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.
PETER B. ELDRIDGE, ESQ. JOHN E. BAUMGARDNER, JR.,
J.P. Morgan Fleming Asset SARAH E. COGAN, ESQ. ESQ.
Management (USA) Inc. Simpson Thacher & Bartlett Sullivan & Cromwell
522 Fifth Avenue 425 Lexington Avenue 125 Broad Street
New York, NY 10036 New York, NY 10017-3954 New York, NY 10004
==============================================================================
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.
J.P. Morgan Bond Fund
a series of J.P. Morgan Funds
60 State Street, Suite 1300
Boston, Massachusetts 02109
May 16, 2001
Dear Shareholder:
A special meeting of the shareholders of J.P. Morgan Bond Fund (the
"Merging Fund"), a series of J.P. Morgan Funds ("JPF"), 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 has recently
completed a merger with J.P. Morgan & Co. Incorporated, the former corporate
parent of the investment adviser of the Merging Fund's assets, 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 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 of the Merging Fund would hold Select Class Shares
of the Surviving Fund. The investment objective and policies of the Surviving
Fund are identical to those of the Merging Fund. Both the Merging Fund and the
Surviving Fund currently invest all of their investable assets in The U.S. Fixed
Income Portfolio (the "Master Portfolio"). Concurrent with the Reorganization,
the Surviving Fund will cease to operate under a "master/feeder" structure and
will instead invest directly in portfolio securities. 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 identical investment policies.
The Surviving Fund has also entered into agreements and plans of
reorganization with (i) JPMorgan Bond Fund II (formerly, Chase Vista Bond
Fund), a series of Mutual Fund Select Group ("MFSG") with similar investment
objectives and policies to the Merging Fund (the "Chase Fund Reorganization
I"), (ii) JPMorgan Intermediate Bond Fund (formerly, Chase Vista Intermediate
Bond Fund), a series of MFSG with similar investment objectives and policies
to the Merging Fund (the "Chase Fund Reorganization II" and, collectively
with the Chase Fund Reorganization I, the "Chase Fund Reorganizations"), and
(iii) one other mutual fund whose assets are managed by J.P. Morgan
Investment Management Inc. ("JPMIM") with identical investment objectives and
policies to the Surviving Fund (collectively, the "Feeder Reorganization"
and, together with the Chase Fund Reorganizations, 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 Reorganization.
At the Meeting, you will also be asked to consider and vote upon the
election of Trustees of JPF.
The investment adviser for the assets of both the Merging Fund and the
Surviving Fund is JPMIM.
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 JPF 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, JPF, the Surviving Fund, JPMF or their shareholders.
If approval of the Reorganization is obtained, you will automatically
receive Select Class shares of the Surviving Fund.
The Proposals have been carefully reviewed by the Board of Trustees of
JPF, which has approved the Proposals.
THE BOARD OF TRUSTEES OF JPF UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
EACH OF THE PROPOSALS.
Following this letter is a list of commonly asked questions. If you have
any additional questions on voting of proxies and/or the meeting agenda, please
call us at 1-800-766-7722.
A proxy card is enclosed for your use in the shareholder meeting. This
card represents shares you held as of the record date, April 6, 2001. IT IS
IMPORTANT THAT YOU COMPLETE, SIGN, AND RETURN YOUR PROXY CARD IN THE ENVELOPE
PROVIDED OR CALL ___________ AS SOON AS POSSIBLE. This will ensure that your
shares will be represented at the Meeting to be held on July 3, 2001.
Please read the enclosed materials carefully. You may, of course, attend
the meeting in person if you wish, in which case the proxy can be revoked by you
at the Meeting.
Sincerely,
Matthew Healey
Chairman
SPECIAL NOTE: You may receive a telephone call from our proxy solicitor, D.F.
King & Co., Inc., or us to answer any questions you may have or to provide
assistance in voting. Remember, your vote is important! Please sign, date
and promptly mail your proxy card(s) in the return envelope provided or call
_________________ in order to vote.
WHY IS THE REORGANIZATION BEING PROPOSED?
The Reorganization is being proposed because each Fund's board believes that it
is in the best interest of the shareholders to operate in a multi-class rather
than a master/feeder structure.
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,
Select Class shares of the Surviving Fund. The Merging Fund will then be
liquidated and the Select Class shares of the Surviving Fund will be distributed
pro rata to shareholders such as you. After the Reorganization, you will own
Select Class shares of the Surviving Fund rather than shares of 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 has identical investment objectives and policies to those of
the Merging Fund. Both the Merging Fund and the Surviving Fund currently invest
all of their investable assets in the Master Portfolio. Concurrent with the
Reorganization, the Surviving Fund will cease to operate under a "master/feeder"
structure and will instead invest its assets directly in portfolio securities.
HOW WILL THE FEES AND EXPENSES ASSOCIATED WITH MY INVESTMENT BE AFFECTED?
As a result of the Reorganization, the contractual (or pre-waiver) total expense
ratios are expected to be higher for your shares in the Surviving Fund than they
are for your shares in the Merging Fund. However, the actual (or post-waiver)
total expense ratios are expected to be the same or less for your shares in the
Surviving Fund than they are for your shares in the Merging Fund. This is
because 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 THREE YEARS after the Reorganization.
WILL THERE BE ANY CHANGE IN WHO MANAGES MY INVESTMENT?
No. JPMIM will continue to manage the assets of the Surviving 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 Select Class shares of 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 assets
and liabilities of the Surviving Fund. The consummation of the Reorganization is
contingent upon the consummation of the Feeder Reorganization, but not on the
consummation of the Chase Fund Reorganizations.
WHY AM I BEING ASKED TO VOTE ON THE ELECTION OF TRUSTEES FOR JPF 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
JPF will continue to exist and operate. All shareholders of any series of JPF as
of the record date (April 6, 2001) are required to be given a vote on proposals
regarding Trustees. Because as of the record date you are still a shareholder in
JPF, you are entitled to vote on this proposal. Shareholders of JPMF are being
asked to approve the same Trustees that are proposed for JPF.
AS A HOLDER OF SHARES OF THE MERGING FUND, WHAT DO I NEED TO DO?
Please read the enclosed Combined Prospectus/Proxy Statement and vote. Your vote
is important! Accordingly, please sign, date and mail the proxy card(s) promptly
in the enclosed return envelope as soon as possible after reviewing the enclosed
Combined Prospectus/Proxy Statement.
MAY I ATTEND THE MEETING IN PERSON?
Yes, you may attend the Meeting in person. If you complete a proxy card and
subsequently attend the Meeting, your proxy can be revoked. Therefore, to ensure
that your vote is counted, we strongly urge you to mail us your signed, dated
and completed proxy card(s) even if you plan to attend the Meeting.
J.P. Morgan Bond Fund
a series of J.P. Morgan Funds
60 State Street, Suite 1300
Boston, Massachusetts 02109
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 3, 2001
To the Shareholders of
J.P. Morgan Bond Fund:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the shareholders
("Shareholders") of J.P. Morgan Bond Fund (the "Merging Fund"), a series of
J.P. Morgan Funds ("JPF"), 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 JPF, on behalf of the Merging Fund, J.P. Morgan
Institutional Funds ("JPMF"), on behalf of J.P. Morgan
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 Select Class shares of the Surviving Fund
(the "Select Class Shares"), and (b) the distribution of
such Select Class 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 JPF.
ITEM 3. To transact such other business as may properly come before
the Special Meeting or any adjournment(s) thereof.
YOUR FUND TRUSTEES UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOR OF ITEMS 1
AND 2.
Each proposal is described in the accompanying Combined Prospectus/Proxy
Statement. Attached as Appendix A to the Combined Prospectus/Proxy Statement is
a copy of the Reorganization Plan.
Shareholders of record as of the close of business on April 6, 2001 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment(s)
thereof.
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY THE BOARD OF
TRUSTEES OF JPF. THIS IS IMPORTANT
TO ENSURE A QUORUM AT THE SPECIAL MEETING.
PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO
THE MERGING FUND A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY
OR BY ATTENDING THE SPECIAL MEETING AND VOTING IN PERSON.
Margaret W. Chambers
Secretary
May 16, 2001
COMBINED PROSPECTUS/PROXY STATEMENT
DATED MAY 16, 2001
ACQUISITION OF THE ASSETS AND LIABILITIES OF
J.P. MORGAN BOND FUND
A SERIES OF J.P. MORGAN FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
(617) 557-0700
BY AND IN EXCHANGE FOR SELECT CLASS 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 J.P. Morgan Bond Fund (the "Merging Fund"), a series of J.P.
Morgan Funds ("JPF"), into J.P. Morgan Institutional Bond Fund (the "Surviving
Fund"), a series of J.P. Morgan Institutional Funds ("JPMF"). If approved by
shareholders of the Merging Fund, the proposed reorganization will be effected
by transferring all of the assets and liabilities of the Merging Fund to the
Surviving Fund, which has identical investment objectives and policies to those
of the Merging Fund, in exchange for Select Class 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"). JPF
and JPMF are both open-end management investment companies offering shares in
several portfolios. In connection with the Reorganization, the JPMorgan
Institutional Bond Fund will be renamed "JPMorgan Bond Fund."
In connection with the proposed 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. If the proposed
Reorganization is approved by Merging Fund Shareholders, each Merging Fund
Shareholder will receive Select Class shares (the "Select Class 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
Select Class Shares received in the Reorganization.
At the Meeting, you will also be asked to consider and vote upon the
election of Trustees of JPF.
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 JPF, on behalf of the Merging Fund, JPMF, on
behalf of the Surviving Fund and J.P. Morgan Chase & Co. ("JPMC"), attached
to this Combined Prospectus/Proxy Statement as Appendix A.
The Board of Trustees for JPF 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 Select Class 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 JPF and JPMF that
an investor should know before voting on the proposals. The current
Prospectuses, Statements of Additional Information and Annual Reports (including
the Annual Report of The U.S. Fixed Income Portfolio) of the Merging Fund and
the Surviving Fund are incorporated herein by reference, and the current
Prospectus and Annual Report (including the Annual Report of The U.S. Fixed
Income Portfolio) for the Surviving Fund are enclosed with this Combined
Prospectus/Proxy Statement. A Statement of Additional Information relating to
this Combined Prospectus/Proxy Statement dated May 16, 2001 containing
additional information about JPF 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 JPF OR JPMF.
INVESTMENTS IN THE SURVIVING FUND ARE SUBJECT TO RISK--INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL. NO SHARES IN THE SURVIVING FUND ARE
ii
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.
iii
TABLE OF CONTENTS
PAGE
INTRODUCTION.................................................................1
PROPOSAL 1: REORGANIZATION PLAN.............................................1
SUMMARY......................................................................2
COMPARATIVE FEE AND EXPENSE TABLES...........................................5
RISK FACTORS.................................................................9
INFORMATION RELATING TO THE PROPOSED REORGANIZATION.........................11
PURCHASES, REDEMPTIONS AND EXCHANGES........................................16
DISTRIBUTIONS AND TAXES.....................................................19
COMPARISON OF THE MERGING FUND'S AND THE SURVIVING FUND'S ORGANIZATION
STRUCTURE.............................................................20
INFORMATION RELATING TO THE ADVISORY CONTRACTS AND OTHER SERVICES...........22
PROPOSAL 2: ELECTION OF TRUSTEES............................................25
INFORMATION RELATING TO VOTING MATTERS......................................29
ADDITIONAL INFORMATION ABOUT JPF............................................32
ADDITIONAL INFORMATION ABOUT JPMF...........................................32
FINANCIAL STATEMENTS AND EXPERTS............................................32
OTHER BUSINESS..............................................................33
LITIGATION..................................................................33
SHAREHOLDER INQUIRIES.......................................................33
APPENDIX A AGREEMENT AND PLAN OF REORGANIZATION...........................A-1
iv
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 JPF 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 16, 2001.
PROPOSAL 1: REORGANIZATION PLAN
---------------------------------
At the Meeting, Merging Fund Shareholders will consider and vote upon the
Agreement and Plan of Reorganization (the "Reorganization Plan") dated _______,
2001 among JPF, 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 J.P. Morgan Chase & Co. ("JPMC"), pursuant to which all of the
assets and liabilities of the Merging Fund will be transferred to the Surviving
Fund in exchange for Select Class Shares of the Surviving Fund. As a result of
the Reorganization, Merging Fund Shareholders will become shareholders of the
Surviving Fund and will receive Select Class 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 JPF 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 JPF 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 (including the Annual Report of The
U.S. Fixed Income Portfolio) in respect of each of the Surviving Fund and the
Merging Fund, and the Reorganization Plan attached to this Combined
Prospectus/Proxy Statement as Appendix A.
PROPOSED REORGANIZATION
Each of the Surviving Fund and the Merging Fund currently invests all
of its assets in The U.S. Fixed Income Portfolio (the "Master Portfolio"),
which has identical investment objectives and policies as the Surviving Fund
and the Merging Fund and which is advised by J.P. Morgan Investment
Management Inc. ("JPMIM"). The Surviving Fund has also entered into plans of
reorganization with (i) JPMorgan Bond Fund II (formerly, Chase Vista Bond
Fund), a series of Mutual Fund Select Group ("MFSG") with similar investment
objectives and policies to the Merging Fund (the "Chase Fund Reorganization
I"), (ii) JPMorgan Intermediate Bond Fund (formerly, Chase Vista Intermediate
Bond Fund), a series of MFSG with similar investment objectives and policies
to the Merging Fund (the "Chase Fund Reorganization II" and, collectively
with the Chase Fund Reorganization I, the "Chase Fund Reorganizations"), and
(iii) J.P. Morgan Institutional Bond Fund -Ultra, a series of JPMF with
identical investment objectives and policies to the Surviving Fund whose
assets are managed by JPMIM (the "Feeder Reorganization" and, together with
the Chase Fund Reorganizations, the "Concurrent Reorganizations").
If each of the Reorganization and the Concurrent Reorganization is
approved by the shareholders of the respective funds and certain other
conditions are met, the Merging Fund and these other funds will be reorganized
into the Surviving Fund. Concurrent with the Feeder Reorganization, the
Surviving Fund will cease to operate under a "master/feeder" structure and will
instead invest directly in portfolio securities rather than in the Master
Portfolio. The consummation of the Reorganization and the Chase Fund
Reorganizations are contingent upon the consummation of the Feeder
Reorganization. The consummation of the Reorganization is not contingent upon
the consummation of either Chase Fund Reorganization.
In connection with the proposed Reorganization, the Surviving Fund will
implement a new multi-class structure under which it will offer Class A, Class
B, Select Class Shares, Institutional Class Shares and Ultra Class Shares.
Pursuant to the proposed Reorganization, the Merging Fund will transfer all of
its assets and liabilities to the Surviving Fund in exchange for Select Class
Shares.
Under the proposed Reorganization, each Merging Fund Shareholder will
receive a number of Select Class Shares of the Surviving Fund with an aggregate
net asset value equal on the date of the exchange to the aggregate net asset
value of such shareholder's Merging Fund Shares on such date. Therefore,
following the proposed Reorganization, Merging Fund Shareholders will be
Surviving Fund Shareholders. Merging Fund Shareholders will not pay a
2
sales load in connection with the Reorganization. See "Information Relating
to the Proposed Reorganization."
The Surviving Fund has investment objectives, policies and restrictions
identical to the Merging Fund. However, while the Merging Fund and the Surviving
Fund currently invest all of their assets in the Master Portfolio (which in turn
invests in portfolio securities), after the Reorganization the Surviving Fund
will invest directly in portfolio securities. 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 identical 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 JPF Board
and the JPMF Board, including a majority of the Board's members who are not
"interested persons" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), have each determined that the proposed
Reorganization is in the best interests of each Fund and its respective
shareholders and that the interests of such shareholders will not be diluted
as a result of such Reorganization.
REASONS FOR THE REORGANIZATION
The Reorganization is being proposed because each Fund's board believes
that it is in the best interest of the shareholders to operate in a multi-class
rather than a master/feeder structure.
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 Select Class 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 ADVISER
The investment adviser for the Master Portfolio (and therefore the
assets of the Merging Fund and the Surviving Fund) is JPMIM. Following the
Reorganization, JPMIM will serve as the Surviving Fund's investment adviser.
JPMIM is a wholly-owned subsidiary of J.P. Morgan Chase & Co. ("JPMC").
3
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Surviving Fund and the Merging Fund is to
provide high total return consistent with moderate risk of capital and
maintenance of liquidity. See "Risk Factors." Both Funds have identical
investment policies, and the Surviving Fund's investment policy will not change
after the Reorganization although as mentioned above, the Surviving Fund will
invest directly in portfolio securities rather than in the Master Portfolio. For
more information regarding the Surviving Fund's Investment policies, see the
Surviving Fund's prospectus enclosed with this Combined Prospectus /Proxy
Statement. Each Fund may change its objective without shareholder approval.
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." The Merging Fund invests mainly in investment grade corporate
bonds as well as other debt securities. Under normal market conditions, the
Merging Fund will invest at least 65% of its total assets in debt securities
with at least an A rating or the equivalent from Moody's Investors Service,
Inc., Standard & Poor's Corporation or Fitch Investor's Service Inc., and will
not invest in securities rated below Baa3 or BBB-. These include unrated
securities of comparable quality.
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 either of the Surviving Fund's
or the Merging Fund's portfolios or on any individual security in the
portfolios.
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."
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS
ADVISORY SERVICES
The investment adviser for the Surviving Fund's and the Merging Fund's
assets is JPMIM. JPMIM oversees the asset management of both funds. As
compensation for its
4
services, JPMIM receives a management fee indirectly from both funds 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 JPF and JPMF is organized as a Massachusetts business trust. The
Merging Fund is organized as a series of JPF 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 Select Class 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.
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 after giving
effect to the Reorganization and the Feeder Reorganization, but not either Chase
Fund Reorganization (iii) estimated fees and expenses on a pro forma basis after
giving effect to the Reorganization, the Feeder Reorganization and the Chase
Fund Reorganization I, (iv) estimated fees and expenses on a pro forma basis
after giving effect to the Reorganization, the Feeder Reorganization and the
Chase Fund Reorganization II and (v) estimated fees and expenses on a pro forma
basis for the Surviving Fund after giving effect to the Concurrent
Reorganizations. Under the proposed
5
Reorganization, holders of Shares in the Merging Fund will receive Select
Class Shares in the Surviving Fund. Please note that the Surviving Fund
currently has one class of shares. In connection with the Reorganization,
this class will be re-named "Institutional Class" and the Class A share
class, the Class B share class, the Select Class share class and the Agency
Class share class will be introduced.
The table indicates that while contractual (pre-waiver) total expense
ratios for current shareholders of the Merging Fund are anticipated to be higher
following the Reorganization, actual (post-waiver) total expense ratios for
current shareholders of the Merging Fund are anticipated to be less or stay the
same following the Reorganization. This is because 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 three years.
THE MERGING FUND THE SURVIVING FUND
---------------- ------------------
SHARES SHARES
---------------- -------------------
SHAREHOLDER FEES (FEES PAID
DIRECTLY FROM YOUR INVESTMENT) -
Maximum Sales Charge (Load) when you
buy shares, shown as % of the offering
price.......................................... None None
Maximum Deferred Sales Charge
(Load) shown as lower of original
purchase price or redemption proceeds.......... None None
ANNUAL FUND OPERATING
EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees.................................. 0.30% 0.30%
Distribution (12b-1) Fees........................ None None
Other Expenses................................... 0.39% 0.19%
Total Annual Fund Operating Expenses............. 0.69% 0.49%
THE SURVIVING FUND
----------------------
PRO FORMA WITH FEEDER
REORGANIZATION
----------------------
SELECT CLASS SHARES
----------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) -
Maximum Sales Charge (Load) when you buy shares, shown as %
of the offering price....................................... None
Maximum Deferred Sales Charge (Load) Shown as lower of
original purchase price or redemption proceeds.............. None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees............................................... 0.30%
Distribution (12b-1) Fees..................................... None
6
THE SURVIVING FUND
----------------------
PRO FORMA WITH FEEDER
REORGANIZATION
----------------------
SELECT CLASS SHARES
----------------------
Other Expenses................................................ 0.43%
Total Annual Fund Operating Expenses.......................... 0.73%
Contractual Fee Waivers and Expense Reimbursements(1)......... 0.04%
Net Expenses.................................................. 0.69%
(1) Reflects an agreement by Morgan, an affiliate of JPMC, to reimburse the fund
to the extent that operating expenses (which include interest, taxes, and
extraordinary expenses) exceed 0.69% of average daily net assets with respect to
Select Class Shares for three years after the Reorganization.
THE SURVIVING FUND
------------------------------
PRO FORMA WITH FEEDER
REORGANIZATION AND CHASE FUND
REORGANIZATION I
------------------------------
SELECT CLASS SHARES
------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) -
Maximum Sales Charge (Load) when you buy
shares, shown as % of the offering price........................ None
Maximum Deferred Sales Charge (Load) Shown as lower of
original purchase price or redemption proceeds.................. None
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)......................................
Management Fees................................................. 0.30%
Distribution (12b-1) Fees....................................... None
Other Expenses.................................................. 0.43%
Total Amount Fund Operating Expenses............................ 0.73%
Contractual Fee Waivers and Expense Reimbursements(1)........... 0.13%
Net Expenses.................................................... 0.60%
(1) Reflects an agreement by Morgan, an affiliate of JPMC, to reimburse the fund
to the extent that operating expenses (which include interest, taxes, and
extraordinary expenses) exceed 0.60% of average daily net assets with respect to
Select Class Shares for the first year after the Reorganization and 0.69% of
average daily net assets with respect to Select Shares for year 2 and year 3
after the Reorganization.
THE SURVIVING FUND
-----------------------------
PRO FORMA WITH FEEDER
REORGANIZATION AND CHASE FUND
REORGANIZATION II
-----------------------------
SELECT CLASS SHARES
-----------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) -
Maximum Sales Charge (Load) when you buy shares, shown as %
of the offering price......................................... None
Maximum Deferred Sales Charge (Load) Shown as lower
of original purchase price or redemption proceeds............. None
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)....................................
Management Fees............................................... 0.30%
7
THE SURVIVING FUND
-----------------------------
PRO FORMA WITH FEEDER
REORGANIZATION AND CHASE FUND
REORGANIZATION II
-----------------------------
Distribution (12b-1) Fees..................................... None
Other Expenses................................................ 0.43%
Total Amount Fund Operating Expenses.......................... 0.73%
Fee Waivers and Expense Reimbursements(1)..................... 0.13%
Net Expenses.................................................. 0.60%
(1) Reflects an agreement by Morgan, an affiliate of JPMC, to reimburse the fund
to the extent that operating expenses (which include interest, taxes, and
extraordinary expenses) exceed 0.60% of average daily net assets with respect to
Select Class Shares for the first year after the Reorganization and 0.69% of
average daily net assets with respect to Select Shares for year 2 and year 3
after the Reorganization.
THE SURVIVING FUND
-----------------------------
PRO FORMA WITH CONCURRENT
REORGANIZATIONS
-----------------------------
SELECT CLASS SHARES
-----------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) -
Maximum Sales Charge (Load) when you
buy shares, shown as % of the offering price.................. None
Maximum Deferred Sales Charge (Load) Shown as lower
of original purchase price or redemption proceeds............. None
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)....................................
Management Fees............................................... 0.30%
Distribution (12b-1) Fees..................................... None
Other Expenses................................................ 0.43%
Total Amount Fund Operating Expenses.......................... 0.73%
Fee Waivers and Expense Reimbursements(1)..................... 0.13%
Net Expenses.................................................. 0.60%
(1) Reflects an agreement by Morgan, an affiliate of JPMC, to reimburse the fund
to the extent that operating expenses (which include interest, taxes, and
extraordinary expenses) exceed 0.60% of average daily net assets with respect to
Select Class Shares for the first year after the Reorganization and 0.69% of
average daily net assets with respect to Select Shares for year 2 and year 3
after the Reorganization.
The table does not reflect charges or credits which investors might incur
if they invest through a financial institution.
EXAMPLE: This example helps investors compare the cost of investing in
the Funds with the cost of investing in other mutual funds. The example
assumes:
- you invest $10,000;
- you sell all of your shares at the end of each period;
- your investment has a 5% return each year; and
- each Fund's operating expenses are waived for three years after the
Reorganization and then unwaived for the period thereafter and
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...................... $ 70 $ 221 $ 384 $ 859
THE SURVIVING FUND.................... 50 157 274 616
PRO FORMA J.P. MORGAN INSTITUTIONAL BOND
FUND WITH FEEDER REORGANIZATION
Select Class Shares................. 61 212 385 888
PRO FORMA J.P. MORGAN INSTITUTIONAL BOND
FUND WITH FEEDER REORGANIZATION WITH
CHASE REORGANIZATION I
Select Class Shares................. 61 212 385 888
PRO FORMA J.P. MORGAN INSTITUTIONAL BOND
FUND WITH FEEDER REORGANIZATION WITH
CHASE REORGANIZATION II
Select Class Shares................. 61 212 385 888
PRO FORMA J.P. MORGAN INSTITUTIONAL BOND
FUND WITH CONCURRENT REORGANIZATIONS
Select Class Shares................. 61 212 385 888
- ---------------
RISK FACTORS
The following discussion highlights the principal risk factors associated
with an investment in the Surviving Fund. The Surviving Fund has investment
policies and investment restrictions, and therefore risks, identical to those of
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 more its value typically
falls. How well the 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/Ba. These bonds are more sensitive to
economic news, their issuers have a less secure
9
financial position and they have a higher risk of default, tend to be less
liquid, and may be more difficult to value.
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 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.
The Surviving Fund may invest in asset-backed securities (securities
representing an interest in, or secured by, a pool of mortgages or other assets
such as receivables) and direct mortgages which could generate capital losses or
periods of low yields if they are paid off substantially earlier or later than
expected.
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 and market 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 to the Fund which can reduce returns. Derivatives that
involve leverage could magnify losses.
The Surviving Fund may invest in illiquid securities. The Surviving Fund
could have difficulty valuing these holdings precisely. The Surviving Fund could
be unable to sell these securities at the time or price desired.
The Surviving Fund may buy when-issued and delayed delivery securities.
The Surviving Fund may use short-term trading to take advantage of
attractive or unexpected opportunities or to meet demands generated by
shareholder activity. Increased trading would raise the Surviving Fund's
transaction costs. Increased short-term capital gains distributions would raise
shareholders' income tax liability.
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
10
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.
INFORMATION RELATING TO THE PROPOSED REORGANIZATION
GENERAL
The terms and conditions under which the Reorganization may be consummated
are set forth in the Reorganization Plan. Significant provisions of the
Reorganization Plan are summarized below; however, this summary is qualified in
its entirety by reference to the Reorganization Plan, a copy of which is
attached as Appendix A to this Combined Prospectus/Proxy Statement and which is
incorporated herein by reference.
DESCRIPTION OF THE REORGANIZATION PLAN
In connection with the Reorganization and the Concurrent Reorganization,
the Merging Fund will cease investing in the Merging Fund Master Portfolio. The
Reorganization Plan provides that at the Effective Time (as defined in the
Reorganization Plan) of the Reorganization, the assets and liabilities of the
Merging Fund will be transferred to and assumed by the Surviving Fund. In
exchange for the transfer of the assets and the assumption of the liabilities of
the Merging Fund, JPMF will issue at the Effective Time of the Reorganization
full and fractional Select Class Shares of the Surviving Fund equal in aggregate
dollar value to the aggregate net asset value of full and fractional outstanding
shares of the Merging Fund as determined at the valuation time specified in the
Reorganization Plan. The Reorganization Plan provides that the Merging Fund will
declare a dividend or dividends prior to the Effective Time of the
Reorganization which, together with all previous dividends, will have the effect
of distributing to Merging Fund Shareholders all undistributed net investment
income earned and net capital gain realized up to and including the Effective
Time of the Reorganization.
Following the transfer of assets to, and the assumption of the liabilities
of the Merging Fund by, the Surviving Fund, the Merging Fund will distribute
Select Class Shares received by it to the Merging Fund Shareholders in
liquidation of the Merging Fund. Each Merging Fund Shareholder at the Effective
Time of the Reorganization will receive an amount of Select Class Shares with a
total net asset value equal to the net asset value of their Merging Fund Shares
plus the right to receive any dividends or distributions which were declared
before the Effective Time of the Reorganization but that remained unpaid at that
time with respect to the shares of the Merging Fund.
The Surviving Fund expects to maintain most of the portfolio investments
of the Merging Fund in light of the identical investment policies of the Merging
Fund and the Surviving Fund. Concurrently with the Reorganization, the Surviving
Fund will cease to operate under a "master/feeder" structure and will instead
invest directly in portfolio securities rather than in the Master Portfolio.
11
After the Reorganization, all of the issued and outstanding shares of the
Merging Fund shall be canceled on the books of the Merging Fund and the stock
transfer books of the Merging Fund will be permanently closed.
The Reorganization is subject to a number of conditions, including without
limitation: approval of the Reorganization Plan and the transactions
contemplated thereby described in this Combined Prospectus/Proxy Statement by
the Merging Fund Shareholders; the receipt of a legal opinion from Simpson
Thacher & Bartlett with respect to certain tax issues, as more fully described
in "Federal Income Tax Consequences" below; and the parties' performance in all
material respects of their respective agreements and undertakings in the
Reorganization Plan. Assuming satisfaction of the conditions in the
Reorganization Plan, the Effective Time of the Reorganization will be on August
11, 2001 or such other date as is agreed to by the parties.
In addition, the consummation of the Reorganization is contingent upon the
consummation of the Feeder Reorganization.
The expenses of the Funds in connection with the Reorganization will be
borne by JPMC.
The Reorganization Plan and the Reorganization described herein may be
abandoned at any time prior to the Effective Time of the Reorganization by
either party if a material condition to the performance of such party under the
Reorganization Plan or a material covenant of the other party is not fulfilled
by the date specified in the Reorganization Plan or if there is a material
default or material breach of the Reorganization Plan by the other party. In
addition, either party may terminate the Reorganization Plan if its trustees
determine that proceeding with the Reorganization Plan is not in the best
interests of their Fund's shareholders.
BOARD CONSIDERATIONS
In 1993, the JPF Board and shareholders approved the restructuring of the
Funds into their current "master-feeder" format, pursuant to which the Funds
(the feeders) invested their assets in a common Portfolio - the "master" - and
shares of each Fund were sold to different categories of investors with
different distribution and shareholder services and fees. Among other reasons
for the 1993 restructuring was the opportunity to obtain the economies of scale
from an investment and expense perspective that might come from the investment
and administration of a larger pool of assets than any one fund could expect to
have on its own. An important factor in the Board's decision at the time was
that non-U.S. investors' assets would be invested alongside those of U.S.
investors within the master Portfolio on a basis that was not disadvantageous to
the non-U.S. investors from a U.S. tax perspective. For various reasons, the
non-U.S. feeders withdrew their assets from the master commencing in 1997,
thereby eliminating one of the principal reasons for the master-feeder format.
Nevertheless, the Funds continued in that format and, the Board believes,
conducted their operations on a basis at least as favorable to the Funds as
would have obtained if the format had been abandoned, as is now proposed.
Following the announcement of the J.P. Morgan-Chase merger, JPMIM and
Morgan and their counterparts within the Chase organization reviewed the
compatibilities of their various mutual fund groups, including their respective
organizational structures, service providers,
12
distribution arrangements and methodologies, and fees and expenses. The
proposed Reorganization of the Merging Fund into the Surviving Fund is a part
of the more general integration of the J.P. Morgan funds complex with the
Chase Vista funds complex to create a single mutual fund complex with
substantially similar arrangements for the provision of advisory,
administration, distribution, custody and fund accounting and transfer agency
services.
The JPF Board believes that the conversion by way of the proposed
Reorganization of the current master-feeder format into the multi-class format
discussed in this proxy statement and the adoption of the service arrangements
by the Surviving Fund described herein (the "Service Arrangements") are in the
best interests of the Surviving and Merging Funds and their respective
shareholders and that the interests of shareholders will not be diluted as a
result of the Reorganization.
In considering the proposed Reorganization and Service Arrangements, the
JPF Board also noted that there were important benefits expected to arise out of
the integration of the J.P. Morgan and Chase Vista mutual funds complexes. Among
these benefits, the Board considered (1) investor and shareholder confusion
should be mitigated if not eliminated by the adoption by both the J.P. Morgan
and the Chase Vista mutual funds of common organizational structures and common
service providers, (2) Surviving Fund shareholders would be able to exchange
into a larger number and greater variety of funds without paying sales charges,
(3) additional share classes offered by the Surviving Fund should have a
positive effect on asset growth, which in turn over time could result in a lower
total expense ratio as economies of scale were realized; (4) JPMIM advised the
Board that it believes that the outsourcing of many functions to the
subadministrator will (a) upgrade the quality of services currently being
provided to the Funds, and (b) enhance Morgan's ability effectively to monitor
and oversee the quality of all Fund service providers, including the investment
adviser, distributor, custodian and transfer agent; (5) Morgan's undertaking for
three years to waive fees or reimburse the Surviving Fund's expenses in order
that the total expense ratios of the Select and Institutional Classes do not
exceed those of the Merging Fund and the Surviving Fund, respectively; (6) the
fact that all costs and expenses of the Reorganization and implementation of the
Service Arrangements would be borne by JPMC and (7) the fact that the
Reorganization would constitute a tax-free reorganization.
In addition, the Board took into account that, notwithstanding the
increase in the contract fee rate of Morgan, J.P. Morgan agreed to increase from
one to three years noted above its undertaking to cap the total expense ratio on
the Select and Institutional Classes and to institute a breakpoint in the
Administration fee from .15% of the average daily net assets in the aggregate of
all funds in the fully integrated funds group to .075% of such assets over [$26]
billion (the aggregate of such assets being [$19] billion as of March 31, 2001).
Moreover, JPMIM agreed that, notwithstanding its proposed increase to $1 million
of the minimum investment in the Select Class, all current shareholders of the
Merging Fund (for which the current minimum is $2,500) will be entitled to make
additional investments in the Select Class of the Surviving Fund or of any other
fund in the integrated fund complex or to exchange shares of the Select Class of
the Surviving Fund for Select Shares of any other such fund. The Board also
noted that J.P. Morgan did not propose and advised that it does not expect to
propose the imposition of any distribution (12b-1) fees or shareholder servicing
fees on the Select or Institutional Class that are not already in place. Finally
the Board was advised that the custody and fund accounting fees to be charged by
Chase Global Investors Services will be lower than those currently charged by
13
The Bank of New York. It should be recognized that, at current asset levels and
in consequence of the expense cap, the lower custody and fund accounting fees
will not have an immediate effect on the Surviving Fund's total expense ratio
but should have some positive effect in the future.
Based upon their evaluation of the relevant information provided to them,
the changes effected in the Service Arrangements in the negotiations between the
Trustees and J.P. Morgan, and in light of their fiduciary duties under federal
and state law, the Trustees, including a majority who are not interested persons
of the Funds or JPMC as defined in the 1940 Act, determined that the proposed
Reorganization is in the best interests of both the Merging and Surviving Fund,
that the interests of the shareholders of each of the Merging Fund and the
Surviving Fund would not be diluted as a result of the Reorganization, and that
the Service Arrangements are in the best interests of the Surviving Fund.
THE JPF BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
PROPOSAL.
The JPF Board has not determined what action the Merging Fund will take in
the event shareholders do not approve the Reorganization Plan or for any reason
the Reorganization is not consummated. In either such event, the Board will
consider other appropriate courses of action.
INFORMATION RELATING TO THE CONCURRENT REORGANIZATIONS
The terms and conditions under which the Concurrent Reorganizations may be
consummated are set forth in a reorganization plan which is substantially
similar to the Reorganization Plan you are in considering. Concurrently with the
Reorganization and Feeder Reorganization, the Surviving Fund will cease to
operate under a "master/feeder" structure and will instead invest directly in
portfolio securities rather than in the Master Portfolio. The consummation of
the Chase Fund Reorganizations is contingent upon the consummation of the Feeder
Reorganization.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the Reorganization is subject to the condition that JPF
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 Select
Class Shares and the liquidating distributions to shareholders of the Select
Class 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 Select Class 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
14
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 Select
Class 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.
JPF has not sought a tax ruling from the Internal Revenue Service (the
"IRS"), but is acting in reliance upon the opinion of counsel discussed in the
previous paragraph. That opinion is not binding on the IRS and does not preclude
the IRS from adopting a contrary position. Shareholders should consult their own
advisers concerning the potential tax consequences to them, including state and
local income taxes.
CAPITALIZATION
Because the Merging Fund will be combined with the Surviving Fund in the
Reorganization as well as other funds as a result of the Concurrent
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 tables set 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 Feeder Reorganization; (iv)
the pro forma capitalization of the Surviving Fund as adjusted to give effect
to the Feeder Reorganization and the Chase Fund Reorganization I, (v) the pro
forma capitalization of the Surviving Fund as adjusted to give effect to the
Feeder Reorganization and the Chase Fund Reorganization I and (v) the pro forma
capitalization of the Surviving Fund as adjusted to give effect to 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. The
Surviving Fund currently has one class of shares. In connection with the
Reorganization, this class will be renamed Institutional Class and the Class A
share class, Class B share class, the Select Class share class and the Agency
Class share class will be introduced.
CAPITALIZATION
PRO FORMA WITH FEEDER REORGANIZATION
(Amounts in Thousands, except per share amounts)
BENEFICIAL SHARES NET ASSETS NET ASSET
INTEREST OUTSTANDING VALUE PER
OUTSTANDING SHARE
THE U.S. FIXED INCOME PORTFOLIO
J.P. Morgan Bond Fund (Merging 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
PRO FORMA COMBINED JPMORGAN
BOND FUND
Select - 25,482 240,180 9.43
Institutional - 96,271 907,411 9.43
Agency - 49,443 466,026 9.43
CAPITALIZATION (3)
PRO FORMA WITH FEEDER REORGANIZATION AND CHASE FUND REORGANIZATION I
(Amounts in Thousands, except per share amounts)
BENEFICIAL SHARES NET ASSETS NET ASSETS
INTEREST OUTSTANDING VALUE PER
OUTSTANDING SHARE
THE U.S. FIXED INCOME PORTFOLIO
J.P. Morgan Bond Fund (Merging 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(1) 15,449 587,369 38.02
PRO FORMA COMBINED JPMORGAN
BOND FUND
Select - 87,704 827,549 9.43
Institutional - 96,271 907,411 9.43
Agency - 49,443 466,026 9.43
15
CAPITALIZATION (3)
PRO FORMA WITH REORGANIZATION AND CHASE FUND REORGANIZATION II
(Amounts in Thousands, except per share amounts)
BENEFICIAL SHARES NET ASSETS NET ASSETS
INTEREST OUTSTANDING VALUE PER
OUTSTANDING SHARE
THE U.S. FIXED INCOME PORTFOLIO
J.P. Morgan Bond Fund (Merging 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 (2)
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
CAPITALIZATION (3)
PRO FORMA WITH CONCURRENT REORGANIZATIONS
(Amounts in Thousands, except per share amounts)
BENEFICIAL SHARES NET ASSETS NET ASSETS
INTEREST OUTSTANDING VALUE PER
OUTSTANDING SHARE
THE U.S. FIXED INCOME PORTFOLIO
J.P. Morgan Bond Fund (Merging 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(1) 15,449 587,369 38.02
JPMORGAN INTERMEDIATE BOND FUND(2) 40,050 387,065 9.66
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 Bond Fund
(2) Formerly Chase Vista Select Intermediate 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 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 net assets as of October 31, 2000. Such net assets are less
than 10% of pro forma combined net asests. 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.
Formerly Chase Vista Select Intermediate Bond Fund
PURCHASES, REDEMPTIONS AND EXCHANGES
Following the Reorganization, the procedures for purchases, redemptions
and exchanges of shares of the Surviving Fund will be substantially similar to
those of the Merging Fund. 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 share class, Class B
share class, Select Class share class and Ultra Class share class 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.
BUYING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF THE SELECT CLASS 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). 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.
16
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.
Select Class Shares of the Surviving Fund may be purchased only through
financial service firms, such as broker-dealers and banks that have an agreement
with the Fund or the Fund's distributor.
The investment minimum for Select Class Shares is $1,000,000. However,
shareholders who receive Select Class Shares as a result of the Reorganization
may purchase new shares without regard to such investment minimum. For Select
Class Shares, checks should be made out to JPMorgan Funds in U.S. dollars.
Credit cards, cash, or checks from a third party will not be accepted. Shares
bought by check may not be sold for 15 calendar days. Shares bought through an
automated clearing house cannot be sold until the payment clears. This could
take more than seven business days. Purchase orders will be canceled if a check
does not clear and the investor will be responsible for any expenses and losses
to the Fund. Orders by wire will be canceled if the Center does not receive
payment by 4:00 p.m., Eastern time, on the day the shareholder buys.
Shareholders seeking to buy Select Class Shares through an investment
representative should instruct their representative to contact the Surviving
Fund. Such representatives may charge investors a fee and may offer additional
services, such as special purchase and redemption programs, "sweep" programs,
cash advances and redemption checks. Such representative may set different
minimum investments and earlier cut-off times.
A systematic investment plan is available for Select Class Shares.
SELLING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO SALES OF THE SELECT CLASS SHARES THAT
YOU MIGHT MAKE AFTER THE REORGANIZATION AND REFLECTS THE NEW CLASS STRUCTURE.
Select Class 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.
17
Under normal circumstances, if a request is received before the close of
regular trading on the New York Stock Exchange, the Surviving Fund will send the
proceeds the next business day. An order to sell shares will not be accepted if
the Fund has not collected payment for the shares. The Surviving Fund may stop
accepting orders to sell and may postpone payments for more than seven days, as
federal securities laws permit.
Generally, proceeds are sent by check, electronic transfer or wire for
Select Class Shares. However, 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 Fund's records.
For Select Class Shares, a shareholder will need to have his or her
signature guaranteed if he or she wants payment to be sent to an address other
than the one in the Surviving Fund's records. Additional documents or a letter
from a surviving joint owner may also be needed.
A shareholder who purchased through an investment representative, or
through a financial service firm, should contact that representative, who will
send the necessary documents to the Center. The representative might charge a
fee for this service.
Shareholders may also sell their shares by contacting the Center
directly. Select Class shareholders may call ___________.
A systematic withdrawal plan is available for Select Class Shares.
EXCHANGING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF THE SELECT CLASS SHARES
THAT YOU MIGHT MAKE AFTER THE REORGANIZATION.
Select Class Shares of the Surviving Fund may be exchanged for shares of
the same class in certain other JPMorgan Funds.
For tax purposes, an exchange is treated as a sale of those shares.
Shareholders should carefully read the prospectus of the fund into which they
want to exchange. Shareholders who exchange must meet any minimum investment
requirements and may have to pay a sales commission.
The exchange privilege is not a means of short-term trading as this could
increase management cost and affect all shareholders of the Surviving Fund. The
Fund reserves the right to limit the number of exchanges or refuse an exchange.
Each exchange privilege may also be terminated. The Fund charges an
administration fee of $5 for each exchange if an investor makes more than 10
exchanges in a year or three in a quarter.
OTHER INFORMATION CONCERNING THE SURVIVING FUND
For Select Class Shares, the Surviving Fund may close an account if the
balance falls below $1,000,000. The Surviving Fund may also close the account if
an investor is in the
18
Systematic Investment Plan and fails to meet investment minimums over a
12-month period. At least 60 days' notice will be given before closing the
account.
Unless a shareholder indicates otherwise on his or her account
application, the Surviving Fund is authorized to act on redemption and transfer
instructions received by phone. If someone trades on an account by phone, the
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 Surviving
Fund takes reasonable precautions. The 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 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
Select Class Shares held by investors serviced by the shareholder servicing
agent. The Merging Fund likewise has similar arrangements with respect to its
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 issues multiple classes of shares. Each class may have
different requirements for who may invest, and may have different sales charges
and expense levels. A person who gets compensated for selling Select Class
Shares may receive a different amount for each class.
DISTRIBUTIONS AND TAXES
The Surviving Fund can earn income and realize capital gain. The Surviving
Fund will deduct from these earnings any expenses and then pay to shareholders
the distributions.
The Surviving Fund typically distributes any net investment income at
least monthly. Net capital gain, if any, is distributed annually. You have three
options for your Surviving Fund distributions. You may:
- reinvest all of them in additional Surviving Fund shares
without a sales charge;
- 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
19
- take all distributions in cash or as a deposit in a
pre-assigned bank account.
If you don't notify us otherwise, we'll reinvest all distributions. If
your distributions are reinvested, they will be in the form of shares of the
same class. The taxation of dividends won't be affected by the form in which you
receive them.
Dividends of net investment income are usually taxable as ordinary income
at the federal, state and local levels.
If you receive distributions of net capital gain, the tax rate will be
based on how long the Surviving Fund held a particular asset, not on how long
you have owned your shares. If you buy shares just before a distribution, you
will pay tax on the entire amount of the taxable distribution you receive, even
though the NAV will be higher on that date because it includes the distribution
amount.
Early in each calendar year, the Surviving Fund will send its shareholders
a notice showing the amount of distributions received in the preceding year and
the tax status of those distributions.
The above is only a general summary of tax implications of investing in
the Surviving Fund. Shareholders should consult their tax advisors to see how
investing in the Surviving Fund will affect their own tax situation.
COMPARISON OF THE MERGING FUND'S
AND THE SURVIVING FUND'S
ORGANIZATION STRUCTURE
There are no material differences in the organizational structure of the
Merging Fund and the Surviving Fund. Set forth below are descriptions of the
structure, voting rights, shareholder liability and the liability of Trustees.
STRUCTURE OF THE MERGING FUND
The Merging Fund is organized as a series of JPF, which is organized under
the law of the Commonwealth of Massachusetts. As a Massachusetts business trust,
JPF's operations are governed by JPF's Declaration of Trust and By-Laws and
applicable Massachusetts law. The operations of the Merging Fund are also
subject to the provisions of the 1940 Act and the rules and regulations
thereunder.
STRUCTURE OF THE SURVIVING FUND
The Surviving Fund is organized as a series of 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.
20
TRUSTEES AND OFFICERS
Subject to the provisions of its trust documents, the business of the
Merging Fund is managed by JPF'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 JPF and JPMF
is set forth in the Funds' respective Statements of Additional Information,
which are incorporated herein by reference.
SHARES OF FUNDS
Each of JPF and JPMF is a trust with an unlimited number of authorized
shares of beneficial interest which may be divided into series or classes
thereof. Each Fund is one series of a trust and may issue multiple classes of
shares. Each share of a series or class of a trust represents an equal
proportionate interest in that series or class with each other share of that
series or class. The shares of each series or class of either JPF 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 JPF 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 JPF 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 JPF or JPMF.
SHAREHOLDER VOTING RIGHTS
A vacancy in the Board of either JPF or JPMF resulting from the
resignation of a Trustee or otherwise may be filled similarly by a vote of a
majority of the remaining Trustees then in office, subject to the 1940 Act. In
addition, Trustees may be removed from office by a vote of holders of shares
representing two-thirds of the outstanding shares of each portfolio of that
trust. A meeting of shareholders shall be held upon the written request of the
holders of shares representing not less than 10% of the outstanding shares
entitled to vote on the matters specified in the written request. Except as set
forth above, the Trustees may continue to hold office and may appoint successor
Trustees.
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders of either JPF 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 JPF 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 JPF and JPMF may maintain appropriate insurance (for example, fidelity
bonding and errors and
21
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 JPF 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 JPF 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 JPF 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 similar 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, 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 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
22
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 Master Portfolio and, therefore, indirectly to the
Merging Fund by JPMIM.
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
Master Portfolio and, therefore, indirectly the Merging Fund also currently pay
0.30% of average net assets to JPMIM 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 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 J.P. Morgan since 1984, Paul Zemsky,
managing director, who has been at J.P. Morgan since 1985 and Jay Gladieux, vice
president, who has been at J.P. Morgan 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.
23
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 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
24
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 is a wholly owned, indirect subsidiary of BISYS Fund
Services, Inc. which currently serves as the distributor for both the Surviving
Fund and the Merging Fund. BISYS is the sub-administrator for both the Surviving
Fund and the Merging Fund. The Distributor is unaffiliated with JPMC or any of
its subsidiaries.
Morgan serves as administrator and shareholder servicing agent, BONY
serves as fund accountant and custodian, and State Street 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 administrator, shareholder servicing agent, fund accountant and
custodian, and DST will become the Surviving Fund's transfer agent and dividend
disbursing agent.
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.
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
JPF, 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 JPF will continue to exist and operate. All shareholders of any series
of JPF 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 JPF, you are entitled to vote on this proposal. Shareholders of
JPMF are being asked to approve the same Trustees as are being proposed for JPF.
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
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 JPF, certain
current Trustees of JPMF and certain members of their respective Adisory Boards.
Each Nominee has consented to being named in this Proxy Statement and has agreed
to serve as a Trustee if elected.
25
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 JPF 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 JPF 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 JPF.
The following are the nominees:
The Board of Trustees of JPF met four times during the fiscal year ended
October 31, 2000, and each of the Trustees attended at least 75% of the
meetings.
The Board of Trustees of JPF presently has an Audit Committee. The members
of the Audit Committee are Messrs. Addy (Chairman), Eschenlauer, Burns, Mallardi
and Healey. The function of the Audit Committee is to recommend independent
auditors and monitor accounting and financial matters. The Audit Committee met
four times during the fiscal year ended October 31, 2000.
* 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 JPMIM 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 JPMIM. Each Trustee receives an annual fee
of $75,000, which is, allocated among all investment companies for which the
Trustees serves.
26
Set forth below is information regarding compensation paid or accrued
during the calendar year ended December 31, 2000 for each Trustee of JPF:
Aggregate
Trustee Total Trustee
Compensation Compensation
Paid by the Accrued by Fund
Trust During Complex(1) During
2000 2000(2)
------------ -----------------
Matthew Healey,
Trustee(3), Chairman and
Chief Executive Officer $11,238 $75,000
Frederick S. Addy,
Trustee $11,238 $75,000
William G. Burns,
Trustee $11,238 $75,000
Arthur C. Eschenlauer,
Trustee $11,238 $75,000
Michael P. Mallardi,
Trustee $11,238 $75,000
The Trustees decide upon general policies and are responsible for
overseeing JPF's business affairs. Each of JPF and the Master Portfolio has
entered into a Fund Services Agreement with Pierpont Group, Inc. to assist
the Trustees in exercising their overall supervisory responsibilities.
Pierpont Group, Inc. was organized in July 1989 to provide services for the
J.P. Morgan Family of Funds (formerly "The Pierpont Family of Funds"), and
the Trustees are the equal and sole shareholders of Pierpont Group, Inc. JPF
has agreed to pay Pierpont Group, Inc. a fee in an amount representing its
reasonable costs in performing these services. These costs are periodically
reviewed by the Trustees. The principal offices of Pierpont Group, Inc. are
located at 461 Fifth Avenue, New York, New York 10017. It is anticipated
that the Surviving Fund and Merging Fund will terminate their agreements with
Pierpont Group, Inc. in connection with the Reorganization.
The aggregate fees paid to Pierpont Group, Inc. by the Merging Fund, the
Surviving Fund and the Master Portfolio during the indicated fiscal periods are
set forth below:
MERGING FUND -- For the fiscal years ended October 31, 1998, 1999 and 2000:
$5,901, $4,299 and $3,586, respectively.
SURVIVING FUND -- For the fiscal years ended October 31, 1998, 1999 and 2000:
$28,012, $21,558 and $14,992, respectively.
- ---------------------------
1 A Fund Complex means two or more investment companies that
hold themselves out to investors as related companies for
purposes of investment and investment services, or have a common
investment adviser or have an investment adviser that is an
affiliated person of the investment adviser of any of the other
investment companies.
2 No investment company within the Fund Complex has a pension or
retirement plan.
3 During 2000, Pierpont Group, Inc. paid Mr. Healey, in his role as
Chairman of Pierpont Group, Inc., compensation in the amount of
$200,000, contributed $25,500 to a defined contribution plan on
his behalf and paid $18,400 in insurance premiums for his benefit.
27
MASTER PORTFOLIO -- For the fiscal years ended October 31, 1998, 1999 and 2000:
$35,661, $30,562 and $24,445, respectively.
ADVISORY BOARD
The Trustees determined as of January 26, 2000 to establish an advisory
board and appoint four members ("Members of the Advisory Board") thereto. Each
member serves at the pleasure of the Trustees. The advisory board is distinct
from the Trustees and provides advice to the Trustees as to investment,
management and operations of JPF; but has no power to vote upon any matter put
to a vote of the Trustees. The advisory board and the members thereof also serve
each of the other trusts in the Fund Complex. The creation of the Advisory Board
and the appointment of the members thereof was designed so that the Board of
Trustees will continuously consist of persons able to assume the duties of
Trustees and be fully familiar with the business and affairs of JPF, in
anticipation of the current Trustees reaching the mandatory retirement age of
seventy. Each Member of the Advisory Board is paid an annual fee of $75,000 for
serving in this capacity for the Fund Complex and is reimbursed for expenses
incurred in connection for such service. The Members of the Advisory Board may
hold various other directorships unrelated to these funds. The mailing address
of the Members of the Advisory Board is c/o Pierpont Group, Inc., 461 Fifth
Avenue, New York, New York 10017. Their names, principal occupations during the
past five years and dates of birth are set forth below:
Ann Maynard Gray -- Former President, Diversified Publishing Group and
Vice President, Capital Cities/ABC, Inc. Her date of birth is August 22, 1945.
John R. Laird-- Retired; Former Chief Executive Officer, Shearson
Lehman Brothers and The Boston Company. His date of birth is June 21, 1942.
Gerard P. Lynch -- Retired; Former Managing Director, Morgan Stanley Group
and President and Chief Operating Officer, Morgan Stanley Services, Inc. His
date of birth is October 5, 1936.
James J. Schonbachler -- Retired; Prior to September, 1998, Managing
Director, Bankers Trust Company and Chief Executive Officer and Director,
Bankers Trust A.G., Zurich and BT Brokerage Corp. His date of birth is January
26, 1943.
PRINCIPAL EXECUTIVE OFFICERS:
The principal executive officers of JPF are as follows:
NAME AND POSITION AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ----------------- --- ------------------------------------------
Matthew Healey 63 Chief Executive Officer; Chairman, Pierpont
Group, since prior to 1993. His address is
Pine Tree Country Club Estates, 10286 Saint
Andrews Road, Boynton Beach, Florida 33436.
Margaret W. 41 Executive Vice President and General Counsel
Chambers of the Distributor since April, 1998. From
August 1996 to March 1998, Ms. Chambers was
Vice President and Assistant General Counsel
for
28
NAME AND POSITION AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ----------------- --- ------------------------------------------
Loomis, Sayles & Company, L.P. From
January 1986 to July 1996, she was an
associate with the law firm of Ropes & Gray.
George A. Rio 46 President and Treasurer. Executive Vice
President and Client Service Director of the
Distributor since April 1998. From June 1995
to March 1998, Mr. Rio was Senior Vice
President and Senior Key Account Manager for
Putnam Mutual Funds.
ACCOUNTANTS
PricewaterhouseCoopers LLP serves as the Merging Fund's, the Surviving
Fund's and the Master Portfolio'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 JPF or JPMF engages it to do so.
AUDIT FEES. The aggregate fees paid to PricewaterhouseCoopers LLP in
connection with the annual audit of the Merging Fund and the Master Portfolio
for the last fiscal year was $42,500.
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, JPMIM and JPMIM's
affiliates that provide services to the Fund for the calendar year ended
December 31, 2000 was $0.
ALL OTHER FEES. The aggregate fees billed for all other non-audit
services, including fees for tax-related services, rendered by
PricewaterhouseCoopers LLP to the Merging Fund, JPMIM and JPMIM's affiliates
that provide services to the Fund for the calendar year ended December 31, 2000
was $11,029,300.
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 JPF Board for use at the Meeting. It is
expected that the solicitation of proxies will be primarily by mail. JPF's
officers and service providers may also solicit proxies by telephone, facsimile
machine, telegraph, the Internet or personal interview. In addition JPF may
retain the services of professional solicitors to aid in the solicitation of
proxies for a fee. It is anticipated that banks, brokerage houses and other
custodians will be requested on behalf of JPF to forward solicitation materials
to their principals to obtain authorizations for the execution of proxies. Any
Merging Fund Shareholder giving a proxy may
29
revoke it at any time before it is exercised by submitting to JPF a written
notice of revocation or a subsequently executed proxy or by attending the
Meeting and electing to vote in person.
Only the Merging Fund Shareholders of record at the close of business on
_________, 2001 will be entitled to vote at the Meeting. On that date, there
were outstanding and entitled to be voted _____________ Merging Fund Shares.
Each share or fraction thereof is entitled to one vote or fraction thereof.
The presence in person or by proxy of shareholders that own one-third of
the outstanding Merging Fund Shares will constitute a quorum for purposes of
transacting all business at the Meeting. If a quorum is not present at the
Meeting, sufficient votes in favor of the proposals are not received by the time
scheduled for the Meeting, or the Merging Fund Shareholders determine to adjourn
the Meeting for any other reason, the Merging Fund Shareholders present (in
person or proxy) may adjourn the Meeting from time to time, without notice other
than announcement at the Meeting. Any such adjournment will require the
affirmative vote of the Merging Fund Shareholders holding a majority of the
Merging Fund Shares present, in person or by proxy, at the Meeting. The persons
named in the Proxy will vote in favor of such adjournment those Merging Fund
Shares that they are entitled to vote if such adjournment is necessary to obtain
a quorum or if they determine such an adjournment is desirable for any other
reason. Business may be conducted once a quorum is present and may continue
until adjournment of the Meeting notwithstanding the withdrawal or temporary
absence of sufficient Merging Fund Shares to reduce the number present to less
than a quorum. If the accompanying proxy is executed and returned in time for
the Meeting, the shares covered thereby will be voted in accordance with the
proxy on all matters that may properly come before the meeting (or any
adjournment thereof).
PROXIES
All Merging Fund Shares represented by each properly signed proxy received
prior to the Meeting will be voted at the Meeting. If a Merging Fund Shareholder
specifies how the proxy is to be voted on any of the business to come before the
Meeting, it will be voted in accordance with such specifications. If a Merging
Fund Shareholder returns its proxy but no direction is made on the proxy, the
proxy will be voted FOR each Proposal 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 JPF,
by submission of a later dated Proxy or by voting in person at the Meeting. If
any other matters come before the Meeting, proxies will be voted by the persons
named as proxies in accordance with their best judgment.
30
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 JPF 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 JPF 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 based upon their
holdings at _______, 2001 are as follows:
Percentage of Percentage of
Amount of Merging Surviving
of Fund Owned Fund Owned
Shares on Record Upon
Name and Address Owned 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% shares of the Surviving Fund 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 based upon their holdings at
_________, 2001 were as follows:
Percentage of
Surviving Percentage of
Amount of Fund Owned Surviving Fund
Shares on Record Owned Upon
Name and Address Owned Date Consummation
- ----------------------- ----------- -------------- ---------------
31
ADDITIONAL INFORMATION ABOUT JPF
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 JPF'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___________.. JPF is subject to the requirements of the 1940 Act and, in
accordance with such requirements, files reports and other information with the
Commission. These materials can be inspected and copied at the Public Reference
Facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices at 7 World Trade Center,
Suite 1300, New York, NY 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549, at prescribed rates,
and are also available on the Commission's web site at http://www.sec.gov.
ADDITIONAL INFORMATION ABOUT JPMF
Information about the 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.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial highlights, financial statements and notes thereto
of each 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, of the Merging Fund, the Surviving Fund and the Master
Portfolio have been incorporated herein by reference in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on their authority
as experts in auditing and accounting.
32
OTHER BUSINESS
The JPF 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 JPF 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 JPF 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 JPF in writing at the address on
the cover page of this Combined Prospectus/Proxy Statement or by telephoning
1-800-521-5411.
* * *
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.
33
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Plan") made this ____ day
of ______, 2001 by and among J.P. Morgan Funds (the "Transferor Trust"), a
Massachusetts business trust, on behalf of the JPMorgan 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 Shares of the Transferor Portfolio,
with the amounts of shares to be determined by the parties. Any
A-1
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
A-2
accordance with the custom of brokers, and shall be accompanied by all
necessary federal and state stock transfer stamps or a check for the
appropriate purchase price thereof.
(c) VALUATION.
(i) The net asset value of the shares of the Acquiring
Portfolio and the net value of the assets of the Transferor Portfolio
to be transferred in exchange therefore shall be determined as of the
Effective Time of the Reorganization. The net asset value of the
Acquiring Portfolio Shares shall be computed by the Custodian in the
manner set forth in the Acquiring Trust's Declaration of Trust or
By-laws and then current prospectus and statement of additional
information and shall be computed to not less than two decimal places.
The net value of the assets of the Transferor Portfolio to be
transferred shall be computed by the Custodian by calculating the value
of the assets transferred by the Transferor Portfolio and by
subtracting therefrom the amount of the liabilities assigned and
transferred to the Acquiring Portfolio, said assets and liabilities to
be valued in the manner set forth in the Transferor Trust's Declaration
of Trust or By-laws and then current prospectus and statement of
additional information.
(ii) The number of Select Class shares of the Acquiring Portfolio
to be issued
(including fractional shares, if any) by the Acquiring Portfolio in
exchange for the Transferor Portfolio's assets attributable to the
Transferor Portfolio's shares shall be determined by an exchange ratio
computed by dividing the net value of the Transferor Portfolio's assets
attributable to its shares by the net asset value per share of the Select
Class shares of the Acquiring Portfolio, both as determined in accordance
with Section 1(c)(i). All computations of value shall be made by the
Custodian in accordance with its regular practice as pricing agent for the
Acquiring Portfolio and the Transferor Portfolio.
2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING TRUST
The Acquiring Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Acquiring Trust is a business
trust that is duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has the power to carry on its
business as it is now being conducted. The Acquiring Portfolio is a validly
existing series of shares of such business trust representing interests therein
under the laws of Massachusetts. Each of the Acquiring Portfolio and the
Acquiring Trust have all necessary federal, state and local authorization to
own all of its properties and assets and to carry on its business as now being
conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Acquiring Trust is
registered under the Investment Company Act of 1940, as amended (the "Act")
as an open-end investment company of the management type; such registration
has not been revoked or rescinded and is in full force and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectus and
statement of additional information of the Acquiring Trust, as amended,
included in the Acquiring Trust's
A-3
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 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
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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 for all taxable years 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.
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
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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 24,290 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.
(e) FINANCIAL STATEMENTS. The financial statements for the
Transferor Trust with respect to the Transferor 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 Transferor 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 GAAP.
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(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 knotwledge of the Transferor Trust, threatened which would
adversely affect the Transferor Trust or the Transferor Portfolio's assets or
business or which would prevent or hinder consummation of the transactions
contemplated hereby, there are no facts which would form the basis for the
institution of administrative proceedings against the Transferor Trust or the
Transferor Portfolio and, to the knowledge of the Transferor Trust, there are
no regulatory investigations of the Transferor Trust or the Transferor
Portfolio, pending or threatened, other than routine inspections and audits.
(j) CONTRACTS. The Transferor Trust, on behalf of the Transferor
Portfolio, is not subject to any contracts or other commitments (other than
this Plan) which will not be terminated with respect to the Transferor
Portfolio without liability to the Transferor Trust or the Transferor
Portfolio as of or prior to the Effective Time of the Reorganization.
(k) TAXES. The federal income tax returns of the Transferor Trust
with respect to the Transferor Portfolio, and all other income tax returns
required to be filed by the Transferor Trust with respect to the Transferor
Portfolio, have been filed and all taxes payable pursuant to such returns
have been paid. To the knowledge of the Transferor Trust, no such return is
under audit and no assessment has been asserted in respect of any such
return. All federal and other taxes owed by the Transferor Trust with respect
to the Transferor Portfolio have been paid so far as due. The Transferor
Portfolio has elected to qualify as a "regulated investment company"
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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 until the consummation of the
Reorganization, it being understood that such ordinary course of business
will include the declaration and payment of customary dividends and
distributions.
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5. COVENANTS OF THE TRANSFEROR TRUST
The Transferor Trust covenants to the following:
(a) MEETING OF THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The
Transferor Trust shall call and hold a meeting of the shareholders of the
Transferor Portfolio for the purpose of acting upon this Plan and the
transactions contemplated herein.
(b) PORTFOLIO SECURITIES. With respect to the assets to be
transferred in accordance with Section 1(a), the Transferor Portfolio's
assets shall consist of all property and assets of any nature whatsoever,
including, without limitation, all cash, cash equivalents, securities, claims
and receivables (including dividend and interest receivables) owned, and any
deferred or prepaid expenses shown as an asset on the Transferor Trust's
books maintained on behalf of the Transferor Portfolio. At least five (5)
business days prior to the Exchange Date, the Transferor Portfolio will
provide the Acquiring Trust, for the benefit of the Acquiring Portfolio, with
a list of its assets and a list of its stated liabilities. The Transferor
Portfolio shall have the right to sell any of the securities or other assets
shown on the list of assets prior to the Exchange Date but will not, without
the prior approval of the Acquiring Trust, on behalf of the Acquiring
Portfolio, acquire any additional securities other than securities which the
Acquiring Portfolio is permitted to purchase, pursuant to its investment
objective and policies or otherwise (taking into consideration its own
portfolio composition as of such date). In the event that the Transferor
Portfolio holds any investments that the Acquiring Portfolio would not be
permitted to hold, the Transferor Portfolio will dispose of such securities
prior to the Exchange Date to the extent practicable, to the extent permitted
by its investment objective and policies and to the extent that its
shareholders would not be materially affected in an adverse manner by such a
disposition. In addition, the 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 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
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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 been issued, and all other approvals,
registrations, and exemptions under federal and state
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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 - Ultra, a series of J.P. Morgan Institutional Funds, into the
Acquiring Portfolio shall have been consummated.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING TRUST
The obligations of the Acquiring Trust with respect to the consummation of
the Reorganization are subject to the satisfaction of the following conditions:
(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The
Transferor Shareholder Approval shall have been obtained.
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Transferor Trust
shall have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all material
respects as of the Effective Time of the
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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
Institutional Bond Fund - Ultra, a series of J.P. Morgan Institutional Funds,
into the Acquiring Portfolio shall have been consummated.
8. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS,
WARRANTIES AND REPRESENTATIONS
(a) AMENDMENTS. The parties hereto may, by agreement in writing
authorized by their respective Board 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
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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 Transferor Portfolio.
(d) TERMINATION BY THE ACQUIRING TRUST. The Acquiring Trust, on
behalf of the Acquiring Portfolio, may terminate this Plan with respect to
the Acquiring Portfolio at any time prior to the Effective Time of the
Reorganization by notice to the Transferor Trust and JPMIM if (i) a material
condition to the performance of the Acquiring Trust hereunder or a material
covenant of the Transferor Trust contained herein shall not be fulfilled on
or before the date specified for the fulfillment thereof or (ii) a material
default or material breach of this Plan shall be made by the Transferor
Trust. In addition, this Plan may be terminated by the Acquiring Trust at any
time prior to the Effective Time of the Reorganization, whether before or
after approval of this Plan by the shareholders of the Transferor Portfolio,
without liability on the part of any party hereto, its Trustees, officers or
shareholders or JPMIM on notice to the other parties in the event that the
Board of Trustees determines that proceeding with this Plan is not in the
best interests of the shareholders of the Acquiring Portfolio.
(e) SURVIVAL. No representations, warranties or covenants in or
pursuant to this Plan, except for the provisions of Section 5(f) and Section
9 of this Plan, shall survive the Reorganization.
9. EXPENSES
The expenses of the Reorganization will be borne by J.P. Morgan Chase &
Co. ("JPMC"). Such expenses include, without limitation, (i) expenses incurred
in connection with the entering into and the carrying out of the provisions of
this Plan; (ii) expenses associated with the preparation and filing of the
Registration Statement; (iii) fees and expenses of preparing and filing such
forms as are necessary under any applicable state securities laws in connection
with the Reorganization; (iv) postage; (v) printing; (vi) accounting fees; (vii)
legal fees and (viii) solicitation costs relating to the Reorganization. In
addition, JPMC or an affiliate will waive fees payable to it or reimburse
expenses to the extent necessary such that the actual (post-waiver) total
expense ratios of the Select Class Shares, 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):
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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.
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
A-14
parties. Nothing herein expressed or implied is intended or shall be
construed to confer upon or give any person, firm or corporation, other
than the parties hereto and their respective successors and assigns, any
rights or remedies under or by reason of this Plan.
(e) The name "J.P. Morgan Funds" is the designation of its
Trustees under a Declaration of Trust dated November 4, 1992, as
amended, and all persons dealing with the Transferor Trust must look
solely to the Transferor Trust's property for the enforcement of any
claims against the Transferor Trust, 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:
J.P. MORGAN FUNDS
on behalf of J.P. Morgan 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
J.P. MORGAN BOND FUND
A SERIES OF J.P. MORGAN FUNDS)
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Combined Prospectus/Proxy Statement dated May
12, 2001 for the Special Meeting of Shareholders of J.P. Morgan Bond Fund
(the "Merging Fund"), a series of J.P. Morgan Funds ("JPF"), 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 1-800-521-5411.
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 JPMF's Statement of Additional Information, which are
incorporated herein by reference.
The date of this Statement of Additional Information is May 16, 2001.
GENERAL INFORMATION
The Shareholders of the Merging Fund are being asked to consider and
vote on two proposals.
With respect to an Agreement and Plan of Reorganization (the
"Reorganization Plan") dated as of __________, 2001 by and among JPF, 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
holder of Shares in the Merging Fund will receive Select Class Shares of the
Surviving Fund of equal value, plus the right to receive any unpaid dividends
and distributions that were declared before the Effective Time of the
Reorganization.
At the Meeting, shareholders will also be asked to consider and vote
upon the election of Trustees of JPF.
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 each of the Merging Fund and the Surviving Fund contained in their respective
Annual Reports dated October 31, 2000, and the audited financial statements,
notes thereto and supplementary data of the Master Portfolio contained in its
Annual Report dated October 31, 2000, are incorporated by reference into this
Statement of Additional Information related to this Combined Prospectus/Proxy
Statement. The audited financial highlights, financial statements, notes thereto
and supplementary data, as applicable, which appear in each of the Surviving
Fund's, the Master Portfolio's and the Merging Fund's Annual Report have been
audited by PricewaterhouseCoopers LLP, whose reports thereon also appear in such
Annual Reports and are also incorporated herein by reference. The financial
highlights, financial statements, notes thereto and supplementary data, as
applicable, for the Merging Fund, 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
THE U.S. FIXED INCOME PORTFOLIO - SCHEDULE OF INVESTMENTS (Unaudited)
- --------------------------------------------------------------------------------
OCTOBER 31, 2000
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------
ASSET BACKED SECURITIES-6.7%
FINANCIAL SERVICES - 6.7%
$10,000,000 Citibank Credit Card Master Trust I,
Series 1998-9, Class A, 5.30%, 1/9/06 $ 9,609,300
15,000,000 Conseco Finance Securitizations Corp.,
Series 2000-5, Class A3 SEQ, 7.21%, 2/1/32 15,000,000
6,600,000 Daimler Chrysler Auto Trust, Series 2000
C, Class A2 SEQ, 6.81%, 7/6/03 6,605,940
21,000,000 Daimler-Benz Vehicle Trust, Series 1998 A,
Class A4 SEQ, 5.22%, 12/22/03 20,625,780
12,000,000 Discover Card Master Trust I,
Series 1998-4, Class A, 5.75%, 10/16/03 11,925,000
5,000,000 First USA Credit Card Master Trust, Series
1999-1, Class C, 6.42%, 10/19/06 4,846,875
5,000,000 Ford Credit Auto Owner Trust, Series 1998
C, Class D, 7.70%, 1/15/04 5,013,280
5,000,000 Ford Credit Auto Owner Trust, Series 1999
A, Class D, 8.00%, 6/15/04 5,035,940
11,000,000 Ford Credit Auto Owner Trust, Series 2000
D, Class A2 SEQ, 7.06%, 4/15/03 11,013,750
15,486,192 Green Tree Financial Corporation,
Series 1993-3, Class B, 6.85%, 10/15/18 13,168,064
10,000,000 Green Tree Financial Corporation,
Series 1999-5, Class B1, 9.20%, 4/1/31 9,437,500
19,855,000 Sears Credit Account Master Trust,
Series 1999-2, Class A, 6.35%, 2/16/07 19,712,243
----------------------
TOTAL ASSET BACKED SECURITIES 131,993,672
----------------------
(Cost $132,976,489)
COLLATERALIZED MORTGAGE OBLIGATIONS - 13.9%
FINANCIAL SERVICES - 13.9%
26,549,732 Chase Commercial Mortgage Securities
Corp., Series 1998-2, Class A2 SEQ,
6.39%, 11/18/08 25,500,195
20,000,000 Chase Manhattan Bank-First Union
National Bank, Series 1999-1, Class A2 SEQ,
7.44%, 7/15/09 20,362,500
4,900,000 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 4,900,000
10,000,000 Commercial Mortgage Acceptance Corp.,
Series 1998-C2, Class D, 6.75%, 11/15/09 9,400,000
42,660,000 DLJ Commercial Mortgage Corporation,
Series 2000-CF1, Class A1B SEQ,
7.62%, 5/10/10 43,673,175
529,704 FHLMC, Series 1980, Class C SEQ,
6.85%, 10/15/21 527,717
28,873,164 First Nationwide Trust, Series 1999-4,
Class 3PA1 SEQ, 6.50%, 10/19/29 27,122,584
20,000,000 First Union Commercial Mortgage Trust,
Series 1999-C1, Class A2 SEQ,
6.07%, 10/15/08 18,812,500
8,895,000 GMAC Commercial Mortgage Securities
Inc., Series 1997-C1, Class A3 SEQ,
6.87%, 8/15/07 8,786,597
5,000,000 GS Mortgage, Series 2000 F, Floater,
8.37%, 11/15/00 5,000,000
6,950,000 Heller Financial Commercial Mortgage
Asset, Series 1999-PH1, Class A2 SEQ,
6.85%, 5/15/31 6,829,459
42,943,000 LB-UBS Commerical Mortgage Trust,
Series 2000-C3, Class A2 SEQ,
7.95%, 1/15/10 44,593,643
7,830,000 Morgan Stanley Capital I,
Series 1998-XL2, Class A2 SEQ,
6.17%, 10/3/08 7,393,235
30,000,000 Mortgage Capital Funding, Inc.,
Series 1998-MC2, Class A2 SEQ,
6.42%, 5/18/08 28,800,000
12,500,000 PNC Mortgage Acceptance Corp.,
Series 2000-C1, Class A2 SEQ,
7.61%, 2/15/10 12,828,125
6,245,000 PNC Mortgage Acceptance Corp.,
Series 2000-C2, Class A2 SEQ,
7.30%, 9/12/10 6,269,393
2,253,150 SACO I Inc. Series 1997-2,
Class 1A5 SEQ, 7.00%, 8/25/36 2,083,812
801,712 Vendee Mortgage Trust, Series 1997-1,
Class 2C SEQ, 7.50%, 9/15/17 800,959
----------------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS 273,683,894
----------------------
(Cost $271,173,312)
CORPORATE BONDS-10.5%
BANKS - 1.1%
2,010,000 Bank One Capital III, 8.75%, 9/1/30 1,954,524
8,500,000 Capital One Bank, 8.25%, 6/15/05 8,545,985
9,975,000 First Union National Bank, 7.80%, 8/18/10 9,939,689
----------------------
20,440,198
----------------------
CHEMICALS - 0.3%
1,000,000 Cytec Industries, Inc., 6.85%, 5/11/05 931,120
5,110,000 Rohm & Haas Co., 7.85%, 7/15/29 4,986,338
----------------------
5,917,458
----------------------
DEFENSE/AEROSPACE - 0.5%
8,530,000 Lockheed Martin Corp., 8.20%, 12/1/09 8,878,621
----------------------
ELECTRICAL UTILITY - 0.6%
506,000 Cogentrix Energy Inc., 8.75%, 10/15/08 507,265
4,025,000 Dominion Resources Inc., Series 2010-A,
8.13%, 6/15/10 4,150,017
7,940,000 Dominion Resources Inc./VA, Series 2000 B,
7.63%, 7/15/05 8,027,236
----------------------
12,684,518
----------------------
ENERGY RESERVES & PRODUCTION(z)
500,000 Lasmo (USA) Inc., 6.75%, 12/15/07 476,620
----------------------
The Accompanying Notes are an Integral Part of the Financial Statements.
4
THE U.S. FIXED INCOME PORTFOLIO - SCHEDULE OF INVESTMENTS (Unaudited)
- --------------------------------------------------------------------------------
(Continued)
OCTOBER 31, 2000
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - 3.6%
$5,493,316 500 Grant St. Association, 144A,
Series 1999 A, 6.46%, 12/1/08 $ 5,256,554
3,400,000 CitiFinancial, 8.70%, 6/15/10 3,681,010
3,490,000 Comdisco, Inc., 6.38%, 11/30/01 2,928,110
4,205,000 Comdisco Inc., 9.50%, 8/15/03 3,153,750
5,000,000 ERAC USA Finance Co., 144A, 6.38%, 5/15/03 4,794,900
135,000 Ford Motor Credit Co., 7.25%, 1/15/03 135,342
1,010,000 Ford Motor Credit Co., 7.38%, 10/28/09 980,660
6,500,000 Household Finance Corp., 8.00%, 5/9/05 6,647,095
2,200,000 Keycorp Institutional Capital, Series 1996 B,
8.25%, 12/15/26 2,000,944
4,475,000 McKesson Financial of Canada, 144A,
6.55%, 11/1/02 4,291,659
6,000,000 Newcourt Credit Group Inc., 6.88%, 2/16/05 5,796,480
8,835,000 NGC Corp. Capital Trust, Series 1997 B,
8.32%, 6/1/27 7,775,772
1,834,912 Oil Purchase Company, 144A, 7.10%, 4/30/02 1,752,341
1,765,000 Provident Financing Trust I, 7.41%, 3/15/38 1,303,523
17,500,000 Washington Mutual Financial Corp.,
8.25%, 6/15/05 18,058,600
----------------------
68,556,740
----------------------
FOOD & BEVERAGE - 0.1%
1,410,000 Smithfield Foods Inc., 7.63%, 2/15/08 1,279,575
----------------------
FOREST PRODUCTS & PAPER - 0.2%
5,000,000 Champion International Corp., 7.10%, 9/1/05 4,899,250
----------------------
GAS & WATER UTILITIES - 0.3%
6,970,000 United Utilities Plc, 6.88%, 8/15/28 5,544,077
----------------------
MEDIA - 0.6%
3,125,000 Adelphia Communications Corp.,
9.38%, 11/15/09 2,664,063
5,540,000 Clear Channel Communications, 7.88%, 6/15/05 5,583,433
2,500,000 Fox Sports Networks LLC, 8.88%, 8/15/07 2,512,500
1,900,000 Lamar Media Corp., 8.63%, 9/15/07 1,852,500
----------------------
12,612,496
----------------------
MEDICAL PROVIDERS & SERVICES(z)
2,000,000 Mariner Post-Acute Network Inc., Series B,
9.50%, 4/1/06(d)+ 10,000
----------------------
MOTOR VEHICLES & PARTS - 0.1%
2,500,000 DaimlerChrysler NA Holding Corp.,
6.90%, 9/1/04 2,466,600
----------------------
MULTI-INDUSTRY - 0.2%
5,000,000 Cendant Corporation, 7.75%, 12/1/03 4,893,300
----------------------
OIL SERVICES - 1.2%
15,000,000 Enron Corp., 144A, 7.11%, 12/12/00,
resets quarterly off the 3-month LIBOR plus
0.45% with no caps 14,992,500
1,497,000 Express Pipeline LP, 144A, Series 1998 B,
7.39%, 12/31/17 1,278,064
4,000,000 Phillips Petroleum Co., 8.75%, 5/25/10 4,362,560
350,000 Williams Cos. Inc., 6.20%, 8/1/02 344,442
----------------------
20,977,566
----------------------
RAILROADS - 0.3%
1,601,413 Burlington Northern Railroad Co.,
7.33%, 6/23/10 1,605,240
5,350,000 Canadian National Railway Co.,
7.00%, 3/15/04 5,286,710
----------------------
6,891,950
----------------------
REAL ESTATE INVESTMENT TRUST(z)
830,000 Felcor Lodging LP, 144A, 9.50%, 9/15/08 820,131
----------------------
SEMICONDUCTOR - 0.1%
3,125,000 Charter Communications Holdings,
LLC/ Charter Communications Holdings
Capital Corp., 8.25%, 4/1/07 2,796,875
----------------------
TELEPHONE - 1.0%
4,125,000 Global Crossing Holding Limited,
9.13%, 11/15/06 3,939,375
3,000,000 McLeodUSA Inc., 9.25%, 7/15/07 2,790,000
1,000,000 XO Communications Inc., 9.63%, 10/1/07 835,000
700,000 Qwest Capital Funding Inc., 6.88%, 7/15/28 614,936
10,000,000 Sprint Capital Corp., 5.88%, 5/1/04 9,518,100
2,000,000 Williams Communications Group,
10.70%, 10/1/07 1,720,000
500,000 WorldCom, Inc., 6.40%, 8/15/05 482,035
----------------------
19,899,446
----------------------
TRUCKING & SHIPPING & AIR FREIGHT - 0.3%
1,900,000 Atlantic Express, 10.75%, 2/1/04 1,634,000
4,681,987 FedEx Corp., Series 1999-1, Class C,
8.25%, 1/15/19 4,729,369
----------------------
6,363,369
----------------------
TOTAL CORPORATE BONDS 206,408,790
----------------------
(Cost $216,432,996)
PREFERRED STOCKS - 0.2%
ENTERTAINMENT - 0.2%
150,000 AT&T Corp., 10.00%, 5/31/45 3,796,875
----------------------
(Cost $4,087,500)
FOREIGN CORPORATE BONDS - 2.4%
BANKS - 0.2%
4,000,000 Barclays Bank Plc, 144A, 8.55%, 9/29/49 4,026,800
----------------------
ELECTRICAL EQUIPMENT - 0.1%
1,785,000 Legrand S.A., 8.50%, 2/15/25 1,864,450
----------------------
The Accompanying Notes are an Integral Part of the Financial Statements.
5
THE U.S. FIXED INCOME PORTFOLIO - SCHEDULE OF INVESTMENTS (Unaudited)
- --------------------------------------------------------------------------------
(Continued)
OCTOBER 31, 2000
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - 0.5%
$7,220,000 HSBC Capital Funding LP, 144A,
10.18%, 12/29/49, resets quarterly off the
3-month LIBOR plus 4.98% with no caps $ 7,901,207
2,250,000 Montell Finance Co. B.V., 144A, 8.10%, 3/15/27 2,022,885
----------------------
9,924,092
----------------------
INFORMATION SERVICES - 0.4%
8,760,000 Marconi Corporation Plc, 8.38%, 9/15/30 8,353,799
----------------------
TELEPHONE - 1.2%
10,000,000 Deutsche Telekom International Finance,
8.25%, 6/15/30 10,205,200
300,000 Microcell Telecommunications Inc.,
Series B, 11.99%, 6/1/06(y) 288,000
12,150,000 Telefonica Europe B.V., 8.25%, 9/15/30 12,441,357
----------------------
22,934,557
----------------------
TOTAL FOREIGN CORPORATE BONDS 47,103,698
----------------------
(Cost $48,063,160)
MORTGAGE PASS THRU - 25.2%
1,032,790 FHLMC, 6.00%, 3/1/11 to 4/1/11 1,000,680
337 FHLMC, 12.50%, 8/1/14 379
58,465,854 FNMA, 6.00%, 12/1/28 to 2/1/29 54,836,488
11,406,862 FNMA, 6.50%, 1/1/28 to 9/1/29 10,966,121
3,178,859 FNMA, 7.00%, 7/1/28 to 10/1/29 3,115,249
166,863 FNMA, 7.50%, 5/1/30 166,659
1,899,247 FNMA, 8.00%, 8/1/22 to 6/1/27 1,924,476
8,010,000 FNMA, TBA, 6.50%, 11/1/30 7,697,129
71,310,000 FNMA, TBA, 7.00%, 11/1/15 70,864,314
107,234,000 FNMA, TBA, 7.00%, 9/1/29 105,056,078
157,605,000 FNMA, TBA, 7.50%, 12/1/30 157,210,989
51,325,080 GNMA, 6.50%, 6/15/28 to 12/15/28 49,554,364
193,732 GNMA, 7.00%, 12/15/08 194,521
8,479,978 GNMA, 7.50%, 1/15/27 to 2/15/27 8,516,441
218,242 GNMA, 8.50%, 5/15/27 223,955
62,710 GNMA, 9.00%, 12/15/19 65,512
28,460,000 GNMA, TBA, 7.00%, 11/1/30 28,051,030
----------------------
TOTAL MORTGAGE PASS THRU 499,444,385
----------------------
(Cost $497,587,636)
PRIVATE PLACEMENTS - 0.9%
CO-OP APARTMENTS - 0.9%
4,414,909 180 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) 4,175,577
10,900,383 200 East 57th Street, secured by first
mortgage and agreement on co-op
apartment building in New York City,
6.50%, 1/1/14(f) 10,110,105
3,239,184 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) $ 3,070,974
----------------------
TOTAL PRIVATE PLACEMENTS 17,356,656
----------------------
(Cost $18,554,476)
SOVEREIGN GOVERNMENTS AND AGENCIES - 0.2%
4,700,000 Province of Quebec, 6.50%, 1/17/06 4,610,465
----------------------
(Cost $4,751,612)
U.S. GOVERNMENT AGENCY SECURITIES - 7.7%
61,175,000 FHLMC, 6.88%, 9/15/10(s) 61,958,652
59,297,000 FNMA, 7.00%, 7/15/05(s) 60,418,306
29,271,000 FNMA, 7.13%, 6/15/10(s) 30,153,813
----------------------
TOTAL U.S. GOVERNMENT AGENCY SECURITIES 152,530,771
----------------------
(Cost $151,845,810)
U.S. TREASURY SECURITIES - 11.8%
38,155,000 U.S. Treasury STRIPS, PO, 6.47%, 11/15/15 15,604,250
70,195,000 U.S. Treasury Bonds, 8.88%, 2/15/19 92,251,673
4,150,000 U.S. Treasury Bonds, 8.00%, 11/15/21 5,129,151
40,743,000 U.S. Treasury Bonds, 6.75%, 8/15/26 44,855,598
7,005,000 U.S. Treasury Bonds, 5.25%, 2/15/29 6,375,671
330,000 U.S. Treasury Notes, 6.75%, 5/15/05(s) 342,118
14,950,000 U.S. Treasury Notes, 6.88%, 5/15/06(s) 15,664,760
50,965,000 U.S. Treasury Notes, 5.75%, 8/15/10(s) 50,917,093
----------------------
TOTAL U.S. TREASURY SECURITIES 231,140,314
----------------------
(Cost $223,074,002)
SHORT-TERM INVESTMENTS - 20.5%
Pro Forma
Combined
Pro Forma JPMorgan
Adjustments Bond Fund
----------------- -------------
COMMERCIAL PAPER - 4.1%
50,000,000 Morgan Stanley, 6.58%, 11/1/00(s) 49,990,861 -- 49,990,861
30,719,000 Salomon Smith Barney 6.60%, 11/1/00(s) 30,713,368 -- 30,713,368
---------------------- ----------------- ------------------
80,704,229 -- 80,704,229
---------------------- ----------------- ------------------
INVESTMENT COMPANIES - 16.3%
320,833,615 J.P. Morgan Institutional Prime
Money Market Fund(s)* 320,833,615 (499,000) 320,334,615
---------------------- ----------------- ------------------
Pro Forma Adjustment
- --------------------
(499,000)
Pro Forma Combined J.P. Morgan Bond Fund
- ----------------------------------------
320,334,615
U.S. TREASURY SECURITIES - 0.1%
$ 2,700,000 U.S. Treasury Notes, 5.63%, 11/30/00(s) 2,698,552 -- 2,698,552
---------------------- ----------------- ------------------
TOTAL SHORT-TERM INVESTMENTS 404,236,396 (499,000) 403,737,396
---------------------- ----------------- ------------------
(Cost $404,252,425)
TOTAL INVESTMENT SECURITIES - 100.0% $1,972,305,916 (499,000) $1,971,806,916
====================== ================= ===================
(Cost $1,972,799,418)
The Accompanying Notes are an Integral Part of the Financial Statements.
6
THE U.S. FIXED INCOME PORTFOLIO - SCHEDULE OF INVESTMENTS (Unaudited)
- --------------------------------------------------------------------------------
(Continued)
OCTOBER 31, 2000
FUTURES CONTRACTS
NET
UNREALIZED
EXPIRATION UNDERLYING FACE APPRECIATION
PURCHASED DATE AMOUNT AT VALUE (DEPRECIATION)
- ---------------------------------------------------------------------------------------------
420 U.S. Two-Year Treasury Note December 2000 $84,052,500 $(160,122)
353 U.S. Five-Year Treasury Note December 2000 35,542,688 334,510
- ---------------------------------------------------------------------------------------------
$119,595,188 $174,388
=========================================
NET
UNREALIZED
EXPIRATION UNDERLYING FACE APPRECIATION
SOLD DATE AMOUNT AT VALUE (DEPRECIATION)
- ---------------------------------------------------------------------------------------------
1,115 U.S. Ten-Year Treasury Note December 2000 $112,283,990 $(746,864)
- ---------------------------------------------------------------------------------------------
133 U.S. Five-Year Treasury Note December 2000 13,279,219 25,956
- ---------------------------------------------------------------------------------------------
$125,563,209 $(720,908)
=========================================
PERCENT OF FOREIGN BONDS
CANADA 0.2%
FRANCE 0.1%
GERMANY 0.5%
NETHERLANDS 0.8%
UNITED KINGDOM 1.0%
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
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.
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
(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
The Accompanying Notes are an Integral Part of the Financial Statements.
7
JP MORGAN BOND FUND / JP MORGAN INSTITUTIONAL BOND FUND /
JP MORGAN INSTITUTIONAL BOND FUND - ULTRA/ THE U.S. FIXED INCOME PORTFOLIO
PRO FORMA COMBINING STATEMENT OF ASSETS & LIABILITIES
AS OF OCTOBER 31, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN
BOND FUND INSTITUTIONAL INSTITUTIONAL BOND
BOND FUND FUND - ULTRA
ASSETS:
Investments at Value ( Cost $1,972,799,418) $ - $ - $ -
Investment in The U.S. Fixed Income Portfolio, at value 242,750 909,964 469,196
Cash - - -
Receivable for Investment Sold - - -
Dividend and Interest Receivable - - -
Receivable for Shares of Beneficial Interest Sold 407 726 37
Variation Margin Receivable - - -
Receivable for Expense Reimbursements - - -
Deferred Organization Expense - - 3
Prepaid Trustees' Fees and Expenses 1 1 1
Prepaid Expenses and Other Assets 1 2 -
----------- ---------- ----------
TOTAL ASSETS 243,159 910,693 469,237
----------- ---------- ----------
LIABILITIES:
Securities Purchased Payable - - -
Payable for Shares of Beneficial Interest Redeemed 2,719 908 2,414
Dividends Payable to Shareholders 154 2,229 688
Advisory Fee Payable - - -
Shareholder Servicing Fee Payable 51 77 20
Due to Custodian - - -
Administration Services Fee Payable 5 18 10
Due to Custodian - - -
Fund Services Fee Payable - 1 -
Accrued Expenses and Other Liabilities 49 49 78
----------- ---------- ----------
TOTAL LIABILITIES 2,978 3,282 3,210
----------- ---------- ----------
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 Depreciation of Investments (201) (254) (584)
----------- ---------- ----------
Net Assets $ 240,180 $ 907,411 $ 466,026
=========== ========== ==========
Shares of beneficial interest outstanding 24,290 96,271 48,475
Net Asset Value Per Share 9.89 9.43 9.61
PRO FORMA WITH REORGANIZATION
JPMORGAN BOND FUND
Shares Outstanding
Select - - -
Institutional - - -
Agency - - -
Net Asset Value Per Share
Select - - -
Institutional - - -
Agency - - -
=========== ========== ==========
PRO FORMA
COMBINED
THE U.S. FIXED PRO FORMA JPMORGAN
INCOME PORTFOLIO ADJUSTMENTS BOND FUND
ASSETS:
Investments at Value ( Cost $1,972,799,418) $ 1,972,306 $ (499)(e) $ 1,971,807
Investment in The U.S. Fixed Income Portfolio, at value - (1,621,910)(a) -
Cash - - -
Receivable for Investment Sold 215,450 - 215,450
Dividend and Interest Receivable 16,802 - 16,802
Receivable for Shares of Beneficial Interest Sold - - 1,170
Variation Margin Receivable 297 - 297
Receivable for Expense Reimbursements - 3 (b) 3
Deferred Organization Expense - (3)(b) -
Prepaid Trustees' Fees and Expenses 6 - 9
Prepaid Expenses and Other Assets 57 - 60
----------- ----------- ------------
TOTAL ASSETS 2,204,918 (1,622,409) 2,205,598
----------- ----------- ------------
LIABILITIES:
Securities Purchased Payable 581,888 - 581,888
Payable for Shares of Beneficial Interest Redeemed - - 6,041
Dividends Payable to Shareholders - - 3,071
Advisory Fee Payable 411 - 411
Shareholder Servicing Fee Payable - - 148
Due to Custodian 52 - 52
Administration Services Fee Payable 33 - 66
Due to Custodian - - -
Fund Services Fee Payable 1 - 2
Accrued Expenses and Other Liabilities 124 - 300
- -
----------- ----------- ------------
TOTAL LIABILITIES 582,509 - 591,979
----------- ----------- ------------
NET ASSETS:
Paid-in Capital - - 1,674,905
Undistributed (Distributions in Excess of) Net Investment Income - - 2,025
Accumulated Net Realized Loss - - (62,277)
Net Unrealized Depreciation of Investments - - (1,039)
-
----------- ----------- ------------
Net Assets $ 1,622,409 $(1,622,409) $ 1,613,619
=========== =========== ============
Shares of beneficial interest outstanding - (169,086)(c) (50)
Net Asset Value Per Share - - -
PRO FORMA WITH REORGANIZATION
JPMORGAN BOND FUND
Shares Outstanding
Select - 25,482(d) 25,482
Institutional - 96,271(d) 96,271
Agency - 49,443(d) 49,443
Net Asset Value Per Share
Select - - 9.43
Institutional - - 9.43
Agency - - 9.43
=========== =========== ============
(a) Reflects reallocation of investment from the feeder funds to the 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 Reorganization
(d) Reflects the additional number of shares outstanding due to the
Reorganization
(e) Reflects the redemption in short-term securities of the J.P. Morgan Bond
Fund- Advisor Series.
See Notes to Pro Forma Financial Statements
8
JP MORGAN BOND FUND / JP MORGAN INSTITUTIONAL BOND FUND /
JP MORGAN INSTITUTIONAL BOND FUND - ULTRA / THE US FIXED INCOME PORTFOLIO
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
BOND FUND INSTITUTIONAL INSTITUTIONAL
BOND FUND BOND FUND
- ULTRA
INCOME:
Allocated Investment Income From Portfolio $ 15,598 $ 64,228 $ 26,181
Interest Income - - -
Dividend Income from Affiliated Investments (includes
reimbursement from affiliate of $719) - - -
Dividend income - - -
Allocated Portfolio Expenses (796) (3,281) (1,162)
----------------------------------------------------
Investment Income 14,802 60,947 25,019
----------------------------------------------------
EXPENSES:
Advisory Fee - - -
Administrative Services Fee 55 228 93
Shareholder Servicing Fee 567 935 192
Custodian Fees and Expenses - - -
Registration Fees 27 32 70
Transfer Agent Fees 42 24 20
Professional Fees 13 17 14
Fund Services Fee 4 15 6
Financial and Fund Accounting Services Fee - 24 24
Trustees' Fees and Expenses 3 11 4
Printing Expenses 8 4 12
Administration Fee 2 11 4
Insurance Expense - - -
Amortization of Organizational Expenses - - -
Distribution Fee - - 1
Miscellaneous 35 35 15
----------------------------------------------------
Total Expenses 756 1,336 455
----------------------------------------------------
Less: Amounts Waived
Less: Reimbursement of Expenses - - (276)
----------------------------------------------------
Net Expenses 756 1,336 179
----------------------------------------------------
----------------------------------------------------
Net Investment Income 14,046 59,611 24,840
----------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (2,881) (16,527) (1,248)
Futures Contracts
Foreign Currency Contracts and Transactions
----------------------------------------------------
Net Realized (Loss) (2,881) (16,527) (1,248)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 3,149 16,693 3,410
Futures Contracts
Foreign Currency Contacts and Translations
Net Change in Unrealized Appreciation (Depreciation) 3,149 16,693 3,410
----------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 14,314 $ 59,777 $ 27,002
====================================================
PRO FORMA
THE U.S. PRO FORMA COMBINED
FIXED INCOME ADJUSTMENTS JPMORGAN
PORTFOLIO BOND FUND
INCOME:
Allocated Investment Income From Portfolio $ (106,007(c) -
Interest Income 84,404 (1)(h) 84,403
Dividend Income from Affiliated Investments (includes
reimbursement from affiliate of $719) 20,928 - 20,928
Dividend income 857 - 857
Allocated Portfolio Expenses - 5,239(b) -
----------------------------------------------------
Investment Income 106,189 (100,769) 106,188
----------------------------------------------------
EXPENSES:
Advisory Fee 4,648 - 4,648
Administrative Services Fee 377 1,564(a) 2,317
Shareholder Servicing Fee - - 1,694
Custodian Fees and Expenses 265 5(f,g) 270
Registration Fees - - 129
Transfer Agent Fees - - 86
Professional Fees 62 (33)(g) 73
Fund Services Fee 24 - 49
Financial and Fund Accounting Services Fee - (48)(f) -
Trustees' Fees and Expenses 18 - 36
Printing Expenses 11 (10)(g) 25
Administration Fee 11 - 28
Insurance Expense 4 - 4
Amortization of Organizational Expenses - 3(e) 3
Distribution Fee - - 1
Miscellaneous - - 85
----------------------------------------------------
Total Expenses 5,420 1,481 - 9,448
----------------------------------------------------
Less: Amounts Waived - 1,481(a) (1,481)
Less: Reimbursement of Expenses - - (276)
----------------------------------------------------
Net Expenses 5,420 - 7,691
----------------------------------------------------
----------------------------------------------------
Net Investment Income 100,769 (100,769) 98,497
----------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (33,777) 20,656(d) (33,777)
Futures Contracts 3,486 3,486
Foreign Currency Contracts and Transactions 9,635 9,635
----------------------------------------------------
Net Realized (Loss) (20,656) 20,656 (20,656)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 24,018 (23,252)(d) 24,018
Futures Contracts 110 110
Foreign Currency Contacts and Translations (876) (876)
----------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) 23,252 (23,252) 23,252
----------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 103,365 $ (103,365) $ 101,093
====================================================
(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.
See Notes to Pro Forma Financial Statements
9
PRO FORMA FINANCIAL STATEMENTS
J.P. MORGAN BOND FUND II(1) / THE U.S. FIXED INCOME PORTFOLIO,
OCTOBER 31, 2000 COMBINING STATEMENT OF INVESTMENTS
(UNAUDITED) (AMOUNTS IN THOUSANDS)
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
THE U.S. PRO
THE U.S. PRO COMBINED FIXED PRO FORMA
JPMORGAN FIXED FORMA JPMORGAN JPMORGAN INCOME FORMA COMBINED
BOND INCOME ADJUST- BOND BOND PORT- ADJUST- JPMORGAN
FUND II(1) PORTFOLIO MENTS FUND FUND II(1) FOLIO MENTS BOND FUND
---------- --------- --------- --------- -------- -------- --------- ---------
ASSET-BACKED SECURITIES - 6.4%
FINANCIAL SERVICES - 6.4%
Citibank Credit Card Master
Trust I,Series 1998-9, Class A,
5.30%, 1/9/06 - 10,000 - 10,000 - 9,609 - 9,609
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, 6.8%,
4/16/07 8,300 - - 8,300 8,270 - - 8,270
MBNA Master Credit Card Trust,
Ser1999-J, Class A, 7%, 2/15/12 10,345 - - 10,345 10,390 - - 10,390
Nomura CBO LTD, Ser. 1997-1,
Class A2, FRN, 144A, 6.67%,
5/15/09 6,500 - - 6,500 5,929 - - 5,929
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
-
------------------------------------------------
TOTAL ASSET-BACKED SECURITIES - 32,192 131,994 - 164,186
------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATIONS - 10.7%
FINANCIAL SERVICES - 10.7%
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
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
See Notes to Pro Forma Financial Statements
16
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO
FORMA THE U.S. PRO
THE U.S. PRO COMBINED FIXED PRO FORMA
JPMORGAN FIXED FORMA JPMORGAN JPMORGAN INCOME FORMA COMBINED
BOND INCOME ADJUST- BOND BOND PORT- ADJUST- JPMORGAN
FUND II(1) PORTFOLIO MENTS FUND FUND II(1) FOLIO MENTS BOND FUND
---------- --------- --------- --------- -------- -------- --------- ---------
------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS - - 273,684 - 273,684
------------------------------------------------
COMMERCIAL MORTGAGE BACKED
SECURITIES - 0.7%
Bear Stearns Commercial
Mortgage Securities,
Ser-2000-WF2, Class A1, 7.11%,
9/15/09 7,900 7,900 7,937 7,937
Bear Stearns Commercial
Mortgage Securities,
Ser-2000-WF2, Class A2, 7.32%,
8/15/10 6,300 6,300 6,343 6,343
LB-UBS Commercial Mortgage
Trust, Ser. 2000-C4, Class A1,
7.18%, 9/15/09 3,088 3,088 3,098 3,098
------------------------------------------------
TOTAL COMMERCIAL MORTGAGE
BACKED SECURITIES - 17,378 - - 17,378
------------------------------------------------
CORPORATE BONDS & NOTES - 13.6%
BANKS - 2.4%
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 5,800 5,824 5,824
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 7,900 7,229 7,229
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 6,415 6,345 6,345
MBNA America Bank, N.A., 7.75%,
9/15/05 7,060 7,060 6,984 6,984
------------------------------------------------
39,053 20,440 - 59,493
------------------------------------------------
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
------------------------------------------------
- 5,917 - 5,917
------------------------------------------------
DEFENSE/AEROSPACE - 0.6%
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 6,700 6,802 6,802
------------------------------------------------
6,802 8,879 - 15,681
------------------------------------------------
ELECTRICAL UTILITY / UTILITIES
- - 0.7%
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 12,685 - 18,870
------------------------------------------------
ENERGY RESERVES & PRODUCTION -
(Z)
Lasmo (USA) Inc., 6.75%,
12/15/07 - 500 500 477 477
------------------------------------------------
- 477 - 477
------------------------------------------------
FINANCIAL SERVICES - 3.3%
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
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 7,100 7,200 7,200
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
McKesson Financial of Canada,
144A, 6.55%, 11/1/02 - 4,475 4,475 4,292 4,292
See Notes to Pro Forma Financial Statements
17
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO
FORMA THE U.S. PRO
THE U.S. PRO COMBINED FIXED PRO FORMA
JPMORGAN FIXED FORMA JPMORGAN JPMORGAN INCOME FORMA COMBINED
BOND INCOME ADJUST- BOND BOND PORT- ADJUST- JPMORGAN
FUND II(1) PORTFOLIO MENTS FUND FUND II(1) FOLIO MENTS BOND FUND
---------- --------- --------- --------- -------- -------- --------- ---------
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 68,557 - 84,873
------------------------------------------------
FOOD & BEVERAGE - 0.1%
Smithfield Foods Inc., 7.63%,
2/15/08 - 1,410 1,410 1,280 1,280
------------------------------------------------
- 1,280 - 1,280
------------------------------------------------
FOREST PRODUCTS & PAPER - 0.2%
Champion International Corp.,
7.10%, 9/1/05 - 5,000 5,000 4,899 4,899
------------------------------------------------
- 4,899 - 4,899
------------------------------------------------
GAS & WATER UTILITIES - 0.2%
United Utilities Plc, 6.88%,
8/15/28 - 6,970 6,970 5,544 5,544
------------------------------------------------
- 5,544 - 5,544
------------------------------------------------
INSURANCE - 0.5%
Conseco, Inc., 8.50%, 10/15/02 9,270 9,270 7,230 7,230
GE Global Insurance Holding
Corp., 7.75%, 6/15/30 5,800 5,800 5,847 5,847
------------------------------------------------
13,077 - - 13,077
------------------------------------------------
MANUFACTURING - 0.3%
Louisiana-Pacific Corp., 8.88%,
8/15/10 7,900 7,900 7,829 7,829
------------------------------------------------
7,829 - - 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 8,705 9,125 9,125
------------------------------------------------
14,517 12,612 - 27,129
------------------------------------------------
MEDICAL PROVIDERS & SERVICES -
(Z)
Mariner Post-Acute Network
Inc., Series B, 9.50%,
4/1/06(d)+ - 2,000 2,000 10 10
------------------------------------------------
- 10 - 10
------------------------------------------------
MOTOR VEHICLES & PARTS /
AUTOMOTIVE - 0.3%
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
------------------------------------------------
5,851 2,467 - 8,318
------------------------------------------------
MULTI-INDUSTRY - 0.2%
Cendant Corporation, 7.75%,
12/1/03 - 5,000 5,000 4,893 4,893
------------------------------------------------
- 4,893 - 4,893
------------------------------------------------
OIL SERVICES - 1.3%
Enron Corp., 144A, 7.11%,
12/12/00, resets quarterly off
the 3-month LIBOR - 15,000 15,000 14,993 14,993
plus 0.45% with no caps
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 20,978 - 33,093
------------------------------------------------
PACKAGING - 0.1%
See Notes to Pro Forma Financial Statements
18
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO
FORMA THE U.S. PRO
THE U.S. PRO COMBINED FIXED PRO FORMA
JPMORGAN FIXED FORMA JPMORGAN JPMORGAN INCOME FORMA COMBINED
BOND INCOME ADJUST- BOND BOND PORT- ADJUST- JPMORGAN
FUND II(1) PORTFOLIO MENTS FUND FUND II(1) FOLIO MENTS BOND FUND
---------- --------- --------- --------- -------- -------- --------- ---------
Tenneco Packaging, Inc., 8.00%,
4/15/07 3,775 3,775 3,759 3,759
------------------------------------------------
3,759 - - 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 - - 10,773
------------------------------------------------
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
------------------------------------------------
- 6,892 - 6,892
------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS -
(Z)
Felcor Lodging LP, 144A, 9.50%,
9/15/08 - 830 830 820 820
------------------------------------------------
- 820 - 820
------------------------------------------------
SEMICONDUCTOR - 0.1%
Charter Communications
Holdings, LLC/ Charter
Communications Holdings - 3,125 3,125 2,797 2,797
Capital Corp., 8.25%, 4/1/07
------------------------------------------------
- 2,797 - 2,797
------------------------------------------------
TELEPHONE / TELECOMMUNICATIONS
- - 1.0%
Global Crossing Holding
Limited, 9.13%, 11/15/06 - 4,125 4,125 3,939 3,939
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 19,899 - 25,227
------------------------------------------------
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
------------------------------------------------
- 6,363 - 6,363
------------------------------------------------
------------------------------------------------
TOTAL CORPORATE BONDS & NOTES - 141,605 206,408 - 348,013
------------------------------------------------
PREFERRED STOCKS - 0.1%
ENTERTAINMENT - 0.1%
AT&T Corp., 10.00%, 5/31/45 - 150 150 3,797 3,797
------------------------------------------------
TOTAL PREFERRED STOCKS - - 3,797 - 3,797
------------------------------------------------
FOREIGN CORPORATE BONDS - 3.1%
BANKS - 0.2%
Barclays Bank Plc, 144A, 8.55%,
9/29/49 - 4,000 4,000 4,027 4,027
------------------------------------------------
- 4,027 - 4,027
------------------------------------------------
ELECTRICAL EQUIPMENT - 0.1%
Legrand S.A., 8.50%, 2/15/25 - 1,785 1,785 1,864 1,864
------------------------------------------------
- 1,864 - 1,864
------------------------------------------------
ELECTRICAL UTILITY / UTILITIES
- - 0.2%
Israel Electric Corp. (Israel),
7.75%, 12/15/27 5,500 5,500 4,676 4,676
See Notes to Pro Forma Financial Statements
19
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO
FORMA THE U.S. PRO
THE U.S. PRO COMBINED FIXED PRO FORMA
JPMORGAN FIXED FORMA JPMORGAN JPMORGAN INCOME FORMA COMBINED
BOND INCOME ADJUST- BOND BOND PORT- ADJUST- JPMORGAN
FUND II(1) PORTFOLIO MENTS FUND FUND II(1) FOLIO MENTS BOND FUND
---------- --------- --------- --------- -------- -------- --------- ---------
------------------------------------------------
4,676 - - 4,676
------------------------------------------------
FINANCIAL SERVICES - 0.4%
HSBC Capital Funding LP, 144A,
10.18%, 12/29/49,
resets
quarterly off the 3-month - 7,220 7,220 7,901 7,901
LIBOR plus 4.98% with no
caps
Montell Finance Co. B.V., 144A,
8.10%, 3/15/27 - 2,250 2,250 2,023 2,023
------------------------------------------------
- 9,924 - 9,924
------------------------------------------------
INFORMATION SERVICES - 0.3%
Marconi Corporation Plc, 8.38%,
9/15/30 - 8,760 8,760 8,354 8,354
------------------------------------------------
- 8,354 - 8,354
------------------------------------------------
OIL SERVICES - 0.8%
PEMEX Finance Limited (Cayman
Islands), 9.14%, 8/15/04 7,040 7,040 7,201 7,201
Repsol International Finance BV
(Netherlands), 7.45%, 7/15/05 7,900 7,900 7,940 7,940
YPF Sociedad Anonima
(Argentina), 7.25%, 3/15/03 6,525 6,525 6,375 6,375
------------------------------------------------
21,516 - - 21,516
------------------------------------------------
TELEPHONE - 1.1%
Deutsche Telekom International
Finance, 8.25%, 6/15/30 - 10,000 10,000 10,205 10,205
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
Vodafone AirTouch Plc, 144A,
7.63%, 2/15/05 5,800 5,800 5,884 5,884
------------------------------------------------
5,884 22,935 - 28,819
------------------------------------------------
------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS - 32,076 47,104 - 79,180
------------------------------------------------
MORTGAGE PASS THRU - 28.0%
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
See Notes to Pro Forma Financial Statements
20
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO
FORMA THE U.S. PRO
THE U.S. PRO COMBINED FIXED PRO FORMA
JPMORGAN FIXED FORMA JPMORGAN JPMORGAN INCOME FORMA COMBINED
BOND INCOME ADJUST- BOND BOND PORT- ADJUST- JPMORGAN
FUND II(1) PORTFOLIO MENTS FUND FUND II(1) FOLIO MENTS BOND FUND
---------- --------- --------- --------- -------- -------- --------- ---------
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
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 - 215,539 499,445 - 714,984
------------------------------------------------
PRIVATE PLACEMENTS - 0.7%
CO-OP APARTMENTS - 0.7%
180 East End Avenue Note,
secured by first mortgage and
agreement on co-opapartment
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 - - 17,357 - 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 7,900 8,011 8,011
United Mexican States, 9.88%,
2/1/10 4,200 4,200 4,358 4,358
------------------------------------------------
TOTAL SOVEREIGN GOVERNMENTS AND
AGENCIES - 20,854 4,610 - 25,464
------------------------------------------------
U.S. GOVERNMENT AGENCY
SECURITIES - 7.4%
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 - - -
FHLMC, 6.88%, 9/15/10(s) - 61,175 61,175 61,959 61,959
FHLMC, 5.00%, 1/15/04 - - -
FHLMC,5.13%, 10/15/08 - - -
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 - - -
FNMA,5.75%, 4/15/03 - - -
FNMA, 5.88%, 4/23/04 - - -
FNMA, 6.00%, 5/15/08 - - -
FNMA, 6.63%, 9/15/09 - - -
------------------------------------------------
TOTAL U. S. GOVERNMENT AGENCY
SECURITIES - 36,390 152,531 - 188,921
------------------------------------------------
U.S. TREASURY SECURITIES - 12.2%
See Notes to Pro Forma Financial Statements
21
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO
FORMA THE U.S. PRO
THE U.S. PRO COMBINED FIXED PRO FORMA
JPMORGAN FIXED FORMA JPMORGAN JPMORGAN INCOME FORMA COMBINED
BOND INCOME ADJUST- BOND BOND PORT- ADJUST- JPMORGAN
FUND II(1) PORTFOLIO MENTS FUND FUND II(1) FOLIO MENTS BOND FUND
---------- --------- --------- --------- -------- -------- --------- ---------
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
------------------------------------------------
TOTAL U.S. TREASURY SECURITIES - 79,249 231,140 - 310,389
------------------------------------------------
SHORT-TERM INVESTMENTS - 16.1%
COMMERCIAL PAPER - 3.2%
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
------------------------------------------------
- 80,704 - 80,704
------------------------------------------------
INVESTMENT COMPANIES - 12.5%
J.P. Morgan Institutional Prime (A)
Money Market Fund(s)* - 320,834 (499) 320,335 320,834 (499)(a) 320,335
------------------------------------------------
- 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 2,699 - 4,687
------------------------------------------------
REPURCHASE AGREEMENTS - 0.2%
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
------------------------------------------------
4,730 - 4,730
------------------------------------------------
------------------------------------------------
TOTAL SHORT TERM INVESTMENTS 6,718 404,237 (499) 410,456
------------------------------------------------
------------------------------------------------
TOTAL INVESTMENT SECURITIES -
(COST $2,553,926) 582,001 1,972,306 (499) 2,553,808
------------------------------------------------
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 35,613,039 700 353 1,053 130 334,510 334,640
----------------------------------------
130 174,388 - 174,518
----------------------------------------
See Notes to Pro Forma Financial Statements
22
UNDERLYING
FACE
AMOUNT NET UNREALIZED
PURCHASED EXPIRATION DATE AT VALUE NUMBER OF CONTRACTS APPRECIATION (DEPRECIATION)
- --------- --------------- ----------- --------------------- ----------------------------------------
SOLD
U.S. Ten-Year Treasury Note December 2000 112,343,985 600 1,115 1,715 (427) (746,864) (747,291)
U.S. Five-Year Treasury Note December 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
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 Bond Fund
See Notes to Pro Forma Financial Statements
23
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) PRO FORMA COMBINING STATEMENT OF ASSETS AND
LIABILITIES AS OF OCTOBER 31, 2000
(UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
J.P. MORGAN THE U.S.
J.P. MORGAN INSTITUTIONAL FIXED
J. P. MORGAN INSTITUTIONAL BOND FUND 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 -
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 -
Due to Custodian - - - 52
Administration Fee Payable - - -
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 ADJUSTMENTS COMBINED
FUND II(1) JPMORGAN
BOND FUND
ASSETS:
Investments at Value $ 582,001 (499)(f) $ 2,553,808
Investment in The U.S. Fixed Income Portfolio, at value - (1,621,910)(a) -
Receivable for Investment Sold - - 215,450
Dividend and Interest Receivable 7,981 - 24,783
Receivable for Shares of Beneficial Interest Sold 1,116 - 2,286
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 - 76
------------- ----------- ------------
TOTAL ASSETS 591,211 (1,622,409) 2,796,809
------------- ----------- ------------
LIABILITIES:
Securities Purchased Payable - - 581,888
Dividends Payable to Shareholders 3,161 - 6,232
Payable for Shares of Beneficial Interest Redeemed 125 - 6,166
Advisory Fee Payable 149 - 560
Shareholder Servicing Fee Payable 124 - 272
Due to Custodian 47 - 99
Administration Fee Payable 75 - 75
Administration Services Fee Payable - - 66
Fund Services Fee Payable - - 4
Accrued Expenses and Other Liabilities 161 - 461
------------- ----------- ------------
TOTAL LIABILITIES 3,842 - 595,823
------------- ----------- ------------
NET ASSETS:
Paid-in Capital 619,499 - 2,294,407
Undistributed (Distributions in Excess of) Net Investment Income 65 - 2,090
Accumulated Net Realized Loss (32,772) - (95,049)
Net Unrealized Appreciation of Investment 577 - (462)
------------- ----------- ------------
Net Assets $ 587,369 (1,622,409) $ 2,200,986
============= =========== ============
Shares of Beneficial Interest Outstanding - (169,086)(c) -
Shares Outstanding 15,449 (15,449)(d) -
Net Asset Value Per Share 38.02 - -
PRO FORMA WITH CONCURRENT REORGANIZATION
J.P. MORGAN INSTITUTIONAL BOND FUND
Shares Outstanding
Select - 87,804(e) 87,804
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 $ - $ 2,553,926
============= =========== ============
(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 Select,
Institutional, and Agency Shares due to the Concurrent Reorganization.
(d) Reallocation of Chase Vista Select Bond Fund shares to Select
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.
See Notes to Pro Forma Financial Statements
24
JP MORGAN BOND FUND / JP MORGAN INSTITUTIONAL BOND FUND /
JP MORGAN INSTITUTIONAL BOND FUND - ULTRA / THE US FIXED INCOME PORTFOLIO /
JPMORGAN BOND FUND II(1) PRO FORMA COMBINING STATEMENT OF OPERATIONS FOR
THE TWELVE MONTHS ENDED OCTOBER 31, 2000
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
J.P. MORGAN THE U.S.
J.P. MORGAN INSTITUTIONAL FIXED
J.P. MORGAN INSTITUTIONAL BOND FUND 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 -
Transfer Agent Fees 42 24 20 -
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
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 ADJUSTMENTS COMBINED
FUND II(1) JPMORGAN
BOND FUND
INCOME:
Allocated Investment Income From Portfolio $ - (106,007)(c) -
Interest Income 41,374 (1)(h) 125,777
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 (100,769) 147,562
---------------------------------------------------------
EXPENSES:
Advisory Fee 1,777 - 6,425
Administrative Services Fee 888 1,564(a) 3,205
Shareholder Servicing Fee 1,223 257(a) 3,174
Custodian Fees and Expenses 141 136(f,g) 542
Registration Fees 29 - 158
Transfer Agent Fees 12 - 98
Professional Fees 46 (64)(g) 88
Fund Services Fee - - 49
Financial and Fund Accounting Services Fee - (48)(f) -
Trustees' Fees and Expenses 30 - 66
Printing Expenses 29 (20)(g) 44
Administration Fee - - 28
Insurance Expense - - 4
Amortization of Organizational Expenses - - -
Distribution Fee - - 1
Miscellaneous 39 3(e) 127
---------------------------------------------------------
Total Expenses 4,214 1,828 14,009
---------------------------------------------------------
Less: Amounts Waived - (1,828)(a) (1,828)
Less: Reimbursement of Expenses (126) - (402)
---------------------------------------------------------
Net Expenses 4,088 - 11,779
---------------------------------------------------------
---------------------------------------------------------
Net Investment Income 37,286 (100,769) 135,783
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (17,973) 20,656(d) (51,750)
Futures Contracts (3,015) 471
Foreign Currency Contracts and Transactions 9,635
---------------------------------------------------------
Net Realized (Loss) (20,988) 20,656 (41,644)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 15,076 (23,252)(d) 39,094
Futures Contracts (188) (78)
Foreign Currency Contacts and Translations (876)
---------------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) 14,888 (23,252) 38,140
---------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations 31,186 (103,365) $ 132,279
=========================================================
(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.
See Notes to Pro Forma Financial Statements
25
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
----------------------- ------------
PRO PRO
JPMORGAN FORMA JPMORGAN FORMA
INTERMEDIATE THE U.S. PRO COMBINED INTERMEDIATE THE U.S. PRO COMBINED
BOND FIXED INCOME FORMA JPMORGAN BOND FIXED 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
--------------------------------------------------
See Notes to Pro Forma Financial Statements
26
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
JPMORGAN FORMA JPMORGAN FORMA
INTERMEDIATE THE U.S. PRO COMBINED INTERMEDIATE THE U.S. PRO COMBINED
BOND FIXED INCOME FORMA JPMORGAN BOND FIXED 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
27
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
JPMORGAN FORMA JPMORGAN FORMA
INTERMEDIATE THE U.S. PRO COMBINED INTERMEDIATE THE U.S. PRO COMBINED
BOND FIXED INCOME FORMA JPMORGAN BOND FIXED 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
28
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
JPMORGAN FORMA JPMORGAN FORMA
INTERMEDIATE THE U.S. PRO COMBINED INTERMEDIATE THE U.S. PRO COMBINED
BOND FIXED INCOME FORMA JPMORGAN BOND FIXED 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
29
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
JPMORGAN FORMA JPMORGAN FORMA
INTERMEDIATE THE U.S. PRO COMBINED INTERMEDIATE THE U.S. PRO COMBINED
BOND FIXED INCOME FORMA JPMORGAN BOND FIXED 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
30
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
JPMORGAN FORMA JPMORGAN FORMA
INTERMEDIATE THE U.S. PRO COMBINED INTERMEDIATE THE U.S. PRO COMBINED
BOND FIXED INCOME FORMA JPMORGAN BOND FIXED 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
31
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
JPMORGAN FORMA JPMORGAN FORMA
INTERMEDIATE THE U.S. PRO COMBINED INTERMEDIATE THE U.S. PRO COMBINED
BOND FIXED INCOME FORMA JPMORGAN BOND FIXED 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
32
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. J.P. MORGAN THE U.S. JPMORGAN PRO FORMA
MORGAN J.P. MORGAN INSTITUTIONAL FIXED INTERMEDIATE COMBINED
BOND INSTITUTIONAL BOND INCOME BOND PRO FORMA JPMORGAN
FUND BOND FUND FUND - ULTRA PORTFOLIO FUND (1) ADJUSTMENTS BOND FUND
--------- ------------- ------------- ----------- ------------ ------------- -------------
ASSETS:
Investments at Value $ - $ - $ - $ 1,972,306 $ 383,324 $ (499)(f) $ 2,355,131
Investment in The U.S. Fixed
Income Portfolio, at value 242,750 909,964 469,196 - - (1,621,910)(a) -
Cash - - - - 1 - 1
Receivable for Investment Sold - - - 215,450 - - 215,450
Dividend and Interest
Receivable - - - 16,802 5,702 - 22,504
Receivable for Shares of
Beneficial Interest Sold 407 726 37 - 400 - 1,570
Variation Margin Receivable - - 297 - - 297
Receivable for Expense
Reimbursements - - - - - - -
Prepaid Trustees' Fees and
Expenses 1 1 1 6 - 3 (b) 12
Deferred Organization Expense - - 3 - - (3)(b) -
Prepaid Expenses and Other
Assets 1 2 - 57 10 - 70
--------- ------------- ------------- ----------- ------------ ------------- -------------
TOTAL ASSETS 243,159 910,693 469,237 2,204,918 389,437 (1,622,409) 2,595,035
--------- ------------- ------------- ----------- ------------ ------------- -------------
LIABILITIES:
Securities Purchased Payable - - - 581,888 - - 581,888
Payable for Shares of
Beneficial Interest Redeemed 2,719 908 2,414 - 24 - 6,065
Dividends Payable to
Shareholders 154 2,229 688 - 1,933 - 5,004
Advisory Fee Payable - - - 411 98 - 509
Shareholder Servicing Fee
Payable 51 77 20 - 82 - 230
Administration Services Fee
Payable 5 18 10 33 - - 66
Due to Custodian - - - 52 7 - 59
Administration Fee Payable - - - - 49 49
Fund Services Fee Payable 1 1 1 1 - 4
Accrued Expenses and Other
Liabilities 49 49 78 124 179 - 479
--------- ------------- ------------- ----------- ------------ ------------- -------------
TOTAL LIABILITIES 2,979 3,282 3,211 582,509 2,372 - 594,352
--------- ------------- ------------- ----------- ------------ ------------- -------------
NET ASSETS:
Paid-in Capital 248,018 950,359 476,531 - 402,912 - 2,077,821
Undistributed (Distributions
in Excess of) Net Investment
Income 315 787 923 - (58) - 1,967
Accumulated Net Realized Loss (7,952) (43,481) (10,844) - (13,300) - (75,577)
Net Unrealized Appreciation
(Depreciation) of Investments (201) (254) (584) - (2,489) - (3,528)
- -
--------- ------------- ------------- ----------- ------------ ------------- -------------
Net Assets $ 240,180 $ 907,411 $ 466,026 1,622,409 $ 387,065 $(1,622,409) $ 2,000,683
========= ============= ============= =========== ============ ============= =============
Shares of beneficial interest
outstanding 24,290 96,271 48,475 - - (169,086)(c) -
Shares Outstanding - - - - 40,050 (40,050)(d) -
Net Asset Value Per Share 9.89 9.43 9.61 - 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 $ - $ - $ - $ 1,972,799 $ 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 Select,
Institutional, and Agency Shares due to the Concurrent Reorganization.
(d) Reallocation of Chase Vista Select Intermediate Bond Fund shares to
Select 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
33
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. J.P. MORGAN THE U.S. JPMORGAN PRO FORMA
MORGAN J.P. MORGAN INSTITUTIONAL FIXED INTERMEDIATE COMBINED
BOND INSTITUTIONAL BOND INCOME BOND PRO FORMA JPMORGAN
FUND BOND FUND FUND - ULTRA PORTFOLIO FUND (1) ADJUSTMENTS BOND FUND
--------- ------------- ------------- ----------- ------------ ------------- -------------
INCOME:
Allocated Investment
Income From Portfolio $ 15,598 $ 64,228 $ 26,181 $ - $ - ($106,007)(c) -
Interest Income - - - 84,404 24,517 (1)(h) 108,920
Dividend Income from Affiliated
Investments (includes
reimbursement from
affiliate of $719) - - - 20,928 - - 20,928
Dividend income - - - 857 - - 857
Allocated Portfolio Expenses (796) (3,281) (1,162) - - 5,239(b) -
--------- ------------- ------------- ----------- ------------ ------------- -------------
Investment Income 14,802 60,947 25,019 106,189 24,517 (100,769) 130,705
--------- ------------- ------------- ----------- ------------ ------------- -------------
EXPENSES:
Advisory Fee - - - 4,648 1,137 - 5,785
Administrative Services Fee 55 228 93 377 568 1,564(a) 2,885
Shareholder Servicing Fee 567 935 192 - 791 156(a) 2,641
Insurance Expense - - - 4 - - 4
Custodian Fees and Expenses - - - 265 92 (88)(f,g) 269
Registration Fees 27 32 70 - 10 - 139
Transfer Agent Fees 42 24 20 - 18 - 104
Amortization of Organizational
Expenses - - - - - 3(e) 3
Professional Fees 13 17 14 62 33 (63)(g) 76
Fund Services Fee 4 15 6 24 - - 49
Financial and Fund Accounting
Services Fee - 24 24 - - (48)(f) -
Trustees' Fees and Expenses 3 11 4 18 19 - 55
Printing Expenses 8 4 12 11 24 (20)(g) 39
Administration Fee 2 11 4 11 - - 28
Distribution Fee - - 1 - - - 1
Miscellaneous 35 35 15 - 20 - 105
--------- ------------- ------------- ----------- ------------ ------------- -------------
Total Expenses 756 1,336 455 5,420 2,712 1,504 - 12,183
--------- ------------- ------------- ----------- ------------ ------------- -------------
Less: Amounts Waived (1,504)(a) (1,504)
Less: Reimbursement of
Expenses - - (276) - (73) - (349)
--------- ------------- ------------- ----------- ------------ ------------- -------------
Net Expenses 756 1,336 179 5,420 2,639 - 10,330
--------- ------------- ------------- ----------- ------------ ------------- -------------
Net Investment Income 14,046 59,611 24,840 100,769 21,878 (100,769) 120,374
--------- ------------- ------------- ----------- ------------ ------------- -------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (2,881) (16,527) (1,248) (33,777) (7,915) 20,656(d) (41,692)
Futures Contracts 3,486 3,486
Foreign Currency Contracts and
Transactions 9,635 9,635
--------- ------------- ------------- ----------- ------------ ------------- -------------
Net Realized (Loss) (2,881) (16,527) (1,248) (20,656) (7,915) 20,656 (28,571)
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) ON
Investment Transactions 3,149 16,693 3,410 24,018 7,215 (23,252)(d) 31,233
Futures Contracts 110 110
Foreign Currency Contacts and
Translations (876) (876)
--------- ------------- ------------- ----------- ------------ ------------- -------------
Net Change in Unrealized
Appreciation (Depreciation) 3,149 16,693 3,410 23,252 7,215 (23,252) 30,467
--------- ------------- ------------- ----------- ------------ ------------- -------------
Net Increase (Decrease) in Net
Assets Resulting from Operations $ 14,314 $ 59,777 $ 27,002 $ 103,365 $ 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
34
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 PRO
JPMORGAN FORMA JPMORGAN THE U.S. FORMA
JPMORGAN INTERMEDIATE THE U.S. COMBINED JPMORGAN INTERMEDIATE FIXED COMBINED
BOND BOND FIXED INCOME PRO FORMA JPMORGAN BOND BOND INCOME JPMORGAN
FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND FUND (II)(1) FUND (2) PORTFOLIO 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
35
PRO PRO
JPMORGAN FORMA JPMORGAN THE U.S. FORMA
JPMORGAN INTERMEDIATE THE U.S. COMBINED JPMORGAN INTERMEDIATE FIXED COMBINED
BOND BOND FIXED INCOME PRO FORMA JPMORGAN BOND BOND INCOME JPMORGAN
FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND FUND (II)(1) FUND (2) PORTFOLIO 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
36
PRO PRO
JPMORGAN FORMA JPMORGAN THE U.S. FORMA
JPMORGAN INTERMEDIATE THE U.S. COMBINED JPMORGAN INTERMEDIATE FIXED COMBINED
BOND BOND FIXED INCOME PRO FORMA JPMORGAN BOND BOND INCOME JPMORGAN
FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND FUND (II)(1) FUND (2) PORTFOLIO 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
37
PRO PRO
JPMORGAN FORMA JPMORGAN THE U.S. FORMA
JPMORGAN INTERMEDIATE THE U.S. COMBINED JPMORGAN INTERMEDIATE FIXED COMBINED
BOND BOND FIXED INCOME PRO FORMA JPMORGAN BOND BOND INCOME JPMORGAN
FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND FUND (II)(1) FUND (2) PORTFOLIO 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
38
PRO PRO
JPMORGAN FORMA JPMORGAN THE U.S. FORMA
JPMORGAN INTERMEDIATE THE U.S. COMBINED JPMORGAN INTERMEDIATE FIXED COMBINED
BOND BOND FIXED INCOME PRO FORMA JPMORGAN BOND BOND INCOME JPMORGAN
FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND FUND (II)(1) FUND (2) PORTFOLIO 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
39
PRO PRO
JPMORGAN FORMA JPMORGAN THE U.S. FORMA
JPMORGAN INTERMEDIATE THE U.S. COMBINED JPMORGAN INTERMEDIATE FIXED COMBINED
BOND BOND FIXED INCOME PRO FORMA JPMORGAN BOND BOND INCOME JPMORGAN
FUND II(1) FUND(2) PORTFOLIO ADJUSTMENTS BOND FUND FUND (II)(1) FUND (2) PORTFOLIO 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
40
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) Formlery Chase Vista Select Intermediate Bond Fund
See Notes to Pro Forma Financial Statements
4 41
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 (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 JPMORGAN PRO FORMA PRO FORMA
BOND INTERMEDIATE ADJUSTMENTS COMBINED
FUND II(1) BOND FUND(2) JPMORGAN
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 (1,622,409) 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 $(1,622,409) $ 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 to Class A, 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 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 Bond Fund
(2) Formerly Chase Vista Select Intermediate Bond Fund
See Notes to Pro Forma Financial Statements
42
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 (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 -
Transfer Agent Fees 42 24 20 -
Professional Fees 13 17 14 62
Trustees' Fees and Expenses 3 11 4 18
Printing Expenses 8 4 12 11
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 JPMORGAN PRO FORMA PRO FORMA
BOND INTERMEDIATE ADJUSTMENTS COMBINED
FUND II(1) BOND FUND(2) JPMORGAN
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
Transfer Agent Fees 12 18 - 116
Professional Fees 46 33 (94)(g) 91
Trustees' Fees and Expenses 30 19 - 85
Printing Expenses 29 24 31(g) 119
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) 158,512
--------------------------------------------------------------
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) $ 154,308
==============================================================
(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
43
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),
JPMorgan Bond Fund II ("JPMBF") and JPMorgan Intermediate Bond Fund ("JPMIBF")
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"), JPMBF ("JPMorgan Bond Fund II") and JPMIBF ("JPMorgan
Intermediate Bond Fund") 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, Bond Fund, Ultra Fund, JPMBF,
and JPMIBF 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 the Institutional Shares
immediately prior to the Concurrent Reorganization.
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 JPMBF and
JPMIBF would receive Select Shares of Institutional Fund with a value equal
to their holdings in their respective funds. Holders of JPMBF and JPMIBF will
receive Select Shares in Institutional Fund.
44
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.
J.P. MORGAN INSTITUTIONAL BOND FUND WITH REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SELECT
------------
Increase in Shares Issued 25,482
Pro Forma Net Assets 10-31-00 $240,180
Pro Forma Net Asset Value 10-31-00 9.43
J.P. MORGAN INSTITUTIONAL BOND FUND WITH JPMORGAN BOND FUND II (1)
REORGANIZATION AND FEEDER REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SELECT
---------
Increase in Shares Issued 87,804
Pro Forma Net Assets 10-31-00 $827,549
Pro Forma Net Asset Value 10-31-00 9.43
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 BOND FUND II(1) AND JPMORGAN
INTERMEDIATE BOND FUND (2) CONCURRENT REORGANIZATION (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
45
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 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
46
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.
Part C-1
Incorporated 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 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 120, 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) Form of Sub-Administration Agreement (to be filed by Amendment).
14 Consent of PricewaterhouseCoopers LLC.
15 None
16 Powers of Attorney.
17(a) Form of Proxy Card.
Part C-4
17(b) Prospectus for the Surviving Fund to be filed by Amendment.
17 (c) Prospectus for the Merging Fund.
17 (d) Statement of Additional Information for the Surviving
Fund to be filed by Amendment.
17 (e) Statement of Additional Information for the Merging
Fund.
17 (f) Annual Report of the Surviving Fund (including the Annual Report
of the Master Portfolio) dated October 31, 2000.
17 (g) Annual Report of the Merging Fund (including the Annual Report of
the Master Portfolio) 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 the J.P. Morgan Bond Fund
(e) Statement of Additional Information for J.P. Morgan 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 J.P. Morgan Bond Fund (including Annual Report of
The U.S. Fixed Income Portfolio), dated October 31, 2000.