without charge upon
written request to that trust.
INFORMATION RELATING TO THE ADVISORY CONTRACTS
AND OTHER SERVICES
GENERAL INFORMATION
As noted above, the assets of the Surviving Fund currently invested in the
Master Portfolio are managed by JPMIM pursuant to an Advisory Agreement between
JPMIM and the Master Portfolio, and JPMIM is responsible for the day-to-day
management of the Surviving Fund's assets. Following the Reorganization and the
Concurrent Reorganizations, the Surviving Fund's assets will be managed directly
by JPMIM pursuant to an Advisory Agreement substantially identical to the
agreement between the Master Portfolio and JPMIM.
DESCRIPTION OF JPMIM
JPMIM is an indirect wholly-owned subsidiary of JPMC incorporated under
the laws of Delaware. JPMIM's principal executive offices are located at 522
Fifth Avenue,
-29-
New York, New York 10036. JPMIM, a registered investment adviser, manages
employee benefit funds of corporations, labor unions and state and local
governments and the accounts of other institutional investors, including
investment companies. As of _______ __, 2001, JPMIM and certain of its
affiliates (including JPMFAM) provided investment management services with
respect to assets of approximately $___ billion.
Under the Advisory Agreement, JPMIM will be responsible for making
decisions with respect to, and placing orders for, all purchases and sales of
the portfolio securities of the Surviving Fund. JPMIM's responsibilities under
the Advisory Agreement will 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. The services to be provided to the Surviving
Fund by JPMIM are substantially similar to the services currently provided to
the Merging Fund by JPMFAM.
EXPENSES AND MANAGEMENT FEES. The Advisory Agreement provides that the
Surviving Fund will pay JPMIM a monthly management fee based upon the net assets
of the Surviving Fund. The annual rate of this management fee is 0.30%. The
Merging Fund also currently pays 0.30% of average net assets to JPMFAM for its
advisory services. JPMIM 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 JPMIM 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; management 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.
LIMITATION ON LIABILITY. The Advisory Agreement provides that JPMIM will
not be liable for any error of judgment or mistake of law or for any act or
omission or loss suffered by JPMF 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 JPMF
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
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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 JPMF Board or by vote of the majority of the Surviving Fund's
outstanding voting securities upon 60 days' written notice to JPMIM, and by
JPMIM on 90 days' written notice to JPMF.
PORTFOLIO MANAGER
The portfolio management team for the Surviving Fund is led by Connie
Plaehn, managing director, who has been at JPMIM since 1984, Paul Zemsky,
managing director, who has been at JPMIM since 1985 and Jay Gladieux, vice
president, who has been at JPMIM since 1997. Mr. Zemsky has been on the team
since 1988 and Mrs. Plaehn has been on the team since 1994. Mr. Gladieux joined
the team in September of 2000.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
JPMIM places orders for the Surviving Fund for all purchases and sales of
portfolio securities, enters into repurchase agreements, and may enter into
reverse repurchase agreements and execute loans of portfolio securities on
behalf of the Surviving Fund. Fixed income and debt securities and municipal
bonds and notes are generally traded at a net price with dealers acting as
principal for their own accounts without a stated commission. The price of the
security usually includes profit to the dealers. In underwritten offerings,
securities are purchased at a fixed price which includes an amount of
compensation to the underwriter, generally referred to as the underwriter's
concession or discount. On occasion, certain securities may be purchased
directly from an issuer, in which case no commissions or discounts are paid.
Portfolio transactions for the Surviving Fund will be undertaken
principally to accomplish the Surviving Fund's objective in relation to expected
movements in the general level of interest rates. The Surviving Fund may engage
in short-term trading consistent with its objectives.
In connection with portfolio transactions, JPMIM intends to seek best
execution on a competitive basis for both purchases and sales of securities.
Subject to the overriding objective of obtaining the best execution of orders,
JPMIM may allocate a portion of the Surviving Fund's brokerage transactions to
affiliates of JPMIM. Under the 1940 Act, persons affiliated with the Surviving
Fund and persons who are affiliated with such persons are prohibited from
dealing with the fund as principal in the purchase and sale of securities unless
a permissive order allowing such transactions is obtained from the Commission.
However, affiliated persons of the fund may serve as its broker in listed or
over-the-counter transactions conducted on an agency basis provided that, among
other things, the fee or commission received by such affiliated broker is
reasonable and fair compared to the fee or commission received by non-affiliated
brokers in connection with comparable transactions. In addition, the Surviving
Fund may not purchase securities during the existence of any underwriting
syndicate for such securities of which JPMIM or an affiliate is a member or in a
private placement in which JPMIM or an affiliate serves as
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placement agent except pursuant to procedures adopted by the Board of Trustees
that either comply with rules adopted by the Commission or with interpretations
of the Commission's staff.
Investment decisions made by JPMIM are the product of many factors in
addition to basic suitability for the particular fund or other client in
question. Thus, a particular security may be bought or sold for certain clients
even though it could have been bought or sold for other clients at the same
time. Likewise, a particular security may be bought for one or more clients when
one or more other clients are selling the same security. The Surviving Fund may
only sell a security to other portfolios or accounts managed by JPMIM or its
affiliates in accordance with procedures adopted by the Trustees.
It also sometimes happens that two or more clients simultaneously purchase
or sell the same security. On those occasions when JPMIM deems the purchase or
sale of a security to be in the best interests of the Surviving Fund, as well as
other clients including other funds, JPMIM, to the extent permitted by
applicable laws and regulations, may, but is not obligated to, aggregate the
securities to be sold or purchased for the Surviving Fund with those to be sold
or purchased for other clients in order to obtain best execution, including
lower brokerage commissions if appropriate. In such event, allocation of the
securities so purchased or sold as well as any expenses incurred in the
transaction will be made by JPMIM in the manner it considers to be most
equitable and consistent with JPMIM's fiduciary obligations to the Surviving
Fund. In some instances, this procedure might adversely affect the Surviving
Fund.
OTHER SERVICES
The Distributor, a wholly owned, indirect subsidiary of BISYS Fund
Services, Inc., which currently serves as the Merging Fund's distributor and
sub-administrator, is the distributor and sub-administrator for the Surviving
Fund. The Distributor is unaffiliated with JPMC or any of its subsidiaries.
Morgan serves as administrator and shareholder servicing agent, BONY
serves as fund accountant and custodian, and DST serves as transfer agent and
dividend disbursing agent for the Surviving Fund. The services provided by
Morgan and BONY 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, BONY will be responsible for the daily safekeeping of
securities and cash held by the Surviving Fund. It is anticipated that prior to
the consummation of the Reorganization, Chase will become the Surviving Fund's
fund accountant and custodian.
In connection with the Reorganization, the administration fee paid to
Morgan will increase 0.15% of average daily net assets on the first $26
billion of complex wide non-money market assets and 0.075% on assets in
excess of $26 billion.
PROPOSAL 2:
ELECTION OF TRUSTEES
It is proposed that shareholders of the Merging Fund consider the election
of the individuals listed below (the "Nominees") to the Board of Trustees of
MFSG, 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 MFSG will
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continue to exist and operate. All shareholders of any series of MFSG 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
MFSG, you are entitled to vote on this proposal. Shareholders of JPMF are being
asked to approve the same Trustees as are being proposed for MFSG.
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 MFSG certain
current Trustees of JPMF and 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 JPMF are concurrently considering the election of the same
individuals to the Board of Trustees of JPMF. Biographical information about the
Nominees and other relevant information is set forth below. More information
regarding the current Trustees of JPMF and MFSG is contained in the Funds'
Statements of Additional Information, which are incorporated herein by
reference.
The persons named in the accompanying form of proxy intend to vote each
such proxy "FOR" the election of the Nominees, unless shareholders specifically
indicate on their proxies the desire to withhold authority to vote for elections
to office. It is not contemplated that any Nominee will be unable to serve as a
Board member for any reason, but if that should occur prior to the Meeting, the
proxy holders reserve the right to substitute another person or persons of their
choice as nominee or nominees.
THE MFSG 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 MFSG.
The following are the nominees:
The Board of Trustees of MFSG met ___ times during the fiscal year ended
October 31, 2000, and each of the Trustees attended at least 75% of the
meetings.
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The Board of Trustees of MFSG presently has an Audit Committee. The
members of the Audit Committee are Messrs. Ten Haken (Chairman), Armstrong,
Eppley, MacCallan and Thode. The function of the Audit Committee is to recommend
independent auditors and monitor accounting and financial matters. The Audit
Committee met two times during the fiscal year ended October 31, 2000.
* Interested Trustee, as defined by the 1940 Act.
REMUNERATION OF TRUSTEES AND CERTAIN EXECUTIVE OFFICERS:
Each Trustee is reimbursed for expenses incurred in attending each meeting
of the Board of Trustees or any committee thereof. Each Trustee who is not an
affiliate of JPMFAM is compensated for his or her services according to a fee
schedule which recognizes the fact that each Trustee also serves as a Trustee of
other investment companies advised by JPMFAM. Each Trustee receives a fee,
allocated among all investment companies for which the Trustees serves, which
consists of an annual retainer component and a meeting fee component. Each
Trustee of MFSG receives a quarterly retainer of $_____ and an additional per
meeting fee of $_____.
Set forth below is information regarding compensation paid or accrued
during the fiscal year ended October 31, 2000 for each Trustee of MFSG:
PENSION OR RETIREMENT TOTAL
BENEFITS ACCRUED AS FUND COMPENSATION FROM
COMPENSATION EXPENSES "FUND COMPLEX"(1)
------------------------ ------------------------ ------------------------
Fergus Reid, III, Trustee $
Richard E. Ten Haken, Trustee
William J. Armstrong, Trustee
John R. H. Blum, Trustee
Joseph J. Harkins, Trustee
H. Richard Vartabedian, Trustee
Stuart W. Cragin, Jr., Trustee
Irving L. Thode, Trustee
Roland R. Eppley, Jr., Trustee
Sarah E. Jones, Trustee
W. D. MacCallan, Trustee
W. Perry Neff, Trustee
Leonard M. Spalding, Jr., Trustee
- ---------------------------------
(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.
MERGING FUNDS RETIREMENT PLAN FOR ELIGIBLE TRUSTEES
Effective August 21, 1995, the Trustees also instituted a Retirement Plan
for Eligible Trustees (the "Plan") pursuant to which each Trustee (who is not an
employee of any of the Funds, JPMFAM, the administrator or distributor or any of
their affiliates) may
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be entitled to certain benefits upon retirement from the Board of Trustees.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible Trustee has attained age 65 and has completed at least five years of
continuous service with one or more of the investment companies advised by
JPMFAM and its affiliates (collectively, the "Covered Funds"). Each Eligible
Trustee is entitled to receive from the Covered Funds an annual benefit
commencing on the first day of the calendar quarter coincident with or following
his date of retirement equal to the sum of (i) 8% of the highest annual
compensation received from the Covered Funds multiplied by the number of such
Trustee's years of service (not in excess of 10 years) completed with respect to
any Covered Funds and (ii) 4% of the highest annual compensation received from
the Covered Funds for each year of service in excess of 10 years, provided that
no Trustee's annual benefit will exceed the highest annual compensation received
by that Trustee from the Covered Funds. Such benefit is payable to each eligible
Trustee in monthly installments for the life of the Trustee. On February 22,
2001, the Board of Trustees voted to terminate the Plan and to pay each Eligible
Trustee an agreed-upon amount of compensation.
Effective August 21, 1995, the Trustees instituted a Deferred Compensation
Plan for Eligible Trustees (the "Deferred Compensation Plan") pursuant to which
each Trustee (who is not an employee of any of the Funds, JPMFAM, the
administrator or distributor or any of their affiliates) may enter into
agreements with the Funds whereby payment of the Trustees' fees are deferred
until the payment date elected by the Trustee (or the Trustee's termination of
service). The deferred amounts are deemed invested in shares of funds selected
by the Trustee. The deferred amounts are paid out in a lump sum or over a period
of several years as elected by the Trustee at the time of deferral. If a
deferring Trustee dies prior to the distribution of amounts held in the deferral
account, the balance of the deferral account will be distributed to the
Trustee's designated beneficiary in a single lump sum payment as soon as
practicable after such deferring Trustee's death. The following Eligible
Trustees have executed a deferred compensation agreement for the 2000 calendar
year: Messrs._____________________________.
PRINCIPAL EXECUTIVE OFFICERS:
The principal executive officers of MFSG are as follows:
NAME AND POSITION AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ----------------- --- ------------------------------------------
Martin R. Dean 37 Treasurer and Assistant Secretary. Vice
President, Administration Services, BISYS Fund
Services, Inc.; formerly Senior Manager, KPMG
Peat Marwick (1987-1994). Address: 3435
Stelzer Road, Columbus, OH 43219.
Lisa Hurley 45 Secretary. Senior Vice President and General
Counsel, BISYS Fund Services, Inc.; formerly
Counsel to Moore Capital Management and
General Counsel to Global Asset Management and
Northstar Investments Management. Address:
90 Park Avenue, New York, NY 10016.
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NAME AND POSITION AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ----------------- --- ------------------------------------------
Vicky M. Hayes 37 Assistant Secretary. Vice President and
Global Marketing Manager, J.P. Morgan Fund
Distributors, Inc.; formerly Assistant Vice
President, Alliance Capital Management and
held various positions with J. & W. Seligman &
Co. Address: 1211 Avenue of the Americas,
41st Floor, New York, NY 10081.
Alaina Metz 33 Assistant Secretary. Chief Administrative
Officer, BISYS Fund Services, Inc.; formerly
Supervisor, Blue Sky Department, Alliance
Capital Management L.P. Address: 3435
Stelzer Road, Columbus, OH 43219.
ACCOUNTANTS
PricewaterhouseCoopers LLP serves as the Merging Fund'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 MFSG or JPMF engages it to do so.
AUDIT FEES. The aggregate fees paid to PricewaterhouseCoopers LLP in
connection with the annual audit of the Merging Fund for the last fiscal year
was $17,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. The
aggregate fees billed for financial systems design and implementation services
rendered by PricewaterhouseCoopers LLP to the Merging Fund, JPMFAM and JPMFAM's
affiliates that provide services to the Fund for the calendar year ended
December 31, 2000 was $1,360,000.
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, JPMFAM and JPMFAM's affiliates
that provide services to the Fund for the calendar year ended December 31, 2000
was $25,318,900.
The Audit Committee has considered whether the provision of non-audit
services is compatible with maintaining the independence of
PricewaterhouseCoopers LLP.
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION
This Combined Prospectus/Proxy Statement is being furnished in connection
with the solicitation of proxies by the MFSG Board for use at the Meeting. It is
expected that the solicitation of proxies will be primarily by mail. MFSG's
officers and service providers may also solicit proxies by telephone, facsimile
machine, telegraph, the Internet or personal interview. In addition MFSG may
retain the services of professional solicitors to aid in the solicitation of
proxies for a fee. It is anticipated that banks, brokerage houses
-36-
and other custodians will be requested on behalf of MFSG 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 MFSG a written notice of revocation or a
subsequently executed proxy or by attending the Meeting and electing to vote in
person.
Only the Merging Fund Shareholders of record at the close of business
on April 6, 2001 will be entitled to vote at the Meeting. On that date, there
were outstanding and entitled to be voted _____________ Merging Fund Shares.
Each share or fraction thereof is entitled to one vote or fraction thereof.
The presence in person or by proxy of shareholders that own a majority 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 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 MFSG,
by
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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 MFSG 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 MFSG 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
Reorganizations based upon their holdings at _______, 2001 are as follows:
Percentage of Percentage of
Amount Merging Fund Surviving Fund
of Shares Owned on Owned Upon
Name and Address Owned Record Date Consummation
- ----------------------------- ---------- ------------- ---------------
On the record date, the Trustees and officers of JPMF as a group owned
less than 1% of the outstanding shares of the Surviving Fund. On the record
date, the name, address and share ownership of the persons who owned
beneficially more than 5% of the shares of the Surviving Fund or any class
thereof and the percentage of shares of the Surviving Fund or any class thereof
that would be owned by such person upon consummation of the Reorganization and
the Concurrent Reorganizations based upon their holdings at _________, 2001 were
as follows:
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Percentage of
Amount Surviving Percentage of
of Fund Owned Surviving Fund
Shares on Record Owned Upon
Name and Address Owned Date Consummation
- ----------------------------- ---------- ------------- ---------------
ADDITIONAL INFORMATION ABOUT MFSG
Information about the Merging Fund is included in its Prospectus, which is
incorporated by reference herein. Additional information about the Merging Fund
is also included in MFSG'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. MFSG 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 is also available on the Commission's web site at
http://www.sec.gov.
ADDITIONAL INFORMATION ABOUT JPMF
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 JPMF's Statement of Additional
Information which has been filed with the Commission and which is incorporated
herein by reference. Copies of the Statement of Additional information may be
obtained without charge by calling 1-800-521-5411. JPMF is subject to the
requirements of the 1940 Act and, in accordance with such requirements, files
reports and other information with the Commission. These materials can be
inspected and copied at the Public Reference Facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices at 7 World Trade Center, Suite 1300, New York, NY
10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of such material can also be obtained from the Public Reference Branch, Office
of Consumer Affairs and Information Services, Securities and Exchange
Commission, Washington, D.C. 20549, at prescribed rates, and are also available
on the Commission's web site at http://www.sec.gov.
-39-
FINANCIAL STATEMENTS AND EXPERTS
The audited financial highlights, financial statements and notes thereto
of the Merging Fund and the Surviving Fund for the fiscal year ended October 31,
2000, and the audited financial statements, notes thereto and supplementary data
of the Master Portfolio for the fiscal year ended October 31, 2000, are
incorporated by reference herein and into the Statement of Additional
Information related to this Combined Prospectus/Proxy Statement. The audited
financial highlights, financial statements, notes thereto and supplementary
data, as applicable, for the Merging Fund, the 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.
OTHER BUSINESS
The MFSG 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 MFSG 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 MFSG nor JPMF is involved in any litigation that would have any
material adverse effect upon either the Merging Fund or the Surviving Fund.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to MFSG 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.
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APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Plan") made this ____ day
of ______, 2001 by and among Mutual Fund Select Group (the "Transferor Trust"),
a Massachusetts business trust, on behalf of the JPMorgan Intermediate Bond Fund
(formerly, Chase Vista Intermediate Bond Fund) (the "Transferor Portfolio"),
J.P. Morgan Institutional Funds (the "Acquiring Trust"), a Massachusetts
business trust, on behalf of the J.P. Morgan Institutional Bond Fund (the
"Acquiring Portfolio"), and J.P. Morgan Chase & Co.
WHEREAS, the Board of Trustees of each of the Transferor Trust and the
Acquiring Trust has determined that the transfer of all of the assets and
liabilities of the Transferor Portfolio to the Acquiring Portfolio is in the
best interests of the Transferor Portfolio and the Acquiring Portfolio, as well
as the best interests of shareholders of the Transferor Portfolio and the
Acquiring Portfolio, and that the interests of existing shareholders would not
be diluted as a result of this transaction;
WHEREAS, each of the Transferor Trust and the Acquiring Trust intends to
provide for the reorganization of the Transferor Portfolio (the
"Reorganization") through the acquisition by the Acquiring Portfolio of all of
the assets, subject to all of the liabilities, of the Transferor Portfolio in
exchange for shares of beneficial interest of the Acquiring Portfolio (the
"Acquiring Portfolio Shares"), the liquidation of the Transferor Portfolio and
the distribution to Transferor Portfolio shareholders of such Acquiring
Portfolio Shares, all pursuant to the provisions of Section 368(a)(1) of the
Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. TRANSFER OF ASSETS OF THE TRANSFEROR PORTFOLIO IN EXCHANGE FOR THE
ACQUIRING PORTFOLIO SHARES AND LIQUIDATION AND TERMINATION OF THE TRANSFEROR
PORTFOLIO
(a) PLAN OF REORGANIZATION.
(i) The Transferor Trust on behalf of the Transferor Portfolio listed
above, will convey, transfer and deliver to the Acquiring Portfolio all of the
then existing assets of the Transferor Portfolio (consisting, without
limitation, of portfolio securities and instruments, dividend and interest
receivables, cash and other assets). In consideration thereof, the Acquiring
Trust on behalf of the Acquiring Portfolio will (A) assume and pay, to the
extent that they exist on or after the Effective Time of the Reorganization (as
defined in Section 1(b)(i) hereof), all of the obligations and liabilities of
the Transferor Portfolio and (B) issue and deliver to the Transferor Portfolio
full and fractional shares of beneficial interest of the Acquiring Portfolio,
with respect to the Acquiring Portfolio equal to that number of full and
fractional Acquiring Portfolio Shares as determined in Section 1(c) hereof. The
Acquiring Portfolio Shares issued and delivered to the Transferor Portfolio
shall be of the Select Class share class in exchange for Institutional Class
Shares of the Transferor Portfolio and the Class A share class in exchange for
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Class A Shares of the Transferor Portfolio, with the amounts of shares of each
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
Chase Manhattan Bank (the "Custodian"), as custodian and pricing agent for the
Transferor Portfolio and the Acquiring Portfolio. The determination of said
Custodian shall be conclusive and binding on all parties in interest.
(ii) As of the Effective Time of the Reorganization, the Transferor
Trust will liquidate and distribute pro rata to its shareholders of record
("Transferor Portfolio Shareholders") as of the Effective Time of the
Reorganization the Acquiring Portfolio Shares received by such Transferor
Portfolio pursuant to Section 1(a)(i) in actual or constructive exchange for the
shares of the Transferor Portfolio held by the Transferor Portfolio
shareholders. Such liquidation and distribution will be accomplished by the
transfer of the Acquiring Portfolio Shares then credited to the account of the
Transferor Portfolio on the books of the Acquiring Portfolio, to open accounts
on the share records of the Acquiring Portfolio in the names of the Transferor
Portfolio shareholders and representing the respective pro rata number of the
Acquiring Portfolio Shares due such shareholders. The Acquiring Portfolio will
not issue certificates representing the Acquiring Portfolio Shares in connection
with such exchange.
(iii) As soon as practicable after the Effective Time of the
Reorganization, the Transferor Trust shall take all the necessary steps under
Massachusetts law, the Transferor Trust's Declaration of Trust and any other
applicable law to effect a complete termination of the Transferor Portfolio.
(b) EXCHANGE DATE AND EFFECTIVE TIME OF THE REORGANIZATION.
(i) Subject to the satisfaction of the conditions to the Reorganization
specified in this Plan, the Reorganization shall occur as of the close of
regularly scheduled trading on the New York Stock Exchange (the "Effective Time
of the Reorganization") on August 11, 2001, or such later date as may be agreed
upon by the parties (the "Exchange Date").
(ii) All acts taking place on the Exchange Date shall be deemed to take
place simultaneously as of the Effective Time of the Reorganization unless
otherwise provided.
(iii) In the event that on the proposed Exchange Date (A) the New York
Stock Exchange shall be closed to trading or trading thereon shall be
restricted, or (B) trading or the reporting of trading on said Exchange or
elsewhere shall be disrupted so that accurate valuation of the net assets of the
Acquiring Portfolio or the Transferor Portfolio is impracticable, the Exchange
Date shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
(iv) On the Exchange Date, portfolio securities of the Transferor
Portfolio shall be transferred by the Custodian to the accounts of the Acquiring
Portfolio duly endorsed in proper form for transfer, in such condition as to
constitute good delivery thereof in accordance with the
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custom of brokers, and shall be accompanied by all necessary federal and state
stock transfer stamps or a check for the appropriate purchase price thereof.
(c) VALUATION.
(i) The net asset value of the shares of the Acquiring Portfolio and
the net value of the assets of the Transferor Portfolio to be transferred in
exchange therefore shall be determined as of the Effective Time of the
Reorganization. The net asset value of the Acquiring Portfolio Shares shall be
computed by the Custodian in the manner set forth in the Acquiring Trust's
Declaration of Trust or By-laws and then current prospectus and statement of
additional information and shall be computed to not less than two decimal
places. The net value of the assets of the Transferor Portfolio to be
transferred shall be computed by the Custodian by calculating the value of the
assets transferred by the Transferor Portfolio and by subtracting therefrom the
amount of the liabilities assigned and transferred to the Acquiring Portfolio,
said assets and liabilities to be valued in the manner set forth in the
Transferor Trust's Declaration of Trust or By-laws and then current prospectus
and statement of additional information.
(ii) The number of Select Class shares of the Acquiring Portfolio to be
issued (including fractional shares, if any) by the Acquiring Portfolio in
exchange for the Transferor Portfolio's assets attributable to the Transferor
Portfolio's Institutional Class shares shall be determined by an exchange ratio
computed by dividing the net value of the Transferor Portfolio's assets
attributable to Institutional Class shares by the net asset value per share of
the Select Class shares of the Acquiring Portfolio, both as determined in
accordance with Section 1(c)(i). The number of Class A 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 Class A shares shall be determined by an exchange ratio
computed by dividing the net value of the Transferor Portfolio's assets
attributable to Class A shares by the net asset value per share of the Class A
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
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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 statement on Form N-1A filed with the Securities
and Exchange Commission, comply in all material respects with the requirements
of the Securities Act of 1933, as amended (the "Securities Act") and the Act and
do not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) CAPITALIZATION. The Acquiring Trust has an unlimited number of
authorized shares of beneficial interest of which as of October 31, 2000
there were outstanding 96,271 shares of the Acquiring Portfolio, and no
shares of such Portfolio were held in the treasury of the Acquiring Trust.
All of the outstanding shares of the Acquiring Trust have been duly
authorized and are validly issued, fully paid and nonassessable (except as
disclosed in the Acquiring Trust's prospectus and recognizing that under
Massachusetts law, shareholders of an Acquiring Trust portfolio could, under
certain circumstances, be held personally liable for the obligations of such
Acquiring Trust portfolio). Because the Acquiring Trust is an open-end
investment company engaged in the continuous offering and redemption of its
shares, the number of outstanding shares may change prior to the Effective
Time of the Reorganization. All of the issued and outstanding shares of the
Acquiring Portfolio have been offered and sold in compliance in all material
respects with applicable registration requirements of the Securities Act and
applicable state securities laws.
(e) FINANCIAL STATEMENTS. The financial statements of the Acquiring Trust
with respect to the Acquiring Portfolio and The U.S. Fixed Income Portfolio for
the fiscal year ended October 31, 2000, which have been audited by
PricewaterhouseCoopers LLP, fairly present the financial position of the
Acquiring Portfolio and The U.S. Fixed Income Portfolio as of the dates thereof
and the respective results of operations and changes in net assets for each of
the periods indicated in accordance with generally accepted accounting
principles ("GAAP").
(f) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring Portfolio
Shares to be issued in connection with the Reorganization will be duly
authorized and upon consummation of the Reorganization will be validly issued,
fully paid and nonassessable (except as disclosed in the Trust's prospectus and
recognizing that under Massachusetts law, shareholders of an Acquiring Trust
portfolio could, under certain circumstances, be held personally liable for the
obligations of such portfolio).
(g) AUTHORITY RELATIVE TO THIS PLAN. The Acquiring Trust, on behalf of the
Acquiring Portfolio, has the power to enter into this Plan and to carry out its
obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Acquiring Trust's Board of Trustees and no other proceedings by the
Acquiring Trust 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
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subject to any order or decree, which would be violated by or which would
prevent its execution and performance of this Plan in accordance with its terms.
(h) LIABILITIES. There are no liabilities of the Acquiring Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Acquiring Trust's
financial statements with respect to the Acquiring Portfolio and liabilities
incurred in the ordinary course of business subsequent to October 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 October 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.
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3. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR TRUST
The Transferor Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Transferor Trust is a business trust
that is duly organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts and has the power to carry on its business as
it is now being conducted. The Transferor Portfolio is a validly existing series
of shares of such business trust representing interests therein under the laws
of Massachusetts. Each of Transferor Portfolio and the Transferor Trust has all
necessary federal, state and local authorization to own all of its properties
and assets and to carry on its business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Transferor Trust is registered
under the Act as an open-end investment company of the management type; such
registration has not been revoked or rescinded and is in full force and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectus and statement of
additional information of the Transferor Trust, as amended, included in the
Transferor Trust's registration statement on Form N-1A filed with the
Commission, comply in all material respects with the requirements of the
Securities Act and the Act and do not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(d) CAPITALIZATION. The Transferor Trust has an unlimited number of
authorized shares of beneficial interest of which as of October 31, 2000
there were outstanding no Class A shares, and 40,050 Institutional Class
shares of the Transferor Portfolio, and no shares of such Portfolio were held
in the treasury of the Transferor Trust. All of the outstanding shares of the
Transferor Trust have been duly authorized and are validly issued, fully paid
and nonassessable (except as disclosed in the Transferor Trust's prospectus
and recognizing that under Massachusetts law, shareholders of a Trust
portfolio could, under certain circumstances, be held personally liable for
the obligations of such Trust portfolio). Because the Transferor Trust is an
open-end investment company engaged in the continuous offering and redemption
of its shares, the number of outstanding shares may change prior to the
Effective Time of the Reorganization. All such shares will, at the Exchange
Date, be held by the shareholders of record of the Transferor Portfolio as
set forth on the books and records of the Transferor Trust in the amounts set
forth therein, and as set forth in any list of shareholders of record
provided to the Acquiring Portfolio for purposes of the Reorganization, and
no such shareholders of record will have any preemptive rights to purchase
any Transferor Portfolio shares, and the Transferor Portfolio does not have
outstanding any options, warrants or other rights to subscribe for or
purchase any Transferor Portfolio shares (other than any existing dividend
reinvestment plans of the Transferor Portfolio or as set forth in this Plan),
nor are there outstanding any securities convertible into any shares of the
Transferor Portfolio (except pursuant to any existing exchange privileges
described in the current prospectus and statement of additional information
of the Transferor Trust). All of the Transferor Portfolio's issued and
outstanding shares have been offered and sold in compliance in all material
respects with applicable registration requirements of the Securities Act and
applicable state securities laws.
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(e) FINANCIAL STATEMENTS. The financial statements for the Transferor
Trust with respect to the Transferor Portfolio for the fiscal year ended October
31, 2000 which have been audited by PricewaterhouseCoopers LLP fairly present
the financial position of the Transferor Portfolio as of the dates thereof and
the respective results of operations and changes in net assets for each of the
periods indicated in accordance with GAAP.
(f) AUTHORITY RELATIVE TO THIS PLAN. The Transferor Trust, on behalf of
the Transferor Portfolio, has the power to enter into this Plan and to carry out
its obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Transferor Trust's Board of Trustees and no other proceedings by the
Transferor Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Transferor Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
(g) LIABILITIES. There are no liabilities of the Transferor Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Transferor Trust's
Financial Statements with respect to the Transferor Portfolio and liabilities
incurred in the ordinary course of business subsequent to October 31, 2000 or
otherwise previously disclosed to the Transferor Trust with respect to the
Transferor Portfolio, none of which has been materially adverse to the business,
assets or results of operations of the Transferor Portfolio.
(h) NO MATERIAL ADVERSE CHANGE. Since October 31, 2000, there has been no
material adverse change in the financial condition, results of operations,
business, properties or assets of the Transferor Portfolio, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
(i) LITIGATION. There are no claims, actions, suits or proceedings pending
or, to the knowledge of the Transferor Trust, threatened which would adversely
affect the Transferor Trust or the Transferor Portfolio's assets or business or
which would prevent or hinder consummation of the transactions contemplated
hereby, there are no facts which would form the basis for the institution of
administrative proceedings against the Transferor Trust or the Transferor
Portfolio and, to the knowledge of the Transferor Trust, there are no regulatory
investigations of the Transferor Trust or the Transferor Portfolio, pending or
threatened, other than routine inspections and audits.
(j) CONTRACTS. The Transferor Trust, on behalf of the Transferor
Portfolio, is not subject to any contracts or other commitments (other than this
Plan) which will not be terminated with respect to the Transferor Portfolio
without liability to the Transferor Trust or the Transferor Portfolio as of or
prior to the Effective Time of the Reorganization.
(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
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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.
(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
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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
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
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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 adverse change (as
described in Section 2(i)) in the financial condition, results of operations,
business, properties or assets of the Acquiring Portfolio since October 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
A-10
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 J.P. Morgan Bond
Fund, a series of J.P. Morgan Funds, and J.P. Morgan Institutional Bond Fund -
Ultra, a series of the Acquiring Trust, into the Acquiring Portfolio shall have
been consummated.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING TRUST
The obligations of the Acquiring Trust with respect to the consummation of
the Reorganization are subject to the satisfaction of the following conditions:
(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
A-11
Reorganization (except as otherwise contemplated herein), and there shall have
been no material adverse change (as described in Section 3(h)) in the financial
condition, results of operations, business, properties or assets of the
Transferor Portfolio since October 31, 2000.
(c) PORTFOLIO SECURITIES. All securities to be acquired by the Acquiring
Portfolio in the Reorganization shall have been approved for acquisition by J.P.
Morgan Investment Management Inc. ("JPMIM"), 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 J.P. Morgan Bond
Fund, a series of J.P. Morgan Funds, and J.P. Morgan Institutional Bond Fund -
Ultra, a series of the Acquiring Trust, into the Acquiring Portfolio shall have
been consummated.
8. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS, WARRANTIES AND
REPRESENTATIONS
(a) AMENDMENTS. The parties hereto may, by agreement in writing authorized
by their respective Boards of Trustees amend this Plan at any time before or
after approval hereof by the shareholders of the Transferor Portfolio, but after
such approval, no amendment shall be made which substantially changes the terms
hereof.
(b) WAIVERS. At any time prior to the Effective Time of the
Reorganization, either the Transferor Trust or the Acquiring Trust may by
written instrument signed by it (i) waive any inaccuracies in the
representations and warranties made to it contained herein and (ii) waive
compliance with any of the covenants or conditions made for its benefit
contained herein, except that conditions set forth in Sections 6(c) and 7(d) may
not be waived.
(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 JPMIM 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
A-12
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 Fleming Asset Management (USA) Inc. 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 J.P. Morgan Fleming Asset Management (USA)
Inc. 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. Such expenses include, without limitation, (i) expenses incurred in
connection with the entering into and the carrying out of the provisions of this
Plan; (ii) expenses associated with the preparation and filing of the
Registration Statement; (iii) fees and expenses of preparing and filing such
forms as are necessary under any applicable state securities laws in connection
with the Reorganization; (iv) postage; (v) printing; (vi) accounting fees; (vii)
legal fees and (viii) solicitation costs relating to the Reorganization. In
addition, JPMC or an affiliate will waive fees payable to it or reimburse
expenses to the extent necessary such that the actual (post-waiver) total
expense ratios of the Select Class Shares, Institutional Class Shares and Agency
Class Shares of the Acquiring Portfolio are not higher than those set forth in
the Registration Statement for a period of three years after the Exchange Date.
10. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Plan shall be in writing and shall be given by hand, certified
mail or by facsimile transmission, shall be deemed given when received and shall
be addressed to the parties hereto at their respective addresses listed below or
to such other persons or addresses as the relevant party shall designate as to
itself from time to time in writing delivered in like manner:
if to the Transferor Trust (for itself or on behalf of the Transferor
Portfolio):
A-13
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 Acquiring Trust (for itself or on behalf of the Acquiring
Portfolio):
60 State Street
Suite 1300
Boston, Massachusetts 02109
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: John E. Baumgardner, Jr., Esq.
11. RELIANCE
All covenants and agreements made under this Plan shall be deemed to have
been material and relied upon by the Transferor Trust and the Acquiring Trust
notwithstanding any investigation made by such party or on its behalf.
12. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
(a) The section and paragraph headings contained in this Plan are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Plan.
(b) This Plan may be executed in any number of counterparts, each of which
shall be deemed an original.
(c) This Plan shall be governed by and construed in accordance with the
laws of The State of New York.
(d) This Plan shall bind and inure to the benefit of the Transferor Trust,
the Transferor Portfolio, the Acquiring Trust and the Acquiring Portfolio and
their respective successors and assigns, but no assignment or transfer hereof or
of any rights or obligations hereunder shall be made by any party without the
written consent of the other parties. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give any person, firm or
corporation, other than the parties hereto and their respective successors and
assigns, any rights or remedies under or by reason of this Plan.
A-14
(e) The name "Mutual Fund Select Group" is the designation of its Trustees
under a Declaration of Trust dated October 1, 1996, 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 "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 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 Bond Fund
By:
---------------------------------
Name:
Title:
MUTUAL FUND SELECT GROUP
on behalf of JPMorgan Intermediate Bond 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
JPMORGAN INTERMEDIATE BOND FUND
(FORMERLY, CHASE VISTA INTERMEDIATE BOND FUND),
A SERIES OF MUTUAL FUND SELECT GROUP)
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 JPMorgan Intermediate Bond Fund
(formerly, Chase Vista Intermediate Bond Fund) (the "Merging Fund"), a series of
Mutual Fund Select Group ("MFSG"), to be held on July 3, 2001. Copies of the
Combined Prospectus/Proxy Statement may be obtained at no charge by calling
JPMorgan Bond Fund at 1-800-348-4782.
Unless otherwise indicated, capitalized terms used herein and not
otherwise defined have the same meanings as are given to them in the Combined
Prospectus/Proxy Statement.
Further information about the Surviving Fund and the Merging Fund is
contained in each of JPMF's and MFSG's Statements of Additional Information,
which are incorporated herein by reference.
The date of this Statement of Additional Information is May 16, 2001.
1
GENERAL INFORMATION
The Shareholders of the Merging Fund are being asked to consider and vote
on two proposals.
With respect to an Agreement and Plan of Reorganization (the
"Reorganization Plan") dated as of __________, 2001 by and among MFSG, on behalf
of the Merging Fund, JPMF, 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 JPMF 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) a
holder of Class A Shares in the Merging Fund will receive Class A Shares of the
Surviving Fund and (b) a holder of Institutional Class Shares in the Merging
Fund will receive Select Class Shares of the Surviving Fund, in each case 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 MFSG.
A Special Meeting of Shareholders of the Merging Fund to consider the
proposals and the related transaction will be held at the offices of J.P. Morgan
Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, NY, on July 3,
2001 at 9:00 a.m., Eastern time. For further information about the transaction,
see the Combined Prospectus/Proxy Statement.
2
FINANCIAL STATEMENTS
The audited financial highlights, financial statements and notes thereto
of the Surviving Fund and of the Merging Fund and the audited financial
statements, notes thereto and supplementary data of the Master Portfolio,
contained in their respective Annual Reports dated October 31, 2000 are
incorporated by reference into this Statement of Additional Information related
to this Combined Prospectus/Proxy Statement. The financial highlights, financial
statements, notes thereto and supplementary data, as applicable, which appear in
each of the Merging Fund's, the Surviving Fund's and the Master Portfolio's
Annual Report have been audited by PricewaterhouseCoopers LLP, whose reports
thereon also appear in such Annual Reports and are also incorporated herein by
reference. The financial highlights, financial statements, notes thereto and
supplementary data, as applicable for the Merging Fund, the Surviving Fund and
the Master Portfolio for the fiscal year ended October 31, 2000 have been
incorporated herein by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on their authority as
experts in auditing and accounting.
3
PRO FORMA FINANCIAL STATEMENTS
JPMORGAN INTERMEDIATE BOND FUND (1) /
THE U.S. FIXED INCOME PORTFOLIO
OCTOBER 31, 2000
COMBINING PORTFOLIO OF INVESTMENTS
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
THE PRO THE PRO
JPMORGAN U.S. FORMA JPMORGAN U.S. FORMA
INTERMEDIATE FIXED PRO COMBINED INTERMEDIATE FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND(1) PORTFOLIO ADJUSTMENTS BOND FUND
----------------------------------------------- --------------------------------------------------
ASSET-BACKED SECURITIES - 6.4%
FINANCIAL SERVICES - 6.4%
American Express Credit Account
Master Trust, Ser. 1997-1,
Class A, 6.40%, 4/15/05 4,750 - - 4,750 4,724 - - 4,724
Citibank Credit Card Master
Trust I,Series 1998-9, Class A,
5.30%, 1/9/06 - 10,000 - 10,000 - 9,609 - 9,609
Citibank Credit Card Master
Trust I, Ser. 1997-2, Class A,
6.55%, 2/15/04 1,700 - - 1,700 1,693 - - 1,693
Conseco Finance Securitizations
Corp., Series 2000-5, Class A3
SEQ, 7.21%, 2/1/32 - 15,000 - 15,000 - 15,000 - 15,000
Daimler Chrysler Auto Trust,
Series 2000 C, Class A2 SEQ,
6.81%, 7/6/03 - 6,600 - 6,600 - 6,606 - 6,606
Daimler-Benz Vehicle Trust,
Series 1998 A, Class A4 SEQ,
5.22%, 12/22/03 - 21,000 - 21,000 - 20,626 - 20,626
Discover Card Master Trust I,
Series 1998-4, Class A, 5.75%,
10/16/03 - 12,000 - 12,000 - 11,925 - 11,925
First USA Credit Card Master
Trust, Series1999-1, Class C,
6.42%, 10/19/06 - 5,000 - 5,000 - 4,847 - 4,847
Ford Credit Auto Owner Trust,
Series 1998 C, Class D, 7.70%,
1/15/04 - 5,000 - 5,000 - 5,013 - 5,013
Ford Credit Auto Owner Trust,
Series 1999A, Class D, 8.00%,
6/15/04 - 5,000 - 5,000 - 5,036 - 5,036
Ford Credit Auto Owner Trust,
Series 2000 D, Class A2 SEQ,
7.06%, 4/15/03 - 11,000 - 11,000 - 11,014 - 11,014
Green Tree Financial
Corporation, Series 1999-5,
Class B1, 9.20%, 4/1/31 - 10,000 - 10,000 - 9,438 - 9,438
Green Tree Financial
Corporation,Series 1993-3,
Class B, 6.85%, 10/15/18 - 15,486 - 15,486 - 13,168 - 13,168
MBNA Master Credit Card Trust,
Ser. 1999-J, Class A, 7.00%,
2/15/12 2,710 - - 2,710 2,722 - - 2,722
Nomura CBO LTD, Series 1997-1,
Class A2, FRN, 144A, SUB,
6.67%, 5/15/09 5,000 - - 5,000 4,561 - - 4,561
Sears Credit Account Master
Trust, Series 1999-2, Class A,
6.35%, 2/16/07 19,855 - 19,855 - 19,712 - 19,712
Standard Credit Card Trust,
Ser. 93, 5.95%, 10/7/04 4,000 - - 4,000 3,919 - - 3,919
-
--------------------------------------------------
TOTAL ASSET-BACKED SECURITIES - 17,619 131,994 - 149,613
--------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATIONS - 12.0%
FINANCIAL SERVICES - 12.0%
Chase Commercial Mortgage
Securities Corp., Series
1998-2, Class A2 SEQ, 6.39%,
11/18/08 - 26,550 26,550 25,500 25,500
Chase Manhattan Bank-First
Union National Bank, Series
1999-1, Class A2 SEQ, 7.44%,
7/15/09 - 20,000 20,000 20,363 20,363
COMM, Series 2000 FL2A, Class
H-NW, Floater, 7.97%, 11/15/00,
resets monthly off the 1-month - 4,900 4,900 4,900 4,900
LIBOR plus 1.35% with no
caps
Commercial Mortgage Acceptance
Corp., Series 1998-C2, Class D,
6.75%, 11/15/09 - 10,000 10,000 9,400 9,400
DLJ Commercial Mortgage
Corporation, Series 2000-CF1,
Class A1B SEQ, 7.62%, 5/10/10 - 42,660 42,660 43,673 43,673
FHLMC, Series 1980, Class C
SEQ, 6.85%, 10/15/21 - 530 530 528 528
FHLMC, Ser. 2155, Class PC,
6.00%, 11/15/17 5,225 5,225 5,120 5,120
FNMA, Ser. 1999-17, Class PC,
6.00%, 12/25/22 4,200 4,200 4,044 4,044
First Nationwide Trust, Series
1999-4, Class 3PA1 SEQ, 6.50%,
10/19/29 - 28,873 28,873 27,123 27,123
First Union Commercial Mortgage
Trust, Series 1999-C1, Class A2
SEQ, 6.07%, 10/15/08 - 20,000 20,000 18,813 18,813
GMAC Commercial Mortgage
Securities Inc., Series
1997-C1, Class A3 SEQ, 6.87%,
8/15/07 - 8,895 8,895 8,787 8,787
GS Mortgage, Series 2000 F,
Floater, 8.37%, 11/15/00 - 5,000 5,000 5,000 5,000
Heller Financial Commercial
Mortgage Asset, Series
1999-PH1, Class A2 SEQ, 6.85%,
5/15/31 - 6,950 6,950 6,829 6,829
LB-UBS Commerical Mortgage
Trust, Series 2000-C3, Class A2
SEQ, 7.95%, 1/15/10 - 42,943 42,943 44,594 44,594
Morgan Stanley Capital I,
Series 1998-XL2, Class A2 SEQ,
6.17%, 10/3/08 - 7,830 7,830 7,393 7,393
Mortgage Capital Funding, Inc.,
Series 1998-MC2, Class A2 SEQ,
6.42%, 5/18/08 - 30,000 30,000 28,800 28,800
PNC Mortgage Acceptance Corp.,
Series 2000-C1, Class A2 SEQ,
7.61%, 2/15/10 - 12,500 12,500 12,828 12,828
PNC Mortgage Acceptance Corp.,
Series 2000-C2, Class A2 SEQ,
7.30%, 9/12/10 - 6,245 6,245 6,269 6,269
See Notes to Pro Forma Financial Statements
4
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
THE PRO THE PRO
JPMORGAN U.S. FORMA JPMORGAN U.S. FORMA
INTERMEDIATE FIXED PRO COMBINED INTERMEDIATE FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND(1) PORTFOLIO ADJUSTMENTS BOND FUND
----------------------------------------------- --------------------------------------------------
SACO I Inc. Series 1997-2,
Class 1A5 SEQ, 7.00%, 8/25/36 - 2,253 2,253 2,084 2,084
Vendee Mortgage Trust, Series
1997-1, Class 2C SEQ, 7.50%,
9/15/17 - 802 802 801 801
--------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS - 9,164 273,684 282,848
--------------------------------------------------
COMMERCIAL MORTGAGE BACKED
SECURITIES - 0.2%
Bear Stearns Commercial
Mortgage Securities, Ser.
2000-WF2, Class A1, 7.11%,
9/15/09 3,000 3,000 3,014 3,014
Credit Suisse First Boston
Mortgage Securities Corp., Ser.
1997-SPCE, Class A, 144A,
6.65%, 6/20/03 536 536 533 533
LB-UBS Commercial Mortgage
Trust, Ser. 2000-C4, Class A1,
7.18%, 9/15/09 897 897 899 899
--------------------------------------------------
TOTAL COMMERCIAL MORTGAGE
BACKED SECURITIES - 4,446 0 4,446
--------------------------------------------------
CORPORATE BONDS & NOTES - 13.9%
BANKS - 1.9%
Bank One Capital III, 8.75%,
9/1/30 2,010 2,010 1,955 1,955
Bank One Corp., 7.88%, 8/1/10 5,000 5,000 5,020 5,020
Capital One Bank, 8.25%, 6/15/05 8,500 8,500 8,546 8,546
First Union National Bank,
7.80%, 8/18/10 9,975 9,975 9,940 9,940
J.P. Morgan & Co., Inc., MTN,
6.00%, 1/15/09 5,000 5,000 4,575 4,575
Manufacturers & Traders Trust
Co., 8.00%, 10/1/10 4,815 4,815 4,763 4,763
MBNA America Bank, N.A., 7.75%,
9/15/05 4,831 4,831 4,779 4,779
U.S. Bank, NA, 5.70%, 12/15/08 5,575 5,575 4,892 4,892
--------------------------------------------------
24,029 20,440 0 44,469
--------------------------------------------------
BROADCASTING/CABLE - 0.4%
Jones Intercable, Inc., 7.63%,
4/15/08 5,425 5,425 5,309 5,309
USA Networks, Inc., 6.75%,
11/15/05 4,275 4,275 4,173 4,173
--------------------------------------------------
9,482 0 0 9,482
--------------------------------------------------
CHEMICALS - 0.3%
Cytec Industries, Inc., 6.85%,
5/11/05 1,000 1,000 931 931
Rohm & Haas Co., 7.85%, 7/15/29 5,110 5,110 4,986 4,986
--------------------------------------------------
0 5,917 0 5,917
--------------------------------------------------
COMPUTERS/COMPUTER HARDWARE -
0.2%
Hewlett-Packard Co., 7.15%,
6/15/05 4,500 4,500 4,549 4,549
--------------------------------------------------
4,549 0 0 4,549
--------------------------------------------------
CONSUMER PRODUCTS - 0.3%
Procter & Gamble Co., 6.60%,
12/15/04 5,890 0 0 5,890 5,867 0 0 5,867
--------------------------------------------------
5,867 0 0 5,867
--------------------------------------------------
DEFENSE/AEROSPACE - 0.5%
Lockheed Martin Corp., 8.20%,
12/1/09 8,530 8,530 8,879 8,879
Raytheon Co., 144A, 7.90%,
3/1/03 3,270 3,270 3,320 3,320
--------------------------------------------------
3,320 8,879 0 12,199
--------------------------------------------------
ELECTRICAL UTILITY / UTILITIES
- - 0.6%
Cogentrix Energy Inc., 8.75%,
10/15/08 506 506 507 507
Dominion Resources Inc., Series
2010-A, 8.13%, 6/15/10 4,025 4,025 4,150 4,150
Dominion Resources Inc./VA,
Series 2000 B, 7.63%, 7/15/05 7,940 7,940 8,027 8,027
--------------------------------------------------
0 12,685 0 12,685
--------------------------------------------------
ENERGY RESERVES & PRODUCTION -
(z)
Lasmo (USA) Inc., 6.75%,
12/15/07 500 500 477 477
--------------------------------------------------
0 477 0 477
--------------------------------------------------
FINANCIAL SERVICES - 3.7%
500 Grant St. Association,
144A, Series 1999 A, 6.46%,
12/1/08 5,493 5,493 5,257 5,257
CitiFinancial, 8.70%, 6/15/10 3,400 3,400 3,681 3,681
Comdisco Inc., 9.50%, 8/15/03 4,205 4,205 3,154 3,154
See Notes to Pro Forma Financial Statements
5
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
THE PRO THE PRO
JPMORGAN U.S. FORMA JPMORGAN U.S. FORMA
INTERMEDIATE FIXED PRO COMBINED INTERMEDIATE FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND(1) PORTFOLIO ADJUSTMENTS BOND FUND
----------------------------------------------- --------------------------------------------------
Comdisco, Inc., 6.38%, 11/30/01 3,490 3,490 2,928 2,928
ERAC USA Finance Co., 144A,
6.38%, 5/15/03 5,000 5,000 4,795 4,795
FleetBoston Financial Corp.,
7.25%, 9/15/05 4,080 4,080 4,102 4,102
Ford Motor Credit Co., 7.25%,
1/15/03 135 135 135 135
Ford Motor Credit Co., 7.38%,
10/28/09 1,010 1,010 981 981
Heller Financial, Inc., 8.00%,
6/15/05 5,000 5,000 5,071 5,071
Household Finance Corp., 8.00%,
5/9/05 6,500 6,500 6,647 6,647
Keycorp Institutional Capital,
Series 1996 B, 8.25%, 12/15/26 2,200 2,200 2,001 2,001
Lehman Brothers Holdings, Inc.,
8.25%, 6/15/07 5,000 5,000 5,104 5,104
McKesson Financial of Canada,
144A, 6.55%, 11/1/02 4,475 4,475 4,292 4,292
National Rural Utilities
Cooperative Finance Corp.,
5.50%, 1/15/05 5,000 5,000 4,719 4,719
Newcourt Credit Group Inc.,
6.88%, 2/16/05 6,000 6,000 5,796 5,796
NGC Corp. Capital Trust, Series
1997 B, 8.32%, 6/1/27 8,835 8,835 7,776 7,776
Oil Purchase Company, 144A,
7.10%, 4/30/02 1,835 1,835 1,752 1,752
Provident Financing Trust I,
7.41%, 3/15/38 1,765 1,765 1,304 1,304
Washington Mutual Financial
Corp., 8.25%, 6/15/05 17,500 17,500 18,059 18,059
--------------------------------------------------
18,996 68,557 0 87,553
--------------------------------------------------
FOOD & BEVERAGE - 0.4%
Smithfield Foods Inc., 7.63%,
2/15/08 1,410 1,410 1,280 1,280
Coca-Cola Enterprises, 7.13%,
9/30/09 3,975 3,975 3,901 3,901
Conagra Foods, Inc., 7.88%,
9/15/10 4,320 4,320 4,385 4,385
--------------------------------------------------
8,286 1,280 0 9,566
--------------------------------------------------
FOREST PRODUCTS & PAPER - 0.5%
Champion International Corp.,
7.10%, 9/1/05 5,000 5,000 4,899 4,899
International Paper Co., 144A,
8.13%, 7/8/05 5,900 5,900 6,072 6,072
--------------------------------------------------
6,072 4,899 0 10,971
--------------------------------------------------
GAS & WATER UTILITIES - 0.2%
United Utilities Plc, 6.88%,
8/15/28 6,970 6,970 5,544 5,544
--------------------------------------------------
0 5,544 0 5,544
--------------------------------------------------
INSURANCE - 0.4%
Conseco, Inc., 8.50%, 10/15/02 6,025 6,025 4,700 4,700
GE Global Insurance Holding
Corp., 7.75%, 6/15/30 5,000 5,000 5,040 5,040
--------------------------------------------------
9,740 0 0 9,740
--------------------------------------------------
MEDIA - 0.8%
Adelphia Communications Corp.,
9.38%, 11/15/09 3,125 3,125 2,664 2,664
Clear Channel Communications,
7.88%, 6/15/05 5,540 5,540 5,583 5,583
Fox Sports Networks LLC, 8.88%,
8/15/07 2,500 2,500 2,513 2,513
Lamar Media Corp., 8.63%,
9/15/07 1,900 1,900 1,853 1,853
Time Warner Entertainment Co.
LP, 8.38%, 3/15/23 5,000 5,000 5,242 5,242
--------------------------------------------------
5,242 12,612 0 17,854
--------------------------------------------------
MEDICAL PROVIDERS & SERVICES -
(z)
Mariner Post-Acute Network
Inc., Series B, 9.50%,
4/1/06(d)+ 2,000 2,000 10 10
--------------------------------------------------
0 10 0 10
--------------------------------------------------
MOTOR VEHICLES & PARTS /
AUTOMOTIVE - 0.2%
DaimlerChrysler NA Holding
Corp., 6.90%, 9/1/04 2,500 2,500 2,467 2,467
TRW, Inc., 6.45%, 6/15/01 3,850 3,850 3,831 3,831
--------------------------------------------------
3,831 2,467 0 6,298
--------------------------------------------------
MULTI-INDUSTRY - 0.2%
Cendant Corporation, 7.75%,
12/1/03 5,000 5,000 4,893 4,893
--------------------------------------------------
0 4,893 0 4,893
--------------------------------------------------
OIL SERVICES - 1.3%
Amerada Hess Corp., 7.38%,
10/1/09 6,150 6,150 6,135 6,135
Enron Corp., 144A, 7.11%,
12/12/00, resets quarterly off
the 3-month LIBOR plus 0.45%
with no caps 15,000 15,000 14,993 14,993
Enron Corp., 7.88%, 6/15/03 4,500 4,500 4,591 4,591
Express Pipeline LP, 144A,
Series 1998 B, 7.39%, 12/31/17 1,497 1,497 1,278 1,278
See Notes to Pro Forma Financial Statements
6
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
THE PRO THE PRO
JPMORGAN U.S. FORMA JPMORGAN U.S. FORMA
INTERMEDIATE FIXED PRO COMBINED INTERMEDIATE FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND(1) PORTFOLIO ADJUSTMENTS BOND FUND
----------------------------------------------- --------------------------------------------------
Phillips Petroleum Co., 8.75%,
5/25/10 4,000 4,000 4,363 4,363
Williams Cos. Inc., 6.20%,
8/1/02 350 350 344 344
--------------------------------------------------
10,726 20,978 0 31,704
--------------------------------------------------
RAILROADS - 0.3%
Burlington Northern Railroad
Co., 7.33%, 6/23/10 1,601 1,601 1,605 1,605
Canadian National Railway Co.,
7.00%, 3/15/04 5,350 5,350 5,287 5,287
--------------------------------------------------
0 6,892 0 6,892
--------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS -
(z)
Felcor Lodging LP, 144A, 9.50%,
9/15/08 830 830 820 820
--------------------------------------------------
0 820 0 820
--------------------------------------------------
RETAILING - 0.2%
Wal-Mart Stores, Inc., 6.88%,
8/10/09 5,175 5,175 5,139 5,139
--------------------------------------------------
5,139 0 0 5,139
--------------------------------------------------
SEMICONDUCTOR - 0.1%
Charter Communications
Holdings, LLC/ Charter
Communications Holdings Capital
Corp., 8.25%, 4/1/07 3,125 3,125 2,797 2,797
--------------------------------------------------
0 2,797 0 2,797
--------------------------------------------------
TELEPHONE / TELECOMMUNICATIONS
- - 1.1%
Global Crossing Holding
Limited, 9.13%, 11/15/06 4,125 4,125 3,939 3,939
MCI Worldcom, Inc., 7.55%,
4/1/04 7,000 7,000 7,058 7,058
McLeodUSA Inc., 9.25%, 7/15/07 3,000 3,000 2,790 2,790
Qwest Capital Funding Inc.,
6.88%, 7/15/28 700 700 615 615
Sprint Capital Corp., 5.88%,
5/1/04 10,000 10,000 9,518 9,518
Williams Communications Group,
10.70%, 10/1/07 2,000 2,000 1,720 1,720
WorldCom, Inc., 6.40%, 8/15/05 500 500 482 482
XO Communications Inc., 9.63%,
10/1/07 1,000 1,000 835 835
--------------------------------------------------
7,058 19,899 0 26,957
--------------------------------------------------
TRUCKING & SHIPPING & AIR
FREIGHT - 0.3%
Atlantic Express, 10.75%, 2/1/04 1,900 1,900 1,634 1,634
FedEx Corp., Series 1999-1,
Class C, 8.25%, 1/15/19 4,682 4,682 4,729 4,729
--------------------------------------------------
0 6,363 0 6,363
--------------------------------------------------
--------------------------------------------------
TOTAL CORPORATE BONDS & NOTES - 122,337 206,408 0 328,745
--------------------------------------------------
PREFERRED STOCKS - 0.2%
ENTERTAINMENT - 0.2%
AT&T Corp., 10.00%, 5/31/45 150 150 3,797 3,797
--------------------------------------------------
TOTAL PREFERRED STOCKS - 0 3,797 0 3,797
--------------------------------------------------
FOREIGN CORPORATE BONDS - 3.5%
BANKS - 0.2%
Barclays Bank Plc, 144A, 8.55%,
9/29/49 4,000 4,000 4,027 4,027
--------------------------------------------------
0 4,027 0 4,027
--------------------------------------------------
ELECTRICAL EQUIPMENT - 0.1%
Legrand S.A., 8.50%, 2/15/25 1,785 1,785 1,864 1,864
--------------------------------------------------
0 1,864 0 1,864
--------------------------------------------------
ELECTRICAL UTILITY / UTILITIES
- - 0.2%
Israel Electronic Corp., 144A,
MTN, 8.25%, 10/15/09 6,000 6,000 5,739 5,739
--------------------------------------------------
5,739 5,739
--------------------------------------------------
FINANCIAL SERVICES - 0.4%
HSBC Capital Funding LP, 144A,
10.18%, 12/29/49,
resets quarterly off the 3-month LIBOR
plus 4.98% with no caps 7,220 7,220 7,901 7,901
Montell Finance Co. B.V., 144A,
8.10%, 3/15/27 2,250 2,250 2,023 2,023
--------------------------------------------------
0 9,924 0 9,924
--------------------------------------------------
See Notes to Pro Forma Financial Statements
7
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
THE PRO THE PRO
JPMORGAN U.S. FORMA JPMORGAN U.S. FORMA
INTERMEDIATE FIXED PRO COMBINED INTERMEDIATE FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND(1) PORTFOLIO ADJUSTMENTS BOND FUND
----------------------------------------------- --------------------------------------------------
INFORMATION SERVICES - 0.4%
Marconi Corporation Plc, 8.38%,
9/15/30 8,760 8,760 8,354 8,354
--------------------------------------------------
0 8,354 0 8,354
--------------------------------------------------
MOTOR VEHICLES & PARTS /
AUTOMOTIVE - 0.2%
Daimler Chrysler NA Holding
Corp., 8.00%, 6/15/10 5,600 5,600 5,689 5,689
--------------------------------------------------
5,689 0 0 5,689
--------------------------------------------------
OIL SERVICES - 0.4%
PEMEX Finance LTD, 144A, 9.03%,
2/15/11 2,560 2,560 2,678 2,678
Repsol International Finance
BV, 7.45%, 7/15/05 6,885 6,885 6,920 6,920
--------------------------------------------------
9,598 0 0 9,598
--------------------------------------------------
TELEPHONE - 1.6%
Deutsche Telekom International
Finance, 8.25%, 6/15/30 10,000 10,000 10,205 10,205
Metronet Communications Corp.,
144A, SUB, 0.0%, 6/15/03 4,000 4,000 3,201 3,201
Microcell Telecommunications
Inc., Series B, 11.99%,
6/1/06(y) 300 300 288 288
Telefonica Europe B.V., 8.25%,
9/15/30 12,150 12,150 12,441 12,441
Telefonica Europe BV, 7.75%,
9/15/10 6,000 6,000 6,024 6,024
Vodafone AirTouch PLC, 144A,
7.63%, 2/15/05 5,200 5,200 5,275 5,275
--------------------------------------------------
14,500 22,935 0 37,435
--------------------------------------------------
--------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS - 35,526 47,104 0 82,630
--------------------------------------------------
MORTGAGE PASS THRU - 22.0%
FHLMC, 12.50%, 8/1/14 1 1 1 1
FHLMC, 6.00%, 3/1/11 to 4/1/11 1,033 1,033 1,001 1,001
FNMA, 6.00%, 12/1/28 to 2/1/29 58,466 58,466 54,836 54,836
FNMA, 6.50%, 1/1/28 to 9/1/29 11,407 11,407 10,966 10,966
FNMA, 7.00%, 7/1/28 to 10/1/29 3,179 3,179 3,115 3,115
FNMA, 7.50%, 5/1/30 167 167 167 167
FNMA, 8.00%, 8/1/22 to 6/1/27 1,899 1,899 1,924 1,924
FNMA, TBA, 6.50%, 11/1/30 8,010 8,010 7,697 7,697
FNMA, TBA, 7.00%, 11/1/15 71,310 71,310 70,864 70,864
FNMA, TBA, 7.00%, 9/1/29 107,234 107,234 105,056 105,056
FNMA, TBA, 7.50%, 12/1/30 157,605 157,605 157,211 157,211
FNMA, 6.50, 6/1/29 7,848 7,848 7,541 7,541
FNMA, 6.50, 9/1/14 1,981 1,981 1,940 1,940
FNMA, 7.50%, 7/1/30 7,430 7,430 7,419 7,419
FNMA, 7.50%, 8/1/15 1,968 1,968 1,982 1,982
GNMA, 6.50%, 6/15/28 to 12/15/28 51,325 51,325 49,554 49,554
GNMA, 7.00%, 12/15/08 194 194 195 195
GNMA, 7.50%, 1/15/27 to 2/15/27 8,480 8,480 8,516 8,516
GNMA, 8.50%, 5/15/27 218 218 224 224
GNMA, 9.00%, 12/15/19 63 63 66 66
GNMA, TBA, 7.00%, 11/1/30 28,460 28,460 28,051 28,051
--------------------------------------------------
TOTAL MORTGAGE PASS THRU - 18,882 499,445 0 518,327
--------------------------------------------------
PRIVATE PLACEMENTS - 0.7%
CO-OP APARTMENTS - 0.7%
180 East End Avenue Note,
secured by first mortgage and
agreement on co-op apartment
building - 4,415 4,415 4,176 4,176
in New York City,6.88%,
1/1/29(f)
200 East 57th Street, secured
by first mortgage and agreement
on co-op apartment building - 10,900 10,900 10,110 10,110
in New York City, 6.50%,
1/1/14(f)
81 Irving Place Note, secured
by first mortgage and agreement
on co-op apartment building - 3,239 3,239 3,071 3,071
in New York City, 6.95%,
1/1/29(f)
--------------------------------------------------
TOTAL PRIVATE PLACEMENTS - 0 17,357 0 17,357
--------------------------------------------------
See Notes to Pro Forma Financial Statements
8
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
THE PRO THE PRO
JPMORGAN U.S. FORMA JPMORGAN U.S. FORMA
INTERMEDIATE FIXED PRO COMBINED INTERMEDIATE FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND(1) PORTFOLIO ADJUSTMENTS BOND FUND
----------------------------------------------- --------------------------------------------------
SOVEREIGN GOVERNMENTS &
AGENCIES - 0.4%
Province of Quebec, 6.50%,
1/17/06 4,700 4,700 4,610 4,610
Quebec Province, 7.50%, 9/15/29 4,200 4,200 4,259 4,259
--------------------------------------------------
TOTAL SOVEREIGN GOVERNMENTS AND
AGENCIES - 4,259 4,610 0 8,869
--------------------------------------------------
U.S. GOVERNMENT AGENCY
SECURITIES - 8.8%
FHLB, 4.88%, 1/22/02 8,000 8,000 7,849 7,849
FHLMC, 6.88%, 9/15/10(s) 61,175 61,175 61,959 61,959
FHLMC, 5.00%, 1/15/04 8,000 8,000 7,654 7,654
FHLMC,5.13%, 10/15/08 3,500 3,500 3,165 3,165
FNMA, 7.00%, 7/15/05(s) 59,297 59,297 60,418 60,418
FNMA, 7.13%, 6/15/10(s) 29,271 29,271 30,154 30,154
FNMA, 5.13%, 2/13/04 9,800 9,800 9,405 9,405
FNMA,5.75%, 4/15/03 7,500 7,500 7,383 7,383
FNMA, 5.88%, 4/23/04 3,500 3,500 3,392 3,392
FNMA, 6.00%, 5/15/08 7,000 7,000 6,723 6,723
FNMA, 6.63%, 9/15/09 10,000 10,000 9,941 9,941
--------------------------------------------------
TOTAL U. S. GOVERNMENT AGENCY
SECURITIES - 55,512 152,531 0 208,043
--------------------------------------------------
U.S. TREASURY SECURITIES - 14.4%
U.S. Treasury Bonds, 5.25%,
2/15/29 7,005 7,005 6,376 6,376
U.S. Treasury Bonds, 6.75%,
8/15/26 40,743 40,743 44,856 44,856
U.S. Treasury Bonds, 8.00%,
11/15/21 4,150 4,150 5,129 5,129
U.S. Treasury Bonds, 8.88%,
2/15/19 70,195 70,195 92,252 92,252
U.S. Treasury Notes, 5.75%,
8/15/10(s) 50,965 50,965 50,917 50,917
U.S. Treasury Notes, 6.75%,
5/15/05(s) 330 330 342 342
U.S. Treasury Notes, 6.88%,
5/15/06(s) 14,950 14,950 15,665 15,665
U.S. Treasury STRIPS, PO,
6.47%, 11/15/15 38,155 38,155 15,604 15,604
U.S. Treasury Notes & Bonds,
5.25%, 2/15/29 1,500 1,500 1,365 1,365
U.S. Treasury Notes & Bonds,
5.88%, 11/15/05 23,000 23,000 23,079 23,079
U.S. Treasury Notes & Bonds,
6.13%, 8/15/29 6,000 6,000 6,214 6,214
U.S. Treasury Notes & Bonds,
6.25%, 8/31/02 9,000 9,000 9,035 9,035
U.S. Treasury Notes & Bonds,
6.5%, 5/31/02 11,000 11,000 11,065 11,065
U.S. Treasury Notes & Bonds,
6.5%, 8/15/05 25,290 25,290 25,990 25,990
U.S. Treasury Notes & Bonds,
8.13%, 8/15/19 26,000 26,000 32,126 32,126
--------------------------------------------------
TOTAL U.S. TREASURY SECURITIES - 108,874 231,140 0 340,014
--------------------------------------------------
SHORT-TERM INVESTMENTS - 17.5%
COMMERCIAL PAPER - 3.4%
Morgan Stanley, 6.58%,
11/1/00(s) 50,000 50,000 49,991 49,991
Salomon Smith Barney 6.60%,
11/1/00(s) 30,719 30,719 30,713 30,713
--------------------------------------------------
0 80,704 80,704
--------------------------------------------------
INVESTMENT COMPANIES - 13.7%
J.P. Morgan Institutional Prime
Money Market Fund(s)* 320,834 (499)(a) 320,335 320,834 (499)(a) 320,335
--------------------------------------------------
0 320,834 (499) 320,335
--------------------------------------------------
U.S. TREASURY SECURITIES - 0.1%
U.S. Treasury Notes, 5.63%,
11/30/00(s) 2,700 2,700 2,699 2,699
--------------------------------------------------
0 2,699 0 2,699
--------------------------------------------------
REPURCHASE AGREEMENTS - 0.3%
Greenwich Capital Markets,
Inc., 6.55%, due 11/01/00,
(dated 10/31/00, proceeds
$6,706, secured by FNMA,
$6,805, 6.75%, due 6/18/21;
value $6,840) 6,705 6,705 6,705 6,705
--------------------------------------------------
6,705 0 6,705
--------------------------------------------------
See Notes to Pro Forma Financial Statements
9
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
THE PRO THE PRO
JPMORGAN U.S. FORMA JPMORGAN U.S. FORMA
INTERMEDIATE FIXED PRO COMBINED INTERMEDIATE FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND(1) PORTFOLIO ADJUSTMENTS BOND FUND
----------------------------------------------- --------------------------------------------------
TOTAL INVESTMENT SECURITIES -
(COST $2,358,612) 383,324 1,972,306 (499) 2,355,131
FUTURES CONTRACTS
UNDERLYING
FACE
AMOUNT NET UNREALIZED
PURCHASED EXPIRATION DATE AT VALUE NUMBER OF CONTRACTS APPRECIATION (DEPRECIATION)
- --------- --------------- ----------- --------------------- ----------------------------------------
U.S. Two-Year Treasury Note December 2000 $84,052,500 420 420 (160,122) (160,122)
U.S. Five-Year Treasury Note December 2000 35,542,688 353 353 334,510 334,510
----------------------------------------
- 174,388 - 174,388
----------------------------------------
SOLD
- ----
U.S. Ten-Year Treasury Note December 2000 112,283,990 1,115 1,115 (746,864) (746,864)
U.S. Five-Year Treasury Note December 2000 13,279,219 133 133 25,956 25,956
----------------------------------------
- (720,908) - (720,908)
----------------------------------------
FHLB - Feneral Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
FRN - Floating Rate Note. The maturity date is the actual maturity date; the
rate shown is the rate in effect at October 31, 2000.
GNMA - Government National Mortgage Association
LIBOR - London Interbank Offered Rate
MTN - Medium Term Note
PO - Principal only resets - The frequency with which a security's coupon
changes, based on current market conditions or an underlying index.
SEQ - Sequential Payor
STRIPS - Separate Trading of Registered Interest and Principal of Securities.
SUB - Step-up Bond. The maturity date shown is the earlier of the call date of
maturity date; the reate shown is the rate in ecfect at October 31, 2000.
TBA - Securities purchased (sold) on a forward commitment basis with an
approximate principal amount and no definite maturity date. The actual principal
amount and maturity will be determined upon settlement.
144A - Securities restricted for resale to Qualified Institutional Buyers
(a) Reflects the redemption of short-term securities of the J.P. Morgan U.S.
Fixed Income - Advisor Series
(d) Defaulted security
(f) Illiquid and fair valued security. Approximately $17,356,656 or 0.9% of the
market value of the securities have been valued at fair value.
(s) Security is fully or partially segregated with custodian as collateral for
futures or with brokers as initial margin for futures contracts.
(y) Yield to maturity
(z) Category is less than 0.05% of total investment securities.
* Money Market Mutual Fund registered under the Investment Act of 1940, as
amended, and advised by J.P. Morgan Investment Management, Inc.
+ Non-income producing security
(1) Formerly Chase Vista Select Intermediate Bond Fund.
See Notes to Pro Forma Financial Statements
10
J.P. MORGAN BOND FUND/ J.P. MORGAN INSTITUTIONAL BOND FUND/
J.P. MORGAN INSTITUTIONAL BOND FUND - ULTRA/ THE
U.S. FIXED INCOME PORTFOLIO / JPMORGAN INTERMEDIATE BOND FUND (1)
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AS OF OCTOBER 31, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN THE U.S. FIXED
BOND FUND INSTITUTIONAL INSTITUTIONAL INCOME
BOND FUND BOND FUND - ULTRA PORTFOLIO
----------- ------------- ----------------- --------------
ASSETS:
Investments at Value $ - $ - $ - $ 1,972,306
Investment in The U.S. Fixed Income Portfolio, at value 242,750 909,964 469,196 -
Cash - - - -
Receivable for Investment Sold - - - 215,450
Dividend and Interest Receivable - - - 16,802
Receivable for Shares of Beneficial Interest Sold 407 726 37 -
Variation Margin Receivable - - 297
Receivable for Expense Reimbursements - - - -
Prepaid Trustees' Fees and Expenses 1 1 1 6
Deferred Organization Expense - - 3 -
Prepaid Expenses and Other Assets 1 2 - 57
------------ ------------ ------------ ------------
TOTAL ASSETS 243,159 910,693 469,237 2,204,918
------------ ------------ ------------ ------------
LIABILITIES:
Securities Purchased Payable - - - 581,888
Payable for Shares of Beneficial Interest Redeemed 2,719 908 2,414 -
Dividends Payable to Shareholders 154 2,229 688 -
Advisory Fee Payable - - - 411
Shareholder Servicing Fee Payable 51 77 20 -
Administration Services Fee Payable 5 18 10 33
Due to Custodian - - - 52
Administration Fee Payable - - - -
Fund Services Fee Payable 1 1 1 1
Accrued Expenses and Other Liabilities 49 49 78 124
------------ ------------ ------------ ------------
TOTAL LIABILITIES 2,979 3,282 3,211 582,509
------------ ------------ ------------ ------------
NET ASSETS:
Paid-in Capital 248,018 950,359 476,531 -
Undistributed (Distributions in Excess of) Net Investment Income 315 787 923 -
Accumulated Net Realized Loss (7,952) (43,481) (10,844) -
Net Unrealized Appreciation (Depreciation) of Investments (201) (254) (584) -
------------ ------------ ------------ ------------
Net Assets $ 240,180 $ 907,411 $ 466,026 1,622,409
============ ============ ============ ============
Shares of beneficial interest outstanding 24,290 96,271 48,475 -
Shares Outstanding - - - -
Net Asset Value Per Share 9.89 9.43 9.61 -
PRO FORMA WITH CONCURRENT REORGANIZATION
J.P. MORGAN INSTITUTIONAL BOND FUND
Shares outstanding
Select - - - -
Institutional - - - -
Agency - - - -
Net Asset Value Per Share
Select - - - -
Institutional - - - -
Agency - - - -
============ ============ ============ ============
Cost of Investments $ - $ - $ - $ 1,972,799
============ ============ ============ ============
PRO FORMA
JPMORGAN COMBINED
INTERMEDIATE PRO FORMA JPMORGAN
BOND FUND (1) ADJUSTMENTS BOND FUND
-------------- ----------- ---------
ASSETS:
Investments at Value $ 383,324 $ (499)(f) $ 2,355,131
Investment in The U.S. Fixed Income Portfolio, at value - (1,621,910)(a) -
Cash 1 - 1
Receivable for Investment Sold - - 215,450
Dividend and Interest Receivable 5,702 - 22,504
Receivable for Shares of Beneficial Interest Sold 400 - 1,570
Variation Margin Receivable - - 297
Receivable for Expense Reimbursements - 3 (b) 3
Prepaid Trustees' Fees and Expenses - - 9
Deferred Organization Expense - (3)(b) -
Prepaid Expenses and Other Assets 10 - 70
------------ ------------ ------------
TOTAL ASSETS 389,437 (1,622,409) 2,595,035
------------ ------------ ------------
LIABILITIES:
Securities Purchased Payable - - 581,888
Payable for Shares of Beneficial Interest Redeemed 24 - 6,065
Dividends Payable to Shareholders 1,933 - 5,004
Advisory Fee Payable 98 - 509
Shareholder Servicing Fee Payable 82 - 230
Administration Services Fee Payable - - 66
Due to Custodian 7 - 59
Administration Fee Payable 49 49
Fund Services Fee Payable - 4
Accrued Expenses and Other Liabilities 179 - 479
------------ ------------ ------------
TOTAL LIABILITIES 2,372 - 594,353
------------ ------------ ------------
NET ASSETS:
Paid-in Capital 402,912 2,077,820
Undistributed (Distributions in Excess of) Net Investment Income (58) - 1,967
Accumulated Net Realized Loss (13,300) - (75,577)
Net Unrealized Appreciation (Depreciation) of Investments (2,489) - (3,528)
------------ ------------ ------------
Net Assets $ 387,065 $ (1,622,412) $ 2,000,682
============ ============ ============
Shares of beneficial interest outstanding - (169,086)(c) -
Shares Outstanding 40,050 (40,050)(d) -
Net Asset Value Per Share 9.66 -
PRO FORMA WITH CONCURRENT REORGANIZATION
J.P. MORGAN INSTITUTIONAL BOND FUND
Shares outstanding
Select - 66,541(e) 66,541
Institutional - 96,271(e) 96,271
Agency - 49,443(e) 49,443
Net Asset Value Per Share
Select - - 9.43
Institutional - - 9.43
Agency - - 9.43
============ ============ ============
Cost of Investments $ 385,813 $ - $ 2,358,612
============ ============ ============
(a) Reflects reallocation of investment from the feeder funds to
master portfolio.
(b) Write-off of deferred organization expenses of the portfolio.
(c) Reallocation of feeder fund's beneficial interest to Class A, Select,
Institutional, and Agency Shares due to the Concurrent Reorganization.
(d) Reallocation of Chase Vista Select Intermediate Bond Fund shares to
Institutional Shares due to the Concurrent Reorganization.
(e) Reflects the additional number of shares outstanding due to the Concurrent
Reorganization.
(f) Reflects the redemption in short-term securities of the J.P. Morgan Bond
Fund- Advisor Series.
(1) Formerly Chase Vista Select Intermediate Bond Fund
See Notes to Pro Forma Financial Statements
11
JP MORGAN BOND FUND / JP MORGAN INSTITUTIONAL BOND FUND /
JP MORGAN INSTITUTIONAL BOND FUND - ULTRA / THE US
FIXED INCOME PORTFOLIO / JPMORGAN INTERMEDIATE BOND FUND (1)
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED OCTOBER 31, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN THE U.S. FIXED
BOND FUND INSTITUTIONAL INSTITUTIONAL INCOME
BOND FUND BOND FUND - PORTFOLIO
ULTRA
INCOME:
Allocated Investment Income From Portfolio $ 15,598 $ 64,228 $ 26,181 $ -
Interest Income - - - 84,404
Dividend Income from Affiliated Investments (includes
reimbursement from affiliate of $719) - - - 20,928
Dividend income - - - 857
Allocated Portfolio Expenses (796) (3,281) (1,162) -
------------------------------------------------------------------
Investment Income 14,802 60,947 25,019 106,189
------------------------------------------------------------------
EXPENSES:
Advisory Fee - - - 4,648
Administrative Services Fee 55 228 93 377
Shareholder Servicing Fee 567 935 192 -
Insurance Expense - - - 4
Custodian Fees and Expenses - - - 265
Registration Fees 27 32 70 -
Transfer Agent Fees 42 24 20 -
Amortization of Organizational Expenses - - - -
Professional Fees 13 17 14 62
Fund Services Fee 4 15 6 24
Financial and Fund Accounting Services Fee - 24 24 -
Trustees' Fees and Expenses 3 11 4 18
Printing Expenses 8 4 12 11
Administration Fee 2 11 4 11
Distribution Fee - - 1 -
Miscellaneous 35 35 15 -
------------------------------------------------------------------
Total Expenses 756 1,336 455 5,420
------------------------------------------------------------------
Less: Amounts Waived - - - -
Less: Reimbursement of Expenses - - (276) -
------------------------------------------------------------------
Net Expenses 756 1,336 179 5,420
------------------------------------------------------------------
------------------------------------------------------------------
Net Investment Income 14,046 59,611 24,840 100,769
------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (2,881) (16,527) (1,248) (33,777)
Futures Contracts - - - 3,486
Foreign Currency Contracts and Transactions - - - 9,635
------------------------------------------------------------------
Net Realized (Loss) (2,881) (16,527) (1,248) (20,656)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 3,149 16,693 3,410 24,018
Futures Contracts - - - 110
Foreign Currency Contacts and Translations - - - (876)
------------------------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) 3,149 16,693 3,410 23,252
------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 14,314 $ 59,777 $ 27,002 $ 103,365
==================================================================
JPMORGAN PRO FORMA PRO FORMA
INTERMEDIATE ADJUSTMENTS COMBINED
BOND FUND (1) JPMORGAN
BOND FUND
INCOME:
Allocated Investment Income From Portfolio $ - ($106,007)(c) -
Interest Income 24,517 (1)(h) 108,920
Dividend Income from Affiliated Investments (includes
reimbursement from affiliate of $719) - - 20,928
Dividend income - - 857
Allocated Portfolio Expenses - 5,239(b) -
----------------------------------------------------
Investment Income 24,517 (100,769) 130,705
----------------------------------------------------
EXPENSES:
Advisory Fee 1,137 - 5,785
Administrative Services Fee 568 1,564(a) 2,885
Shareholder Servicing Fee 791 156(a) 2,641
Insurance Expense - - 4
Custodian Fees and Expenses 92 (88)(f,g) 269
Registration Fees 10 - 139
Transfer Agent Fees 18 - 104
Amortization of Organizational Expenses - 3(e) 3
Professional Fees 33 (63)(g) 76
Fund Services Fee - - 49
Financial and Fund Accounting Services Fee - (48)(f) -
Trustees' Fees and Expenses 19 - 55
Printing Expenses 24 (20)(g) 39
Administration Fee - - 28
Distribution Fee - - 1
Miscellaneous 20 - 105
----------------------------------------------------
Total Expenses 2,712 1,504 - 12,183
----------------------------------------------------
Less: Amounts Waived (1,504)(a) (1,504)
Less: Reimbursement of Expenses (73) - (349)
----------------------------------------------------
Net Expenses 2,639 - 10,330
----------------------------------------------------
----------------------------------------------------
Net Investment Income 21,878 (100,769) 120,374
----------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (7,915) 20,656(d) (41,692)
Futures Contracts - - 3,486
Foreign Currency Contracts and Transactions - - 9,635
----------------------------------------------------
Net Realized (Loss) (7,915) 20,656 (28,571)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 7,215 (23,252)(d) 31,233
Futures Contracts - - 110
Foreign Currency Contacts and Translations - - (876)
----------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) 7,215 (23,252) 30,467
----------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 21,178 (103,365) $ 122,270
====================================================
(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 write-off of deferred organization expenses of the portfolio.
(f) Reclassification of fund accounting into Custody charge.
(g) Reduction reflects expected benefit from combined operations.
(h) Reflects the elimination of J.P. Morgan - Advisor Series allocated income.
(1) Formerly Chase Vista Select Intermediate Bond Fund
See Notes to Pro Forma Financial Statements
12
PRO FORMA FINANCIAL STATEMENTS
JPMORGAN BOND FUND II (1) / JPMORGAN INTERMEDIATE BOND FUND
(2) / THE U.S. FIXED INCOME PORTFOLIO
OCTOBER 31, 2000
COMBINING PORTFOLIO OF INVESTMENTS
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
SHARES/PRINCIPAL AMOUNT MARKET VALUE
--------------------------------------------------- -------------------------------------------------
PRO
JPMORGAN THE U.S. PRO JPMORGAN THE U.S. FORMA
JPMORGAN INTERMEDIATE FIXED FORMA JPMORGAN INTERMEDIATE FIXED COMBINED
BOND BOND INCOME PRO FORMA COMBINED BOND BOND INCOME PRO FORMA JPMORGAN
FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND
---------- ------- --------- ----------- --------- ---------- --------- --------- ---------- --------
ASSET-BACKED
SECURITIES - 6.2%
FINANCIAL SERVICES - 6.2%
American Express Credit
Account Master Trust,
Ser. 1997-1, Class A,
6.40%, 4/15/05 - 4,750 - - 4,750 - 4,724 - - 4,724
Citibank Credit Card
Master Trust I,Series
1998-9, Class A, 5.30%,
1/9/06 - - 10,000 - 10,000 - - $9,609 - 9,609
Citibank Credit Card
Master Trust I, Ser.
1997-2, Class A, 6.55%,
2/15/04 - 1,700 - - 1,700 - 1,693 - - 1,693
Conseco Finance
Securitizations Corp.,
Series 2000-5, Class A3
SEQ, 7.21%, 2/1/32 - - 15,000 - 15,000 - - 15,000 - 15,000
Daimler Chrysler Auto
Trust, Series 2000 C,
Class A2 SEQ, 6.81%,
7/6/03 - - 6,600 - 6,600 - - 6,606 - 6,606
Daimler-Benz Vehicle
Trust, Series 1998 A,
Class A4 SEQ, 5.22%,
12/22/03 - - 21,000 - 21,000 - - 20,626 - 20,626
Discover Card Master
Trust I, Series 1998-4,
Class A, 5.75%, 10/16/03 - - 12,000 - 12,000 - - 11,925 - 11,925
First USA Credit Card
Master Trust,
Series1999-1, Class C,
6.42%, 10/19/06 - - 5,000 - 5,000 - - 4,847 - 4,847
Ford Credit Auto Owner
Trust, Series 1998 C,
Class D, 7.70%, 1/15/04 - - 5,000 - 5,000 - - 5,013 - 5,013
Ford Credit Auto Owner
Trust, Series 1999A,
Class D, 8.00%, 6/15/04 - - 5,000 - 5,000 - - 5,036 - 5,036
Ford Credit Auto Owner
Trust, Series 2000 D,
Class A2 SEQ, 7.06%,
4/15/03 - - 11,000 - 11,000 - - 11,014 - 11,014
Green Tree Financial
Corporation, Series
1999-5, Class B1, 9.20%,
4/1/31 - - 10,000 - 10,000 - - 9,438 - 9,438
Green Tree Financial
Corporation,Series
1993-3, Class B, 6.85%,
10/15/18 - - 15,486 - 15,486 - - 13,168 - 13,168
MBNA Master Credit Card
Trust, Ser1999-M, Class
B, 6.80%, 4/16/07 8,300 - - - 8,300 8,270 - - - 8,270
MBNA Master Credit Card
Trust, Ser1999-J, Class
A, 7.00%, 2/15/12 10,345 2,710 - - 13,055 10,390 2,722 - - 13,112
Nomura CBO LTD, Ser.
1997-1, Class A2, FRN,
144A, 6.67%, 5/15/09 6,500 - - 6,500 5,929 - - - 5,929
Nomura CBO LTD, Ser.
1997-1, Class A2, FRN,
144A, SUB, 6.67%, 5/15/09 - 5,000 - - 5,000 - 4,561 - - 4,561
Residential Funding
Mortgage Securities II,
Ser. 2000-HI1, Class
AI4, 7.79%, 1/25/14 7,500 - - - 7,500 7,603 - - - 7,603
Sears Credit Account
Master Trust, Series
1999-2, Class A, 6.35%,
2/16/07 - 19,855 - 19,855 - - 19,712 - 19,712
Standard Credit Card
Trust, Ser. 93, 5.95%,
10/7/04 - 4,000 - - 4,000 - 3,919 - - 3,919
--------------------------------------------------
TOTAL ASSET-BACKED
SECURITIES - 32,192 17,619 131,994 - 181,805
--------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATIONS - 9.6%
FINANCIAL SERVICES - 9.6%
Chase Commercial
Mortgage Securities
Corp., Series 1998-2,
Class A2 SEQ, 6.39%,
11/18/08 - - 26,550 26,550 25,500 25,500
Chase Manhattan
Bank-First Union
National Bank, Series
1999-1, Class A2 SEQ,
7.44%, 7/15/09 - - 20,000 20,000 20,363 20,363
COMM, Series 2000 FL2A,
Class H-NW, Floater,
7.97%, 11/15/00, resets
monthly off the 1-month
LIBOR plus 1.35%
with no caps - - 4,900 4,900 4,900 4,900
Commercial Mortgage
Acceptance Corp., Series
1998-C2, Class D, 6.75%,
11/15/09 - - 10,000 10,000 9,400 9,400
DLJ Commercial Mortgage
Corporation, Series
2000-CF1, Class A1B SEQ,
7.62%, 5/10/10 - - 42,660 42,660 43,673 43,673
FHLMC, Series 1980,
Class C SEQ, 6.85%,
10/15/21 - - 530 530 528 528
FHLMC, Ser. 2155, Class
PC, 6.00%, 11/15/17 - 5,225 5,225 5,120 5,120
FNMA, Ser. 1999-17,
Class PC, 6.00%, 12/25/22 - 4,200 4,200 4,044 4,044
First Nationwide Trust,
Series 1999-4, Class
3PA1 SEQ, 6.50%, 10/19/29 - - 28,873 28,873 27,123 27,123
First Union Commercial
Mortgage Trust, Series
1999-C1, Class A2 SEQ,
6.07%, 10/15/08 - - 20,000 20,000 18,813 18,813
GMAC Commercial Mortgage
Securities Inc., Series
1997-C1, Class A3 SEQ,
6.87%, 8/15/07 - - 8,895 8,895 8,787 8,787
GS Mortgage, Series 2000
F, Floater, 8.37%,
11/15/00 - - 5,000 5,000 5,000 5,000
Heller Financial
Commercial Mortgage
Asset, Series 1999-PH1,
Class A2 SEQ, 6.85%,
5/15/31 - - 6,950 6,950 6,829 6,829
LB-UBS Commerical
Mortgage Trust, Series
2000-C3, Class A2 SEQ,
7.95%, 1/15/10 - - 42,943 42,943 44,594 44,594
Morgan Stanley Capital
I, Series 1998-XL2,
Class A2 SEQ, 6.17%,
10/3/08 - - 7,830 7,830 7,393 7,393
Mortgage Capital
Funding, Inc., Series
1998-MC2, Class A2 SEQ,
6.42%, 5/18/08 - - 30,000 30,000 28,800 28,800
PNC Mortgage Acceptance
Corp., Series 2000-C1,
Class A2 SEQ, 7.61%,
2/15/10 - - 12,500 12,500 12,828 12,828
PNC Mortgage Acceptance
Corp., Series 2000-C2,
Class A2 SEQ, 7.30%,
9/12/10 - - 6,245 6,245 6,269 6,269
SACO I Inc. Series
1997-2, Class 1A5 SEQ,
7.00%, 8/25/36 - - 2,253 2,253 2,084 2,084
Vendee Mortgage Trust,
Series 1997-1, Class 2C
SEQ, 7.50%, 9/15/17 - - 802 802 801 801
--------------------------------------------------
TOTAL COLLATERALIZED
MORTGAGE OBLIGATIONS - 0 9,164 273,684 282,848
--------------------------------------------------
COMMERCIAL MORTGAGE
BACKED SECURITIES - 0.8%
Bear Stearns Commercial
Mortgage Securities,
Ser-2000-WF2, Class A1,
7.11%, 9/15/09 7,900 3,000 10,900 7,937 3,014 10,951
Bear Stearns Commercial
Mortgage Securities,
Ser-2000-WF2, Class A2,
7.32%, 8/15/10 6,300 6,300 6,343 6,343
Credit Suisse First
Boston Mortgage
Securities Corp., Ser.
1997-SPCE, Class A,
144A, 6.65%, 6/20/03 - 536 536 533 533
LB-UBS Commercial
Mortgage Trust, Ser.
2000-C4, Class A1,
7.18%, 9/15/09 3,088 897 3,985 3,098 899 3,997
--------------------------------------------------
TOTAL COMMERCIAL
MORTGAGE BACKED
SECURITIES - 17,378 4,446 0 21,824
--------------------------------------------------
See Notes to Pro Forma Financial Statements
13
PRO
JPMORGAN THE U.S. PRO JPMORGAN THE U.S. FORMA
JPMORGAN INTERMEDIATE FIXED FORMA JPMORGAN INTERMEDIATE FIXED COMBINED
BOND BOND INCOME PRO FORMA COMBINED BOND BOND INCOME PRO FORMA JPMORGAN
FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND
---------- ------- --------- ----------- --------- ---------- --------- --------- ---------- --------
CORPORATE BONDS & NOTES
- - 16.0%
BANKS - 2.8%
Bank of America Corp.,
7.80%, 2/15/10 7,700 7,700 7,820 7,820
Bank One Capital III,
8.75%, 9/1/30 - 2,010 2,010 1,955 1,955
Bank One Corp., 7.88%,
8/1/10 5,800 5,000 10,800 5,824 5,020 10,844
Capital One Bank, 8.25%,
6/15/05 - 8,500 8,500 8,546 8,546
First Union National
Bank, 7.80%, 8/18/10 - 9,975 9,975 9,940 9,940
J.P. Morgan & Co., Inc.,
MTN, 6.00%, 1/15/09 7,900 5,000 12,900 7,229 4,575 11,804
Keystone Financial
Mid-Atlantic Funding
Corp., MTN, 7.30%,
5/15/04 4,850 4,850 4,851 4,851
Manufacturers & Traders
Trust Co., 8.00%, 10/1/10 6,415 4,815 11,230 6,345 4,763 11,108
MBNA America Bank, N.A.,
7.75%, 9/15/05 7,060 4,831 11,891 6,984 4,779 11,763
U.S. Bank, NA, 5.70%,
12/15/08 - 5,575 5,575 4,892 4,892
--------------------------------------------------
39,053 24,029 20,440 0 83,522
--------------------------------------------------
BROADCASTING/CABLE - 0.3%
Jones Intercable, Inc.,
7.63%, 4/15/08 - 5,425 5,425 5,309 5,309
USA Networks, Inc.,
6.75%, 11/15/05 - 4,275 4,275 4,173 4,173
--------------------------------------------------
0 9,482 0 0 9,482
--------------------------------------------------
CHEMICALS - 0.2%
Cytec Industries, Inc.,
6.85%, 5/11/05 - 1,000 1,000 931 931
Rohm & Haas Co., 7.85%,
7/15/29 - 5,110 5,110 4,986 4,986
--------------------------------------------------
0 0 5,917 0 5,917
--------------------------------------------------
COMPUTERS/COMPUTER
HARDWARE - 0.2%
Hewlett-Packard Co.,
7.15%, 6/15/05 - 4,500 4,500 4,549 4,549
--------------------------------------------------
0 4,549 0 0 4,549
--------------------------------------------------
CONSUMER PRODUCTS - 0.2%
Procter & Gamble Co.,
6.60%, 12/15/04 - 5,890 0 0 5,890 0 5,867 0 0 5,867
--------------------------------------------------
0 5,867 0 0 5,867
--------------------------------------------------
DEFENSE/AEROSPACE - 0.7%
Lockheed Martin Corp.,
8.20%, 12/1/09 - 8,530 8,530 8,879 8,879
Raytheon Co., 144A,
7.90%, 3/1/03 6,700 3,270 9,970 6,802 3,320 10,122
--------------------------------------------------
6,802 3,320 8,879 0 19,001
--------------------------------------------------
ELECTRICAL UTILITY /
UTILITIES - 0.6%
Cilcorp Inc., 8.70%,
10/15/09 6,000 6,000 6,185 6,185
Cogentrix Energy Inc.,
8.75%, 10/15/08 - 506 506 507 507
Dominion Resources Inc.,
Series 2010-A, 8.13%,
6/15/10 - 4,025 4,025 4,150 4,150
Dominion Resources
Inc./VA, Series 2000 B,
7.63%, 7/15/05 - 7,940 7,940 8,027 8,027
--------------------------------------------------
6,185 0 12,685 0 18,870
--------------------------------------------------
ENERGY RESERVES &
PRODUCTION - (z)
Lasmo (USA) Inc., 6.75%,
12/15/07 - 500 500 477 477
--------------------------------------------------
0 0 477 0 477
--------------------------------------------------
FINANCIAL SERVICES - 3.5%
500 Grant St.
Association, 144A,
Series 1999 A, 6.46%,
12/1/08 - 5,493 5,493 5,257 5,257
CIT Group, Inc., 7.63%,
8/16/05 9,125 9,125 9,116 9,116
CitiFinancial, 8.70%,
6/15/10 - 3,400 3,400 3,681 3,681
Comdisco Inc., 9.50%,
8/15/03 - 4,205 4,205 3,154 3,154
Comdisco, Inc., 6.38%,
11/30/01 - 3,490 3,490 2,928 2,928
ERAC USA Finance Co.,
144A, 6.38%, 5/15/03 - 5,000 5,000 4,795 4,795
FleetBoston Financial
Corp., 7.25%, 9/15/05 - 4,080 4,080 4,102 4,102
Ford Motor Credit Co.,
7.25%, 1/15/03 - 135 135 135 135
Ford Motor Credit Co.,
7.38%, 10/28/09 - 1,010 1,010 981 981
Heller Financial, Inc.,
8.00%, 6/15/05 7,100 5,000 12,100 7,200 5,071 12,271
Household Finance Corp.,
8.00%, 5/9/05 - 6,500 6,500 6,647 6,647
Keycorp Institutional
Capital, Series 1996 B,
8.25%, 12/15/26 - 2,200 2,200 2,001 2,001
Lehman Brothers
Holdings, Inc., 8.25%,
6/15/07 - 5,000 5,000 5,104 5,104
McKesson Financial of
Canada, 144A, 6.55%,
11/1/02 - 4,475 4,475 4,292 4,292
National Rural Utilities
Cooperative Finance
Corp., 5.5%, 1/15/05 - 5,000 5,000 4,719 4,719
Newcourt Credit Group
Inc., 6.88%, 2/16/05 - 6,000 6,000 5,796 5,796
NGC Corp. Capital Trust,
Series 1997 B, 8.32%,
6/1/27 - 8,835 8,835 7,776 7,776
Oil Purchase Company,
144A, 7.10%, 4/30/02 - 1,835 1,835 1,752 1,752
Provident Financing
Trust I, 7.41%, 3/15/38 - 1,765 1,765 1,304 1,304
Washington Mutual
Financial Corp., 8.25%,
6/15/05 - 17,500 17,500 18,059 18,059
--------------------------------------------------
16,316 18,996 68,557 0 103,869
--------------------------------------------------
FOOD & BEVERAGE - 0.3%
Smithfield Foods Inc.,
7.63%, 2/15/08 - 1,410 1,410 1,280 1,280
Coca-Cola Enterprises,
7.13%, 9/30/09 - 3,975 3,975 3,901 3,901
Conagra Foods, Inc.,
7.88%, 9/15/10 - 4,320 4,320 4,385 4,385
--------------------------------------------------
0 8,286 1,280 0 9,566
--------------------------------------------------
See Notes to Pro Forma Financial Statements
14
PRO
JPMORGAN THE U.S. PRO JPMORGAN THE U.S. FORMA
JPMORGAN INTERMEDIATE FIXED FORMA JPMORGAN INTERMEDIATE FIXED COMBINED
BOND BOND INCOME PRO FORMA COMBINED BOND BOND INCOME PRO FORMA JPMORGAN
FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND
---------- ------- --------- ----------- --------- ---------- --------- --------- ---------- --------
FOREST PRODUCTS & PAPER
- - 0.4%
Champion International
Corp., 7.10%, 9/1/05 - 5,000 5,000 4,899 4,899
International Paper Co.,
144A, 8.13%, 7/8/05 - 5,900 5,900 6,072 6,072
--------------------------------------------------
0 6,072 4,899 0 10,971
--------------------------------------------------
GAS & WATER UTILITIES -
0.2%
United Utilities Plc,
6.88%, 8/15/28 - 6,970 6,970 5,544 5,544
--------------------------------------------------
0 0 5,544 0 5,544
--------------------------------------------------
INSURANCE - 0.8%
Conseco, Inc., 8.50%,
10/15/02 9,270 6,025 15,295 7,230 4,700 11,930
GE Global Insurance
Holding Corp., 7.75%,
6/15/30 5,800 5,000 10,800 5,847 5,040 10,887
--------------------------------------------------
13,077 9,740 0 0 22,817
--------------------------------------------------
MANUFACTURING - 0.3%
Louisiana-Pacific Corp.,
8.88%, 8/15/10 7,900 7,900 7,829 7,829
--------------------------------------------------
7,829 0 0 0 7,829
--------------------------------------------------
MEDIA - 1.1%
Adelphia Communications
Corp., 9.38%, 11/15/09 - 3,125 3,125 2,664 2,664
Clear Channel
Communications, 7.88%,
6/15/05 5,350 5,540 10,890 5,392 5,583 10,975
Fox Sports Networks LLC,
8.88%, 8/15/07 - 2,500 2,500 2,513 2,513
Lamar Media Corp.,
8.63%, 9/15/07 - 1,900 1,900 1,853 1,853
Time Warner
Entertainment Co. LP,
8.38%, 3/15/23 8,705 5,000 13,705 9,125 5,242 14,367
--------------------------------------------------
14,517 5,242 12,612 0 32,371
--------------------------------------------------
MEDICAL PROVIDERS &
SERVICES - (z)
Mariner Post-Acute
Network Inc., Series B,
9.50%, 4/1/06(d)+ - 2,000 2,000 10 10
--------------------------------------------------
0 0 10 0 10
--------------------------------------------------
MOTOR VEHICLES & PARTS /
AUTOMOTIVE - 0.4%
DaimlerChrysler NA
Holding Corp., 6.90%,
9/1/04 - 2,500 2,500 2,467 2,467
GMAC, 7.50%, 7/15/05 5,800 5,800 5,851 5,851
TRW, Inc., 6.45%, 6/15/01 - 3,850 3,850 3,831 3,831
--------------------------------------------------
5,851 3,831 2,467 0 12,149
--------------------------------------------------
MULTI-INDUSTRY - 0.2%
Cendant Corporation,
7.75%, 12/1/03 - 5,000 5,000 4,893 4,893
--------------------------------------------------
0 0 4,893 0 4,893
--------------------------------------------------
OIL SERVICES - 1.5%
Amerada Hess Corp.,
7.38%, 10/1/09 - 6,150 6,150 6,135 6,135
Enron Corp., 144A,
7.11%, 12/12/00, resets
quarterly off the
3-month LIBOR
plus 0.45% with - 15,000 15,000 14,993 14,993
no caps
Enron Corp., 7.88%,
6/15/03 - 4,500 4,500 4,591 4,591
Express Pipeline LP,
144A, Series 1998 B,
7.39%, 12/31/17 - 1,497 1,497 1,278 1,278
Phillips Petroleum Co.,
8.75%, 5/25/10 - 4,000 4,000 4,363 4,363
Valero Energy Corp.,
8.38%, 6/15/05 6,000 6,000 6,221 6,221
Valero Energy Corp.,
8.75%, 6/15/30 5,600 5,600 5,894 5,894
Williams Cos. Inc.,
6.20%, 8/1/02 - 350 350 344 344
--------------------------------------------------
12,115 10,726 20,978 0 43,819
--------------------------------------------------
PACKAGING - 0.1%
Tenneco Packaging, Inc.,
8.00%, 4/15/07 3,775 3,775 3,759 3,759
--------------------------------------------------
3,759 0 0 0 3,759
--------------------------------------------------
PIPELINES - 0.4%
Duke Energy Field
Services LLC, 7.88%,
8/16/10 5,750 5,750 5,860 5,860
El Paso Energy Corp.,
6.75%, 5/15/09 5,170 5,170 4,913 4,913
--------------------------------------------------
10,773 0 0 0 10,773
--------------------------------------------------
RAILROADS - 0.2%
Burlington Northern
Railroad Co., 7.33%,
6/23/10 - 1,601 1,601 1,605 1,605
Canadian National
Railway Co., 7.00%,
3/15/04 - 5,350 5,350 5,287 5,287
--------------------------------------------------
0 0 6,892 0 6,892
--------------------------------------------------
REAL ESTATE INVESTMENT
TRUSTS - (z)
Felcor Lodging LP, 144A,
9.50%, 9/15/08 - 830 830 820 820
--------------------------------------------------
0 0 820 0 820
--------------------------------------------------
RETAILING - 0.2%
Wal-Mart Stores, Inc.,
6.88%, 8/10/09 - 5,175 5,175 5,139 5,139
--------------------------------------------------
0 5,139 0 0 5,139
--------------------------------------------------
See Notes to Pro Forma Financial Statements
15
PRO
JPMORGAN THE U.S. PRO JPMORGAN THE U.S. FORMA
JPMORGAN INTERMEDIATE FIXED FORMA JPMORGAN INTERMEDIATE FIXED COMBINED
BOND BOND INCOME PRO FORMA COMBINED BOND BOND INCOME PRO FORMA JPMORGAN
FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND
---------- ------- --------- ----------- --------- ---------- --------- --------- ---------- --------
SEMICONDUCTOR - 0.1%
Charter Communications
Holdings, LLC/ Charter
Communications Holdings
Capital Corp.,
8.25%, 4/1/07 - 3,125 3,125 2,797 2,797
--------------------------------------------------
0 0 2,797 0 2,797
--------------------------------------------------
TELEPHONE /
TELECOMMUNICATIONS - 1.1%
Global Crossing Holding
Limited, 9.13%,
11/15/06 - 4,125 4,125 3,939 3,939
MCI Worldcom, Inc.,
7.55%, 4/1/04 - 7,000 7,000 7,058 7,058
McLeodUSA Inc., 9.25%,
7/15/07 - 3,000 3,000 2,790 2,790
Qwest Capital Funding
Inc., 6.88%, 7/15/28 - 700 700 615 615
Sprint Capital Corp.,
5.88%, 5/1/04 - 10,000 10,000 9,518 9,518
U.S. West Capital
Funding, Inc., 6.25%,
7/15/05 5,575 5,575 5,328 5,328
Williams Communications
Group, 10.70%, 10/1/07 - 2,000 2,000 1,720 1,720
WorldCom, Inc., 6.40%,
8/15/05 - 500 500 482 482
XO Communications Inc.,
9.63%, 10/1/07 - 1,000 1,000 835 835
--------------------------------------------------
5,328 7,058 19,899 0 32,285
--------------------------------------------------
TRUCKING & SHIPPING &
AIR FREIGHT - 0.2%
Atlantic Express,
10.75%, 2/1/04 - 1,900 1,900 1,634 1,634
FedEx Corp., Series
1999-1, Class C, 8.25%,
1/15/19 - 4,682 4,682 4,729 4,729
-------------------------------------------------
0 0 6,363 0 6,363
--------------------------------------------------
--------------------------------------------------
TOTAL CORPORATE BONDS &
NOTES - 141,605 122,337 206,408 0 470,350
--------------------------------------------------
PREFERRED STOCKS - 0.1%
- -----------------------
ENTERTAINMENT - 0.1%
- --------------------
AT&T Corp., 10.00%,
5/31/45 - 150 150 3,797 3,797
--------------------------------------------------
TOTAL PREFERRED STOCKS - 0 0 3,797 0 3,797
--------------------------------------------------
FOREIGN CORPORATE BONDS
- - 3.9%
BANKS - 0.1%
Barclays Bank Plc, 144A,
8.55%, 9/29/49 - 4,000 4,000 4,027 4,027
--------------------------------------------------
0 0 4,027 0 4,027
--------------------------------------------------
ELECTRICAL EQUIPMENT -
0.1%
Legrand S.A., 8.50%,
2/15/25 - 1,785 1,785 1,864 1,864
--------------------------------------------------
0 0 1,864 0 1,864
--------------------------------------------------
ELECTRICAL UTILITY /
UTILITIES - 0.4%
Israel Electric Corp.,
7.75%, 12/15/27 5,500 5,500 4,676 4,676
Israel Electronic Corp.,
MTN, 144A, 8.25%,
10/15/09 - 6,000 6,000 5,739 5,739
--------------------------------------------------
4,676 5,739 - - 10,415
--------------------------------------------------
FINANCIAL SERVICES - 0.3%
HSBC Capital Funding LP,
144A, 10.18%, 12/29/49,
resets quarterly off the
3-month
LIBOR plus 4.98%
with no caps - 7,220 7,220 7,901 7,901
Montell Finance Co.
B.V., 144A, 8.10%,
3/15/27 - 2,250 2,250 2,023 2,023
--------------------------------------------------
0 0 9,924 0 9,924
--------------------------------------------------
INFORMATION SERVICES -
0.3%
Marconi Corporation Plc,
8.38%, 9/15/30 - 8,760 8,760 8,354 8,354
--------------------------------------------------
0 0 8,354 0 8,354
--------------------------------------------------
TELEPHONE /
TELECOMMUNICATIONS - 1.5%
Deutsche Telekom
International Finance,
8.25%, 6/15/30 - 10,000 10,000 10,205 10,205
Metronet Communications
Corp., 144A, SUB, 0.00%,
6/15/03 - 4,000 4,000 3,201 3,201
Microcell
Telecommunications Inc.,
Series B, 11.99%,
6/1/06(y) - 300 300 288 288
Telefonica Europe B.V.,
8.25%, 9/15/30 - 12,150 12,150 12,441 12,441
Telefonica Europe BV,
7.75%, 9/15/10 - 6,000 6,000 6,024 6,024
Vodafone AirTouch PLC,
144A, 7.63%, 2/15/05 5,800 5,200 11,000 5,884 5,275 11,159
--------------------------------------------------
5,884 14,500 22,935 0 43,319
--------------------------------------------------
MOTOR VEHICLES & PARTS /
AUTOMOTIVE - 0.2%
Daimler Chrysler NA
Holding Corp., 8.00%,
6/15/10 - 5,600 5,600 5,689 5,689
--------------------------------------------------
0 5,689 0 0 5,689
--------------------------------------------------
OIL SERVICES - 1.0%
PEMEX Finance Limited,
9.14%, 8/15/04 7,040 7,040 7,201 7,201
PEMEX Finance LTD, 144A,
9.03%, 2/15/11 - 2,560 2,560 2,678 2,678
Repsol International
Finance BV, 7.45%,
7/15/05 7,900 6,885 14,785 7,940 6,920 14,860
YPF Sociedad Anonima,
7.25%, 3/15/03 6,525 6,525 6,375 6,375
--------------------------------------------------
21,516 9,598 0 0 31,114
--------------------------------------------------
--------------------------------------------------
TOTAL FOREIGN CORPORATE
BONDS - 32,076 35,526 47,104 0 114,706
--------------------------------------------------
See Notes to Pro Forma Financial Statements
16
PRO
JPMORGAN THE U.S. PRO JPMORGAN THE U.S. FORMA
JPMORGAN INTERMEDIATE FIXED FORMA JPMORGAN INTERMEDIATE FIXED COMBINED
BOND BOND INCOME PRO FORMA COMBINED BOND BOND INCOME PRO FORMA JPMORGAN
FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND
---------- ------- --------- ----------- --------- ---------- --------- --------- ---------- --------
MORTGAGE PASS THRU -
25.0%
FHLMC, 12.50%, 8/1/14 - 1 1 1 1
FHLMC, 6.00%, 3/1/11 to
4/1/11 - 1,033 1,033 1,001 1,001
FNMA, 6.00%, 12/1/28 to
2/1/29 - 58,466 58,466 54,836 54,836
FNMA, 6.50%, 1/1/28 to
9/1/29 - 11,407 11,407 10,966 10,966
FNMA, 7.00%, 7/1/28 to
10/1/29 - 3,179 3,179 3,115 3,115
FNMA, 7.50%, 5/1/30 - 167 167 167 167
FNMA, 8.00%, 8/1/22 to
6/1/27 - 1,899 1,899 1,924 1,924
FNMA, 7.00%, 5/1/28 85 85 83 83
FNMA, 6.50%, 11/1/28 12,075 12,075 11,610 11,610
FNMA, 6.00%, 3/1/29 11,027 11,027 10,341 10,341
FNMA, 6.00%, 5/1/14 2,146 2,146 2,066 2,066
FNMA, 6.50%, 9/1/29 3,442 3,442 3,308 3,308
FNMA, 7.00%, 4/1/30 37 37 37 37
FNMA, 7.00%, 3/1/29 23,754 23,754 23,279 23,279
FNMA, 7.50%, 4/1/29 21,319 21,319 21,332 21,332
FNMA, 7.50%, 3/1/29 4,321 4,321 4,324 4,324
FNMA, 6.00%, 1/1/29 3,452 3,452 3,237 3,237
FNMA, 6.50%, 3/1/29 8,855 8,855 8,509 8,509
FNMA, 6.00%, 3/1/29 10,555 10,555 9,899 9,899
FNMA, 6.50%, 4/1/29 11,362 11,362 10,918 10,918
FNMA, 7.00%, 9/1/29 47 47 46 46
FNMA, 7.00%, 2/1/30 1,682 1,682 1,648 1,648
FNMA, 7.00%, 3/1/30 499 499 488 488
FNMA, 8.00%, 3/1/30 8,574 8,574 8,678 8,678
FNMA, 6.00%, 11/1/14 21,666 21,666 20,853 20,853
FNMA, 7.50%, 6/1/15 12,522 12,522 12,608 12,608
FNMA, 7.50%, 7/1/30 5,710 5,710 5,701 5,701
FNMA, 7.00%, 7/1/30 99 99 97 97
FNMA, TBA, 6.50%, 11/1/30 - 8,010 8,010 7,697 7,697
FNMA, TBA, 7.00%, 11/1/15 - 71,310 71,310 70,864 70,864
FNMA, TBA, 7.00%, 9/1/29 - 107,234 107,234 105,056 105,056
FNMA, TBA, 7.50%, 12/1/30 - 157,605 157,605 157,211 157,211
FNMA, 6.50, 6/1/29 - 7,848 7,848 7,541 7,541
FNMA, 6.50, 9/1/14 - 1,981 1,981 1,940 1,940
FNMA, 7.50%, 7/1/30 - 7,430 7,430 7,419 7,419
FNMA, 7.50%, 8/1/15 - 1,968 1,968 1,982 1,982
GNMA, 6.50%, 6/15/28 to
12/15/28 - 51,325 51,325 49,554 49,554
GNMA, 7.00%, 12/15/08 - 194 194 195 195
GNMA, 7.50%, 1/15/27 to
2/15/27 - 8,480 8,480 8,516 8,516
GNMA, 8.50%, 5/15/27 - 218 218 224 224
GNMA, 9.00%, 12/15/19 - 63 63 66 66
GNMA, 6.50%, 5/15/29 14,475 14,475 13,973 13,973
GNMA, 7.00%, 8/15/29 12,250 12,250 12,074 12,074
GNMA, 7.50%, 9/15/29 8,542 8,542 8,571 8,571
GNMA, 8.00%, 3/15/30 9,973 9,973 10,138 10,138
GNMA, 8.00%, 7/15/30 11,530 11,530 11,721 11,721
GNMA, TBA, 7.00%, 11/1/30 - 28,460 28,460 28,051 28,051
--------------------------------------------------
TOTAL MORTGAGE PASS THRU - 215,539 18,882 499,445 0 733,866
--------------------------------------------------
PRIVATE PLACEMENTS - 0.6%
CO-OP APARTMENTS - 0.6%
180 East End Avenue Note,
secured by first mortgage
and agreement on co-op
apartment building
in New York
City,6.88%, 1/1/29(f) - - 4,415 4,415 4,176 4,176
200 East 57th Street,
secured by first
mortgage and agreement
on co-op apartment
building
in New York City,
6.50%, 1/1/14(f) - - 10,900 10,900 10,110 10,110
81 Irving Place Note,
secured by first
mortgage and agreement
on co-op apartment
building
in New York City,
6.95%, 1/1/29(f) - - 3,239 3,239 3,071 3,071
- -
--------------------------------------------------
TOTAL PRIVATE PLACEMENTS 0 0 17,357 0 17,357
--------------------------------------------------
SOVEREIGN GOVERNMENTS &
AGENCIES - 1.0%
Bancomext Trust
Division, 11.25%, 5/30/06 1,800 1,800 1,944 1,944
Korea Development Bank,
6.50%, 11/15/02 6,722 6,722 6,541 6,541
Province of Quebec,
6.50%, 1/17/06 4,700 4,700 4,610 4,610
Quebec Province, 7.50%,
9/15/29 7,900 4,200 12,100 8,011 4,259 12,270
United Mexican States,
9.88%, 2/1/10 4,200 4,200 4,358 4,358
--------------------------------------------------
TOTAL SOVEREIGN
GOVERNMENTS AND AGENCIES
- - 20,854 4,259 4,610 0 29,723
--------------------------------------------------
U.S. GOVERNMENT AGENCY
SECURITIES - 8.3%
FHLB, 7.25%, 5/13/05 15,000 15,000 15,403 15,403
FHLB, 7.63%, 5/15/07 15,000 15,000 15,804 15,804
FHLB, 4.88%, 1/22/02 - 8,000 8,000 7,849 7,849
FHLMC, 6.88%, 9/15/10(s) - 61,175 61,175 61,959 61,959
FHLMC, 5.00%, 1/15/04 - 8,000 8,000 7,654 7,654
See Notes to Pro Forma Financial Statements
17
PRO
JPMORGAN THE U.S. PRO JPMORGAN THE U.S. FORMA
JPMORGAN INTERMEDIATE FIXED FORMA JPMORGAN INTERMEDIATE FIXED COMBINED
BOND BOND INCOME PRO FORMA COMBINED BOND BOND INCOME PRO FORMA JPMORGAN
FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND
---------- ------- --------- ----------- --------- ---------- --------- --------- ---------- --------
FHLMC,5.13%, 10/15/08 - 3,500 3,500 3,165 3,165
FNMA, 7.00%, 7/15/05(s) - 59,297 59,297 60,418 60,418
FNMA, 7.13%, 6/15/10(s) - 29,271 29,271 30,154 30,154
FNMA, 7.25%, 1/15/10 5,000 5,000 5,183 5,183
FNMA, 5.13%, 2/13/04 - 9,800 9,800 9,405 9,405
FNMA,5.75%, 4/15/03 - 7,500 7,500 7,383 7,383
FNMA, 5.88%, 4/23/04 - 3,500 3,500 3,392 3,392
FNMA, 6.00%, 5/15/08 - 7,000 7,000 6,723 6,723
FNMA, 6.63%, 9/15/09 - 10,000 10,000 9,941 9,941
--------------------------------------------------
TOTAL U. S. GOVERNMENT
AGENCY SECURITIES - 36,390 55,512 152,531 0 244,433
--------------------------------------------------
U.S. TREASURY SECURITIES
- - 14.3%
U.S. Treasury Bonds,
5.25%, 2/15/29 - 7,005 7,005 6,376 6,376
U.S. Treasury Bonds,
6.75%, 8/15/26 - 40,743 40,743 44,856 44,856
U.S. Treasury Bonds,
8.00%, 11/15/21 - 4,150 4,150 5,129 5,129
U.S. Treasury Bonds,
8.88%, 2/15/19 - 70,195 70,195 92,252 92,252
U.S. Treasury Notes &
Bonds, 8.13%, 8/15/19 44,000 44,000 54,368 54,368
U.S. Treasury Notes,
5.75%, 8/15/10(s) - 50,965 50,965 50,917 50,917
U.S. Treasury Notes,
6.75%, 5/15/05(s) 24,000 330 24,330 24,881 342 25,223
U.S. Treasury Notes,
6.88%, 5/15/06(s) - 14,950 14,950 15,665 15,665
U.S. Treasury STRIPS,
PO, 6.47%, 11/15/15 - 38,155 38,155 15,604 15,604
U.S. Treasury Notes &
Bonds, 5.25%, 2/15/29 - 1,500 1,500 1,365 1,365
U.S. Treasury Notes &
Bonds, 5.88%, 11/15/05 - 23,000 23,000 23,079 23,079
U.S. Treasury Notes &
Bonds, 6.13%, 8/15/29 - 6,000 6,000 6,214 6,214
U.S. Treasury Notes &
Bonds, 6.25%, 8/31/02 - 9,000 9,000 9,035 9,035
U.S. Treasury Notes &
Bonds, 6.5%, 5/31/02 - 11,000 11,000 11,065 11,065
U.S. Treasury Notes &
Bonds, 6.5%, 8/15/05 - 25,290 25,290 25,990 25,990
U.S. Treasury Notes &
Bonds, 8.13%, 8/15/19 - 26,000 26,000 32,126 32,126
--------------------------------------------------
TOTAL U.S. TREASURY
SECURITIES - 79,249 108,874 231,140 0 419,263
--------------------------------------------------
SHORT-TERM INVESTMENTS -
14.2%
COMMERCIAL PAPER - 2.7%
Morgan Stanley, 6.58%,
11/1/00(s) - 50,000 50,000 49,991 49,991
Salomon Smith Barney
6.60%, 11/1/00(s) - 30,719 30,719 30,713 30,713
--------------------------------------------------
0 0 80,704 80,704
--------------------------------------------------
INVESTMENT COMPANIES -
10.9%
J.P. Morgan
Institutional Prime
Money Market Fund(s)* - 320,834 (499)(a) 320,335 320,834 (499)(a) 320,335
--------------------------------------------------
0 0 320,834 (499) 320,335
--------------------------------------------------
U.S. TREASURY SECURITIES
- - 0.2%
U.S. Treasury Notes,
5.63%, 11/30/00(s) - 2,700 2,700 2,699 2,699
U.S. Treasury Bill,
6.18%, 12/7/00 2,000 2,000 1,988 1,988
--------------------------------------------------
1,988 0 2,699 0 4,687
--------------------------------------------------
REPURCHASE AGREEMENTS -
0.4%
Greenwich Capital
Markets, Inc., 6.55%,
due 11/01/00, (dated
10/31/00, proceeds
$4,731, secured by FNMA,
$4,805, 6.75%, due
6/18/21; value $4,829) 4,730 4,730 4,730 4,730
Greenwich Capital
Markets, Inc., 6.55%,
due 11/01/00, (dated
10/31/00, proceeds
$6,706, secured by FNMA,
$6,805, 6.75%, due
6/18/21; value $6,840) - 6,705 6,705 6,705 6,705
--------------------------------------------------
4,730 6,705 0 11,435
--------------------------------------------------
TOTAL INVESTMENT
SECURITIES - (COST
$2,939,739) 582,001 383,324 1,972,306 (499) 2,937,132
See Notes to Pro Forma Financial Statements
18
FUTURES CONTRACTS
UNDERLYING
FACE
EXPIRATION AMOUNT AT
PURCHASED DATE VALUE NUMBER OF CONTRACTS NET UNREALIZED APPRECIATION (DEPRECIATION)
- --------- ---------- ---------- ------------------- ------------------------------------------
U.S. Two-Year December
Treasury Note 2000 $ 84,052,500 420 420 (160,122) (160,122)
U.S. Five-Year December
Treasury Note 2000 35,613,039 700 353 1,053 130 334,510 334,640
-------------------------------------------------
130 - 174,388 - 174,518
-------------------------------------------------
SOLD
- ----
U.S. Ten-Year December
Treasury Note 2000 112,343,985 600 1,115 1,715 (427) (746,864) (747,291)
U.S. Five-Year December
Treasury Note 2000 13,279,219 133 133 25,956 25,956
-------------------------------------------------
(427) - (720,908) - (721,335)
-------------------------------------------------
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
FRN - Floating Rate Note. The maturity date is the actual maturity date; the
rate shown is the rate in effect at October 31, 2000.
GNMA - Government National Mortgage Association
LIBOR - London Interbank Offered Rate
PO - Principal only
resets - The frequency with which a security's coupon changes, based on
current market conditions or an underlying index.
SEQ - Sequential Payor
STRIPS - Separate Trading of Registered Interest and Principal of Securities.
SUB - Step-up Bond. The maturity date shown is the earlier of the call date of
maturity date; the reate shown is the rate in ecfect at October 31, 2000.
TBA -Securities purchased (sold) on a forward commitment basis with an
approximate principal amount and no definite maturity date. The actual
principal amount and maturity will be determined upon settlement.
144A - Securities restricted for resale to Qualified Institutional Buyers
(a) Reflects the redemption of short-term securities of the J.P. Morgan U.S.
Fixed Income - Advisor Series
(d) Defaulted security
(f) Illiquid and fair valued security. Approximately $17,356,656 or 0.9% of
the market value of the securities have been valued at fair value.
(s) Security is fully or partially segregated with custodian as collateral
for futures or with brokers as initial margin for futures contracts.
(y) Yield to maturity
(z) Category is less than 0.05% of total investment securities.
* Money Market Mutual Fund registered under the Investment Act of 1940, as
amended, and advised by J.P. Morgan Investment Management, Inc.
+ Non-income producing security
(1) Formerly Chase Vista Select Bond Fund
(2) Formerly Chase Vista Select Intermediate Bond Fund
See Notes to Pro Forma Financial Statements
19
J.P. MORGAN BOND FUND/ J.P. MORGAN INSTITUTIONAL BOND FUND/
J.P. MORGAN INSTITUTIONAL BOND FUND - ULTRA/ THE U.S. FIXED INCOME PORTFOLIO/
JPMORGAN BOND FUND II (1) / JPMORGAN INTERMEDIATE BOND FUND (2)
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES AS OF OCTOBER 31, 2000
(UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
J.P. MORGAN
J.P. MORGAN INSTITUTIONAL THE U.S.
J. P. MORGAN INSTITUTIONAL BOND FUND FIXED INCOME
BOND FUND BOND FUND - ULTRA PORTFOLIO
ASSETS:
Investments at Value $ - $ - $ - $ 1,972,306
Investment in The U.S. Fixed Income Portfolio, at value 242,750 909,964 469,196 -
Cash - - - -
Receivable for Investment Sold - - - 215,450
Dividend and Interest Receivable - - - 16,802
Receivable for Shares of Beneficial Interest Sold 407 726 37 -
Variation Margin Receivable - - - 297
Receivable for Expense Reimbursements - - - -
Deferred Organization Expense - - 3 -
Prepaid Trustees' Fees and Expenses 1 1 1 6
Prepaid Expenses and Other Assets 1 2 - 57
----------- ----------- ----------- -------------
TOTAL ASSETS 243,159 910,693 469,237 2,204,918
----------- ----------- ----------- -------------
LIABILITIES:
Securities Purchased Payable - - - 581,888
Dividends Payable to Shareholders 154 2,229 688 -
Payable for Shares of Beneficial Interest Redeemed 2,719 908 2,414 -
Advisory Fee Payable - - - 411
Shareholder Servicing Fee Payable 51 77 20 -
Administration Fee Payable - - - -
Due to Custodian - - - 52
Administration Services Fee Payable 5 18 10 33
Fund Services Fee Payable 1 1 1 1
Accrued Expenses and Other Liabilities 49 49 78 124
----------- ----------- ----------- -------------
TOTAL LIABILITIES 2,979 3,282 3,211 582,509
----------- ----------- ----------- -------------
NET ASSETS:
Paid-in Capital 248,018 950,359 476,531 -
Undistributed (Distributions in Excess of) Net
Investment Income 315 787 923 -
Accumulated Net Realized Loss (7,952) (43,481) (10,844) -
Net Unrealized Appreciation of Investment (201) (254) (584) -
----------- ----------- ----------- -------------
Net Assets $ 240,180 $ 907,411 $ 466,026 1,622,409
=========== =========== =========== =============
Shares of Beneficial Interest Outstanding 24,290 96,271 48,475 -
Shares Outstanding - - - -
Net Asset Value Per Share 9.89 9.43 9.61 -
PRO FORMA WITH CONCURRENT REORGANIZATION
J.P. MORGAN INSTITUTIONAL BOND FUND
Shares Outstanding
Select - - -
Institutional - - -
Agency - - -
Net Asset Value Per Share
Select - - -
Institutional - - -
Agency - - -
=========== =========== =========== =============
Cost of Investments $ - $ - $ - $ 1,972,799
=========== =========== =========== =============
JPMORGAN PRO FORMA PRO FORMA
BOND JPMORGAN ADJUSTMENTS COMBINED
FUND II(1) INTERMEDIATE JPMORGAN
BOND FUND (2) BOND FUND
ASSETS:
Investments at Value $ 582,001 $ 383,324 $ (499)(f) $2,937,132
Investment in The U.S. Fixed Income Portfolio, at value - - (1,621,910)(a) -
Cash - 1 - -
Receivable for Investment Sold - - - 215,450
Dividend and Interest Receivable 7,981 5,702 - 30,485
Receivable for Shares of Beneficial Interest Sold 1,116 400 - 2,686
Variation Margin Receivable 97 - - 394
Receivable for Expense Reimbursements - - 3 3
Deferred Organization Expense - - (3)(b) -
Prepaid Trustees' Fees and Expenses - - - 9
Prepaid Expenses and Other Assets 16 10 - 86
------------ ----------- ----------- -----------
TOTAL ASSETS 591,211 389,437 (1,622,412) 3,186,245
------------ ----------- ----------- -----------
LIABILITIES:
Securities Purchased Payable - - - 581,888
Dividends Payable to Shareholders 3,161 1,933 - 8,165
Payable for Shares of Beneficial Interest Redeemed 125 24 - 6,190
Advisory Fee Payable 149 98 - 658
Shareholder Servicing Fee Payable 124 82 - 354
Administration Fee Payable 75 49 - 124
Due to Custodian 47 7 - 106
Administration Services Fee Payable - - - 66
Fund Services Fee Payable - - - 4
Accrued Expenses and Other Liabilities 161 179 - 640
------------ ----------- ----------- -----------
TOTAL LIABILITIES 3,842 2,372 - 598,195
------------ ----------- ----------- -----------
NET ASSETS:
Paid-in Capital 619,499 402,912 - 2,697,318
Undistributed (Distributions in Excess of) Net
Investment Income 65 (58) - 2,032
Accumulated Net Realized Loss (32,772) (13,300) - (108,349)
Net Unrealized Appreciation of Investment 577 (2,489) - (2,951)
------------ ----------- ----------- -----------
Net Assets $ 587,369 $ 387,065 $(1,622,412) $ 2,588,050
============ =========== =========== ===========
Shares of Beneficial Interest Outstanding - - (169,036)(c) -
Shares Outstanding 15,449 40,050 (55,499)(d) -
Net Asset Value Per Share 38.02 9.66
PRO FORMA WITH CONCURRENT REORGANIZATION
J.P. MORGAN INSTITUTIONAL BOND FUND
Shares Outstanding
Select - - 128,863(e) 128,863
Institutional - - 96,271(e) 96,271
Agency - - 49,443(e) 49,443
Net Asset Value Per Share
Select - - - 9.43
Institutional - - - 9.43
Agency - - - 9.43
============ =========== =========== ===========
Cost of Investments $ 581,127 $ 385,813 $ - $ 2,939,739
============ =========== =========== ===========
(a) Reflects reallocation of investment from the feeder funds to master
portfolio.
(b) Write-off of deferred organization expenses of the portfolio.
(c) Reallocation of feeder fund's beneficial interest, Select, Institutional,
and Agency Shares due to the Concurrent Reorganization.
(d) Reallocation of Chase Vista Select Bond Fund and Chase Vista Select
Intermediate Bond Fund shares to Select X Shares due to the Concurrent
Reorganization
(e) Reflects the additional number of shares outstanding due to the Concurrent
Reorganization.
(f) Reflects the redemption in short-term securities of the J.P. Morgan Bond
Fund- Advisor Series.
(1) Formerly Chase Vista Select Bond Fund
(2) Formerly Chase Vista Select Intermediate Bond Fund
See Notes to Pro Forma Financial Statements
20
J.P. MORGAN BOND FUND / J.P. MORGAN INSTITUTIONAL BOND FUND /
J.P. MORGAN INSTITUTIONAL BOND FUND - ULTRA
THE U.S. FIXED INCOME PORTFOLIO / JPMORGAN BOND FUND II (1) /
JPMORGAN INTERMEDIATE BOND FUND (2)
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED OCTOBER 31, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN THE U.S. FIXED
BOND FUND INSTITUTIONAL INSTITUTIONAL INCOME
BOND FUND BOND FUND - ULTRA PORTFOLIO
INCOME:
Allocated Investment Income From Portfolio $ 15,598 $ 64,228 $ 26,181 $ -
Interest Income - - - 84,404
Dividend Income from Affiliated Investments (includes
reimbursement from affiliate of $719) - - - 20,928
Dividend income - - - 857
Allocated Portfolio Expenses (796) (3,281) (1,162) -
--------------------------------------------------------------
Investment Income 14,802 60,947 25,019 106,189
--------------------------------------------------------------
EXPENSES:
Advisory Fee - - - 4,648
Administrative Services Fee 55 228 93 377
Shareholder Servicing Fee 567 935 192 -
Custodian Fees and Expenses - - - 265
Registration Fees 27 32 70 -
Printing Expenses 8 4 12 11
Transfer Agent Fees 42 24 20 -
Professional Fees 13 17 14 62
Trustees' Fees and Expenses 3 11 4 18
Fund Services Fee 4 15 6 24
Financial and Fund Accounting Services Fee - 24 24 -
Administration Fee 2 11 4 11
Insurance Expense - - - 4
Amortization of Organizational Expenses - - - -
Distribution Fee - - 1 -
Miscellaneous 35 35 15 -
--------------------------------------------------------------
Total Expenses 756 1,336 455 5,420
--------------------------------------------------------------
Less: Amounts Waived - - - -
Less: Reimbursement of Expenses - - (276) -
--------------------------------------------------------------
Net Expenses 756 1,336 179 5,420
--------------------------------------------------------------
--------------------------------------------------------------
Net Investment Income 14,046 59,611 24,840 100,769
--------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (2,881) (16,527) (1,248) (33,777)
Futures Contracts - - - 3,486
Foreign Currency Contracts and Transactions - - - 9,635
--------------------------------------------------------------
Net Realized (Loss) (2,881) (16,527) (1,248) (20,656)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 3,149 16,693 3,410 24,018
Futures Contracts - - - 110
Foreign Currency Contacts and Translations - - - (876)
--------------------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) 3,149 16,693 3,410 23,252
--------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 14,314 $ 59,777 $ 27,002 $ 103,365
===============================================================
JPMORGAN PRO FORMA PRO FORMA
BOND JPMORGAN ADJUSTMENTS COMBINED
FUND II (1) INTERMEDIATE JPMORGAN
BOND FUND (2) BOND FUND
INCOME:
Allocated Investment Income From Portfolio $ - $ - $ (106,007)(c) -
Interest Income 41,374 24,517 (1)(h) 150,294
Dividend Income from Affiliated Investments (includes
reimbursement from affiliate of $719) - - - 20,928
Dividend income - - - 857
Allocated Portfolio Expenses - - 5,239(b) -
--------------------------------------------------------------
Investment Income 41,374 24,517 (100,769) 172,079
--------------------------------------------------------------
EXPENSES:
Advisory Fee 1,777 1,137 (16) 7,546
Administrative Services Fee 888 568 1,524(a) 3,733
Shareholder Servicing Fee 1,223 791 412(a) 4,120
Custodian Fees and Expenses 141 92 (228)(f,g) 270
Registration Fees 29 10 - 168
Printing Expenses 29 24 31(g) 119
Transfer Agent Fees 12 18 - 116
Professional Fees 46 33 (94)(g) 91
Trustees' Fees and Expenses 30 19 - 85
Fund Services Fee - - - 49
Financial and Fund Accounting Services Fee - - (48)(f) -
Administration Fee - - - 28
Insurance Expense - - - 4
Amortization of Organizational Expenses - - - -
Distribution Fee - - - 1
Miscellaneous 39 20 3(e) 147
--------------------------------------------------------------
Total Expenses 4,214 2,712 1,584 16,477
--------------------------------------------------------------
Less: Amounts Waived (1,584)(a) (1,584)
Less: Reimbursement of Expenses (126) (73) (852)(a) (1,327)
--------------------------------------------------------------
Net Expenses 4,088 2,639 (852) 13,566
--------------------------------------------------------------
--------------------------------------------------------------
Net Investment Income 37,286 21,878 (99,917) 158,513
--------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (17,973) (7,915) 20,656(d) (59,665)
Futures Contracts (3,015) - - 471
Foreign Currency Contracts and Transactions - - - 9,635
--------------------------------------------------------------
Net Realized (Loss) (20,988) (7,915) 20,656 (49,559)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 15,076 7,215 (23,252)(d) 46,309
Futures Contracts (188) - - (78)
Foreign Currency Contacts and Translations - - - (876)
--------------------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) 14,888 7,215 (23,252) 45,355
--------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 31,186 $ 21,178 $ (102,513) $ 154,309
==============================================================
(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 write-off of deferred organization expenses of the portfolio.
(f) Reclassification of fund accounting into Custody charge.
(g) Reduction reflects expected benefit from combined operations.
(h) Reflects the elimination of J.P. Morgan - Advisor Series allocated income.
(1) Formerly Chase Vista Select Bond Fund
(2) Formerly Chase Vista Select Intermediate Bond Fund
See Notes to Pro Forma Financial Statements
21
PRO FORMA FINANCIAL STATEMENTS
J.P. MORGAN BOND FUND/C/J.P. MORGAN INSTITUTIONAL BOND FUND/J.P.
MORGAN INSTITUTIONAL BOND-ULTRA/THE U.S. FIXED INCOME
PORTFOLIO/JPMORGAN BOND FUND II (1)/JPMORGAN
INTERMEDIATE BOND FUND(2)
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 U.S. Fixed Income Portfolio ("Master Portfolio"), J.P. Morgan
Bond Fund ("Bond Fund"), J.P. Morgan Institutional Bond Fund ("Institutional
Fund"), J.P. Morgan Institutional Bond Fund - Ultra ("Ultra Fund"),
(collectively the "feeder funds" of the Master Portfolio), Chase Vista Select
Bond Fund ("CVSBF") and Chase Vista Select Intermediate Bond Fund ("CVSIBF") as
if the proposed Reorganization and Concurrent Reorganization occurred as of and
for the twelve months ended October 31, 2000.
The Pro Forma Statements give effect to the proposed transfer of all
assets and liabilities of Master Portfolio, Bond Fund, and Ultra Fund
("Reorganization"), CVSBF ("Chase Vista Select Bond Fund") and CVSIBF ("Chase
Vista Select Intermediate Concurrent Reorganization") in exchange for shares in
Institutional Bond Fund. The Pro Forma Financial 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:
The existing shares of Institutional Bond Fund, Bond Fund, Ultra Fund
would be renamed Institutional Shares, Select Shares, and Agency Shares
respectively. The net asset value per share for Select, and Agency Shares at the
commencement of offering would be identical to the closing net asset value per
share for the Institutional Shares immediately prior to the Reorganization.
The existing shares of Institutional Bond Fund, Ultra Fund, CVSBF, and
CVSIBF would be renamed Institutional Shares, Select Shares, Agency Shares and
Select Shares respectively. The net asset value per share for Select, and Agency
Shares at the commencement of offering would be identical to the closing net
asset value per share for Institutional shares immediately prior to the
Concurrent Reorganization.
22
Under the proposed Reorganization, each shareholder of Bond Fund and Ultra
Fund would receive shares of Institutional Fund with a value equal to their
holdings in their respective funds. Holders of Bond Fund and Ultra Fund will
receive Select Shares and Agency Shares in Institutional Fund. Therefore, as a
result of the proposed Reorganization current shareholders of Bond Fund and
Ultra Fund will become shareholders of Institutional Fund.
Under the proposed Concurrent Reorganization, each shareholder of CVSBF
and CVSIBF would receive Select Shares of Institutional Fund with a value equal
to their holdings in their respective funds. Holders of CVSBF and CVSIBF will
receive Select Shares in Institutional Fund. Therefore, as a result of the
proposed Concurrent Reorganization current shareholders of CVSBF and CVSIBF will
become shareholders of Institutional Fund.
The Pro Forma net asset value per share assumes the issuance of additional
shares of Institutional Fund, which would have been issued on October 31, 2000
in connection with the proposed Reorganization and the proposed Concurrent
Reorganization. The amount of additional shares assumed to be issued was
calculated based on the October 31, 2000 net assets of Bond Fund, Ultra Fund,
CVSBF and CVSIBF and the net asset values per share of Institutional Fund.
23
J.P. MORGAN INSTITUTIONAL BOND FUND WITH JPMORGAN INTERMEDIATE BOND FUND (2)
REORGANIZATION AND FEEDER REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SELECT
------
Increase in Shares Issued 66,541
Pro Forma Net Assets 10-31-00 $627,245
Pro Forma Net Asset Value 10-31-00 9.43
J.P. MORGAN INSTITUTIONAL BOND FUND WITH JPMORGAN INTERMEDIATE BOND FUND (2)
AND JPMORGAN BOND FUND II (1) CONCURRENT REORGANIZATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SELECT
------
Increase in Shares Issued 128,863
Pro Forma Net Assets 10-31-00 $1,214,614
Pro Forma Net Asset Value 10-31-00 9.43
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, including the change in administration fee and the
new expected expense cap. The pro forma investment advisory, shareholder
servicing and distribution fees of the combined Fund 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 October 31, 2000.
4. As the Chase Income Fund and the Chase Vista Bond Fund merged into the
JPMorgan Bond Fund II (formerly the Chase Vista Select Bond Fund) and the
Chase Intermediate Term Bond Fund merged into the JPMorgan Intermediate Bond
Fund (formerly the Chase Vista Select Intermediate Bond Fund) on March 2,
2001 and February 16, 2001, respectively, their net assets are not included
in the pro forma combining statements as of October 31, 2000. Such net assets
are less than 10% of pro forma combined net assets. The net assets of Class A
and Class B shares of JPMorgan Bond Fund II and JPMorgan Intermediate Bond
Fund will become Class A and Class B shares in the Surviving Fund, as
applicable. The pro forma net asset value per share of Class A and Class B
shares would be $9.43 each, similar to all other classes, if included.
- ----------------------
(1) Formerly Chase Vista Select Bond Fund
(2) Formerly Chase Vista Select Intermediate Bond Fund
24
FORM N-14
---------
PART C - OTHER INFORMATION
--------------------------
Item 15. Indemnification.
---------------
Reference is made to Section 5.3 of Registrant's Declaration of Trust and
Section 5 of Registrant's Distribution Agreement.
Registrant, its Trustees and officers are insured against certain expenses
in connection with the defense of claims, demands, actions, suits, or
proceedings, and certain liabilities that might be imposed as a result of such
actions, suits or proceedings.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "1933 Act"), may be permitted to directors,
trustees, officers and controlling persons of the Registrant and the principal
underwriter pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the 1933 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 director, trustee, officer, or controlling person of the
Registrant and the principal underwriter in connection with the successful
defense of any action, suit or proceeding) is asserted against the Registrant by
such director, trustee, officer or controlling person or principal underwriter
in connection with the shares 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 1933 Act and
will be governed by the final adjudication of such issue.
Item 16. Exhibits.
---------------
1 Declaration of Trust.
(a) Declaration of Trust, as amended, was filed as Exhibit No. 1 to
Post-Effective Amendment No. 25 to the Registrant's Registration Statement on
Form N-1A (File No. 033-54642) (the "Registration Statement") filed on September
26, 1996 (Accession Number 0000912057-96-021281).
(b) Amendment No. 5 to Declaration of Trust; Amendment and Fifth Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest. Incorporated
Part C-1
herein by reference to Post-Effective Amendment No. 29 to the Registration
Statement filed on December 26, 1996 (Accession Number 0001016964-96-000061).
(c) Amendment No. 6 to Declaration of Trust; Amendment and Sixth Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest was filed as Exhibit No. 1(b) to Post-Effective Amendment No. 31 to the
Registration Statement on February 28, 1997 (Accession Number
0001016964-97-000041).
(d) Amendment No. 7 to Declaration of Trust; Amendment and Seventh Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest was filed as Exhibit No. 1(c) to Post-Effective Amendment No. 32 to the
Registration Statement on April 15, 1997 (Accession Number
0001016964-97-000053).
(e) Amendment No. 8 to Declaration of Trust; Amendment and Eighth Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest was filed as Exhibit No. l(d) to Post-Effective Amendment No. 40 to the
Registration Statement on October 9, 1997 (Accession Number
0001016964-97-000158).
(f) Amendment No. 9 to Declaration of Trust; Amendment and Ninth Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest was filed as Exhibit No. l(e) to Post-Effective Amendment No. 50 to the
Registration Statement on December 29, 1997 (Accession Number
0001041455-97-000014).
(g) Amendment No. 10 to Declaration of Trust; Amendment and Tenth Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest and change voting procedures to dollar-based voting was filed as
Exhibit No. (a)6 to Post-Effective Amendment No. 60 to the Registration
Statement on December 31, 1998 (Accession Number 0001041455-98-000097).
(h) Amendment No. 11 to Declaration of Trust. Incorporated herein by
reference to Post-Effective Amendment No. 63 to the Registration Statement filed
on April 29, 1999 (Accession Number 00001041455-99-000041).
(i) Amendment No. 12 to Declaration of Trust. Incorporated herein by
reference to Post-Effective Amendment No. 72 to the Registration Statement filed
on April 12, 2000 (Accession Number 0001041455-00-000084).
(j) Amendment No.13 to Declaration of Trust, incorporated herein by
reference to Post-Effective Amendment No. 78 to the Registration Statement filed
on August 1, 2000 (Accession Number 0000894088-00-000008).
(k) Amendment No.14 to Declaration of Trust incorporated herein by
reference to Post-Effective Amendment No. 78 to the Registration Statement filed
on August 1, 2000 (Accession Number 0000894088-00-000008).
Part C-2
2 By-laws.
(a) Restated By-Laws of Registrant. Incorporated herein by reference to
Post-Effective Amendment No. 29 to the Registration Statement filed on December
26, 1996 (Accession Number 0001016964-96-000061).
(b) Amendment to Restated By-laws of Registrant. Incorporated herein by
reference to Post-Effective Amendment No. 71 to the Registration Statement filed
on February 28, 2000 (Accession Number 0001041455-00-000056).
3 Not Applicable
4 Agreement and Plan of Reorganization filed herewith as
Appendix A to the Combined Prospectus/Proxy Statement.
5 Not Applicable
6 Form of Investment Advisory Agreement to be filed by
Amendment.
7 Distribution Agreement to be filed by Amendment.
8 Not Applicable
9 Custodian Agreement
(a) Custodian Contract between Registrant and State Street Bank and Trust
Company ("State Street"). Incorporated herein by reference to Post-Effective
Amendment No. 29 to the Registration Statement filed on December 26, 1996
(Accession Number 0001016964-96-000061).
(b) Custodian Contract between Registrant and The Bank of New York.
Incorporated herein by reference to Post-Effective Amendment No. 71 to the
Registration Statement filed on February 28, 2000 (Accession Number
0001041455-00-000056).
10 Forms of Rule 12b-1 Distribution Plans to be filed by
Amendment.
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 Material Contracts.
(a) Co-Administration Agreement between Registrant and FDI. Incorporated
herein by reference to Post-Effective Amendment No. 29 to the Registration
Statement filed on December 26, 1996 (Accession Number 0001016964-96-000061).
Part C-3
(b) Restated Shareholder Servicing Agreement between Registrant and Morgan
Guaranty Trust Company of New York ("Morgan Guaranty") filed as Exhibit (h)2 to
Post Effective Amendment No. 54 to the Registration Statement on August 25, 1998
(Accession No. 0001041455-98-000053).
(c) Transfer Agency and Service Agreement between Registrant and State
Street. Incorporated herein by reference to Post-Effective Amendment No. 29 to
the Registration Statement filed on December 26,1996 (Accession Number
0001016964-96-000061).
(d) Restated Administrative Services Agreement between Registrant and
Morgan Guaranty. Incorporated herein by reference to Post-Effective Amendment
No. 29 to the Registration Statement filed on December 26, 1996 (Accession
Number 0001016964-96-000061).
(e) Fund Services Agreement, as amended, between Registrant and Pierpont
Group, Inc. Incorporated herein by reference to Post-Effective Amendment No. 29
to the Registration Statement filed on December 26, 1996 (Accession Number
0001016964-96-000061).
(f) Service Plan with respect to Registrant's Service Money Market Funds.
Incorporated herein by reference to Post-Effective Amendment No. 33 to the
Registration Statement filed on April 30, 1997 (Accession Number
00001016964-97-000059).
(g) Service Plan with respect to Registrant's Small Company Fund Advisor
Series, Small Company Opportunities Fund -- Advisor Series, International Equity
Fund -- Advisor Series, International Opportunities Fund -- Advisor Series, U.S.
Equity Fund -- Advisor Series, Diversified Fund -- Advisor Series incorporated
herein by reference to Post-Effective Amendment No. 78 to the Registration
Statement filed on August 1, 2000 (Accession Number 0000894088-00-000008).
(h) Amended Service Plan with respect to Registrant's Disciplined Equity
- -- Advisor series and Direct Prime Money Market Funds. Incorporated herein by
reference to Post-Effective Amendment No. 72 to the Registration Statement filed
on April 12, 2000 (Accession Number 0001041455-00-000084).
(i) Amended Service Plan with respect to Registrant's J.P. Morgan Prime
Cash Management Fund. Incorporated herein by reference to Post-Effective
Amendment No. 75 to Registration Statement filed on May 17, 2000 (Accession
Number 0001041455-00-000122).
(j) Form of Administration Agreement to be filed by Amendment.
(k) For of Sub-Administration Agreement to be filed by Amendment.
14 Consent of PricewaterhouseCoopers LLC.
15 None
16 Powers of Attorney.
Part C-4
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 to Shareholders of the Surviving Fund (including the
Annual Report of the Master Portfolio) dated October 31, 2000.
17(g) Annual Report to Shareholders of the Merging Fund dated
October 31, 2000.
Item 17. Undertakings.
---------------
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is part of
this registration statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, as
amended (the "1933 Act"), the reoffering prospectus will contain the information
called for by the applicable registration form for reofferings by persons who
may be deemed underwriters, in addition to the information called for by the
other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
Part C-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.
J.P. MORGAN INSTITUTIONAL FUNDS
Registrant
By: /s/ Christopher Kelley
---------------------------------
Christopher Kelley
Vice President and Assistant Secretary
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.
George Rio*
- ------------------------------
George Rio
President and Treasurer
Matthew Healey*
- ------------------------------
Matthew Healey
Trustee, Chairman and Chief Executive Officer (Principal Executive Officer)
Frederick S. Addy*
- ------------------------------
Frederick S. Addy
Trustee
William G. Burns*.
- ------------------------------
William G. Burns
Trustee
Arthur C. Eschenlauer*
- ------------------------------
Arthur C. Eschenlauer
Trustee
MICHAEL P. MALLARDI*
- ------------------------------
Michael P. Mallardi
Trustee
*By /s/ Christopher Kelley
------------------------------
Christopher Kelley
as attorney-in-fact pursuant to a power of attorney.
EXHIBITS
ITEM DESCRIPTION
- ---- -----------
(14) Consent of PricewaterhouseCoopers LLP.
(16) Powers of Attorney.
(17)(a) Form of Proxy Card.
(c) Prospectus for JPMorgan Intermediate Bond Fund (formerly, Chase
Vista Intermediate Bond Fund).
(e) Statement of Additional Information for JPMorgan Intermediate
Bond Fund (formerly, Chase Vista Intermediate Bond Fund).
(f) Annual Report of J.P. Morgan Institutional Bond Fund (including
Annual Report of The U.S. Fixed Income Portfolio) dated
October 31, 2000.
(g) Annual Report of JPMorgan Intermediate Bond Fund (formerly, Chase
Vista Intermediate Bond Fund) dated October 31, 2000.