As filed with the Securities and Exchange Commission on April 16, 2001
Registration No. 333-___/811-8358
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U.S. Securities and Exchange Commission
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___ Post-Effective Amendment No.___
(Check appropriate box or boxes)
Exact Name of Registrant as Specified in Charter:
MUTUAL FUND TRUST
Area Code and Telephone Number:
(212) 492-1600
Address of Principal Executive Offices:
1211 Avenue of the Americas, 41st Floor
New York, New York 10036
Name and Address of Agent for Service:
Lisa Hurley
c/o BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, Ohio 43219
Copies to:
JOSEPH J. BERTINI, ESQ. SARAH E. COGAN, ESQ. JOHN E. BAUMGARDNER,
PETER B. ELDRIDGE, ESQ. Simpson Thacher & Bartlett JR., ESQ.
J.P. Morgan Fleming Asset 425 Lexington Avenue Sullivan & Cromwell
Management (USA) Inc. New York, NY 10017-3954 125 Broad Street
522 Fifth Avenue New York, NY 10004
New York, NY 10036
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Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective under the Securities Act of 1933.
It is proposed that this filing will become effective on May 16, 2001 pursuant
to Rule 488 under the Securities Act of 1933.
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is required because an indefinite number of shares have previously been
registered on Form N-1A (Registration No. 033-75250/811-8358) pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Registrant's
Form 24f-2 for the fiscal year ended August 31, 2000 was filed on November 27,
2000. Pursuant to Rule 429, this Registration Statement relates to the aforesaid
Registration Statement on Form N-1A.
J.P. MORGAN PRIME CASH MANAGEMENT FUND
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
May 16, 2001
Dear Shareholder:
A special meeting of the shareholders of J.P. Morgan Prime Cash
Management Fund (the "Merging Fund"), a series of J.P. Morgan Institutional
Funds ("JPMIF"), will be held on July 3, 2001 at 9:00 a.m., Eastern time. Formal
notice of the meeting appears after this letter, followed by materials regarding
the meeting.
As you may be aware, J.P. Morgan & Co. Incorporated, the former
corporate parent of the investment adviser of the Merging Fund's assets,
recently completed a merger with The Chase Manhattan Corporation to form J.P.
Morgan Chase & Co. ("JPMC"). As a result of this merger, JPMC is seeking to
reorganize parts of its investment management business in order to provide
better service for shareholders of funds advised by its subsidiaries. At the
special meeting (the "Meeting"), shareholders will be asked to consider and vote
upon the proposed reorganization of the Merging Fund into JPMorgan Prime Money
Market Fund II (formerly, Chase Vista Prime Money Market Fund) (the "Surviving
Fund"), a series of Mutual Fund Trust ("MFT") (the "Reorganization"). After the
Reorganization, shareholders would hold an interest in the Surviving Fund. The
investment objective and policies of the Merging Fund generally are similar to
those of the Surviving Fund. In connection with the Reorganization, the
Surviving Fund will be renamed "JPMorgan Prime Money Market Fund."
After the proposed Reorganization, your investment will be in a larger
combined fund with similar investment policies.
The Surviving Fund has also entered into agreements and plans of
reorganization with other money market funds whose assets are managed by J.P.
Morgan Investment Management Inc. ("JPMIM") and which have identical investment
objectives and policies to the Merging Fund (collectively, the "Concurrent
Reorganization"). If the Concurrent Reorganization is approved by the
shareholders of these other funds and certain other conditions are met, these
funds will be reorganized into the Surviving Fund. The consummation of the
Reorganization is contingent upon the consummation of the Concurrent
Reorganization.
At the Meeting, you will also be asked to consider and vote upon the
election of Trustees of JPMIF.
The investment adviser for the assets of the Merging Fund is JPMIM. The
investment adviser for the Surviving Fund is JPMorgan Fleming Asset Management
(USA) Inc. ("JPMFAM"). After the Reorganization, JPMFAM the same investment
adviser that currently is responsible for the Surviving Fund, will make the
day-to-day investment decisions for your portfolio.
Please see the enclosed Combined Prospectus/Proxy Statement for
detailed information regarding the proposed Reorganization, the Concurrent
Reorganization and a comparison of the Merging Fund and JPMIF to the Surviving
Fund and MFT. The cost and expenses associated with the Reorganization,
including costs of soliciting proxies, will be borne by JPMC and not by the
Merging Fund, JPMIF, the Surviving Fund, MFT or their shareholders.
If approval of the Reorganization is obtained, you will automatically
receive shares in the Surviving Fund.
The Proposals have been carefully reviewed by the Board of Trustees of
JPMIF, which has approved the Proposals.
THE BOARD OF TRUSTEES OF JPMIF UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" EACH OF THE PROPOSALS.
Following this letter is a list of commonly asked questions. If you
have any additional questions on voting of proxies and/or the meeting agenda,
please call us at 1-800-766-7722.
A proxy card is enclosed for your use in the shareholder meeting. This
card represents shares you held as of the record date, April 6, 2001. IT IS
IMPORTANT THAT YOU COMPLETE, SIGN, AND RETURN YOUR PROXY CARD IN THE ENVELOPE
PROVIDED OR CALL ________________ AS SOON AS POSSIBLE. This will ensure that
your shares will be represented at the Meeting to be held on July 3, 2001.
Please read the enclosed materials carefully. You may, of course,
attend the meeting in person if you wish, in which case the proxy can be revoked
by you at the Meeting.
Sincerely,
Matthew Healey
Chairman
SPECIAL NOTE: You may receive a telephone call from our proxy solicitor, D.F.
King & Co., Inc., or us to answer any questions you may have or to provide
assistance in voting. Remember, your vote is important! Please sign, date and
promptly mail your proxy card(s) in the return envelope provided or call
____________ in order to vote.
WHY IS THE REORGANIZATION BEING PROPOSED?
The Reorganization is being proposed because each Fund's board believes it is in
the best interests of shareholders to combine funds that have similar investment
objectives and policies and each board believes that the Reorganization should
result in better service for shareholders, including a wider variety of
investment options.
IF THE REORGANIZATION IS APPROVED, WHAT WILL HAPPEN?
Under the Reorganization, the Merging Fund will cease investing in The Prime
Money Market Portfolio (the "Master Portfolio" in which it currently invests),
will transfer all of its assets and liabilities to the Surviving Fund and will
receive, in exchange, shares of the Surviving Fund. The Merging Fund will then
be liquidated and those shares of the Surviving Fund will be distributed to
shareholders such as you. After the Reorganization, you will own shares in the
Surviving Fund rather than the Merging Fund. The Surviving Fund invests directly
in portfolio securities rather than in a master portfolio.
WHAT WILL BE THE EFFECT ON THE INVESTMENT STRATEGIES ASSOCIATED WITH MY
INVESTMENT IF THE PROPOSED CHANGES ARE APPROVED?
The Surviving Fund generally has similar investment objectives and policies to
those of the Merging Fund. The principal differences are as follows:
SURVIVING FUND MERGING FUND
- The Surviving Fund's investment - The Merging Fund's investment
objective is to aim to provide objective is to maximize current
the highest income possible income consistent with the
level of current income while preservation of capital and same-
still maintaining liquidity day liquidity.
and preserving capital.
- As an AAA-rated Fund, the dollar - The dollar weighted average
weighted average maturity of the maturity of the Merging Fund will
Surviving Fund is maintained at be 90 days or less.
60 days or less.
There can be no assurance that the Fund will continue to be rated by Standard &
Poor's Ratings Service and/or Moody's Investors Service or that these agencies
will not downgrade their current ratings. The Merging Fund has not applied for a
rating.
The Reorganization is not intended to have any immediate significant impact on
the investment strategy implemented in respect of your investment. However,
please note that while the Merging Fund invests all of its asset in the Master
Portfolio (which in turn invests in portfolio securities), the Surviving Fund
invests directly in portfolio securities.
HOW WILL THE FEES AND EXPENSES ASSOCIATED WITH MY INVESTMENT BE AFFECTED?
As a result of the Reorganization, the contractual (or pre-waiver) and actual
(or post-waiver) total expense ratios are expected to be the same or less for
your shares in the Surviving Fund than they are for your shares in the Merging
Fund. If an increase does occur, The Chase Manhattan Bank has contractually
agreed to waive fees payable to it and reimburse expenses so that the total
expense ratio will remain the same for at least THREE YEARS after the
Reorganization.
WILL THERE BE ANY CHANGE IN WHO MANAGES MY INVESTMENT?
Yes, JPMFAM, the investment adviser that currently manages the day-to-day
investment activities of the Surviving Fund, will continue to manage that fund
after the Reorganization.
WHO WILL PAY FOR THE REORGANIZATION?
The cost and expenses associated with the Reorganization, including costs of
soliciting proxies, will be borne by JPMC and not by either the Merging Fund or
the Surviving Fund (or shareholders of either fund).
WHAT IF I DO NOT VOTE OR VOTE AGAINST THE REORGANIZATION, YET APPROVAL OF THE
REORGANIZATION IS OBTAINED?
You will automatically receive shares in the Surviving Fund.
HOW WILL THE PROPOSED CONCURRENT REORGANIZATION AFFECT MY INVESTMENT IF IT IS
APPROVED BY THE SHAREHOLDERS OF THE OTHER FUNDS?
If the Concurrent Reorganization is approved and certain other conditions are
met, the assets and liabilities of the other merging funds will become the
assets and liabilities of the Surviving Fund. The consummation of the
Reorganization is contingent upon the consummation of the Concurrent
Reorganization.
WHY AM I BEING ASKED TO VOTE ON THE ELECTION OF TRUSTEES FOR JPMIF IF AFTER THE
REORGANIZATION I WILL OWN SHARES IN THE SURVIVING FUND, A SERIES OF MFT?
Even if the Reorganization is approved, other mutual funds that are series of
JPMIF will continue to exist and operate. All shareholders of any series of
JPMIF as of the record date (April 6, 2001) are required to be given a vote on
the proposal regarding Trustees. Because as of the record date you are still a
shareholder in JPMIF, you are entitled to vote on this proposal. Shareholders of
MFT are being asked to approve the same Trustees.
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 PRIME CASH MANAGEMENT FUND,
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 3, 2001
To the Shareholders of
J.P. Morgan Prime Cash Management Fund:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the shareholders
("Shareholders") of J.P. Morgan Prime Cash Management Fund (the "Merging Fund"),
a series of J.P. Morgan Institutional Funds ("JPMIF"), will be held at the
offices of J.P. Morgan Chase & Co., 1211 Avenue of the Americas, 41st Floor, New
York, N.Y., on July 3, 2001 at 9:00 a.m., (Eastern time) for the following
purposes:
ITEM 1. To consider and act upon a proposal to approve an Agreement
and Plan of Reorganization (the "Reorganization Plan") by
and among JPMIF, on behalf of the Merging Fund, Mutual Fund
Trust ("MFT"), on behalf of J.P. Morgan Prime Money Market
Fund II (formerly, Chase Vista Prime Money Market Fund) (the
"Surviving Fund"), and J.P. Morgan Chase & Co. and the
transactions contemplated thereby, including (a) the
transfer of all of the assets and liabilities of the Merging
Fund to the Surviving Fund in exchange for Cash Management
Class shares of the Surviving Fund (the "Surviving Fund
Shares"); and (b) the distribution of such Surviving Fund
Shares to the Shareholders of the Merging Fund in connection
with the liquidation of the Merging Fund.
ITEM 2. To elect __ Trustees to serve as members of the Board of
Trustees of JPMIF.
ITEM 3. To transact such other business as may properly come before
the Special Meeting or any adjournment(s) thereof.
YOUR FUND TRUSTEES UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOR OF ITEMS 1
AND 2.
Each proposal is described in the attached Combined Prospectus/Proxy
Statement. Attached as Appendix A to the Combined Prospectus/Proxy Statement is
a copy of the Reorganization Plan.
Shareholders of record as of the close of business on April 6, 2001 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment(s)
thereof.
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY THE BOARD OF
TRUSTEES OF JPMIF. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE SPECIAL MEETING.
PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO
THE MERGING FUND A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY
OR BY ATTENDING THE SPECIAL MEETING AND VOTING IN PERSON.
Margaret W. Chambers
Secretary
May 16, 2001
COMBINED PROSPECTUS/PROXY STATEMENT
DATED MAY 16, 2001
ACQUISITION OF THE ASSETS AND LIABILITIES OF
J.P. MORGAN PRIME CASH MANAGEMENT FUND,
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
(617) 557-0700
BY AND IN EXCHANGE FOR SHARES OF
JPMORGAN PRIME MONEY MARKET FUND II
(FORMERLY, CHASE VISTA PRIME MONEY MARKET FUND),
A SERIES OF MUTUAL FUND TRUST
1211 AVENUE OF THE AMERICAS, 41ST FLOOR
NEW YORK, NEW YORK 10036
(800) _________
This Combined Prospectus/Proxy Statement relates to the proposed
reorganization of J.P. Morgan Prime Cash Management Fund (the "Merging Fund"), a
series of J.P. Morgan Institutional Funds ("JPMIF"), into JPMorgan Prime Money
Market Fund II (formerly, Chase Vista Prime Money Market Fund) (the "Surviving
Fund"), a series of Mutual Fund Trust ("MFT"). If approved by Shareholders, the
proposed reorganization will be effected by transferring all of the assets and
liabilities of the Merging Fund to the Surviving Fund, which has generally
similar investment objectives and policies to those of the Merging Fund, in
exchange for shares of the Surviving Fund (the "Reorganization"). Therefore, as
a result of the proposed Reorganization, current shareholders of the Merging
Fund (the "Merging Fund Shareholders") will become shareholders of the Surviving
Fund ("Surviving Fund Shareholders"). JPMIF and MFT are both open-end management
investment companies offering shares in several portfolios. In connection with
the Reorganization, the Surviving Fund will be renamed "JPMorgan Prime Money
Market Fund."
Under the proposed Reorganization, each Merging Fund Shareholder
will receive Cash Management Class shares (the "Surviving Fund Shares") of
the Surviving Fund with a value equal to such Merging Fund Shareholder's
holdings in the Merging Fund. The Surviving Fund currently has a multi-class
structure under which it offers Reserve Class, Vista Class, Premier Class,
Institutional Class, Class B and Class C shares. In connection with the
Reorganization, the Surviving Fund will introduce Cash Management Class,
Retail Class, a new Reserve Class and a new Institutional Class, will re-name
the Vista Class "Morgan Class", the Institutional Class "Agency Class" and
the Reserve Class will merge into the Morgan Class.
At the Meeting, you also will be asked to consider and vote upon the
election of Trustees of JPMIF.
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The terms and conditions of these transactions are more fully described
in this Combined Prospectus/Proxy Statement and in the Agreement and Plan of
Reorganization (the "Reorganization Plan") between JPMIF, on behalf of the
Merging Fund, and MFT, on behalf of the Surviving Fund, attached to this
Combined Prospectus/Proxy Statement as Appendix A.
The Board of Trustees for JPMIF is soliciting proxies in connection
with a Special Meeting (the "Meeting") of Shareholders to be held on July 3,
2001 at 9:00 a.m., Eastern time, at the offices of J.P. Morgan Chase & Co., 1211
Avenue of the Americas, 41st Floor, New York, N.Y., at which meeting
shareholders in the Merging Fund will be asked to consider and approve the
proposed Reorganization Plan, certain transactions contemplated by the
Reorganization Plan and certain other proposals. This Combined Prospectus/Proxy
Statement constitutes the proxy statement of the Merging Fund for the meeting of
its Shareholders and also constitutes MFT's prospectus for Surviving Fund Shares
that have been registered with the Securities and Exchange Commission (the
"Commission") and are to be issued in connection with the Reorganization.
This Combined Prospectus/Proxy Statement, which should be retained for
future reference, sets forth concisely the information about MFT and JPMIF that
an investor should know before voting on the proposals. The current
Prospectuses, Statements of Additional Information and Annual Reports for the
Merging Fund and the Surviving Fund (including the Annual Report of The Prime
Money Market Portfolio) and the Semi Annual Report of the Surviving Fund are
incorporated herein by reference, and the current Prospectus, Annual Report and
the Semi Annual Report for the Surviving Fund are enclosed with this Combined
Prospectus/Proxy Statement. A Statement of Additional Information relating to
this Combined Prospectus/Proxy Statement dated May 12, 2001 containing
additional information about MFT and JPMIF has been filed with the Commission
and is incorporated by reference into this Combined Prospectus/Proxy Statement.
A copy of the Statement of Additional Information, as well as the Prospectus,
Statement of Additional Information and Annual Report of the Merging Fund
(including the Annual Report of The Prime Money Market Portfolio), may be
obtained without charge by writing to MFT at its address noted above or by
calling 1-800 ________.
This Combined Prospectus/Proxy Statement is expected to first be sent
to shareholders on or about May 16, 2001.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS COMBINED PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROSPECTUS/PROXY
STATEMENT AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND,
IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY MFT OR JPMIF.
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INVESTMENTS IN THE SURVIVING FUND ARE SUBJECT TO RISK--INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL. NO SHARES IN THE SURVIVING FUND ARE BANK DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK AND ARE NOT FEDERALLY
INSURED BY, OBLIGATIONS OF, OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY.
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TABLE OF CONTENTS
PAGE
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INTRODUCTION......................................................................................................1
PROPOSAL 1: REORGANIZATION PLAN..................................................................................1
SUMMARY...........................................................................................................2
COMPARATIVE FEE AND EXPENSE TABLES................................................................................5
RISK FACTORS......................................................................................................9
INFORMATION RELATING TO THE PROPOSED REORGANIZATION..............................................................10
INVESTMENT POLICIES..............................................................................................14
PURCHASES, REDEMPTIONS AND EXCHANGES.............................................................................20
DISTRIBUTIONS AND TAXES..........................................................................................24
COMPARISON OF THE MERGING FUND'S AND THE SURVIVING FUND'S ORGANIZATION STRUCTURE.................................25
INFORMATION RELATING TO THE ADVISORY CONTRACTS AND OTHER SERVICES................................................27
PROPOSAL 2: ELECTION OF TRUSTEES.................................................................................30
VOTE REQUIRED....................................................................................................31
INFORMATION RELATING TO VOTING MATTERS...........................................................................35
ADDITIONAL INFORMATION ABOUT MFT.................................................................................37
ADDITIONAL INFORMATION ABOUT JPMIF...............................................................................37
FINANCIAL STATEMENTS AND EXPERTS.................................................................................38
OTHER BUSINESS...................................................................................................38
LITIGATION.......................................................................................................38
SHAREHOLDER INQUIRIES............................................................................................39
APPENDIX A AGREEMENT AND PLAN OF REORGANIZATION................................................................A-1
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INTRODUCTION
GENERAL
This Combined Prospectus/Proxy Statement is being furnished to the
shareholders of the Merging Fund, an open-end management investment company, in
connection with the solicitation by the Board of Trustees of JPMIF of proxies to
be used at a Special Meeting of Shareholders of the Merging Fund to be held on
July 3, 2001 at 9:00 a.m., Eastern time, at the offices of J.P. Morgan Chase &
Co., 1211 Avenue of the Americas, 41st Floor, New York, N.Y. (together with any
adjournments thereof, the "Meeting"). It is expected that the mailing of this
Combined Prospectus/Proxy Statement will be made on or about May 16, 2001.
PROPOSAL 1: REORGANIZATION PLAN
As you may be aware, J.P. Morgan & Co. Incorporated, the former
corporate parent of the investment adviser of the Merging Fund's assets,
recently completed a merger with The Chase Manhattan Corporation to form J.P.
Morgan Chase & Co. ("JPMC"). As a result of this merger, JPMC is seeking to
reorganize parts of its investment management business in order to provide
better service for shareholders of funds advised by its subsidiaries. At the
Meeting, Merging Fund Shareholders will consider and vote upon the Agreement and
Plan of Reorganization (the "Reorganization Plan") dated _______, 2001 among
JPMIF, on behalf of the Merging Fund, MFT, on behalf of the Surviving Fund (the
Merging Fund and the Surviving Fund are collectively defined as the "Funds"),
and JPMC pursuant to which all of the assets and liabilities of the Merging Fund
will be transferred to the Surviving Fund in exchange for Surviving Fund Shares.
As a result of the Reorganization, Merging Fund Shareholders will become
shareholders of the Surviving Fund and will receive Surviving Fund Shares equal
in value to their holdings in the Merging Fund on the date of the
Reorganization. Further information relating to the Surviving Fund is set forth
herein, and the Surviving Fund's Prospectus, Annual Report and Semi-Annual
Report are enclosed with this Combined Prospectus/Proxy Statement.
THE JPMIF BOARD HAS UNANIMOUSLY RECOMMENDED THAT SHAREHOLDERS VOTE "FOR"
PROPOSAL 1.
VOTE REQUIRED
Approval of the Reorganization Plan by the Merging Fund requires the
affirmative vote of the lesser of (i) 67% or more of the shares of the Merging
Fund present at the Meeting if the holders of more than 50% of the outstanding
shares of the Merging Fund are present or represented by proxy and (ii) more
than 50% of all outstanding shares of the Merging Fund. If the Reorganization
Plan is not approved by the Merging Fund Shareholders, the JPMIF Board will
consider other appropriate courses of action.
SUMMARY
The following is a summary of certain information relating to the
proposed Reorganization, the parties thereto and the transactions contemplated
thereby, and is qualified by reference to the more complete information
contained elsewhere in this Combined Prospectus/Proxy Statement, the Prospectus,
Statement of Additional Information, Annual Report in respect of the Surviving
Fund and the Merging Fund, (including the Annual Report of the Prime Money
Market Portfolio) and the Semi-Annual Report of the Surviving Fund and the
Reorganization Plan attached to this Combined Prospectus/Proxy Statement as
Appendix A.
PROPOSED REORGANIZATION
Pursuant to the proposed Reorganization Plan, the Merging Fund will
transfer all of its assets and liabilities to the Surviving Fund in exchange for
shares of the Surviving Fund.
Under the proposed Reorganization, each Merging Fund Shareholder will
receive a number of Cash Management Class shares of the Surviving Fund with an
aggregate net asset value equal on the date of the exchange to the aggregate net
asset value of such shareholder's Merging Fund Shares on such date. Therefore,
following the proposed Reorganization, Merging Fund Shareholders will be
Surviving Fund Shareholders. Merging Fund Shareholders will not pay a sales
charge in connection with the Reorganization. See "Information Relating to the
Proposed Reorganization."
The Surviving Fund has investment objectives, policies and restrictions
generally similar to the Merging Fund.
Based upon their evaluation of the relevant information presented to
them, including an analysis of the operation of the Surviving Fund both before
and after the Reorganization, the terms of the Reorganization Plan, the
opportunity to combine the two Funds with generally similar investment
objectives and policies, and the fact that the Reorganization will be tax-free,
and in light of their fiduciary duties under federal and state law, the MFT
Board and the JPMIF Board, including a majority of each Board's members who are
not "interested persons" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), have each determined that the proposed
Reorganization is in the best interests of each Fund and its respective
shareholders and that the interests of such shareholders will not be diluted as
a result of such Reorganization.
REASONS FOR THE REORGANIZATION
The Reorganization is being proposed because each Fund's board believes
it is in the best interests of shareholders to combine funds that have similar
investment objectives and policies and each board believes that the
Reorganization should result in better service for shareholders, including a
wider variety of investment options.
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CONCURRENT REORGANIZATION
The Merging Fund currently invests all of its investable assets in The
Prime Money Market Portfolio (the "Master Portfolio"), which has identical
investment objectives and policies as the Merging Fund and which is advised by
JPMorgan Investment Management Inc. ("JPMIM"). J.P. Morgan Institutional Prime
Money Market Fund, J.P. Morgan Institutional Service Prime Money Market Fund,
J.P. Morgan Institutional Direct Prime Money Market Fund and J.P. Morgan Prime
Money Market Reserves Fund, each a series of JPMIF with identical investment
objectives and policies as the Merging Fund and J.P. Morgan Prime Money Market
Fund, a series of J.P. Morgan Funds with identical investment objectives and
policies as the Merging Fund (collectively, the "Feeder Portfolios") also
currently invest all of their assets in the Master Portfolio. The Surviving Fund
has entered into substantially similar agreements and plans of reorganization
with each Feeder Portfolio (collectively, the "Concurrent Reorganization"). If
each of the Reorganization and the Concurrent Reorganization is approved by the
shareholders of the Merging Fund and each Feeder Portfolio, respectively, and
certain other conditions are met, the Merging Fund and the Feeder Portfolios
will be reorganized into the Surviving Fund and the Merging Fund and the Feeder
Portfolios will no longer invest their assets in the Master Portfolio. The
consummation of the Reorganization is contingent upon the consummation of the
Concurrent Reorganization.
FEDERAL INCOME TAX CONSEQUENCES
Simpson Thacher & Bartlett will issue an opinion (based on certain
assumptions) as of the effective time of the Reorganization to the effect that
the transaction will not give rise to the recognition of income, gain or loss
for federal income tax purposes to the Merging Fund, the Surviving Fund or the
shareholders of the Merging Fund. The holding period and tax basis of Surviving
Fund Shares received by a shareholder of the Merging Fund will be the same as
the holding period and tax basis of such shareholder's shares of the Merging
Fund. In addition, the holding period and tax basis of those assets owned by the
Merging Fund and transferred to the Surviving Fund will be identical for the
Surviving Fund. See "Information Relating to the Proposed Reorganization -
Federal Income Tax Consequences."
INVESTMENT ADVISERS
The investment adviser for the Master Portfolio (and therefore the
assets of the Merging Fund and the Feeder Portfolios) is JPMIM. The investment
adviser for the Surviving Fund is J.P. Morgan Fleming Asset Management (USA)
Inc. ("JPMFAM"). JPMFAM and JPMIM are each wholly-owned subsidiaries of JPMC.
JPMFAM will continue to serve as investment advisor following the
Reorganization.
INVESTMENT OBJECTIVES AND POLICIES
The Surviving Fund aims to provide the highest possible level of
current income while still maintaining liquidity and preserving capital. The
Merging Fund's goal is to
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maximize current income consistent with the preservation of capital and same-day
liquidity. See "Risk Factors" and "Investment Restrictions."
The investment policies of the Surviving Fund are generally similar to
those of the Merging Fund, although the Surviving Fund invests its assets
directly in portfolio securities, while the Merging Fund invests its assets in
the Master Portfolio, which in turn invests in portfolio securities. The
Surviving Fund invests in a wide range of high quality, short-term money market
instruments that are issued and payable in U.S. dollars. The Surviving Fund
principally invests in commercial paper and other short-term debt securities,
debt securities issued or guaranteed by qualified banks, securities issued or
guaranteed by the U.S. Government, its agencies and authorities, asset-backed
securities and repurchase agreements. LIKEWISE, THE MERGING FUND INVESTS ACROSS
A BROAD SPECTRUM OF U.S. DOLLAR-DENOMINATED MONEY MARKET SECURITIES, INCLUDING
OBLIGATIONS ISSUED BY THE U.S. TREASURY, GOVERNMENT AGENCIES, DOMESTIC AND
FOREIGN BANKS AND CORPORATIONS AND FOREIGN GOVERNMENTS, REPURCHASE AGREEMENTS
AND ASSET-BACKED SECURITIES. As an AAA-rated fund the dollar weighted average
maturity of the Surviving Fund will be 60 days or less. There can be no
assurance that the Fund will continue to be rated by Standard & Poor's Ratings
Service and/or Moody's Investors Service or that these agencies will not
downgrade their current ratings. THE DOLLAR WEIGHTED AVERAGE MATURITY OF THE
MERGING FUND WILL BE 90 DAYS OR LESS. THE MERGING FUND HAS NOT APPLIED FOR A
RATING. Each Fund seeks to maintain a net asset value of $1.00 per share.
PRINCIPAL RISKS OF INVESTING IN THE SURVIVING FUND
The principal risk factors associated with an investment in the
Surviving Fund are those typically associated with investing in a managed
portfolio of money market securities. The Surviving Fund attempts to keep its
net asset value at $1.00, although there is no guarantee it will be able to do
so. In general, the value of a money market investment tends to fall when
prevailing interest rates rise, although it tends to be less sensitive to
interest rate changes than the value of longer-term securities. Additionally,
investments in the Surviving Fund may not earn as high a current income as
longer-term or lower-quality securities. Any investments that the Surviving Fund
makes in foreign banks and issuers carry additional risk with respect to
liquidity and foreign instability and regulations. See "Risk Factors."
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS
ADVISORY SERVICES
The investment adviser for the Surviving Fund is JPMFAM. JPMFAM
oversees the asset management of the Surviving Fund. As compensation for its
services, JPMFAM receives a management fee from the Surviving Fund at an annual
rate of 0.10% of average daily net asset. The Merging Fund currently pays a
management fee at an annual rate of 0.20% of the first $1 billion of average
daily net assets and 0.10% of average daily net assets for assets over $1
billion. Following the Reorganization, JPMFAM will continue to manage the
Surviving Fund's assets and will receive a fee at an annual rate of 0.10% of
average daily net assets.
-4-
OTHER SERVICES
J.P. Morgan Fund Distributors, Inc. (the "Distributor") is the
distributor for the Surviving Fund. The Chase Manhattan Bank ("Chase") serves as
shareholder servicing agent, administrator, fund accountant and custodian, an
affiliate of the Distributor serves as sub-administrator and DST Systems, Inc.
("DST") serves as transfer agent and dividend disbursing agent for the Surviving
Fund. It is anticipated that prior to the consummation of the Reorganization,
The Bank of New York ("BONY") will become the Surviving Fund's fund accountant
and custodian. PricewaterhouseCoopers LLP serves as the Surviving Fund's
independent accountants.
ADMINISTRATOR
As administrator, Chase receives a fee of 0.10% of average daily net
assets. It is anticipated that, in connection with the Reorganization, the
administration fee will be amended to reduce the fee to 0.05% for complex wide
money market Fund assets in excess of $100 billion.
ORGANIZATION
Each of MFT and JPMIF is organized as a Massachusetts business trust.
The Merging Fund is organized as a series of JPMIF and the Surviving Fund is
organized as a series of MFT.
PURCHASES, REDEMPTIONS AND EXCHANGES
After the Reorganization, the procedures for making purchases,
redemptions and exchanges of shares of the Surviving Fund will be as described
in this Combined Prospectus/Proxy Statement and in the Surviving Fund's
Prospectus and Statement of Additional Information.
COMPARATIVE FEE AND EXPENSE TABLES
The table below shows (i) information regarding the fees and
expenses paid by each of the Merging Fund and the Surviving Fund that reflect
current expense arrangements (i) and (ii) estimated fees and expenses on a
pro forma basis for the Surviving Fund after giving effect to the proposed
Reorganization and the Concurrent Reorganization. Under the proposed
Reorganization, holders of shares in the Merging Fund will receive Cash
Management Class shares in the Surviving Fund. Please note that the Surviving
Fund currently has six classes of shares: Reserve Class, Vista Class, Premier
Class, Institutional Class, Class B and Class C. In connection with the
Reorganization and Concurrent Reorganizations, four additional classes, the
Cash Management Class, Retail Class, a new Institutional Class and a new
Reserve Class will be introduced, the Vista Class will be renamed the "Morgan
Class", the Institutional Class will be renamed "Agency Class," and the
Reserve Class will merge into the Morgan Class.
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
-5-
Reorganization, actual (post-waiver) total expense ratios for current
shareholders of the Merging Fund are anticipated to be less or stay the same
following the Reorganization. This is because Chase has agreed to waive certain
fees and/or reimburse certain expenses to ensure that actual total operating
expenses do not increase for at least three years.
The table indicates that both contractual (pre-waiver) and actual
(post-waiver) total expense ratios for current shareholders of the Merging Fund
are anticipated to be less or stay the same following the Reorganization. In
addition, Chase has agreed to waive certain fees and/or reimburse certain
expenses to ensure that actual total operating expenses do not increase for at
least three years after the Reorganization.
THE MERGING
FUND THE SURVIVING FUND*
------------- -------------------------------------------------------------------------------------
PREMIER
CLASS VISTA CLASS CLASS B CLASS C INSTITUTIONAL RESERVE CLASS
SHARES* SHARES SHARES SHARES SHARES CLASS SHARES SHARES
------------ ---------- -------------- ---------- ---------- ---------------- ---------------
SHAREHOLDER FEES (FEES
PAID DIRECTLY FROM YOUR
INVESTMENT) -Maximum
Sales Charge (Load)
when you buy shares,
shown as % of the
offering price.......... None None None None None None None
Maximum Deferred Sales
Charge (Load) shown as
lower of original
purchase price or
redemption proceeds..... None None None 5.00% 1.00% None None
ANNUAL FUND OPERATING
EXPENSES (EXPENSES THAT
ARE DEDUCTED FROM FUND
ASSETS)
Management Fees......... 0.11% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10%
Distribution (12b-1)
Fees.................... 0.50% None None 0.75% 0.75% None 0.30%
Other Expenses (1)...... 0.47% 0.38%# 0.50%# 0.40%# 0.40%# 0.23% 1.05%
Total Annual Fund
Operating Expenses...... 1.08% 0.48%# 0.60%# 1.25%# 1.25%# 0.33% 1.45%
Contractual Fee Waivers
and Expense
Reimbursements (2)..... 0.10% None None None None None None
Net Expenses............ 0.98% 0.48% 0.60% 1.25% 1.25% 0.33% 1.45%
-6-
* The table is based on the expenses incurred in the most recent fiscal year.
# Restated from the most recent fiscal year current expense arrangements.
(1) Service organizations may charge other fees to their customers who are
beneficial owners of shares in connection with their customer's account. Such
fees, if any, may affect the return such customers realize with respect to
their investments.
(2) Reflects an agreement dated 5/17/00 by Morgan, an affiliate of JPMC, to
reimburse the Fund to the extent operating expenses (which exclude interest,
taxes and extraordinary expenses) exceed 0.98% of average daily net assets
through 2/28/02.
The actual Distribution Fees are expected to be 0.00% for Reserve Class. The
actual Other Expense for Premier Class, Vista Class, Class B, Class C,
Institutional Class and Reserve Class are expected to be 0.35%, 0.49%, 0.39%,
0.39%, 0.16% and 0.69% respectively, and Total Annual Fund Operating Expense
for Premier Class, Vista Class, Class B, Class C, Institutional Class and
Reserve Class, are not expected to exceed 0.45%, 0.59%, 1.24%, 1.24%, 0.26%
and 0.79%, respectively. That is because Chase and some of the Funds' other
service providers have volunteered not to collect a portion of its fees and
to reimburse others. Chase and these other service providers may terminate
this arrangement at any time.
The table does not reflect charges or credits which investors might incur if
they invest through a financial institution.
-7-
THE SURVIVING FUND
----------------------------------------
PRO FORMA WITH CONCURRENT REORGANIZATION
----------------------------------------
CASH MANAGEMENT CLASS SHARES
----------------------------------------
SHAREHOLDER FEES (FEES
PAID DIRECTLY FROM YOUR
INVESTMENT) - Maximum Sales
Charge (Load) when you buy
shares, shown as % of the
offering price................. None
Maximum Deferred Sales
Charge (Load) shown as
lower of original purchase
price or redemption
proceeds....................... None
ANNUAL FUND OPERATING
EXPENSES (EXPENSES THAT
ARE DEDUCTED FROM FUND
ASSETS)
Management Fees................ 0.10%
Distribution (12b-1) Fees...... 0.25%
Other Expenses................. 0.66%
Total Annual Fund
Operating Expenses............. 1.01%
Contractual Fee Waivers
and Expense Reimbursements..... 0.04%
Net Expenses (1)............... 0.97%
- ------------------
(1) Reflects an agreement by Chase, an affiliate of JPMC, to reimburse the Fund
to the extent operating expenses (which exclude interest, taxes and
extraordinary expenses) exceed 0.97% of average daily net assets with
respect to Cash Management Class Shares for three years after the
Reorganization.
The table does not reflect charges or credits which investors might
incur if they invest through a financial institution.
EXAMPLE: This example helps investors compare the cost of investing
in the Funds with the cost of investing in other mutual funds. The example
assumes:
- - you invest $10,000;
- - you sell all of your shares at the end of each period;
- - your investment has a 5% return each year; and
- - each Fund's operating expenses are waived for three years after the
Reorganization and unwaivered hereafter, and remain the same as shown above.
-8-
Although actual costs may be higher or lower, based upon these assumptions your
costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
THE MERGING FUND $ 100 $ 334 $ -- $ --
THE SURVIVING FUND
Reserve Class ......................................... $ 148 $ 459 $ 792 $ 1,735
Vista Class ........................................... 61 192 335 750
Class B With Redemption* .............................. 627 697 886 1,331**
Class B Without Redemption ............................ 127 397 686 1,331**
Class C With Redemption* .............................. 227 397 686 1,511
Class C Without Redemption ............................ 127 397 686 1,511
Premier Class ......................................... 49 154 269 604
Institutional Shares .................................. 34 106 185 418
PRO FORMA THE SURVIVING FUND WITH CONCURRENT
REORGANIZATION
Cash Management........................................ 99 309 546 1,225
- ----------------
* Assumes applicable deferred sales charge is deducted when shares are sold.
** Reflects conversion of Class B shares to Morgan class shares after they
have been owned for eight years.
RISK FACTORS
The following discussion highlights the principal risk factors
associated with an investment in the Surviving Fund. The Surviving Fund has
investment policies and investment restrictions generally similar to those of
the Merging Fund. Therefore, there should be similarities between the risk
factors associated with the Surviving Fund and the Merging Fund. This discussion
is qualified in its entirety by the more extensive discussion of risk factors
set forth in the Prospectus and Statement of Additional Information of the
Surviving Fund, which are incorporated herein by reference.
The Surviving Fund attempts to keep its net asset value constant, but
there is no guarantee it will be able to do so. Investments in the Surviving
Fund are not bank deposits or obligations of, or guaranteed or endorsed by,
Chase or any of its affiliates and are not insured by the FDIC, the Federal
Reserve Board or any other government agency. Although the Surviving Fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Surviving Fund.
The value of a money market investment tends to fall when prevailing
interest rates rise, although it tends to be generally less sensitive to
interest rate changes than the value of longer-term securities. Although the
Surviving Fund seeks to be fully invested, it may at times hold some of its
assets in cash, which could hurt the Fund's performance. Securities in the
Fund's portfolio may not earn as high a current income as longer term or
lower-quality securities.
-9-
Repurchase agreements involve some risk of loss to the Surviving Fund
if the other party does not live up to its obligations under the agreement.
The Surviving Fund's ability to concentrate its investments in the
banking industry could increase risks. The profitability of banks depends
largely on the availability and cost of funds, which can change depending upon
economic conditions. Banks are also exposed to losses if borrowers get into
financial trouble and cannot repay their loans.
Investments in foreign banks and other foreign issuers may be riskier
than investments in the United States. That could be, in part, because of
difficulty converting investments into cash, political and economic instability,
the imposition of government controls, or regulations that do not match U.S.
standards.
INFORMATION RELATING TO THE PROPOSED REORGANIZATION
GENERAL
The terms and conditions under which the Reorganization may be
consummated are set forth in the Reorganization Plan. Significant provisions of
the Reorganization Plan are summarized below; however, this summary is qualified
in its entirety by reference to the Reorganization Plan, a copy of which is
attached as Appendix A to this Combined Prospectus/Proxy Statement and which is
incorporated herein by reference.
DESCRIPTION OF THE REORGANIZATION PLAN
In connection with the Reorganization, the Merging Fund and the Feeder
Portfolios will cease investing in the Master Portfolio. The Reorganization Plan
provides that at the Effective Time (as defined in the Reorganization Plan) of
the Reorganization, the assets and liabilities of the Merging Fund will be
transferred to and assumed by the Surviving Fund. In exchange for the transfer
of the assets and the assumption of the liabilities of the Merging Fund, MFT
will issue at the Effective Time of the Reorganization full and fractional Cash
Management Class shares of the Surviving Fund equal in aggregate dollar value to
the aggregate net asset value of full and fractional outstanding shares of the
Merging Fund as determined at the valuation time specified in the Reorganization
Plan. The Reorganization Plan provides that the Merging Fund will declare a
dividend or dividends prior to the Effective Time of the Reorganization which,
together with all previous dividends, will have the effect of distributing to
Merging Fund Shareholders all undistributed net investment income earned and net
capital gain realized up to and including the Effective Time of the
Reorganization.
Following the transfer of assets to, and the assumption of the
liabilities of the Merging Fund by, the Surviving Fund, the Merging Fund will
distribute Surviving Fund Shares received by it to the Merging Fund Shareholders
in liquidation of the Merging Fund. Each Merging Fund Shareholder at the
Effective Time of the Reorganization will receive an amount of Cash Management
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.
-10-
The Surviving Fund expects to maintain most of the portfolio
investments of the Merging Fund in light of the similar investment policies of
the Merging Fund and the Surviving Fund.
After the Reorganization, all of the issued and outstanding shares of
the Merging Fund shall be canceled on the books of the Merging Fund and the
stock transfer books of the Merging Fund will be permanently closed.
The Reorganization is subject to a number of conditions, including
without limitation: approval of the Reorganization Plan and the transactions
contemplated thereby described in this Combined Prospectus/Proxy Statement by
the Merging Fund Shareholders; the receipt of a legal opinion from Simpson
Thacher & Bartlett with respect to certain tax issues, as more fully described
in "Federal Income Tax Consequences" below; and the parties' performance in all
material respects of their respective agreements and undertakings in the
Reorganization Plan. Assuming satisfaction of the conditions in the
Reorganization Plan, the Effective Time of the Reorganization will be on August
11, 2001 or such other date as is agreed to by the parties.
In addition, the consummation of the Reorganization is contingent upon
the consummation of the Concurrent Reorganization.
The expenses of the Funds in connection with the Reorganization will be
borne by JPMC.
The Reorganization Plan and the Reorganization described herein may be
abandoned at any time prior to the Effective Time of the Reorganization by
either party if a material condition to the performance of such party under the
Reorganization Plan or a material covenant of the other party is not fulfilled
by the date specified in the Reorganization Plan or if there is a material
default or material breach of the Reorganization Plan by the other party. In
addition, either party may terminate the Reorganization Plan if its trustees
determine that proceeding with the Reorganization Plan is not in the best
interests of their Fund's shareholders.
BOARD CONSIDERATIONS
The JPMIF Board met on March 26 and 27, 2001 and the MFT Board met on
April 3, 2001, and each considered and discussed the proposed Reorganization.
The Trustees of each Board discussed the advantages of reorganizing the Merging
Fund into the Surviving Fund.
The Board of each trust has determined that it is in the best interests
of the Fund's shareholders to combine the Merging Fund with the Surviving Fund.
This Reorganization is part of the general integration of the J.P. Morgan and
former Chase Vista funds into a single mutual fund complex. In reaching the
conclusion that the Reorganization is in the best interests of Fund
shareholders, each Board considered a number of factors including, among others:
the terms of the Reorganization Plan; a comparison of each Fund's historical and
projected expense ratios; the comparative investment performance of the Merging
Fund and Surviving Fund; the anticipated effect of such Reorganization on the
-11-
relevant Fund and its shareholders; the investment advisory services supplied by
the Surviving Fund's investment adviser; the management and other fees payable
by the Surviving Fund; the similarities and differences in the investment
objectives and policies of the Merging Fund and the Surviving Fund; and the
recommendations of the relevant Fund's current investment adviser with respect
to the proposed Reorganization.
The Board determined that the Funds have generally similar investment
objectives and policies. They noted that the Reorganization could permit the
shareholders of the Merging Fund to pursue similar investment goals in a single
larger fund.
The Board also considered benefits expected to arise as a result of the
Reorganization. Among these benefits, the Board noted that Surviving Fund
Shareholders would be able to exchange into a larger number and greater variety
of funds and the Surviving Fund would also benefit from the administrator's
overall intent to enhance its ability effectively to monitor and oversee the
quality of all service providers to the fund, including the investment adviser.
Finally, the Board considered the expenses related to the
Reorganization. The Board noted the administrator's undertaking to waive fees
or reimburse the Surviving Fund's expenses so that the total expense ratio of
each share class of the Merging Fund dose not increase during the period
specified in the expense table. Additional important factors were that all
costs and expenses of the Reorganization would be borne by JPMC and the fact
that the Board was advised that Reorganization would constitute a tax-free
reorganization.
After considering the foregoing factors, together with such information
as it believed to be relevant, and in light of its fiduciary duties under
federal and state law, each Board, determined that the proposed Reorganization
is in the interests of the applicable Fund and its shareholders determined the
best interests of the Shareholders would not be diluted as a result of the
Reorganization, approved the Reorganization Plan and directed that the
Reorganization Plan be submitted to the Merging Fund Shareholders for approval.
THE JPMIF BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE PROPOSAL.
The JPMIF Board has not determined what action the Merging Fund will
take in the event shareholders do not approve the Reorganization Plan or for any
reason the Reorganization is not consummated. In either such event, the Board
will consider other appropriate courses of action.
INFORMATION RELATING TO CONCURRENT REORGANIZATION
The terms and conditions under which the Concurrent Reorganization may
be consummated are set forth in reorganization plans which are substantially
similar to the Reorganization Plan you are considering. As a result of the
Reorganization and the Concurrent Reorganization, the Merging Fund and the
Feeder Portfolios will no longer invest their assets in the Master Portfolio.
The consummation of the Reorganization is contingent upon the consummation of
the Concurrent Reorganization.
-12-
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the Reorganization is subject to the condition that
JPMIF receive an opinion from Simpson Thacher & Bartlett to the effect that for
federal income tax purposes: (i) the transfer of all of the assets and
liabilities of the Merging Fund to the Surviving Fund in exchange for the
Surviving Fund Shares and the liquidating distributions to shareholders of the
Surviving Fund Shares so received, as described in the Reorganization Plan, will
constitute a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and with respect to the
Reorganization, the Merging Fund and the Surviving Fund will each be considered
"a party to a reorganization" within the meaning of Section 368(b) of the Code;
(ii) no gain or loss will be recognized by the Merging Fund as a result of such
transaction; (iii) no gain or loss will be recognized by the Surviving Fund as a
result of such transaction; (iv) no gain or loss will be recognized by the
Merging Fund Shareholders on the distribution to the Merging Fund Shareholders
of the Surviving Fund Shares solely in exchange for their Merging Fund Shares;
(v) the aggregate basis of shares of the Surviving Fund received by a
shareholder of the Merging Fund will be the same as the aggregate basis of such
Merging Fund Shareholder's Merging Fund Shares immediately prior to the
Reorganization; (vi) the basis of the Surviving Fund in the assets of the
Merging Fund received pursuant to such transaction will be the same as the basis
of such assets in the hands of the Merging Fund immediately before such
transaction; (vii) a Merging Fund Shareholder's holding period for the Surviving
Fund Shares will be determined by including the period for which such Merging
Fund Shareholder held the Merging Fund Shares exchanged therefor, provided that
the Merging Fund Shareholder held such Merging Fund Shares as a capital asset;
and (viii) the Surviving Fund's holding period with respect to the assets
received in the Reorganization will include the period for which such assets
were held by the Merging Fund.
JPMIF has not sought a tax ruling from the Internal Revenue Service
(the "IRS"), but is acting in reliance upon the opinion of counsel discussed in
the previous paragraph. That opinion is not binding on the IRS and does not
preclude the IRS from adopting a contrary position. Shareholders should consult
their own advisers concerning the potential tax consequences to them, including
state and local income taxes.
CAPITALIZATION
Because the Merging Fund will be combined with the Surviving Fund in
the Reorganization as well as other funds as a result of the Concurrent
Reorganization, the total capitalization of the Surviving Fund after the
Reorganization and the Concurrent Reorganization is expected to be greater
than the current capitalization of the Merging Fund. The following table sets
forth as of February 28, 2001: (i) the capitalization of the Merging Fund;
(ii) the capitalization of the Surviving Fund; and (iii) the pro forma
capitalization of the Surviving Fund as adjusted to give effect to the
Reorganization and the Concurrent Reorganization. There is, of course, no
assurance that the Reorganization and the Concurrent Reorganization will be
consummated. Moreover, if consummated, the capitalizations of the Surviving
Fund and the Merging Fund are likely to be different at the Effective Time of
the Reorganization as a result of fluctuations in the value of portfolio
-13-
securities of each Fund and daily share purchase and redemption activity in each
Fund. Please note that the Surviving Fund currently has six classes of shares:
Reserve Class, Vista Class, Premier Class, Institutional Class, Class B and
Class C. In connection with the Reorganization and Concurrent Reorganization,
four additional classes, the Cash Management Class, Retail Class, a new
Institutional Class and a new Reserve Class will be introduced, the Vista Class
will be renamed the "Morgan Class", the Institutional Class will be renamed
"Agency Class", and the Reserve Class will merge into the Morgan Class.
CAPITALIZATION
PRO FORMA WITH CONCURRENT REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
BENEFICIAL SHARES NET ASSETS NET ASSET
INTEREST OUTSTANDING VALUE PER
OUTSTANDING SHARE
J.P. MORGAN FUNDS
J.P. Morgan Prime Money Market Fund 4,662,032 $4,662,087 $1.00
J.P. Morgan Institutional Prime Money Market Fund 14,102,955 $14,102,612 $1.00
J.P. Morgan Institutional Service Prime Money Market 1,361,177 $1,361,097 $1.00
Fund
J.P. Morgan Prime Money Market Reserve Fund 279,169 $279,160 $1.00
J.P. Morgan Institutional Prime Direct Money 20,307 $20,307 $1.00
Market Fund
J.P. Morgan Prime Cash Management Fund 533,344 $533,339 $1.00
(the Merging Fund)
THE SURVIVING FUND
Reserve Class 123 $123 $1.00
Vista Class 10,213,350 $10,212,881 $1.00
Class B 12,496 $12,486 $1.00
Class C 309 $309 $1.00
Premier Class 2,059,160 $2,059,102 $1.00
Institutional Class 17,334,106 $17,333,442 $1.00
PRO FORMA THE SURVIVING WITH CONCURRENT
REORGANIZATION
Reserve Class 279,169 $279,160 $1.00
Morgan Class 10,213,473 $10,213,004 $1.00
Class B Class 12,496 $12,486 $1.00
Class C Class 309 $309 $1.00
Cash Management Class 533,344 $533,339 $1.00
Retail Class 4,662,032 $4,662,087 $1.00
Premier Class 3,420,337 $3,420,199 $1.00
Agency Class 17,354,413 $17,353,749 $1.00
Institutional Class 14,102,955 $14,102,612 $1.00
INVESTMENT POLICIES
The following discussion summarizes some of the investment policies of
the Surviving Fund. Except as noted below, the Merging Fund generally has
similar investment policies to those of the Surviving Fund. This section is
qualified in its entirety by the discussion in the Prospectus and Statement of
Additional Information of the Surviving Fund, which are incorporated herein by
reference.
OBJECTIVE
The Surviving Fund's investment objective is to aim to provide the
highest possible level of current income while still maintaining liquidity and
preserving capital. This objective cannot be changed without shareholder
approval. THE MERGING FUND'S INVESTMENT OBJECTIVE IS TO MAXIMIZE CURRENT INCOME
CONSISTENT WITH THE PRESERVATION OF CAPITAL AND SAME-DAY LIQUIDITY. THE MERGING
FUND'S OBJECTIVE CAN BE CHANGED WITHOUT SHAREHOLDER APPROVAL. SHAREHOLDERS OF
THE SURVIVING FUND CURRENTLY ARE CONSIDERING A PROPOSAL THAT, IF PASSED AT A
SHAREHOLDER MEETING TO BE HELD THE SAME DAY AS THE MEETING OF THE MERGING FUND,
WOULD ALLOW THE SURVIVING FUND TO CHANGE ITS OBJECTIVE WITHOUT SHAREHOLDER
APPROVAL.
MAIN INVESTMENT STRATEGIES
The Surviving Fund invests its assets directly in portfolio securities.
THE MERGING FUND INVESTS ITS ASSETS IN THE MASTER PORTFOLIO, WHICH IN TURN
INVESTS IN PORTFOLIO SECURITIES.
-14-
The Surviving Fund invests in high quality, short-term money market
instruments that are issued and payable in U.S. dollars. The Surviving Fund
principally invests in:
- high quality commercial paper and other short-term debt securities
(including floating and variable rate demand notes of U.S. and foreign
corporations),
- debt securities issued or guaranteed by qualified banks, which
include (i) U.S. banks with more than $1 billion in total assets, and foreign
branches of these banks, (ii) foreign banks with the equivalent of more than $10
billion in total assets and which have branches or agencies in the U.S. and
(iii) other U.S. or foreign commercial banks which JPMFAM judges to have
comparable credit standing,
- securities issued or guaranteed by the U.S. Government, its agencies
or authorities,
- asset-backed securities, and
- repurchase agreements.
The dollar weighted average maturity of the Surviving Fund will be 60
days or less and the Surviving Fund will buy only those instruments which have
remaining maturities of 397 days or less. THE MERGING FUND MAINTAINS A DOLLAR
WEIGHTED AVERAGE MATURITY OF NO MORE THAN 90 DAYS.
The Surviving Fund seeks to maintain a net asset value of $1.00 per
share.
The Surviving Fund may invest any portion of its assets in debt
securities issued or guaranteed by U.S. banks and their foreign branches. These
include certificates of deposit, time deposits and bankers' acceptances.
The Surviving Fund invests only in securities issued and payable in
U.S. dollars. Each investment must have the highest possible short-term rating
from at least two national rating organizations, or one such rating if only one
organization rates that security. Alternatively, some securities may have
additional third party guarantees in order to meet the rating requirements
mentioned above. If the security is not rated, it must be considered of
comparable quality by JPMFAM.
The Surviving Fund seeks to develop an appropriate portfolio by
considering the differences in yields among securities of different maturities,
market sectors and issuers.
-15-
INVESTMENT RESTRICTIONS
The Surviving Fund and the Merging Fund have each adopted the following
investment restrictions which may not be changed without approval by a "majority
of the outstanding shares" of a Fund, which means the vote of the lesser of (i)
67% or more of the shares of a Fund present at a meeting, if the holders of more
than 50% of the outstanding shares of a Fund are present or represented by
proxy, and (ii) more than 50% of the outstanding shares of a Fund.
SURVIVING FUND MERGING FUND
-------------- ------------
While the Surviving Fund is also The Merging Fund may not make any
diversified under the 1940 Act, it investment inconsistent with its
is not subject to a similar classification as a diversified
fundamental restriction. investment company under the 1940
Act.
The Surviving Fund may not purchase The Merging Fund may not purchase
the securities of any issuer (other any security that would cause it to
than securities issued or concentrate its investments in the
guaranteed by the U.S. government securities of issuers primarily
or any of its agencies or engaged in any particular industry
instrumentalities, or repurchase except as permitted by the
agreements secured thereby) if, as Commission, except that this
a result, more than 25% of the restriction does not apply to any
Surviving Fund's total assets would instruments considered to be
be invested in the securities of domestic bank money market
companies whose principal business instruments.
activities are in the same
industry. Notwithstanding the
foregoing, (i) with respect to the
Surviving Fund's permissible
futures and options transactions in
U.S. Government securities,
positions in such options and
futures shall not be subject to
this restriction; and (ii) the
Surviving Fund may invest more than
25% of its total assets in
obligations issued by banks,
including U.S. banks.
The Surviving Fund may not borrow The Merging Fund may not borrow
money, except for temporary or money, except to the extent
emergency purposes, or by engaging permitted by applicable law.
in reverse repurchase transactions,
in an amount not exceeding 33% of
the value of its total assets at
the time when the loan is made and
may pledge, mortgage or hypothecate
no more than 1/3 of its net assets
to secure such borrowings. Any
borrowings representing more than
5% of the Surviving
-16-
SURVIVING FUND MERGING FUND
-------------- ------------
Fund's total assets must be repaid
before the Surviving Fund may make
additional investments.
The Surviving Fund may not purchase The Merging Fund may not purchase
or sell physical commodities unless or sell commodities or commodity
acquired as a result of ownership contracts unless acquired as a
of securities or other instruments result of ownership of securities
but this shall not prevent the Fund or other instruments issued by
from (i) purchasing or selling persons that purchase or sell
options and futures contracts or commodities or commodities
from investing in securities or contracts; but this shall not
other instruments backed by prevent the Merging Fund from
physical commodities or (ii) purchasing, selling and entering
engaging in forward purchases or into financial futures contracts
sales of foreign currencies or (including futures contracts on
securities. indices of securities, interest
rates and currencies), options on
financial futures contracts
(including futures contracts on
indices of securities, interest
rates and currencies), warrants,
swaps, forward contracts, foreign
currency spot and forward contracts
or other derivative instruments
that are not related to physical
commodities.
The Surviving Fund may not make The Merging Fund may make loans to
loans, except that the Surviving other persons, in accordance with
Fund may: (i) purchase and hold the Fund's investment objective and
debt instruments (including without policies and to the extent
limitation, bonds, notes, permitted by applicable law.
debentures or other obligations and
certificates of deposit, bankers'
acceptances and fixed time
deposits) in accordance with its
investment objectives and policies;
(ii) enter into repurchase
agreements with respect to
portfolio securities; and (iii)
lend portfolio securities with a
value not in excess of one-third of
the value of its total assets.
SHAREHOLDERS OF THE SURVIVING FUND
CURRENTLY ARE CONSIDERING A
PROPOSAL THAT, IF PASSED AT A
SHAREHOLDER MEETING TO BE HELD THE
SAME DAY AS THE MEETING OF THE
MERGING FUND, WOULD ADOPT A
FUNDAMENTAL INVESTMENT RESTRICTION
REGARDING LOANS THAT IS IDENTICAL
TO THE MERGING FUND'S RESTRICTION.
-17-
Neither Fund may issue senior securities, except as permitted under the
1940 Act or any rule, order or interpretation thereunder.
Neither Fund may underwrite securities of other issuers, except to the
extent that the Fund, in disposing of portfolio securities, may be deemed an
underwriter within the meaning of the Securities Act of 1933, as amended.
Neither Fund may purchase or sell real estate (including, for the
Surviving Fund, real estate limited partnerships), except that, to the extent
permitted by applicable law, each Fund may (a) invest in securities or other
instruments directly or indirectly secured by real estate and (b) invest in
securities or other instruments issued by issuers that invest in real estate.
Notwithstanding any other investment policy or restriction, the
Surviving Fund may seek to achieve its investment objective by investing all of
its investable assets in another investment company having substantially the
same investment objective and policies as the Surviving Fund. Although the
Merging Fund currently invests all of its assets in the Master Portfolio,
following the Reorganization the Surviving Fund will invest directly in
portfolio securities.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The investment restrictions
described below are not fundamental policies of the Surviving Fund and/or the
Merging Fund and may be changed by their respective Trustees.
SURVIVING FUND MERGING FUND
-------------- ------------
The Surviving Fund may not invest The Merging Fund may not acquire
more than 10% of its assets in any illiquid securities, such as
illiquid securities. For purposes repurchase agreements with more
of this non-fundamental than seven days to maturity or
restriction, "illiquid securities" fixed time deposits with a duration
include securities restricted as to of over seven calendar days, if as
resale unless they are determined a result thereof, more than 10% of
to be readily marketable in the market value of the Merging
accordance with the procedures Fund's total assets would be in
established by the Board of investments which are illiquid.
Trustees.
The Surviving Fund may not make The Merging Fund may not purchase
short sales of securities, other securities on margin, make short
than short sales "against the box," sales of securities, or maintain a
or purchase securities on margin short position, provided that this
except for short-term credits restriction shall not be deemed to
necessary for clearance of be applicable to the purchase or
portfolio transactions, provided sale of when-issued or delayed
that this restriction will not be delivery securities.
applied to limit the use of
options, futures contracts and
related options, in the manner
otherwise permitted by the
investment restrictions, policies
and investment program of the Fund.
The
-18-
SURVIVING FUND MERGING FUND
-------------- ------------
Surviving Fund has no current
intention of making short sales
against the box.
The Surviving Fund may not, with The Merging Fund is not subject to
respect to 75% of its assets, hold a similar non-fundamental
more than 10% of the outstanding restriction, although as a matter
voting securities of any issuer or of fundamental policy the Merging
invest more than 5% of its assets Fund may not make any investment
in the securities of any one issuer inconsistent with its
(other than obligations of the U.S. classification as a diversified
Government, its agencies and investment company under the 1940
instrumentalities). Act.
The Surviving Fund may invest up to The Merging Fund may not acquire
5% of its total assets in the securities of other investment
securities of any one investment companies, except as permitted by
company, but may not own more than the 1940 Act or any order pursuant
3% of the securities of any one thereto.
investment company or invest more
than 10% of its total assets in the
securities of other investment
companies.
The Surviving Fund may not purchase The Merging Fund is not subject to
or sell interests in oil, gas or a similar non-fundamental
mineral leases. restriction.
The Surviving Fund may not write, The Merging Fund is not subject to
purchase or sell any put or call a similar non-fundamental
option or any combination thereof, restriction.
provided that this shall not
prevent (i) the writing, purchasing
or selling of puts, calls or
combinations thereof with respect
to portfolio securities or (ii)
with respect to the Surviving
Fund's permissible futures and
options transactions, the writing,
purchasing, ownership, holding or
selling of futures and options
positions or of puts, calls or
combinations thereof with respect
to futures.
The Surviving Fund will not invest The Merging Fund is not subject to
more than 25% of its total assets a similar non-fundamental
in obligations issued by foreign restriction.
banks (other than foreign branches
of U.S. banks).
The Surviving Fund is not subject The Merging Fund may not borrow
to a similar non-fundamental money, except from banks for
restriction, although it is subject extraordinary or emergency purposes
to the fundamental and then only in
-19-
SURVIVING FUND MERGING FUND
-------------- ------------
restriction regarding borrowing amounts not to exceed 10% of the
described above. value of the Fund's total assets,
taken at cost, at the time of such
borrowing or mortgage, pledge, or
hypothecate any assets except in
connection with any such borrowing
and in amounts not to exceed 10% of
the value of the Fund's net assets
at the time of such borrowing. The
Fund will not purchase securities
while borrowings exceed 5% of the
Fund's total assets; provided,
however, that the Fund may increase
its interest in an open-end
management investment company with
the same investment objective and
restrictions as the Fund while such
borrowings are outstanding. This
borrowing provision is included to
facilitate the orderly sale of
portfolio securities, for example,
in the event of abnormally heavy
redemption requests, and is not for
investment purposes and shall not
apply to reverse repurchase
agreements.
There will be no violation of any investment restriction if that
restriction is complied with at the time the relevant action is taken
notwithstanding a later change in market value of an investment, in net or total
assets, in the securities rating of the investment, or any other later change.
PURCHASES, REDEMPTIONS AND EXCHANGES
Following the Reorganization, the procedures for purchases, redemptions
and exchanges of shares will be those of the Surviving Fund, which are generally
similar to those of the Merging Fund. The following discussion applies to Cash
Management Class shares. This section is qualified in its entirety by the
discussion in the Prospectus and Statement of Additional Information of the
Surviving Fund, which are incorporated herein by reference.
SALES CHARGES
There is no sales charge to buy or sell Cash Management Class shares.
12b-1 FEES
There is no Rule 12b-1 distribution plan for Cash Management Class
shares of the Surviving Fund.
-20-
BUYING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF CASH MANAGEMENT CLASS
SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION.
The price shareholders pay for their shares is the net asset value per
share (NAV). NAV is the value of everything the Surviving Fund owns, minus
everything it owes, divided by the number of shares held by investors. The
Surviving Fund seeks to maintain a stable NAV of $1.00. The Surviving Fund uses
the amortized cost method to value its portfolio of securities. This method
provides more stability in valuations. However, it may also result in periods
during which the stated value of a security is different than the price the
Surviving Fund would receive if it sold the investment.
The NAV of each class of shares is generally calculated as of 6:00 p.m.
Eastern time each day the Surviving Fund is accepting purchase orders.
A shareholder will pay the next NAV calculated after the JPMorgan Funds
Service Center (the "Center") receives that shareholder's order in proper form.
An order is in proper form only after payment is converted into federal funds.
The Center accepts purchase orders on any business day that the Federal
Reserve Bank of New York and the New York Stock Exchange are open. If an order
is sent in proper form by the Surviving Fund's cut-off time, it will be
processed at that day's price and you will be entitled to all dividends declared
on that day. If your order is received after the cut-off time, it generally will
be processed at the next day's price. If you pay by check before the cut-off
time, your order generally will be processed the next day the Surviving Fund is
open for business. Normally, the cut-off (in Eastern time) is 5:00 p.m. A later
cut-off time may be permitted for investors buying their shares through Chase or
a bank affiliate of Chase so long as such later cut-off time is before the
Fund's NAV is calculated. If you buy through an agent and not directly from the
Center, the agent could set earlier cut-off times. The Surviving Fund can set an
earlier cut-off time if the Public Securities Association recommends that the
U.S. Government securities market close trading early. You must provide a
Taxpayer Identification Number when you open an account.
The Surviving Fund has the right to reject any purchase order for any
reason.
Cash Management Class shares are available only to qualified investors.
These are defined as institutions, trusts, partnerships, corporations and
certain retirement plans and fiduciary accounts opened by a bank, trust company
or thrift institution which has investment authority over such accounts, as well
as individuals who meet the Surviving Fund's minimum investment requirements.
Shareholders receiving Cash Management Class shares in the Reorganization will
be permitted to purchase additional Cash Management shares in the future
For Cash Management 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
-21-
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 5:00 p.m., Eastern time, on the day the shareholder buys.
Shareholders seeking to buy Cash Management 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 Cash Management Class
shares.
SELLING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO SALES OF THE CASH MANAGEMENT CLASS
SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION.
Shares of the Surviving Fund may be sold on any day the Center is open
for trading, either directly to the Fund or through an investment
representative. Shareholders of the Surviving Fund will receive the next NAV
calculated after the Center accepts his or her sale order.
Under normal circumstances, if a request is received before the cut-off
time, the Surviving Fund will send the proceeds the next business day. An order
to sell shares will not be accepted if the Surviving Fund has not collected
payment for the shares. The 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. If
a shareholder's address of record has changed within the 30 days prior to the
sale request or if more than $25,000 of shares is sold by phone, proceeds by
electronic transfer or wire will be sent only to the bank account on the
Surviving Fund's records.
For Cash Management Class shares, a shareholder will need to have his
or her signature guaranteed if he or she wants payment to be sent to an address
other than the one in the Surviving Fund's records. Additional documents or a
letter from a surviving joint owner may also be needed.
A shareholder who purchased through an investment representative or
through a financial service firm, should contact that representative, who will
send the necessary documents to the Center. The representative might charge a
fee for this service.
Shareholders may also sell their shares by contacting the Center
directly by calling 1-800-___-____.
A systematic withdrawal plan is available for Cash Management Class
shares.
-22-
EXCHANGING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF CASH MANAGEMENT CLASS
SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION.
Cash Management Class shares of the Surviving Fund may be exchanged for
shares of the same class in certain other JPMorgan Funds.
For tax purposes, an exchange is treated as a sale of those shares.
Shareholders should carefully read the prospectus of the fund into which they
want to exchange. Shareholders who exchange must meet any minimum investment
requirements and may have to pay a sales commission.
The exchange privilege is not a means of short-term trading as this
could increase management cost and affect all shareholders of the Surviving
Fund. The Surviving Fund reserves the right to limit the number of exchanges or
refuse an exchange. Each exchange privilege may also be terminated. The
Surviving Fund charges an administration fee of $5 for each exchange if an
investor makes more than 10 exchanges in a year or three in a quarter.
OTHER INFORMATION CONCERNING THE SURVIVING FUND
For Cash Management shares, the Surviving Fund may close an account if
the balance falls below $100,000. The Surviving Fund may also close the account
if an investor is in the systematic investment plan and fails to meet investment
minimums over a 12-month period. At least 60 days' notice will be given before
closing the account.
Unless a shareholder indicates otherwise on his or her account
application, the Surviving Fund is authorized to act on redemption and transfer
instructions received by phone. If someone trades on an account by phone, the
Surviving Fund will ask that person to confirm the account registration and
address to make sure they match those in the Surviving Fund records. If they do
correspond, the Surviving Fund is generally authorized to follow that person's
instructions. The Surviving Fund will take all reasonable precautions to confirm
that the instructions are genuine. Investors agree that they will not hold the
Surviving Fund liable for any loss or expenses from any sales request, if the
Surviving Fund takes reasonable precautions. The Surviving Fund will be liable
for any losses to a shareholder from an unauthorized sale or fraud against such
shareholder if the Surviving Fund does not follow reasonable procedures.
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.
MFT, on behalf of the Surviving Fund has entered into agreements with
certain shareholder servicing agents (including Chase) under which the
shareholder servicing agents agree to provide certain support services to their
customers. For performing these services, each shareholder servicing agent will
receive an annual fee of up to 0.25% of the
-23-
average daily net assets of the Cash Management Class shares held by investors
serviced by the shareholder servicing agent.
JPMFAM and/or the Distributor may, at their own expense, make
additional payments to certain selected dealers or other shareholder servicing
agents for performing administrative services for their customers.
The Surviving Fund issues multiple classes of shares. Each class may
have different requirements for who may invest, and may have different sales
charges and expense levels. A person who gets compensated for selling Fund
shares may receive a different amount for each class.
DISTRIBUTIONS AND TAXES
The Surviving Fund can earn income and realize capital gain. The
Surviving Fund will deduct from these earnings any expenses and then pay to
shareholders the distributions.
The Surviving Fund declares dividends daily and distributes any net
investment income at least monthly. Net capital gain is distributed annually.
You have three options for your Surviving Fund distributions. You may:
- reinvest all of them in additional Fund shares without a sales
charge;
- take all distributions in cash or as a deposit in a pre-assigned
bank account.
If you don't notify us otherwise, we'll reinvest all distributions. If
your distributions are reinvested, they will be in the form of shares of the
same class. The taxation of dividends won't be affected by the form in which you
receive them.
Dividends of net investment income are usually taxable as ordinary
income at the federal, state and local levels.
If you receive distributions of net capital gain, the tax rate will be
based on how long the Surviving Fund held a particular asset, not on how long
you have owned your shares. If you buy shares just before a distribution, you
will pay tax on the entire amount of the taxable distribution you receive, even
though the NAV will be higher on that date because it includes the distribution
amount.
Early in each calendar year, the Surviving Fund will send its
shareholders a notice showing the amount of distributions received in the
preceding year and the tax status of those distributions.
The above is only a general summary of tax implications of investing in
the Surviving Fund. Shareholders should consult their tax advisors to see how
investing in the Surviving Fund will affect their own tax situation.
-24-
COMPARISON OF THE MERGING FUND'S
AND THE SURVIVING FUND'S
ORGANIZATION STRUCTURE
There are no material differences in the organizational structure of
the Merging Fund and the Surviving Fund. Set forth below are descriptions of the
structure, voting rights, shareholder liability and the liability of Trustees.
STRUCTURE OF THE MERGING FUND
The Merging Fund is organized as a series of JPMIF, which is organized
under the law of the Commonwealth of Massachusetts. As a Massachusetts business
trust, JPMIF's operations are governed by JPMIF's Declaration of Trust and
By-Laws and applicable Massachusetts law. The operations of the Merging Fund are
also subject to the provisions of the 1940 Act and the rules and regulations
thereunder.
STRUCTURE OF THE SURVIVING FUND
The Surviving Fund is organized as a series of MFT, which is organized
under the law of the Commonwealth of Massachusetts. As a Massachusetts business
trust, MFT's operations are governed by MFT's Declaration of Trust and By-Laws
and applicable Massachusetts law. The operations of the Surviving Fund are also
subject to the provisions of the 1940 Act and the rules and regulations
thereunder.
TRUSTEES AND OFFICERS
Subject to the provisions of its trust documents, the business of the
Merging Fund is managed by JPMIF's Trustees and the business of the Surviving
Fund is managed by MFT's Trustees, who serve indefinite terms and have all
powers necessary or convenient to carry out their responsibilities.
Information concerning the current Trustees and officers of MFT and
JPMIF is set forth in the Funds' respective Statements of Additional
Information, which are incorporated herein by reference.
SHARES OF FUNDS
Each of MFT and JPMIF is a trust with an unlimited number of authorized
shares of beneficial interest which may be divided into series or classes
thereof. Each Fund is one series of a trust and may issue multiple classes of
shares. Each share of a series or class of a trust represents an equal
proportionate interest in that series or class with each other share of that
series or class. The shares of each series or class of either MFT or JPMIF
participate equally in the earnings, dividends and assets of the particular
series or class. Fractional shares have proportionate rights to full shares.
Expenses of MFT or JPMIF that are not attributable to a specific series or class
will be allocated to all the series of that trust in a manner believed by its
board to be fair and equitable. Generally, shares of each series will be voted
separately, for example, to approve an investment advisory agreement. Likewise,
shares of each class of each series will be voted separately, for
-25-
example, to approve a distribution plan, but shares of all series and classes
vote together, to the extent required by the 1940 Act, including for the
election of Trustees. Neither MFT nor JPMIF is required to hold regular annual
meetings of shareholders, but may hold special meetings from time to time. There
are no conversion or preemptive rights in connection with shares of either MFT
or JPMIF.
SHAREHOLDER VOTING RIGHTS
A vacancy in the Board of either MFT or JPMIF resulting from the
resignation of a Trustee or otherwise may be filled similarly by a vote of a
majority of the remaining Trustees then in office, subject to the 1940 Act. In
addition, Trustees may be removed from office by a vote of holders of shares
representing two-thirds of the outstanding shares of each portfolio of that
trust. A meeting of shareholders shall be held upon the written request of the
holders of shares representing not less than 10% of the outstanding shares
entitled to vote on the matters specified in the written request. Except as set
forth above, the Trustees may continue to hold office and may appoint successor
Trustees.
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders of either MFT or JPMIF could,
under certain circumstances, be held personally liable as partners for the
obligations of that trust. However, the Declaration of Trust of each of MFT and
JPMIF disclaims shareholder liability for acts or obligations of that trust and
provides for indemnification and reimbursement of expenses out of trust property
for any shareholder held personally liable for the obligations of that trust.
Each of MFT and JPMIF may maintain appropriate insurance (for example, fidelity
bonding and errors and omissions insurance) for the protection of that trust,
its shareholders, Trustees, officers, employees and agents covering possible
tort and other liabilities. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability generally is limited to circumstances
in which both inadequate insurance existed and the trust itself was unable to
meet its obligations.
LIABILITY OF DIRECTORS AND TRUSTEES
Under the Declaration of Trust of each of MFT and JPMIF, the Trustees
of that trust are personally liable only for bad faith, willful misfeasance,
gross negligence or reckless disregard of their duties as Trustees. Under the
Declaration of Trust of each of MFT and JPMIF, a Trustee or officer will
generally be indemnified against all liability and against all expenses
reasonably incurred or paid by such person in connection with any claim, action,
suit or proceeding in which such person becomes involved as a party or otherwise
by virtue of such person being or having been a Trustee or officer and against
amounts paid or incurred by such person in the settlement thereof.
The foregoing is only a summary of certain organizational and governing
documents and Massachusetts business trust law. It is not a complete
description. Shareholders should refer to the provisions of these documents and
state law directly for a more thorough comparison. Copies of the Declaration of
Trust and By-Laws of each of MFT and JPMIF are available without charge upon
written request to that trust.
-26-
INFORMATION RELATING TO THE ADVISORY CONTRACTS AND OTHER
SERVICES
GENERAL INFORMATION
As noted above, the investment adviser of the Master Portfolio (and
therefore the Merging Fund's assets) is JPMIM. Pursuant to an Advisory
Agreement, the investment adviser of the Surviving Fund is JPMFAM.
DESCRIPTION OF JPMFAM
JPMFAM, a registered investment adviser, is an indirect wholly-owned
subsidiary of JPMC, incorporated under the laws of Delaware. JPMFAM's principal
executive offices are located at 522 Fifth Avenue, New York, New York 10036. As
of _______ __, 2001, JPMFAM and certain of its affiliates (including JPMIM)
provided investment management services with respect to assets of approximately
$___ billion.
Under the Advisory Agreement, JPMFAM is responsible for making
decisions with respect to, and placing orders for, all purchases and sales of
the portfolio securities of the Surviving Fund. JPMFAM's responsibilities under
the Advisory Agreement include supervising the Surviving Fund's investments and
maintaining a continuous investment program, placing purchase and sale orders
and paying costs of certain clerical and administrative services involved in
managing and servicing the Surviving Fund's investments and complying with
regulatory reporting requirements. Under the Advisory Agreement, JPMFAM is
obligated to furnish employees, office space and facilities required for the
operation of the Surviving Fund. The services provided to the Surviving Fund by
JPMFAM are substantially similar to the services currently provided to the
Master Portfolio by JPMIM.
EXPENSES AND MANAGEMENT FEES. The Advisory Agreement provides that the
Surviving Fund will pay JPMFAM a monthly management fee based upon the net
assets of the Surviving Fund. The annual rate of this management fee is 0.10%.
The Merging Fund currently pays JPMIM 0.20% of the first $1 billion of average
daily net assets and 0.10% of average daily net assets in excess of $1 billion
with respect to its assets in the Master Portfolio. JPMFAM may waive fees from
time to time.
Under the Advisory Agreement, except as indicated above, the Surviving
Fund is responsible for its operating expenses including, but not limited to,
taxes; interest; fees (including fees paid to its Trustees who are not
affiliated with JPMFAM or any of its affiliates); fees payable to the
Commission; state securities qualification fees; association membership dues;
costs of preparing and printing prospectuses for regulatory purposes and for
distribution to existing shareholders; advisory and administrative fees; charges
of the custodian and transfer agent; insurance premiums; auditing and legal
expenses; costs of shareholders' reports and shareholder meetings; any
extraordinary expenses; and brokerage fees and commissions, if any, in
connection with the purchase or sale of portfolio securities.
-27-
SUBCONTRACTING. JPMFAM is authorized by the Advisory Agreement to
employ or associate with such other persons or entities as it believes to be
appropriate to assist it in the performance of its duties. Any such person is
required to be compensated by JPMFAM, not by the Surviving Fund, and to be
approved by the shareholders of that Fund as required by the 1940 Act.
LIMITATION ON LIABILITY. The Advisory Agreement provides that JPMFAM
will not be liable for any error of judgment or mistake of law or for any act or
omission or loss suffered by MFT or the Surviving Fund in connection with the
performance of the Advisory Agreement except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services or from
willful misfeasance, bad faith, or gross negligence in the performance of its
duties or reckless disregard of its obligations and duties under the Advisory
Agreement.
DURATION AND TERMINATION. The Advisory Agreement will continue in
effect from year to year with respect to the Surviving Fund, only so long as
such continuation is approved at least annually by (i) the Board of Trustees of
MFT or the majority vote of the outstanding voting securities of the Surviving
Fund, and (ii) a majority of those Trustees who are neither parties to the
Advisory Agreement nor "interested persons," as defined in the 1940 Act, of any
such party, acting in person at a meeting called for the purpose of voting on
such approval. The Advisory Agreement will terminate automatically in the event
of its "assignment," as defined in the 1940 Act. In addition, the Advisory
Agreement is terminable at any time as to the Surviving Fund without penalty by
the MFT Board or by vote of the majority of the Surviving Fund's outstanding
voting securities upon 60 days' written notice to JPMFAM, and by JPMFAM on 60
days' written notice to MFT.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
JPMFAM, as the investment adviser to the Surviving Fund, has
responsibilities with respect to the Fund's portfolio transactions and brokerage
arrangements pursuant to the Fund's policies, subject to the overall authority
of the MFT Board.
Under the Advisory Agreement, JPMFAM, subject to the general
supervision of the Board, is responsible for the placement of orders for the
purchase and sale of portfolio securities for the Surviving Fund with brokers
and dealers selected by JPMFAM. These brokers and dealers may include brokers or
dealers affiliated with JPMFAM to the extent permitted by the 1940 Act and MFT's
policies and procedures applicable to the Fund. JPMFAM shall use its best
efforts to seek to execute portfolio transactions at prices which, under the
circumstances, result in total costs or proceeds being the most favorable to
such Fund. In assessing the best overall terms available for any transaction,
JPMFAM shall consider all factors it deems relevant, including the breadth of
the market in the security, the price of the security, the financial condition
and execution capability of the broker or dealer, research services provided to
JPMFAM, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In no event shall JPMFAM be under any
duty to obtain the lowest commission or the best net price for the Fund on any
particular transaction, nor shall JPMFAM be under any duty to execute any
-28-
order in a fashion either preferential to such Fund relative to other accounts
managed by JPMFAM or otherwise materially adverse to such other accounts.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to JPMFAM, the Fund and/or the other accounts over which
JPMFAM exercises investment discretion. JPMFAM is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Fund which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if JPMFAM determines in good faith that the total commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or the overall responsibilities of JPMFAM with respect to accounts
over which it exercises investment discretion. JPMFAM shall report to the Board
regarding overall commissions paid by the Fund and their reasonableness in
relation to the benefits to such Fund.
In executing portfolio transactions for the Fund, JPMFAM may, to the
extent permitted by applicable laws and regulations, but shall not be obligated
to, aggregate the securities to be sold or purchased with those of other funds
or its other clients if, in JPMFAM's reasonable judgment, such aggregation (i)
will result in an overall economic benefit to such fund, taking into
consideration the advantageous selling or purchase price, brokerage commission
and other expenses, and trading requirements, and (ii) is not inconsistent with
the policies set forth in MFT's registration statement, as the case may be, and
the Fund's Prospectus and Statement of Additional Information. In such event,
JPMFAM will allocate the securities so purchased or sold, and the expenses
incurred in the transaction, in an equitable manner, consistent with its
fiduciary obligations to such Fund and such other clients.
It is possible that certain of the brokerage and research services
received will primarily benefit one or more other investment companies or other
accounts for which JPMFAM exercises investment discretion. Conversely, MFT or
any of its portfolios may be the primary beneficiary of the brokerage or
research services received as a result of portfolio transactions effected for
such other accounts or investment companies.
OTHER SERVICES
The Distributor is a wholly owned, indirect subsidiary of BISYS Fund
Services, Inc., which currently serves as the distributor for both the Surviving
and the Merging Fund. BISYS Fund Services, Inc. is the sub-administrator for
both the Surviving and the Merging Fund. The Distributor is unaffiliated with
JPMC or any of its subsidiaries.
Chase serves as administrator, shareholder servicing agent, fund
accountant and custodian, and DST serves as transfer agent and dividend
disbursing agent, for the Surviving Fund. The services provided by Chase include
day-to-day maintenance of certain books and records, calculation of the offering
price of the shares and preparation of reports. In its role as custodian, Chase
is responsible for the daily safekeeping of securities
-29-
and cash held by the Surviving Fund. It is anticipated that prior to the
consummation of the Reorganization, BONY will become the Surviving Fund's fund
accountant and custodian.
As administrator, Chase receives a fee of 0.10% of average daily net
assets. It is anticipated that, in connection with the Reorganization, the
administration fee will be amended to reduce the fee to 0.05% for complex wide
money market Fund assets in excess of $100 billion.
PROPOSAL 2:
ELECTION OF TRUSTEES
It is proposed that shareholders of the Merging Fund consider the
election of the individuals listed below (the "Nominees") to the Board of
Trustees of JPMIF, which is currently organized as a Massachusetts business
trust. Even if the Reorganization described in Proposal 1 is approved, other
mutual funds that are series of JPMIF will continue to exist and operate. All
shareholders of any series of JPMIF as of the record date (April 6, 2001) are
required to be given a vote on the proposal regarding Trustees. Because as of
the record date you are still a shareholder in JPMIF, you are entitled to vote
on this proposal. Shareholders of MFT are being asked to approve the same
Trustees as are being proposed for JPMIF.
In connection with the merger of J.P. Morgan & Co. Incorporated and The
Chase Manhattan Corporation, it has been proposed, subject to shareholder
approval, that the Boards of Trustees of the investment companies managed by
JPMFAM, JPMIM and their affiliates be rationalized in order to obtain additional
operating efficiencies by having the same Board of Trustees for all of the
funds. Therefore, the Nominees include certain current Trustees of MFT and
certain current Trustees of JPMIF, including certain members of JPMIF's Advisory
Board. Each Nominee has consented to being named in this Proxy Statement and has
agreed to serve as a Trustee if elected.
Shareholders of MFT are concurrently considering the election of the
same individuals to the Board of Trustees of MFT. Biographical information about
the Nominees and other relevant information is set forth below. More information
regarding the current Trustees of MFT and JPMIF is contained in the Funds'
Statements of Additional Information, which are incorporated herein by
reference.
The persons named in the accompanying form of proxy intend to vote each
such proxy "FOR" the election of the Nominees, unless shareholders specifically
indicate on their proxies the desire to withhold authority to vote for elections
to office. It is not contemplated that any Nominee will be unable to serve as a
Board member for any reason, but if that should occur prior to the Meeting, the
proxy holders reserve the right to substitute another person or persons of their
choice as nominee or nominees.
-30-
THE JPMIF BOARD HAS UNANIMOUSLY RECOMMENDED THAT SHAREHOLDERS VOTE "FOR" EACH OF
THE NOMINEES LISTED BELOW.
VOTE REQUIRED
The election of each of the Nominees listed below requires the
affirmative vote of a majority of all the votes entitled to be cast at the
Meeting by all shareholders of JPMIF.
The following are the nominees:
The Board of Trustees of JPMIF met four times during the fiscal year
ended November 30, 2000, and each of the Trustees attended at least 75% of
the meetings.
The Board of Trustees of JPMIF presently has an Audit Committee. The
members of the Audit Committee are Messrs. Addy (Chairman), Eschenlauer, Burns,
Mallardi, and Healey. The function of the Audit Committee is to recommend
independent auditors and monitor accounting and financial matters. The Audit
Committee met four times during the fiscal year ended November 30, 2000.
A majority of the disinterested Trustees have adopted written
procedures reasonably appropriate to deal with potential conflicts of interest
arising from the fact that the same individuals are Trustees of JPMIF, the
Master Portfolio and certain other investment companies in the Fund Complex, up
to and including creating a separate board of trustees.
*Interested Trustee, as defined by the 1940 Act.
REMUNERATION OF TRUSTEES AND CERTAIN EXECUTIVE OFFICERS
Each Trustee is currently paid an annual fee of $75,000 for serving as
Trustee of the investment companies in the Fund Complex, which is allocated
among all investment companies for which the Trustee serves, and is reimbursed
for expenses incurred in connection with service as a Trustee. The Trustees may
hold various other directorships unrelated to these funds.
Trustee compensation expenses paid for the calendar year ended December
31, 2000 are set forth below.
-31-
Aggregate Trustee
Compensation Paid by the Total Trustee Compensation Accrued
Name of Trustee Trust During 2000 by Fund Complex(1) During 2000(2)
- ------------------------------------ ----------------------------------- ----------------------------------------
Frederick S. Addy, Trustee $23,538 $ 75,000
William G. Burns, Trustee $23,538 $ 75,000
Arthur C. Eschenlauer, Trustee $23,538 $ 75,000
Matthew Healey, Trustee(3)
Chairman and Chief Executive
Officer $23,538 $ 75,000
Michael P. Mallardi, Trustee $23,538 $ 75,000
- -------------------
(1) A Fund Complex means two or more investment companies that hold themselves
out to investors as related companies for purposes of investment and
investment services, or have a common investment adviser or have an
investment adviser that is an affiliated person of the investment adviser
of any of the other investment companies.
(2) No investment company within the Fund Complex has a pension or retirement
plan.
(3) During 2000, Pierpont Group, Inc. paid Mr. Healey, in his role as Chairman
of Pierpont Group, Inc., compensation in the amount of $200,000,
contributed $25,500 to a defined contribution plan on his behalf and paid
$18,400 in insurance premiums for his benefit.
The Trustees decide upon general policies and are responsible for
overseeing JPMIF's business affairs. Each of JPMIF and the Master Portfolio has
entered into a Fund Services Agreement with Pierpont Group, Inc. to assist the
Trustees in exercising their overall supervisory responsibilities. Pierpont
Group, Inc. was organized in July 1989 to provide services for the J.P. Morgan
Family of Funds (formerly "The Pierpont Family of Funds"), and the Trustees are
the equal and sole shareholders of Pierpont Group, Inc. JPMIF has agreed to pay
Pierpont Group, Inc. a fee in an amount representing its reasonable costs in
performing these services. These costs are periodically reviewed by the
Trustees. The principal offices of Pierpont Group, Inc. are located at 461 Fifth
Avenue, New York, New York 10017. It is anticipated that the Merging Fund will
terminate its agreement with Pierpont Group, Inc. in connection with the
Reorganization.
The aggregate fees paid to Pierpont Group, Inc. by the Merging Fund and
the Master Portfolio during the indicated fiscal periods are set forth below:
MERGING FUND-- For the period August 21, 2000 through November 30, 2000: $1,092.
MASTER PORTFOLIO -- For the fiscal years ended November 30, 1998, 1999 and 2000:
$173,032, $228,328 and $268,198.
-32-
ADVISORY BOARD
The Trustees determined as of January 26, 2000 to establish an advisory
board and appoint four members ("Members of the Advisory Board") thereto. Each
member serves at the pleasure of the Trustees. The Advisory Board is distinct
from the Trustees and provides advice to the Trustees as to investment,
management and operations of JPMIF; but has no power to vote upon any matter put
to a vote of the Trustees. The Advisory Board and the members thereof also serve
each of the other trusts in the Fund Complex. The creation of the Advisory Board
and the appointment of the members thereof was designed so that the Board of
Trustees will continuously consist of persons able to assume the duties of
Trustees and be fully familiar with the business and affairs of JPMIF, in
anticipation of the current Trustees reaching the mandatory retirement age of
seventy. Each Member of the Advisory Board is paid an annual fee of $75,000 for
serving in this capacity for the Fund Complex and is reimbursed for expenses
incurred in connection for such service. The Members of the Advisory Board may
hold various other directorships unrelated to these funds. The mailing address
of the Members of the Advisory Board is c/o Pierpont Group, Inc., 461 Fifth
Avenue, New York, New York 10017. Their names, principal occupations during the
past five years and dates of birth are set forth below:
Ann Maynard Gray -- Former President, Diversified Publishing Group
and Vice President, Capital Cities/ABC, Inc. Her date of birth is August 22,
1945.
John R. Laird-- Retired; Former Chief Executive Officer, Shearson
Lehman Brothers and The Boston Company. His date of birth is June 21, 1942.
Gerard P. Lynch -- Retired; Former Managing Director, Morgan Stanley
Group and President and Chief Operating Officer, Morgan Stanley Services, Inc.
His date of birth is October 5, 1936.
James J. Schonbachler -- Retired; Prior to September, 1998, Managing
Director, Bankers Trust Company and Chief Executive Officer and Director,
Bankers Trust A.G., Zurich and BT Brokerage Corp. His date of birth is January
26, 1943.
PRINCIPAL EXECUTIVE OFFICERS:
JPMIF's and the Master Portfolio's principal executive officers (listed
below), other than the Chief Executive Officer and the officers who are
employees of JPMIM, are provided and compensated by Funds Distributors, Inc., a
wholly owned indirect subsidiary of Boston Institutional Group, Inc. The
officers conduct and supervise the business operations of JPMIF and the Master
Portfolio. JPMIF and the Master Portfolio have no employees.
The business address of each of the officers unless otherwise noted is
Funds Distributor, Inc., 60 State Street, Suite 1300, Boston, Massachusetts
02109. The principal executive officers of JPMIF are as follows:
-33-
NAME AND POSITION AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ----------------------- ---------- ------------------------------------------------------------
Matthew Healey 63 Chief Executive Officer; Chairman, Pierpont Group,
since prior to 1993. His address is Pine Tree Country
Club Estates, 10286 Saint Andrews Road, Boynton Beach,
Florida 33436.
Margaret W. Chambers 41 Vice President and Secretary. Senior Vice President
and General Counsel of the Distributor since April,
1998. From August 1996 to March 1998, Ms. Chambers was
Vice President and Assistant General Counsel for
Loomis, Sayles & Company, L.P. From January 1986 to
July 1996, she was an associate with the law firm of
Ropes & Gray.
George A. Rio 46 President and Treasurer. Executive Vice President and
Client Service Director of the Distributor since April
1998. From June 1995 to March 1998, Mr. Rio was Senior
Vice President and Senior Key Account Manager for
Putnam Mutual Funds. From May 1994 to June 1995, Mr.
Rio was Director of Business Development for First Data
Corporation.
ACCOUNTANTS
Pricewaterhouse Coopers LLP serves as the Merging Fund's, the Master
Portfolio's and the Surviving Fund's independent accountants, auditing and
reporting on the annual financial statements and reviewing certain regulatory
reports and federal income tax returns. PricewaterhouseCoopers LLP also performs
other professional accounting, auditing, tax and advisory services when MFT or
JPMIF engages it to do so.
AUDIT FEES. The aggregate fees paid to PricewaterhouseCoopers LLP in
connection with the annual audit of the Merging Fund and the Master Portfolio
for the last fiscal year was $42,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. The
aggregate fees billed for financial information systems and design
implementation services rendered by PricewaterhouseCoopers LLP to the Merging
Fund, JPMIM and JPMIM's affiliates that provide services to the Fund for the
calendar year ended December 31, 2000 was $0.
ALL OTHER FEES. The aggregate fees billed for all other non-audit
services, including fees for tax-related services, rendered by
PricewaterhouseCoopers LLP to the Merging Fund, JPMIM and JPMIM's affiliates
that provide services to the Fund for the calendar year ended December 31, 2000
was $11,025,350.
The Audit Committee has considered whether the provision of non-audit
services is compatible with maintaining the independence of
PricewaterhouseCoopers LLP.
-34-
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION
This Combined Prospectus/Proxy Statement is being furnished in
connection with the solicitation of proxies by the JPMIF Board for use at the
Meeting. It is expected that the solicitation of proxies will be primarily by
mail. JPMIF's officers and service providers may also solicit proxies by
telephone, facsimile machine, telegraph, the Internet or personal interview. In
addition JPMIF may retain the services of professional solicitors to aid in the
solicitation of proxies for a fee. It is anticipated that banks, brokerage
houses and other custodians will be requested on behalf of JPMIF to forward
solicitation materials to their principals to obtain authorizations for the
execution of proxies. Any Merging Fund Shareholder giving a proxy may revoke it
at any time before it is exercised by submitting to JPMIF a written notice of
revocation or a subsequently executed proxy or by attending the Meeting and
electing to vote in person.
Only the Merging Fund Shareholders of record at the close of business
on April 6, 2001 will be entitled to vote at the Meeting. On that date, there
were outstanding and entitled to be voted _____________ Merging Fund Shares.
Each share or fraction thereof is entitled to one vote or fraction thereof.
The presence in person or by proxy of shareholders that own 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
-35-
described in this Combined Prospectus/Proxy Statement. The Merging Fund
Shareholders voting to ABSTAIN on the Proposals will be treated as present for
purposes of achieving a quorum and in determining the votes cast on the
Proposals, but not as having voted FOR the Proposals. A properly signed proxy on
which a broker has indicated that it has no authority to vote on the Proposals
on behalf of the beneficial owner (a "broker non-vote") will be treated as
present for purposes of achieving a quorum but will not be counted in
determining the votes cast on the Proposals.
A proxy granted by any Merging Fund Shareholder may be revoked by such
Merging Fund Shareholder at any time prior to its use by written notice to
JPMIF, by submission of a later dated Proxy or by voting in person at the
Meeting. If any other matters come before the Meeting, proxies will be voted by
the persons named as proxies in accordance with their best judgment.
EXPENSES OF PROXY SOLICITATION
JPMC, and not the Merging Fund or the Surviving Fund (or shareholders
of either Fund), will bear the cost of solicitation of proxies, including the
cost of printing, preparing, assembling and mailing the Notice of Meeting,
Combined Prospectus/Proxy Statement and form of proxy. In addition to
solicitations by mail, proxies may also be solicited by officers and regular
employees of JPMIF by personal interview, by telephone or by telegraph without
additional remuneration thereof. Professional solicitors may also be retained.
ABSTENTIONS AND BROKER NON-VOTES
In tallying the Merging Fund Shareholder votes, abstentions and broker
non-votes (i.e., proxies sent in by brokers and other nominees that cannot be
voted on a proposal because instructions have not been received from the
beneficial owners) will be counted for purposes of determining whether or not a
quorum is present for purposes of convening the Meeting. Abstentions and broker
non-votes will be considered to be a vote against each proposal.
INTERESTED PARTIES
On the record date, the Trustees and officers of JPMIF as a group owned
less than 1% of the outstanding shares of the Merging Fund. On the record date,
the name, address and percentage ownership of the persons who owned beneficially
more than 5% of the shares of the Merging Fund or any class thereof and the
percentage of shares of the Surviving Fund or any class thereof that would be
owned by such persons upon consummation of the Reorganization and the Concurrent
Reorganization based upon their holdings at _______, 2001 are as follows:
-36-
Percentage of Percentage of
Amount of Merging Fund Surviving Fund
Shares Owned on Record Owned Upon
Name and Address Owned Date Consummation
- --------------------------------------------------------------------------------
On the record date, the Trustees and officers of MFT as a group owned
less than 1% of the outstanding shares of the Surviving Fund. On the record
date, the name, address and percentage ownership of the persons who owned
beneficially more than 5% of the shares of the Surviving Fund or any class
thereof and the percentage of shares of the Surviving Fund or any class thereof
that would be owned by such persons upon consummation of the Reorganization and
the Concurrent Reorganization based upon their holdings at _______, 2001 are as
follows:
Percentage of Percentage of
Amount of Merging Fund Surviving Fund
Shares Owned on Record Owned Upon
Name and Address Owned Date Consummation
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT MFT
Information about the Surviving Fund is included in its Prospectus,
which is incorporated by reference and enclosed herein. Additional information
about the Surviving Fund is also included in MFT's Statement of Additional
Information, which has been filed with the Commission and which is incorporated
herein by reference. Copies of the Statement of Additional information may be
obtained without charge by calling 1-800-348-4782. MFT is subject to the
requirements of the 1940 Act and, in accordance with such requirements, files
reports and other information with the Commission. These materials can be
inspected and copied at the Public Reference Facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices at 7 World Trade Center, Suite 1300, New York, NY
10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of such material can also be obtained from the Public Reference Branch, Office
of Consumer Affairs and Information Services, Securities and Exchange
Commission, Washington, D.C. 20549, at prescribed rates, and are also available
on the Commission's web site at http://www.sec.gov.
ADDITIONAL INFORMATION ABOUT JPMIF
Information about the Merging Fund is included in its Prospectus, which
is incorporated by reference herein. Additional information about the Merging
Fund is also
-37-
included in JPMIF's Statement of Additional Information which has been filed
with the Commission and which is incorporated herein by reference. Copies of the
Statement of Additional information may be obtained without charge by calling
1-800-766-7722. JPMIF is subject to the requirements of the 1940 Act and, in
accordance with such requirements, files reports and other information with the
Commission. These materials can be inspected and copied at the Public Reference
Facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices at 7 World Trade Center,
Suite 1300, New York, NY 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549, at prescribed rates,
and are also available on the Commission's web site at http://www.sec.gov.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial highlights, financial statements and notes
thereto of the Merging Fund for the fiscal year ended November 30, 2000, and the
Surviving Fund for the fiscal year ended August 31, 2000, and the audited
financial statements, notes thereto and supplementary data for the Master
Portfolio for the fiscal year ended November 30, 2000, are incorporated by
reference herein and into the Statement of Additional Information related to
this Combined Prospectus/Proxy Statement. The audited financial highlights,
financial statements, notes thereto and supplementary data, as applicable, for
the Merging Fund, the Surviving Fund and the Master Portfolio have been
incorporated herein by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on their authority as
experts in auditing and accounting.
The unaudited financial highlights, financial statements and notes
thereto of the Surviving Fund for the fiscal period ended February 28, 2001 are
incorporated by reference herein and into the Statement of Additional
Information related to this Combined Prospectus/Proxy Statement.
OTHER BUSINESS
The JPMIF Board knows of no other business to be brought before the
Meeting. However, if any other matters come before the Meeting, it is the
intention of the JPMIF Board that proxies that do not contain specific
restrictions to the contrary will be voted on such matters in accordance with
the judgment of the persons named in the enclosed form of proxy.
LITIGATION
Neither MFT nor JPMIF is involved in any litigation that would have any
material adverse effect upon either the Merging Fund or the Surviving Fund.
-38-
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to JPMIF in writing at the
address on the cover page of this Combined Prospectus/Proxy Statement or by
telephoning 1-800-766-7722.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE
REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
-39-
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Plan") made this ____
day of ______, 2001 by and among J.P. Morgan Institutional Funds (the
"Transferor Trust"), a Massachusetts business trust, on behalf of the J.P.
Morgan Prime Cash Management Fund (the "Transferor Portfolio"), Mutual Fund
Trust (the "Acquiring Trust"), a Massachusetts business trust, on behalf of
JPMorgan Prime Money Market Fund II (formerly, Chase Vista Prime Money Market
Fund) (the "Acquiring Portfolio").
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 Cash Management Class share class in exchange for shares of the
Transferor Portfolio, with the amounts of shares of each share class to
A-1
be determined by the parties. Any shares of beneficial interest (if any) of the
Transferor Portfolio ("Transferor Portfolio Shares") held in the treasury of the
Transferor Trust at the Effective Time of the Reorganization shall thereupon be
retired. Such transactions shall take place on the date provided for in Section
1(b) hereof (the "Exchange Date"). All computations for the Transferor Portfolio
and the Acquiring Portfolio shall be performed by The Bank of New York (the
"Custodian"), as custodian and pricing agent for the Transferor Portfolio and
the Acquiring Portfolio. The determination of said Custodian shall be conclusive
and binding on all parties in interest.
(ii) As of the Effective Time of the Reorganization, the Transferor
Trust will liquidate and distribute pro rata to its shareholders of record
("Transferor Portfolio Shareholders") as of the Effective Time of the
Reorganization the Acquiring Portfolio Shares received by such Transferor
Portfolio pursuant to Section 1(a)(i) in actual or constructive exchange for the
shares of the Transferor Portfolio held by the Transferor Portfolio
shareholders. Such liquidation and distribution will be accomplished by the
transfer of the Acquiring Portfolio Shares then credited to the account of the
Transferor Portfolio on the books of the Acquiring Portfolio, to open accounts
on the share records of the Acquiring Portfolio in the names of the Transferor
Portfolio Shareholders and representing the respective pro rata number of the
Acquiring Portfolio Shares due such shareholders. The Acquiring Portfolio will
not issue certificates representing the Acquiring Portfolio Shares in connection
with such exchange.
(iii) As soon as practicable after the Effective Time of the
Reorganization, the Transferor Trust shall take all the necessary steps under
Massachusetts law, the Transferor Trust's Declaration of Trust and any other
applicable law to effect a complete termination of the Transferor Portfolio.
(b) EXCHANGE DATE AND EFFECTIVE TIME OF THE REORGANIZATION.
(i) Subject to the satisfaction of the conditions to the
Reorganization specified in this Plan, the Reorganization shall occur as of the
close of regularly scheduled trading on the New York Stock Exchange (the
"Effective Time of the Reorganization") on August 11, 2001, or such later date
as may be agreed upon by the parties (the "Exchange Date").
(ii) All acts taking place on the Exchange Date shall be deemed to
take place simultaneously as of the Effective Time of the Reorganization unless
otherwise provided.
(iii) In the event that on the proposed Exchange Date (A) the New
York Stock Exchange shall be closed to trading or trading thereon shall be
restricted, or (B) trading or the reporting of trading on said Exchange or
elsewhere shall be disrupted so that accurate valuation of the net assets of the
Acquiring Portfolio or the Transferor Portfolio is impracticable, the Exchange
Date shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
(iv) On the Exchange Date, portfolio securities of the Transferor
Portfolio shall be transferred by the Custodian to the accounts of the Acquiring
Portfolio duly endorsed in proper form for transfer, in such condition as to
constitute good delivery thereof in accordance with the
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custom of brokers, and shall be accompanied by all necessary federal and state
stock transfer stamps or a check for the appropriate purchase price thereof.
(c) VALUATION.
(i) The net asset value of the shares of the Acquiring Portfolio and
the net value of the assets of the Transferor Portfolio to be transferred in
exchange therefore shall be determined as of the Effective Time of the
Reorganization. The net asset value of the Acquiring Portfolio Shares shall be
computed by the Custodian in the manner set forth in the Acquiring Trust's
Declaration of Trust or By-laws and then current prospectus and statement of
additional information and shall be computed to not less than two decimal
places. The net value of the assets of the Transferor Portfolio to be
transferred shall be computed by the Custodian by calculating the value of the
assets transferred by the Transferor Portfolio and by subtracting therefrom the
amount of the liabilities assigned and transferred to the Acquiring Portfolio,
said assets and liabilities to be valued in the manner set forth in the
Transferor Trust's Declaration of Trust or By-laws and then current prospectus
and statement of additional information.
(ii) The number of Cash Management 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 Cash Management Class shares
of the Acquiring Portfolio, both as determined in accordance with Section
1(c)(i).
(iii) All computations of value shall be made by the Custodian in
accordance with its regular practice as pricing agent for the Acquiring
Portfolio and the Transferor Portfolio.
2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING TRUST
The Acquiring Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Acquiring Trust is a business
trust that is duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has the power to carry on its
business as it is now being conducted. The Acquiring Portfolio is a validly
existing series of shares of such business trust representing interests therein
under the laws of Massachusetts. Each of the Acquiring Portfolio and the
Acquiring Trust have all necessary federal, state and local authorization to own
all of its properties and assets and to carry on its business as now being
conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Acquiring Trust is
registered under the Investment Company Act of 1940, as amended (the "Act") as
an open-end investment company of the management type; such registration has not
been revoked or rescinded and is in full force and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectus and statement
of additional information of the Acquiring Trust, as amended, included in the
Acquiring Trust's registration
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statement on Form N-1A filed with the Securities and Exchange Commission, comply
in all material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act") and the Act and do not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(d) CAPITALIZATION. The Acquiring Trust has an unlimited number
of authorized shares of which as of February 28, 2001 there were no Cash
Management Class shares of the Acquiring Portfolio outstanding, and no shares
of such Portfolio were held in the treasury of the Acquiring Trust. All of the
outstanding shares of the Acquiring Trust have been duly authorized and are
validly issued, fully paid and nonassessable (except as disclosed in the
Acquiring Trust's prospectus and recognizing that under Massachusetts law,
shareholders of an Acquiring Trust portfolio could, under certain
circumstances, be held personally liable for the obligations of such Acquiring
Trust portfolio). Because the Acquiring Trust is an open-end investment company
engaged in the continuous offering and redemption of its shares, the number of
outstanding shares may change prior to the Effective Time of the Reorganization.
All of the issued and outstanding shares of the Acquiring Portfolio have been
offered and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable state
securities laws.
(e) FINANCIAL STATEMENTS. The financial statements of the
Acquiring Trust with respect to the Acquiring Portfolio for the fiscal year
ended August 31, 2000, which have been audited by PricewaterhouseCoopers LLP,
fairly present the financial position of the Acquiring Portfolio as of the
dates thereof and the respective results of operations and changes in net
assets for each of the periods indicated in accordance with generally
accepted accounting principles ("GAAP"). The financial statements of the
Acquiring Trust with respect to the Acquiring Portfolio for the fiscal period
ended February 28, 2001 fairly present the financial position of the
Acquiring Portfolio as of the dates thereof and the respective results of
operations and changes in net assets for each of the periods indicated in
accordance with GAAP.
(f) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring Portfolio
Shares to be issued in connection with the Reorganization will be duly
authorized and upon consummation of the Reorganization will be validly issued,
fully paid and nonassessable (except as disclosed in the Trust's prospectus and
recognizing that under Massachusetts law, shareholders of an Acquiring Trust
portfolio could, under certain circumstances, be held personally liable for the
obligations of such portfolio).
(g) AUTHORITY RELATIVE TO THIS PLAN. The Acquiring Trust, on behalf
of the Acquiring Portfolio, has the power to enter into this Plan and to carry
out its obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Acquiring Trust's Board of Trustees and no other proceedings by the
Acquiring Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Acquiring Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or
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subject to any order or decree, which would be violated by or which would
prevent its execution and performance of this Plan in accordance with its terms.
(h) LIABILITIES. There are no liabilities of the Acquiring
Portfolio, whether actual or contingent and whether or not determined or
determinable, other than liabilities disclosed or provided for in the Acquiring
Trust's financial statements with respect to the Acquiring Portfolio and
liabilities incurred in the ordinary course of business subsequent to February
28, 2001 or otherwise previously disclosed to the Acquiring Trust with respect
to the Acquiring Portfolio, none of which has been materially adverse to the
business, assets or results of operations of the Acquiring Portfolio.
(i) NO MATERIAL ADVERSE CHANGE. Since February 28, 2001, there has
been no material adverse change in the financial condition, results of
operations, business, properties or assets of the Acquiring Portfolio, other
than those occurring in the ordinary course of business (for these purposes, a
decline in net asset value and a decline in net assets due to redemptions do not
constitute a material adverse change).
(j) LITIGATION. There are no claims, actions, suits or proceedings
pending or, to the knowledge of the Acquiring Trust, threatened which would
adversely affect the Acquiring Trust or the Acquiring Portfolio's assets or
business or which would prevent or hinder consummation of the transactions
contemplated hereby, there are no facts which would form the basis for the
institution of administrative proceedings against the Acquiring Trust or the
Acquiring Portfolio and, to the knowledge of the Acquiring Trust, there are no
regulatory investigations of the Acquiring Trust or the Acquiring Portfolio,
pending or threatened, other than routine inspections and audits.
(k) CONTRACTS. No default exists under any material contract or
other commitment to which the Acquiring Trust, on behalf of the Acquiring
Portfolio, is subject.
(l) TAXES. The federal income tax returns of the Acquiring Trust
with respect to the Acquiring Portfolio, and all other income tax returns
required to be filed by the Acquiring Trust with respect to the Acquiring
Portfolio, have been filed, and all taxes payable pursuant to such returns have
been paid. To the knowledge of the Acquiring Trust, no such return is under
audit and no assessment has been asserted in respect of any such return. All
federal and other taxes owed by the Acquiring Trust with respect to the
Acquiring Portfolio have been paid so far as due. The Acquiring Portfolio has
elected to qualify and has qualified as a "regulated investment company" under
Subchapter M of the Code as of and since its first taxable year and intends to
continue to so qualify.
(m) NO APPROVALS REQUIRED. Except for the Registration Statement
(as defined in Section 4(a) hereof) and the approval of the Transferor
Portfolio's shareholders (referred to in Section 6(a) hereof), no consents,
approvals, authorizations, registrations or exemptions under federal or state
laws are necessary for the consummation by the Acquiring Trust of the
Reorganization, except such as have been obtained as of the date hereof.
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3. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR TRUST
The Transferor Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Transferor Trust is a business
trust that is duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has the power to carry on its
business as it is now being conducted. The Transferor Portfolio is a validly
existing series of shares of such business trust representing interests therein
under the laws of Massachusetts. Each of Transferor Portfolio and the Transferor
Trust has all necessary federal, state and local authorization to own all of its
properties and assets and to carry on its business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Transferor Trust is
registered under the Act as an open-end investment company of the management
type; such registration has not been revoked or rescinded and is in full force
and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectus and statement
of additional information of the Transferor Trust, as amended, included in the
Transferor Trust's registration statement on Form N-1A filed with the
Commission, comply in all material respects with the requirements of the
Securities Act and the Act and do not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(d) CAPITALIZATION. The Transferor Trust has an unlimited number of
authorized shares of beneficial interest, of which as of February 28, 2001
there were 533,344,000 outstanding shares of the Transferor Portfolio, and no
shares of such Portfolio were held in the treasury of the Transferor Trust.
All of the outstanding shares of the Transferor Trust have been duly
authorized and are validly issued, fully paid and nonassessable (except as
disclosed in the Transferor Trust's prospectus and recognizing that under
Massachusetts law, shareholders of a Trust portfolio could, under certain
circumstances, be held personally liable for the obligations of such Trust
portfolio). Because the Transferor Trust is an open-end investment company
engaged in the continuous offering and redemption of its shares, the number
of outstanding shares may change prior to the Effective Time of the
Reorganization. All such shares will, at the Exchange Date, be held by the
shareholders of record of the Transferor Portfolio as set forth on the books
and records of the Transferor Trust in the amounts set forth therein, and as
set forth in any list of shareholders of record provided to the Acquiring
Portfolio for purposes of the Reorganization, and no such shareholders of
record will have any preemptive rights to purchase any Transferor Portfolio
shares, and the Transferor Portfolio does not have outstanding any options,
warrants or other rights to subscribe for or purchase any Transferor
Portfolio shares (other than any existing dividend reinvestment plans of the
Transferor Portfolio or as set forth in this Plan), nor are there outstanding
any securities convertible into any shares of the Transferor Portfolio
(except pursuant to any existing exchange privileges described in the current
prospectus and statement of additional information of the Transferor Trust).
All of the Transferor Portfolio's issued and outstanding shares have been
offered and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable state
securities laws.
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(e) FINANCIAL STATEMENTS. The financial statements for the
Transferor Trust with respect to the Transferor Portfolio and for The Prime
Money Market Portfolio for the fiscal year ended November 30, 2000 which have
been audited by PricewaterhouseCoopers LLP fairly present the financial position
of the Transferor Portfolio and The Prime Money Market Portfolio as of the dates
thereof and the respective results of operations and changes in net assets for
each of the periods indicated in accordance with GAAP.
(f) AUTHORITY RELATIVE TO THIS PLAN. The Transferor Trust, on behalf
of the Transferor Portfolio, has the power to enter into this Plan and to carry
out its obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Transferor Trust's Board of Trustees and no other proceedings by the
Transferor Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Transferor Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
(g) LIABILITIES. There are no liabilities of the Transferor
Portfolio, whether actual or contingent and whether or not determined or
determinable, other than liabilities disclosed or provided for in the Transferor
Trust's Financial Statements with respect to the Transferor Portfolio and
liabilities incurred in the ordinary course of business subsequent to November
30, 2000 or otherwise previously disclosed to the Transferor Trust with respect
to the Transferor Portfolio, none of which has been materially adverse to the
business, assets or results of operations of the Transferor Portfolio.
(h) NO MATERIAL ADVERSE CHANGE. Since November 30, 2000, there has
been no material adverse change in the financial condition, results of
operations, business, properties or assets of the Transferor Portfolio, other
than those occurring in the ordinary course of business (for these purposes, a
decline in net asset value and a decline in net assets due to redemptions do not
constitute a material adverse change).
(i) LITIGATION. There are no claims, actions, suits or proceedings
pending or, to the knowledge of the Transferor Trust, threatened which would
adversely affect the Transferor Trust or the Transferor Portfolio's assets or
business or which would prevent or hinder consummation of the transactions
contemplated hereby, there are no facts which would form the basis for the
institution of administrative proceedings against the Transferor Trust or the
Transferor Portfolio and, to the knowledge of the Transferor Trust, there are no
regulatory investigations of the Transferor Trust or the Transferor Portfolio,
pending or threatened, other than routine inspections and audits.
(j) CONTRACTS. The Transferor Trust, on behalf of the Transferor
Portfolio, is not subject to any contracts or other commitments (other than this
Plan) which will not be terminated with respect to the Transferor Portfolio
without liability to the Transferor Trust or the Transferor Portfolio as of or
prior to the Effective Time of the Reorganization.
A-7
(k) TAXES. The federal income tax returns of the Transferor Trust
with respect to the Transferor Portfolio, and all other income tax returns
required to be filed by the Transferor Trust with respect to the Transferor
Portfolio, have been, and all taxes payable pursuant to such returns have been
paid. To the knowledge of the Transferor Trust, no such return is under audit
and no assessment has been asserted in respect of any such return. All federal
and other taxes owed by the Transferor Trust with respect to the Transferor
Portfolio have been paid so far as due. The Transferor Portfolio has elected to
qualify as a "regulated investment company" under Subchapter M of the Code, as
of and since its first taxable year, and shall continue to so qualify until the
Effective Time of the Reorganization.
(l) NO APPROVALS REQUIRED. Except for the Registration Statement
(as defined in Section 4(a) hereof) and the approval of the Transferor
Portfolio's shareholders referred to in Section 6(a) hereof, no consents,
approvals, authorizations, registrations or exemptions under federal or state
laws are necessary for the consummation by the Transferor Trust of the
Reorganization, except such as have been obtained as of the date hereof.
4. COVENANTS OF THE ACQUIRING TRUST
The Acquiring Trust covenants to the following:
(a) REGISTRATION STATEMENT. On behalf of the Acquiring Portfolio, the
Acquiring Trust shall file with the Commission a Registration Statement on Form
N-14 (the "Registration Statement") under the Securities Act relating to the
Acquiring Portfolio Shares issuable hereunder and the proxy statement of the
Transferor Portfolio relating to the meeting of the Transferor Portfolio's
shareholders referred to in Section 5(a) herein. At the time the Registration
Statement becomes effective, the Registration Statement (i) will comply in all
material respects with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder (the "Regulations") and (ii) will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and at the time the Registration Statement becomes effective, at the
time of the Transferor Portfolio shareholders' meeting referred to in Section
5(a) hereof, and at the Effective Time of the Reorganization, the
prospectus/proxy statement (the "Prospectus") and statement of additional
information (the "Statement of Additional Information") included therein, as
amended or supplemented by any amendments or supplements filed by the Trust,
will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) COOPERATION IN EFFECTING REORGANIZATION. The Acquiring Trust
agrees to use all reasonable efforts to effectuate the Reorganization, to
continue in operation thereafter, and to obtain any necessary regulatory
approvals for the Reorganization. The Acquiring Trust shall furnish such data
and information relating to the Acquiring Trust as shall be reasonably requested
for inclusion in the information to be furnished to the Transferor Portfolio
shareholders in connection with the meeting of the Transferor Portfolio's
shareholders for the purpose of acting upon this Plan and the transactions
contemplated herein.
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(c) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise
contemplated by this Plan, the Acquiring Trust shall conduct the business of the
Acquiring Portfolio in the ordinary course until the consummation of the
Reorganization, it being understood that such ordinary course of business will
include the declaration and payment of customary dividends and distributions.
5. COVENANTS OF THE TRANSFEROR TRUST
The Transferor Trust covenants to the following:
(a) MEETING OF THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The
Transferor Trust shall call and hold a meeting of the shareholders of the
Transferor Portfolio for the purpose of acting upon this Plan and the
transactions contemplated herein.
(b) PORTFOLIO SECURITIES. With respect to the assets to be
transferred in accordance with Section 1(a), the Transferor Portfolio's assets
shall consist of all property and assets of any nature whatsoever, including,
without limitation, all cash, cash equivalents, securities, claims and
receivables (including dividend and interest receivables) owned, and any
deferred or prepaid expenses shown as an asset on the Transferor Trust's books
maintained on behalf of the Transferor Portfolio. At least five (5) business
days prior to the Exchange Date, the Transferor Portfolio will provide the
Acquiring Trust, for the benefit of the Acquiring Portfolio, with a list of its
assets and a list of its stated liabilities. The Transferor Portfolio shall have
the right to sell any of the securities or other assets shown on the list of
assets prior to the Exchange Date but will not, without the prior approval of
the Acquiring Trust, on behalf of the Acquiring Portfolio, acquire any
additional securities other than securities which the Acquiring Portfolio is
permitted to purchase, pursuant to its investment objective and policies or
otherwise (taking into consideration its own portfolio composition as of such
date). In the event that the Transferor Portfolio holds any investments that the
Acquiring Portfolio would not be permitted to hold, the Transferor Portfolio
will dispose of such securities prior to the Exchange Date to the extent
practicable, to the extent permitted by its investment objective and policies
and to the extent that its shareholders would not be materially affected in an
adverse manner by such a disposition. In addition, the Transferor Trust will
prepare and deliver immediately prior to the Effective Time of the
Reorganization, a Statement of Assets and Liabilities of the Transferor
Portfolio, prepared in accordance with GAAP (each, a "Schedule"). All securities
to be listed in the Schedule for the Transferor Portfolio as of the Effective
Time of the Reorganization will be owned by the Transferor Portfolio free and
clear of any liens, claims, charges, options and encumbrances, except as
indicated in such Schedule, and, except as so indicated, none of such securities
is or, after the Reorganization as contemplated hereby, will be subject to any
restrictions, legal or contractual, on the disposition thereof (including
restrictions as to the public offering or sale thereof under the Securities Act)
and, except as so indicated, all such securities are or will be readily
marketable.
(c) REGISTRATION STATEMENT. In connection with the preparation of
the Registration Statement, the Transferor Trust will cooperate with the
Acquiring Trust and will furnish to the Acquiring Trust the information relating
to the Transferor Portfolio required by the Securities Act and the Regulations
to be set forth in the Registration Statement (including the Prospectus and
Statement of Additional Information). At the time the Registration Statement
becomes
A-9
effective, the Registration Statement, insofar as it relates to the
Transferor Portfolio, (i) will comply in all material respects with the
provisions of the Securities Act and the Regulations and (ii) will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and at the time the Registration Statement becomes effective, at the time of the
Transferor Portfolio's shareholders' meeting referred to in Section 5(a) and at
the Effective Time of the Reorganization, the Prospectus and Statement of
Additional Information, as amended or supplemented by any amendments or
supplements filed by the Transferor Trust, insofar as they relate to the
Transferor Portfolio, will not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall apply
only to statements in or omissions from the Registration Statement, Prospectus
or Statement of Additional Information made in reliance upon and in conformity
with information furnished by the Transferor Portfolio for use in the
registration statement, prospectus or statement of additional information as
provided in this Section 5(c).
(d) COOPERATION IN EFFECTING REORGANIZATION. The Transferor Trust
agrees to use all reasonable efforts to effectuate the Reorganization and to
obtain any necessary regulatory approvals for the Reorganization.
(e) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise
contemplated by this Plan, the Transferor Trust shall conduct the business of
the Transferor Portfolio in the ordinary course until the consummation of the
Reorganization, it being understood that such ordinary course of business will
include the declaration and payment of customary dividends and distributions.
(f) STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable,
but in any case within 60 days after the Exchange Date, the Transferor Trust on
behalf of the Transferor Portfolio, shall prepare a statement of the earnings
and profits of the Transferor Portfolio for federal income tax purposes, and of
any capital loss carryovers and other items that the Acquiring Portfolio will
succeed to and take into account as a result of Section 381 of the Code.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRANSFEROR TRUST
The obligations of the Transferor Trust with respect to the
consummation of the Reorganization are subject to the satisfaction of the
following conditions:
(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. This Plan
and the transactions contemplated by the Reorganization shall have been approved
by the requisite vote of the shares of the Transferor Portfolio entitled to vote
on the matter ("Transferor Shareholder Approval").
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Acquiring Trust
shall have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all material
respects as of the Effective Time of the Reorganization (except as otherwise
contemplated herein), and there shall have been no material
A-10
adverse change (as described in Section 2(i)) in the financial condition,
results of operations, business, properties or assets of the Acquiring Portfolio
since August 31, 2000.
(c) REGULATORY APPROVAL. The Registration Statement shall have been
declared effective by the Commission and no stop orders under the Securities Act
pertaining thereto shall have been issued, and all other approvals,
registrations, and exemptions under federal and state laws considered to be
necessary shall have been obtained (collectively, the "Regulatory Approvals").
(d) TAX OPINION. The Transferor Trust shall have received the
opinion of Simpson Thacher & Bartlett, dated on or before the Exchange Date,
addressed to and in form and substance satisfactory to the Transferor Trust, as
to certain of the federal income tax consequences under the Code of the
Reorganization, insofar as it relates to the Transferor Portfolio and the
Acquiring Portfolio, and to shareholders of each Transferor Portfolio (the "Tax
Opinion"). For purposes of rendering the Tax Opinion, Simpson Thacher & Bartlett
may rely exclusively and without independent verification, as to factual
matters, upon the statements made in this Plan, the Prospectus and Statement of
Additional Information, and upon such other written representations as the
President or Treasurer of the Transferor Trust will have verified as of the
Effective Time of the Reorganization. The Tax Opinion will be to the effect
that, based on the facts and assumptions stated therein, for federal income tax
purposes: (i) the Reorganization will constitute a reorganization within the
meaning of section 368(a)(1) of the Code with respect to the Transferor
Portfolio and the Acquiring Portfolio; (ii) no gain or loss will be recognized
by any of the Transferor Portfolio or the Acquiring Portfolio upon the transfer
of all the assets and liabilities, if any, of the Transferor Portfolio to the
Acquiring Portfolio solely in exchange for shares of the Acquiring Portfolio or
upon the distribution of the shares of the Acquiring Portfolio to the holders of
the shares of the Transferor Portfolio solely in exchange for all of the shares
of the Transferor Portfolio; (iii) no gain or loss will be recognized by
shareholders of the Transferor Portfolio upon the exchange of shares of such
Transferor Portfolio solely for shares of the Acquiring Portfolio; (iv) the
holding period and tax basis of the shares of the Acquiring Portfolio received
by each holder of shares of the Transferor Portfolio pursuant to the
Reorganization will be the same as the holding period and tax basis of shares of
the Transferor Portfolio held by such holder immediately prior to the
Reorganization (provided the shares of the Transferor Portfolio were held as a
capital asset on the date of the Reorganization); and (v) the holding period and
tax basis of the assets of the Transferor Portfolio acquired by the Acquiring
Portfolio will be the same as the holding period and tax basis of those assets
to the Transferor Portfolio immediately prior to the Reorganization.
(e) CONCURRENT REORGANIZATION. The Reorganization of each of J.P.
Morgan Prime Money Market Fund, a series of J.P. Morgan Funds, and JPMorgan
Institutional Prime Money Market Fund, J.P. Morgan Institutional Service Prime
Money Market Fund, J.P. Morgan Institutional Direct Prime Money Market Fund and
J.P. Morgan Prime Money Market Reserves Fund, each a series of J.P. Morgan
Institutional Funds, into the Acquiring Portfolio shall have been consummated.
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7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING TRUST
The obligations of the Acquiring Trust with respect to the consummation
of the Reorganization are subject to the satisfaction of the following
conditions:
(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The
Transferor Shareholder Approval shall have been obtained.
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Transferor Trust
shall have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all material
respects as of the Effective Time of the Reorganization (except as otherwise
contemplated herein), and there shall have been no material adverse change (as
described in Section 3(h)) in the financial condition, results of operations,
business, properties or assets of the Transferor Portfolio since November 30,
2000.
(c) PORTFOLIO SECURITIES. All securities to be acquired by the
Acquiring Portfolio in the Reorganization shall have been approved for
acquisition by J.P. Morgan Fleming Asset Management (USA) Inc. ("JPMFAM"), in
its capacity as investment adviser to the Acquiring Portfolio, as consistent
with the investment policies of the Acquiring Portfolio.
(d) REGULATORY APPROVAL. The Regulatory Approvals shall have been
obtained.
(e) DISTRIBUTION OF INCOME AND GAINS. The Transferor Trust on behalf
of the Transferor Portfolio shall have distributed to the shareholders of the
Transferor Portfolio all of the Transferor Portfolio's investment company
taxable income (determined without regard to the deduction for dividends paid)
as defined in Section 852(b)(2) of the Code for its taxable year ending on the
Exchange Date and all of its net capital gain as such term is used in Section
852(b)(3) of the Code, after reduction by any capital loss carry forward, for
its taxable year ending on the Exchange Date.
(f) TAX OPINION. The Acquiring Trust shall have received the
Tax Opinion.
(g) CONCURRENT REORGANIZATION. The reorganization of each of
J.P. Morgan Prime Money Market Fund, a series of J.P. Morgan Funds, and J.P.
Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional
Service Prime Cash Money Market Fund, J.P. Morgan Institutional Direct Prime
Money Market Fund and J.P. Morgan Prime Money Market Reserves Fund, each a
series of J.P. Morgan Institutional Funds, into the Acquiring Portfolio shall
have been consummated.
8. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS, WARRANTIES
AND REPRESENTATIONS
(a) AMENDMENTS. The parties hereto may, by agreement in writing
authorized by their respective Boards of Trustees amend this Plan at any time
before or after approval hereof by the shareholders of the Transferor Portfolio,
but after such approval, no amendment shall be made which substantially changes
the terms hereof.
A-12
(b) WAIVERS. At any time prior to the Effective Time of the
Reorganization, either the Transferor Trust or the Acquiring Trust may by
written instrument signed by it (i) waive any inaccuracies in the
representations and warranties made to it contained herein and (ii) waive
compliance with any of the covenants or conditions made for its benefit
contained herein, except that conditions set forth in Sections 6(c) and 7(d) may
not be waived.
(c) TERMINATION BY THE TRANSFEROR TRUST. The Transferor Trust, on
behalf of the Transferor Portfolio, may terminate this Plan with respect to the
Transferor Portfolio at any time prior to the Effective Time of the
Reorganization by notice to the Acquiring Trust and JPMFAM if (i) a material
condition to the performance of the Transferor Trust hereunder or a material
covenant of the Acquiring Trust contained herein shall not be fulfilled on or
before the date specified for the fulfillment thereof or (ii) a material default
or material breach of this Plan shall be made by the Acquiring Trust. In
addition, this Plan may be terminated by the Transferor Trust at any time prior
to the Effective Time of the Reorganization, whether before or after approval of
this Plan by the shareholders of the Transferor Portfolio, without liability on
the part of any party hereto, its Trustees, officers or shareholders or J.P.
Morgan Investment Management Inc. ("JPMIM") on notice to the other parties in
the event that the Board of Trustees determines that proceeding with this Plan
is not in the best interests of the shareholders of the Transferor Portfolio.
(d) TERMINATION BY THE ACQUIRING TRUST. The Acquiring Trust, on
behalf of the Acquiring Portfolio, may terminate this Plan with respect to the
Acquiring Portfolio at any time prior to the Effective Time of the
Reorganization by notice to the Transferor Trust and JPMIM if (i) a material
condition to the performance of the Acquiring Trust hereunder or a material
covenant of the Transferor Trust contained herein shall not be fulfilled on or
before the date specified for the fulfillment thereof or (ii) a material default
or material breach of this Plan shall be made by the Transferor Trust. In
addition, this Plan may be terminated by the Acquiring Trust at any time prior
to the Effective Time of the Reorganization, whether before or after approval of
this Plan by the shareholders of the Transferor Portfolio, without liability on
the part of any party hereto, its Trustees, officers or shareholders or JPMIM on
notice to the other parties in the event that the Board of Trustees determines
that proceeding with this Plan is not in the best interests of the shareholders
of the Acquiring Portfolio.
(e) SURVIVAL. No representations, warranties or covenants in or
pursuant to this Plan, except for the provisions of Section 5(f) and Section 9
of this Plan, shall survive the Reorganization.
9. EXPENSES
The expenses of the Reorganization will be borne by J.P. Morgan Chase &
Co. ("JPMC"). Such expenses include, without limitation, (i) expenses incurred
in connection with the entering into and the carrying out of the provisions of
this Plan; (ii) expenses associated with the preparation and filing of the
Registration Statement; (iii) fees and expenses of preparing and filing such
forms as are necessary under any applicable state securities laws in connection
with the Reorganization; (iv) postage; (v) printing; (vi) accounting fees; (vii)
legal fees and (viii) solicitation costs relating to the Reorganization. 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)
A-13
total expense ratios of the Acquiring Portfolio are not higher than those as set
forth in the Registration Statement for a period of three years after the
Exchange Date.
10. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Plan shall be in writing and shall be given by hand, certified
mail or by facsimile transmission, shall be deemed given when received and shall
be addressed to the parties hereto at their respective addresses listed below or
to such other persons or addresses as the relevant party shall designate as to
itself from time to time in writing delivered in like manner:
if to the Acquiring Trust (for itself or on behalf of the Acquiring
Portfolio):
1211 Avenue of the Americas, 41st Floor
New York, New York 10036
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Sarah E. Cogan, Esq.
if to the Transferor Trust (for itself or on behalf of the Transferor
Portfolio):
60 State Street
Suite 1300
Boston, Massachusetts 02109
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: John E. Baumgardner, Jr., Esq.
11. RELIANCE
All covenants and agreements made under this Plan shall be deemed to
have been material and relied upon by the Transferor Trust and the Acquiring
Trust notwithstanding any investigation made by such party or on its behalf.
12. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
(a) The section and paragraph headings contained in this Plan are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Plan.
A-14
(b) This Plan may be executed in any number of counterparts, each
of which shall be deemed an original.
(c) This Plan shall be governed by and construed in accordance with
the laws of The State of New York.
(d) This Plan shall bind and inure to the benefit of the Transferor
Trust, the Transferor Portfolio, the Acquiring Trust and the Acquiring Portfolio
and their respective successors and assigns, but no assignment or transfer
hereof or of any rights or obligations hereunder shall be made by any party
without the written consent of the other parties. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this Plan.
(e) The name "J.P. Morgan Institutional Funds" is the designation
of its Trustees under a Declaration of Trust dated November 4, 1992, as amended,
and all persons dealing with the Transferor Trust must look solely to the
Transferor Trust's property for the enforcement of any claims against the
Transferor Trust, as none of the Transferor Trustees, officers, agents or
shareholders assumes any personal liability for obligations entered into on
behalf of the Transferor Trust. No series of the Transferor Trust shall be
liable for claims against any other series of the Transferor Trust.
(f) The name "Mutual Fund Trust" is the designation of its Trustees
under a Declaration of Trust dated February 1, 1994, as amended, and all persons
dealing with the Acquiring Trust must look solely to the Acquiring Trust's
property for the enforcement of any claims against the Acquiring Trust, as none
of the Acquiring Trustees, officers, agents or shareholders assumes any personal
liability for obligations entered into on behalf of the Acquiring Trust. No
series of the Acquiring Trust shall be liable for claims against any other
series of the Acquiring Trust.
A-15
IN WITNESS WHEREOF, the undersigned have executed this Plan as of the
date first above written.
J.P. MORGAN INSTITUTIONAL FUNDS
on behalf of J.P. Morgan Prime Cash Management Fund
By:
--------------------------------------------------
Name:
Title:
MUTUAL FUND TRUST
on behalf of JPMorgan Prime Money Market Fund II
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 PRIME CASH MANAGEMENT FUND,
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS)
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Combined Prospectus/Proxy Statement dated May
12, 2001 for the Special Meeting of Shareholders of J.P. Morgan Prime Cash
Management Fund (the "Merging Fund"), a series of J.P. Morgan Institutional
Funds ("JPMIF"), to be held on July 3, 2001. Copies of the Combined
Prospectus/Proxy Statement may be obtained at no charge by calling the Merging
Fund at 1-800-766-7722.
Unless otherwise indicated, capitalized terms used herein and not
otherwise defined have the same meanings as are given to them in the Combined
Prospectus/Proxy Statement.
Further information about the Surviving Fund and the Merging Fund is
contained in each of MFT's and JPMIF's Statements of Additional Information,
which are incorporated herein by reference.
The date of this Statement of Additional Information is May 12, 2001.
1
GENERAL INFORMATION
The Shareholders of the Merging Fund are being asked to consider and
vote on two proposals.
With respect to an Agreement and Plan of Reorganization (the
"Reorganization Plan") dated as of __________, 2001 by and among JPMIF, on
behalf of the Merging Fund, MFT, on behalf of the Surviving Fund, and JPMC, and
the transactions contemplated thereby, the Reorganization Plan contemplates the
transfer of all of the assets and liabilities of the Merging Fund to the
Surviving Fund in exchange for shares issued by MFT in the Surviving Fund that
will have an aggregate net asset value equal to the aggregate net asset value of
the shares of the Merging Fund that are outstanding immediately before the
Effective Time of the Reorganization.
Following the exchange, the Merging Fund will make a liquidating
distribution of the Surviving Fund shares to its Shareholders, so that a holder
of shares in the Merging Fund will receive Cash Management Class shares of the
Surviving of equal value, plus the right to receive any unpaid dividends and
distributions that were declared before the Effective Time of the
Reorganization.
At the Meeting, shareholders will also be asked to consider and vote
upon the election of Trustees of JPMIF.
A Special Meeting of Shareholders of the Merging Fund to consider the
proposals and the related transaction will be held at the offices of J.P. Morgan
Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, NY, on July 3,
2001 at 9:00 a.m., Eastern time. For further information about the transaction,
see the Combined Prospectus/Proxy Statement.
2
FINANCIAL STATEMENTS
The audited financial statements and notes thereto of the Merging Fund
and the Master Portfolio contained in its Annual Report dated November 30, 2000
are incorporated by reference into this Statement of Additional Information
related to this Combined Prospectus/Proxy Statement. The audited financial
statements and notes thereto of the Surviving Fund contained in its Annual
Report dated August 31, 2000 are incorporated by reference into this Statement
of Additional Information related to this Combined Prospectus/Proxy Statement.
The financial statements and notes thereto which appear in each of the Merging
Fund's and the Surviving Fund's Annual Report have been audited by
PricewaterhouseCoopers LLP, whose reports thereon also appear in such Annual
Reports and are also incorporated herein by reference. The financial statements
and notes thereto for the Merging Fund and the Master Portfolio for the fiscal
year ended November 30, 2000 and for the Surviving Fund for the fiscal year
ended August 31, 2000 have been incorporated herein by reference in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on
their authority as experts in auditing and accounting.
The unaudited financial highlights, financial statements and notes thereto of
the Surviving Fund for the fiscal period ended February 28, 2001 are
incorporated by reference herein and into the Statement of Additional
Information related to this Combined Prospectus/Proxy Statement.
3
PRO FORMA FINANCIAL STATEMENTS
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
--------------------------------
CERTIFICATES OF DEPOSIT 8.06%
-------------------------------
125,000 125,000 Banc One NA, 5.67%, $ - $125,000 $125,000
5/7/2001
Banca Commerciale
Italiana (Italy),
100,000 100,000 (Yankee), 5.75%, 4/9/2001 100,000 100,000
Banco Santander Central
Hispano SA (Spain),
50,000 50,000 (Yankee), 6.50%, 6/6/2001 50,000 50,000
Bank Austria AG,
Floating Rate,
(Austria), (Yankee),
75,000 200,000 275,000 5.63%, 7/16/2001 74,994 199,978 274,972
Bank of Nova Scotia,
50,000 50,000 5.47%, 4/23/2001 (Canada) 50,000 50,000
100,000 100,000 5.53%, 4/27/2001 (Canada) 100,000 100,000
Bank One NA,
70,000 70,000 5.13%, 7/17/2001 70,000 70,000
40,000 40,000 6.65%, 3/22/2001 40,000 40,000
Barclays Bank PLC
(United Kingdom),
(Yankee),
120,000 120,000 5.53%, 4/10/2001 119,973 119,973
Floating Rate, 5.57%,
260,000 260,000 12/12/2001 259,941 259,941
Floating Rate, 5.59%,
210,000 210,000 9/24/2001 209,937 209,937
Bayerische Hypo-und
Vereinsbank AG
(Germany), (Yankee),
100,000 100,000 5.58%, 4/27/2001 100,000 100,000
Bayerische Landesbank
Girozentrale, 5.22%,
150,000 145,000 295,000 2/20/2002 (Germany) 149,958 144,959 294,917
Canadian Imperial Bank,
100,000 100,000 5.51%, 3/6/2001 (Canada) 100,000 100,000
Commerzbank AG, 7.00%,
25,000 25,000 7/17/2001 (Germany) 25,158 25,158
Credit Agricole Indosuez
SA (France), (Yankee),
141,000 101,000 242,000 5.23%, 2/20/2002 140,974 100,981 241,955
Credit Communal de
Belgique, 7.06%,
20,000 20,000 5/3/2001 (Belgium) 19,999 19,999
Deutsche Bank AG,
(Germany), (Yankee),
150,000 150,000 6.73%, 3/16/2001 149,996 149,996
Dexia Bank (Belgium),
23,600 23,600 5.59%, 4/11/2001 23,602 23,602
Dresdner Bank, 5.27%,
125,000 125,000 7/16/2001 (Germany) 125,009 125,009
Landesbank Baden
Wurttenberg, 5.74%,
75,000 75,000 4/9/2001 (Germany) 75,000 75,000
Landesbank
Hessen-Thueringen,
205,000 205,000 7.14%, 5/8/2001 (Germany) 204,997 204,997
Landesbank
Hessen-Thuringen
Girozentrale (Germany),
(Yankee),
75,000 75,000 6.54%, 4/6/2001 75,000 75,000
110,000 110,000 6.89%, 4/30/2001 109,997 109,997
Lloyds Bank Plc, 7.20%,
160,000 160,000 6/15/2001(United Kingdom) 159,987 159,987
Rabobank Nederland NV,
6.66%,
105,000 105,000 3/9/2001(Netherlands) 104,999 104,999
Rabobank Nederland NV,
7.05%,
100,000 100,000 5/2/2001(Netherlands) 99,995 99,995
Societe Generale, 5.52%,
32,800 32,800 4/9/2001(France) 32,799 32,799
Suntrust Bank Atlanta,
95,000 95,000 6.77%, 4/18/2001 95,002 95,002
Svenska Handelsbanken,
Inc. (Sweden), (Yankee),
50,000 40,000 90,000 5.12%, 8/2/2001 49,996 39,997 89,993
Toronto Dominion Bank,
20,000 20,000 5.53%, 4/9/2001(Canada) 19,999 19,999
UBS (Switzerland)
(Yankee),
100,000 100,000 5.10%, 8/2/2001 99,983 99,983
4
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
130,000 130,000 6.88%, 4/30/2001 129,996 129,996
40,000 40,000 7.03%, 7/19/2001 39,996 39,996
Westdeutsche Landesbank
Girozentrale (Germany),
(Yankee), 6.66%,
100,000 100,000 11/16/2001 100,005 100,005
World Savings Bank,
160,000 160,000 5.32%, 5/31/2001 160,000 160,000
------------------------------------ -------------
TOTAL CERTIFICATES OF
DEPOSIT 1,950,754 2,127,453 - 4,078,207
-------------------------------
COMMERCIAL PAPER 50.36%
-------------------------------
Abbey National North
America Corp. (United
Kingdom),
170,000 170,000 5.20%, 8/20/2001 165,882 165,882
168,250 168,250 5.40%, 4/24/2001 166,865 166,865
Alliance & Leicester Plc
(United Kingdom),
50,000 50,000 5.18%, 4/23/2001 49,601 49,601
100,000 100,000 5.19%, 4/24/2001 99,187 99,187
50,000 50,000 5.19%, 4/25/2001 49,587 49,587
25,000 25,000 5.19%, 4/26/2001 24,790 24,790
30,000 30,000 5.34%, 3/12/2001 29,942 29,942
50,000 50,000 5.34%, 3/13/2001 49,894 49,894
Allied Irish Banks North
America (Ireland),
85,000 85,000 5.62%, 3/19/2001 84,761 84,761
70,000 70,000 5.62%, 4/9/2001 69,574 69,574
Alpine Securitization
Corp.,
40,500 40,500 5.25%, 3/22/2001 40,370 40,370
100,000 100,000 5.52%, 3/22/2001 99,679 99,679
143,191 143,191 5.52%, 3/23/2001 142,710 142,710
Amstel Funding Corp.,
30,000 30,000 5.12%, 5/2/2001 29,727 29,727
50,000 50,000 5.32%, 3/16/2001 49,885 49,885
152,000 152,000 5.37%, 5/9/2001 150,456 150,456
95,000 95,000 5.56%, 3/7/2001 94,912 94,912
48,000 48,000 6.67%, 3/15/2001 47,878 47,878
Amsterdam Funding Corp.,
125,000 125,000 5.26%, 3/21/2001 124,620 124,620
70,000 70,000 5.34%, 3/12/2001 69,883 69,883
25,000 25,000 5.43%, 4/4/2001 24,873 24,873
50,000 50,000 5.51%, 3/7/2001 49,954 49,954
Aspen Funding Corp.,
45,000 45,000 5.32%, 3/16/2001 44,894 44,894
34,085 34,085 5.34%, 3/12/2001 34,028 34,028
Asset Portfolio Funding
37,300 37,300 Corp., 6.47%, 3/16/2001 37,201 37,201
Asset Securitization
Corp.,
50,000 50,000 6.49%, 3/7/2001 49,953 49,953
3,000 3,000 6.49%, 4/27/2001 2,974 2,974
Associates Corp. of
North America,
20,000 20,000 6.68%, 3/2/2001 19,996 19,996
109,000 109,000 ECN, 6.50%, 3/2/2001 108,981 108,981
Associates First Capital
Corp.,
25,000 25,000 5.26%, 3/21/2001 24,924 24,924
25,000 25,000 5.27%, 3/20/2001 24,928 24,928
11,000 11,000 5.32%, 3/16/2001 10,971 10,971
Atlantis One Funding
Corp.,
5
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
35,806 35,806 5.13%, 5/9/2001 35,446 35,446
113,295 113,295 5.16%, 5/4/2001 112,239 112,239
50,000 50,000 5.30%, 5/4/2001 49,534 49,534
50,000 50,000 5.31%, 5/4/2001 49,534 49,534
Banco B.I. Creditanstalt
SA (United Kingdom),
15,000 15,000 5.01%, 8/22/2001 14,638 14,638
25,000 25,000 6.73%, 3/9/2001 24,964 24,964
Banco Rio De La Plata SA
(Argentina), 6.78%,
20,000 20,000 3/8/2001 19,975 19,975
Banco Santander Central
Hispano SA (Spain),
50,000 50,000 (Yankee), 5.17%, 8/6/2001 48,894 48,894
Bank of America Corp.,
40,000 40,000 4.91%, 7/26/2001 39,200 39,200
29,000 29,000 5.34%, 3/7/2001 28,969 28,969
Bank of America N.A.,
75,000 75,000 6.52%, 5/10/2001 74,075 74,075
250,000 250,000 6.69%, 3/12/2001 249,505 249,505
Banque & Caisse d'
Epargne de l'Etat
(Luxemburg),
38,000 38,000 5.00%, 8/15/2001 37,103 37,103
20,000 20,000 5.17%, 4/9/2001 19,869 19,869
100,000 100,000 4.93%, 8/30/2001 97,568 97,568
Banque Generale du
Luxembourg SA
(Luxemburg),
100,000 100,000 4.84%, 8/27/2001 97,608 97,608
50,000 50,000 5.50%, 7/16/2001 48,982 48,982
Barton Capital Corp.,
31,308 31,308 5.33%, 3/15/2001 31,241 31,241
49,485 49,485 5.33%, 3/2/2001 49,477 49,477
100,000 100,000 5.34%, 3/8/2001 99,893 99,893
115,000 115,000 5.50%, 3/7/2001 114,895 114,895
74,366 74,366 5.52%, 3/13/2001 74,230 74,230
140,154 140,154 5.52%, 3/7/2001 140,026 140,026
BASF AG (Germany),
53,000 53,000 5.09%, 6/5/2001 52,112 52,112
75,000 75,000 6.68%, 3/29/2001 74,623 74,623
Bavaria TRR Corp.,
100,000 100,000 5.18%, 4/17/2001 99,159 99,159
49,212 49,212 5.34%, 3/12/2001 49,129 49,129
15,876 15,876 5.51%, 3/5/2001 15,866 15,866
Bavaria Universal
Funding Co., Floating
50,000 50,000 Rate, 5.54%, 8/10/2001 50,000 50,000
Bayerische Hypo
Vereinsbank (Germany),
75,000 75,000 5.60%, 3/13/2001 74,860 74,860
90,000 90,000 5.60%, 5/21/2001 88,811 88,811
BBL North American
Funding Corp., 5.20%,
50,000 50,000 3/26/2001 49,806 49,806
BCI Funding Corp.,
100,000 100,000 5.41%, 4/24/2001 99,189 99,189
Beta Finance Corp., Inc.
(Channel Islands),
50,000 50,000 6.73%, 3/22/2001 49,810 49,810
Bills Securitization
82,500 82,500 LTD, 5.33%, 5/8/2001 81,680 81,680
Blue Ridge Asset Funding
Corp.,
23,000 23,000 5.34%, 3/7/2001 22,979 22,979
83,478 83,478 5.48%, 3/23/2001 83,199 83,199
50,015 50,015 5.52%, 3/14/2001 49,916 49,916
6
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
23,000 23,000 5.53%, 3/9/2001 22,972 22,972
Bradford & Bingley Plc
(United Kingdom),
40,000 40,000 6.38%, 3/8/2001 39,950 39,950
25,000 25,000 6.38%, 4/4/2001 24,867 24,867
50,000 50,000 6.38%, 4/9/2001 49,695 49,695
Brahms Funding Corp.,
90,000 90,000 5.27%, 3/20/2001 89,737 89,737
40,000 40,000 5.45%, 4/25/2001 39,670 39,670
140,000 140,000 5.61%, 3/26/2001 139,459 139,459
Canada (Government of),
65,000 65,000 5.08%, 6/7/2001 63,885 63,885
35,000 35,000 6.52%, 6/7/2001 34,400 34,400
CBA Finance, 5.45%,
47,650 47,650 4/11/2001 47,354 47,354
CC USA Inc.,
30,000 30,000 5.00%, 8/15/2001 29,290 29,290
35,000 35,000 5.02%, 8/6/2001 34,229 34,229
Certain Funding Corp.,
45,815 45,815 5.46%, 5/1/2001 45,397 45,397
59,000 59,000 6.51%, 3/12/2001 58,885 58,885
Charta Corp., 5.34%,
50,000 50,000 3/14/2001 49,901 49,901
Christiania Capital
40,000 40,000 Corp., 4.93%, 8/28/2001 39,038 39,038
Ciesco L.P.,
31,000 31,000 5.18%, 4/12/2001 30,807 30,807
30,000 30,000 5.18%, 4/18/2001 29,786 29,786
50,000 50,000 5.39%, 4/12/2001 49,688 49,688
50,000 50,000 5.39%, 4/18/2001 49,643 49,643
Citibank Capital Markets
Assets LLC, 5.34%,
65,000 65,000 3/14/2001 64,848 64,848
Citibank Credit Card
Master Trust,
100,000 100,000 0.00%, 3/2/2001 99,985 99,985
100,000 100,000 0.00%, 3/7/2001 99,908 99,908
Citicorp,
300,000 300,000 5.51%, 3/2/2001 299,955 299,955
200,000 200,000 5.52%, 3/5/2001 199,878 199,878
Clipper Receivables
105,000 105,000 Corp., 5.26%, 3/21/2001 104,680 104,680
Comision Federal De
Electricdad (Mexico),
150,000 150,000 6.48%, 3/20/2001 149,495 149,495
Commerzbank US Finance,
95,500 95,500 5.50%, 3/13/2001 95,325 95,325
100,000 100,000 5.50%, 3/7/2001 99,908 99,908
100,000 100,000 5.50%, 3/8/2001 99,893 99,893
200,000 200,000 5.53%, 3/13/2001 199,633 199,633
Compass Securitization
LLC,
7,191 7,191 5.19%, 4/25/2001 7,131 7,131
56,000 56,000 5.25%, 3/22/2001 55,820 55,820
44,424 44,424 5.34%, 3/12/2001 44,337 44,337
30,000 30,000 5.34%, 3/15/2001 29,925 29,925
120,000 120,000 5.52%, 3/16/2001 119,725 119,725
60,000 60,000 6.50%, 3/15/2001 59,851 59,851
Corporate Asset Funding,
60,000 60,000 5.17%, 4/3/2001 59,704 59,704
Corporate Receivables
60,000 60,000 Corp., 5.32%, 5/10/2001 59,388 59,388
Credit Suisse First
Boston, Inc.,
100,000 100,000 6.71%, 3/12/2001 99,802 99,802
7
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
75,000 75,000 6.71%, 3/14/2001 74,824 74,824
70,000 70,000 5.24%, 7/20/2001 68,594 68,594
Credit Suisse First
Boston, Inc.
(Switzerland),
40,000 40,000 5.02%, 8/6/2001 39,122 39,122
40,000 40,000 5.12%, 5/25/2001 39,496 39,496
50,000 50,000 5.12%, 5/29/2001 49,336 49,336
40,000 40,000 5.18%, 4/12/2001 39,699 39,699
75,000 75,000 5.18%, 4/20/2001 74,327 74,327
26,000 26,000 5.33%, 3/5/2001 25,981 25,981
50,000 50,000 5.34%, 3/13/2001 49,892 49,892
Credit Suisse First
Boston International,
(Switzerland),
36,000 36,000 6.63%, 4/16/2001 35,703 35,703
20,000 20,000 6.66%, 5/7/2001 19,760 19,760
CXC Inc.,
105,000 105,000 5.11%, 5/15/2001 103,596 103,596
70,000 70,000 5.17%, 4/2/2001 69,615 69,615
100,000 100,000 5.18%, 4/23/2001 99,199 99,199
50,000 50,000 5.19%, 4/24/2001 49,592 49,592
50,000 50,000 5.19%, 4/27/2001 49,568 49,568
174,000 174,000 5.34%, 3/8/2001 173,783 173,783
75,000 75,000 5.59%, 4/4/2001 74,609 74,609
Dakota Certificate
Program (Citibank Credit
Card Master Trust I),
147,956 147,956 5.51%, 3/7/2001 147,821 147,821
Danske Corp. (Denmark),
80,000 80,000 5.01%, 8/20/2001 78,064 78,064
75,000 75,000 5.34%, 3/13/2001 74,860 74,860
Den Danske Corp.
(Denmark), 6.37%,
40,000 40,000 3/14/2001 39,908 39,908
Den Norske Bank
(Norway),
75,000 75,000 5.03%, 8/2/2001 73,386 73,386
50,000 50,000 5.13%, 5/11/2001 49,416 49,416
162,000 162,000 5.17%, 5/2/2001 160,535 160,535
Depfa Bank Europe Plc
(United Kingdom),
65,000 65,000 5.09%, 6/6/2001 63,975 63,975
125,000 125,000 5.13%, 5/10/2001 123,459 123,459
35,000 35,000 5.16%, 5/4/2001 34,605 34,605
65,000 65,000 5.17%, 4/4/2001 64,604 64,604
100,000 100,000 5.17%, 5/1/2001 98,921 98,921
40,000 40,000 5.18%, 4/12/2001 39,741 39,741
18,000 18,000 5.18%, 4/16/2001 17,869 17,869
75,000 75,000 5.18%, 4/17/2001 74,385 74,385
25,000 25,000 5.27%, 3/20/2001 24,916 24,916
42,839 42,839 5.28%, 3/19/2001 42,703 42,703
125,000 125,000 5.32%, 3/16/2001 124,668 124,668
75,000 75,000 5.33%, 3/6/2001 74,942 74,942
75,500 75,500 5.34%, 3/13/2001 75,340 75,340
Deutsche Bank Financial
Inc. (Germany), 5.16%,
193,500 193,500 5/4/2001 191,467 191,467
Dexia CLF Finance Co.
(France),
100,000 100,000 5.60%, 3/20/2001 99,704 99,704
50,000 50,000 5.60%, 4/27/2001 49,569 49,569
Dexia Delaware LLC,
70,000 70,000 5.16%, 8/10/2001 68,416 68,416
Diageo Plc (United
Kingdom), 5.17%,
50,000 50,000 4/10/2001 49,664 49,664
8
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
Dorada Finance, Inc.,
47,000 47,000 5.44%, 4/19/2001 46,656 46,656
30,890 30,890 5.47%, 4/24/2001 30,640 30,640
31,000 31,000 5.47%, 4/25/2001 30,744 30,744
40,500 40,500 5.47%, 4/30/2001 40,136 40,136
Dresdner U.S. Finance
Inc. (Germany), 5.34%,
10,000 10,000 3/12/2001 9,983 9,983
Edison Asset
Securitization LLC,
100,000 100,000 5.34%, 3/7/2001 99,906 99,906
80,000 80,000 5.34%, 3/9/2001 79,900 79,900
150,000 150,000 5.50%, 3/6/2001 149,886 149,886
Edison Asset
Securitization LLC,
150,000 150,000 5.50%, 3/7/2001 149,863 149,863
Enterprise Funding
Corp.,
38,235 38,235 6.52%, 3/9/2001 38,180 38,180
75,274 75,274 6.52%, 3/15/2001 75,088 75,088
31,725 31,725 6.52%, 3/19/2001 31,622 31,622
5,007 5,007 6.52%, 4/25/2001 4,965 4,965
Fairway Finance Corp.,
45,000 45,000 4.89%, 8/23/2001 43,937 43,937
15,000 15,000 5.01%, 8/8/2001 14,664 14,664
6,392 6,392 5.48%, 4/16/2001 6,348 6,348
40,000 40,000 6.48%, 3/15/2001 39,901 39,901
Falcon Asset
Securitization Corp.,
37,955 37,955 5.33%, 3/15/2001 37,874 37,874
75,000 75,000 5.34%, 3/7/2001 74,931 74,931
45,000 45,000 5.51%, 3/13/2001 44,916 44,916
171,000 171,000 5.64%, 3/13/2001 170,682 170,682
57,100 57,100 5.65%, 3/9/2001 57,029 57,029
Forrestal Funding Master
Trust,
102,140 102,140 5.47%, 4/24/2001 101,313 101,313
140,000 140,000 6.64%, 3/16/2001 139,621 139,621
Forrestral Funding
Master Trust,
30,000 30,000 5.45%, 4/12/2001 29,809 29,809
35,000 35,000 5.45%, 4/24/2001 34,717 34,717
Four Winds Funding
Corp.,
13,000 13,000 5.17%, 4/10/2001 12,921 12,921
70,000 70,000 5.28%, 3/19/2001 69,807 69,807
26,480 26,480 5.49%, 4/10/2001 26,320 26,320
50,000 50,000 #, 5.52%, 3/21/2001 49,847 49,847
73,000 73,000 5.54%, 3/19/2001 72,799 72,799
Galaxy Funding, Inc.,
29,500 29,500 5.01%, 8/10/2001 28,832 28,832
50,000 50,000 5.04%, 7/30/2001 48,943 48,943
90,000 90,000 5.17%, 8/10/2001 87,963 87,963
64,000 64,000 5.33%, 3/15/2001 63,863 63,863
73,000 73,000 5.56%, 3/15/2001 72,843 72,843
50,000 50,000 5.56%, 3/16/2001 49,885 49,885
General Electric Capital
Corp.,
100,000 100,000 5.00%, 7/11/2001 98,167 98,167
80,000 80,000 5.11%, 7/11/2001 78,534 78,534
50,000 50,000 5.18%, 4/19/2001 49,630 49,630
115,000 115,000 5.18%, 4/20/2001 114,133 114,133
33,000 33,000 5.19%, 4/25/2001 32,728 32,728
9
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
50,000 50,000 6.66%, 3/7/2001 49,946 49,946
Giro Funding U.S. Corp.,
2,164 2,164 5.52%, 3/1/2001 2,164 2,164
Giro Multi Funding
Corp.,
60,000 60,000 5.27%, 3/20/2001 59,826 59,826
3,365 3,365 5.52%, 3/1/2001 3,365 3,365
121,000 121,000 5.53%, 3/20/2001 120,648 120,648
Goldman Sachs Group
Inc.,
225,000 225,000 5.18%, 4/12/2001 223,529 223,529
125,000 125,000 5.18%, 4/16/2001 124,109 124,109
200,000 200,000 5.76%, 4/12/2001 198,677 198,677
Govco, Inc.,
90,000 90,000 5.16%, 5/4/2001 89,160 89,160
60,000 60,000 5.32%, 5/16/2001 59,335 59,335
Grand Funding Corp.,
60,000 60,000 5.34%, 3/13/2001 59,890 59,890
75,000 75,000 5.34%, 3/14/2001 74,851 74,851
40,000 40,000 #, 5.51%, 3/12/2001 39,933 39,933
Greenwich Funding Corp.,
85,000 85,000 5.33%, 3/6/2001 84,935 84,935
40,000 40,000 5.34%, 3/7/2001 39,963 39,963
100,000 100,000 #, 5.52%, 3/6/2001 99,919 99,919
57,468 57,468 #, 6.54%, 3/6/2001 57,421 57,421
Greyhawk Funding LLC,
53,000 53,000 5.51%, 4/24/2001 52,568 52,568
90,000 90,000 5.52%, 3/14/2001 89,821 89,821
220,000 220,000 #, 5.47%, 5/4/2001 217,891 217,891
136,300 136,300 #, 6.40%, 6/8/2001 133,976 133,976
Halifax PLC (United
Kingdom),
25,000 25,000 5.17%, 4/3/2001 24,861 24,861
75,000 75,000 5.45%, 7/16/2001 73,487 73,487
30,000 30,000 5.60%, 4/10/2001 29,816 29,816
150,000 150,000 6.61%, 5/2/2001 148,347 148,347
HD Real Estate Funding
160,263 160,263 Corp., 5.17%, 5/22/2001 157,923 157,923
HomeSide Lending, Inc.,
25,000 25,000 5.50%, 3/21/2001 24,924 24,924
12,775 12,775 5.50%, 3/22/2001 12,734 12,734
14,716 14,716 5.50%, 3/23/2001 14,667 14,667
Ing America Insurance
Holdings, 5.01%,
73,000 73,000 8/22/2001 71,211 71,211
Jupiter Securitization
Corp.,
21,409 21,409 5.32%, 3/16/2001 21,360 21,360
32,755 32,755 5.34%, 3/8/2001 32,720 32,720
20,870 20,870 5.34%, 3/13/2001 20,832 20,832
50,000 50,000 5.34%, 3/14/2001 49,901 49,901
98,710 98,710 5.52%, 3/7/2001 98,620 98,620
211,167 211,167 5.52%, 3/12/2001 210,812 210,812
47,435 47,435 5.53%, 3/8/2001 47,384 47,384
41,880 41,880 6.40%, 6/12/2001 41,137 41,137
K2 (USA) LLC,
38,000 38,000 5.01%, 8/10/2001 37,142 37,142
28,000 28,000 5.15%, 8/7/2001 27,379 27,379
38,000 38,000 5.17%, 5/2/2001 37,653 37,653
52,000 52,000 5.17%, 8/9/2001 50,828 50,828
14,000 14,000 5.47%, 4/25/2001 13,884 13,884
10
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
50,000 50,000 6.94%, 4/17/2001 49,569 49,569
Kitty Hawk Funding
Corp.,
50,000 50,000 5.00%, 8/15/2001 48,829 48,829
69,647 69,647 5.18%, 8/15/2001 68,015 68,015
Landesbank Schleswig
Holstein (Germany),
55,000 55,000 5.03%, 7/31/2001 53,553 53,553
40,000 40,000 5.09%, 6/6/2001 39,322 39,322
50,000 50,000 5.10%, 6/4/2001 49,165 49,165
100,000 100,000 5.11%, 6/1/2001 98,382 98,382
215,000 215,000 5.19%, 4/25/2001 213,216 213,216
Liberty Street Funding
Corp.,
32,000 32,000 5.26%, 3/21/2001 31,902 31,902
19,880 19,880 5.55%, 4/20/2001 19,729 19,729
Links Finance LLC,
100,000 100,000 5.01%, 8/21/2001 97,552 97,552
20,000 20,000 #, 5.16%, 8/1/2001 19,572 19,572
Lloyds Bank Plc (United
Kingdom),
70,000 70,000 5.59%, 3/12/2001 69,880 69,880
65,000 65,000 5.59%, 3/16/2001 64,848 64,848
Lloyds TSB Bank PLC
(United Kingdom), 5.14%,
40,000 40,000 8/1/2001 39,148 39,148
Market Street Funding,
22,064 22,064 5.34%, 3/13/2001 22,024 22,024
Mont Blanc Capital
20,000 20,000 Corp., 5.33%, 3/6/2001 19,985 19,985
Montauk Funding Corp.,
40,000 40,000 5.34%, 3/9/2001 39,951 39,951
100,000 100,000 5.51%, 3/9/2001 99,878 99,878
Monte Rosa Capital
Corp.,
10,000 10,000 5.20%, 3/26/2001 9,962 9,962
26,233 26,233 5.25%, 3/22/2001 26,149 26,149
42,000 42,000 5.26%, 3/21/2001 41,872 41,872
36,000 36,000 5.51%, 3/19/2001 35,901 35,901
Morgan Stanley Dean
Witter & Co.,
150,000 150,000 5.18%, 4/23/2001 148,792 148,792
80,000 80,000 5.33%, 3/15/2001 79,825 79,825
Floating Rate, 5.64%,
75,000 75,000 5/30/2001 75,000 75,000
Moriarty LLC,
60,000 60,000 5.00%, 8/13/2001 58,603 58,603
65,000 65,000 5.16%, 8/9/2001 63,538 63,538
65,000 65,000 5.21%, 8/13/2001 63,487 63,487
250,000 250,000 5.33%, 5/8/2001 247,515 247,515
26,400 26,400 5.36%, 7/16/2001 25,876 25,876
89,000 89,000 5.56%, 4/9/2001 88,472 88,472
80,000 80,000 5.92%, 7/5/2001 78,390 78,390
National Rural Utilities
Cooperative Finance
45,000 45,000 Corp., 5.04%, 7/19/2001 43,913 43,913
Nationwide Building
Society (United
Kingdom),
100,000 100,000 5.18%, 8/13/2001 97,685 97,685
65,000 65,000 5.73%, 4/3/2001 64,663 64,663
Nationwide Building
Society (United
Kingdom),
117,700 117,700 6.60%, 3/1/2001 117,700 117,700
46,000 46,000 6.60%, 3/22/2001 45,826 45,826
Ness Limited,
100,000 100,000 5.45%, 4/20/2001 99,243 99,243
11
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
57,900 57,900 5.52%, 3/16/2001 57,768 57,768
New Castle Certificate
Program (Discover Card
Master Trust I, Ser.
2000-A),
40,000 40,000 5.55%, 3/22/2001 39,871 39,871
175,000 175,000 ECN, 6.66%, 3/6/2001 174,840 174,840
Newport Funding Corp.,
65,000 65,000 5.17%, 4/6/2001 64,643 64,643
16,534 16,534 5.32%, 3/16/2001 16,495 16,495
20,000 20,000 5.34%, 3/7/2001 19,982 19,982
50,000 50,000 5.34%, 3/12/2001 49,916 49,916
68,000 68,000 5.58%, 4/11/2001 67,574 67,574
Nordbanken NA Inc.
(Sweden), 6.37%,
85,000 85,000 3/14/2001 84,804 84,804
Northern Rock Plc
(United Kingdom),
25,000 25,000 5.18%, 4/17/2001 24,823 24,823
25,000 25,000 5.33%, 3/6/2001 24,978 24,978
Old Line Funding Corp.,
39,372 39,372 5.34%, 3/8/2001 39,330 39,330
35,000 35,000 5.34%, 3/14/2001 34,931 34,931
65,556 65,556 5.52%, 3/14/2001 65,426 65,426
Parthenon Receivables
Funding LLC,
25,116 25,116 4.87%, 8/28/2001 24,508 24,508
31,050 31,050 5.33%, 3/5/2001 31,031 31,031
25,000 25,000 5.34%, 3/13/2001 24,953 24,953
Pennine Funding LLC,
40,000 40,000 5.15%, 8/1/2001 39,147 39,147
45,000 45,000 5.49%, 4/19/2001 44,668 44,668
Pooled Accounts
Receivable Capital
Corp.,
50,000 50,000 5.32%, 3/16/2001 49,885 49,885
50,000 50,000 5.52%, 3/16/2001 49,885 49,885
Preferred Rec Funding
(PREFCO),
110,000 110,000 5.32%, 3/16/2001 109,749 109,749
65,640 65,640 5.62%, 3/13/2001 65,518 65,518
Procter & Gamble Co.,
50,000 50,000 ECN, 5.60%, 4/5/2001 49,731 49,731
Quincy Capital Corp.,
100,032 100,032 5.51%, 3/12/2001 99,864 99,864
34,212 34,212 5.51%, 3/9/2001 34,170 34,170
Receivables Capital
Corp.,
25,320 25,320 5.18%, 4/16/2001 25,145 25,145
35,000 35,000 5.34%, 3/12/2001 34,941 34,941
90,462 90,462 5.51%, 3/9/2001 90,352 90,352
60,000 60,000 5.52%, 3/12/2001 59,899 59,899
Repeat Offering
Securitization Entity
71,340 71,340 (ROSE), 5.53%, 4/23/2001 70,768 70,768
Salomon Smith Barney
Inc.,
35,000 35,000 5.17%, 4/10/2001 34,788 34,788
100,000 100,000 5.18%, 4/17/2001 99,292 99,292
50,000 50,000 5.18%, 4/18/2001 49,639 49,639
60,000 60,000 5.23%, 3/2/2001 59,991 59,991
125,000 125,000 5.33%, 3/5/2001 124,913 124,913
100,000 100,000 5.33%, 3/6/2001 99,911 99,911
San Paolo IMI US
Financial Co. (Brazil),
84,000 84,000 5.02%, 8/6/2001 82,146 82,146
12
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
Santander Hispano
Finance Delaware Inc.
40,000 40,000 (Spain), 5.02%, 8/6/2001 39,115 39,115
SBC Communications Inc.,
34,000 34,000 5.17%, 4/11/2001 33,793 33,793
Sheffield Receivables
Corp.,
52,900 52,900 5.33%, 3/5/2001 52,868 52,868
75,000 75,000 5.33%, 3/15/2001 74,840 74,840
40,000 40,000 5.34%, 3/8/2001 39,957 39,957
53,500 53,500 5.52%, 3/12/2001 53,405 53,405
175,000 175,000 5.52%, 3/15/2001 174,625 174,625
150,000 150,000 5.53%, 3/19/2001 149,588 149,588
150,000 150,000 5.62%, 3/20/2001 149,559 149,559
26,800 26,800 6.50%, 3/12/2001 26,753 26,753
Sigma Finance Corp.
(Channel Islands),
150,000 150,000 #, 5.14%, 8/2/2001 146,778 146,778
83,500 83,500 #, 5.16%, 8/2/2001 81,707 81,707
66,400 66,400 #, 5.47%, 4/23/2001 65,872 65,872
45,000 45,000 #, 6.37%, 6/11/2001 44,213 44,213
Sigma Finance Corp.,
100,000 100,000 5.03%, 8/2/2001 97,857 97,857
50,000 50,000 5.16%, 5/4/2001 49,532 49,532
Silver Tower U.S.
Funding LLC,
135,000 135,000 4.98%, 8/29/2001 131,701 131,701
95,000 95,000 5.25%, 8/17/2001 92,721 92,721
Societe Generale NA
(France),
100,000 100,000 5.19%, 4/26/2001 99,152 99,152
124,700 124,700 5.34%, 3/7/2001 124,567 124,567
Special Purpose Accounts
Receivable Cooperative
Corp.,
25,000 25,000 5.16%, 5/3/2001 24,770 24,770
117,000 117,000 5.47%, 4/26/2001 116,017 116,017
18,320 18,320 5.54%, 4/12/2001 18,203 18,203
Spintab-Swedmortgage AB
(Sweden),
60,000 60,000 5.13%, 5/9/2001 59,396 59,396
78,669 78,669 5.16%, 5/3/2001 77,945 77,945
Surrey Funding Corp.,
43,500 43,500 5.16%, 5/3/2001 43,099 43,099
30,000 30,000 5.49%, 3/26/2001 29,886 29,886
Svenska Handelsbanken,
Inc. (Sweden),
16,500 16,500 5.03%, 8/1/2001 16,149 16,149
65,000 65,000 5.20%, 8/15/2001 63,471 63,471
25,000 25,000 5.28%, 3/19/2001 24,930 24,930
69,760 69,760 5.32%, 3/16/2001 69,597 69,597
25,000 25,000 5.33%, 3/15/2001 24,938 24,938
156,500 156,500 5.34%, 3/12/2001 156,195 156,195
Swedish Export Credit
10,300 10,300 (Sweden), 5.03%, 8/1/2001 10,083 10,083
Thames Asset Global
Securitization (TAGS),
22,573 22,573 5.11%, 5/15/2001 22,326 22,326
32,000 32,000 5.61%, 4/17/2001 31,769 31,769
86,394 86,394 6.51%, 3/15/2001 86,179 86,179
Total Fina Elf SA
202,000 202,000 (France), 5.57%, 3/1/2001 202,000 202,000
Triple-A One Funding
Corp.,
82,107 82,107 5.51%, 3/8/2001 82,019 82,019
24,963 24,963 5.61%, 4/5/2001 24,829 24,829
13
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
Tulip Funding Corp.,
62,500 62,500 5.16%, 5/4/2001 61,917 61,917
56,749 56,749 5.34%, 3/8/2001 56,688 56,688
35,000 35,000 5.34%, 3/13/2001 34,936 34,936
150,000 150,000 5.49%, 5/1/2001 148,625 148,625
46,687 46,687 #, 5.07%, 8/28/2001 45,534 45,534
UBS Finance LLC
(Switzerland), 5.03%,
85,000 85,000 8/1/2001 83,190 83,190
Unibanco - Grand Cayman,
Series A, (Germany),
60,000 60,000 5.55%, 7/11/2001 58,812 58,812
Variable Funding Capital
Corp.,
45,000 45,000 5.13%, 5/10/2001 44,541 44,541
100,000 100,000 5.47%, 4/27/2001 99,145 99,145
Victory Receivables
Corp.,
68,000 68,000 5.42%, 4/25/2001 67,437 67,437
50,000 50,000 5.57%, 4/11/2001 49,687 49,687
Wal-Mart Funding Corp.,
116,000 116,000 5.25%, 3/22/2001 115,628 115,628
25,000 25,000 5.53%, 3/22/2001 24,920 24,920
WCP Funding Inc.,
29,000 29,000 5.11%, 5/14/2001 28,687 28,687
50,000 50,000 5.33%, 5/14/2001 49,460 49,460
Wells Fargo & Co.,
45,000 45,000 5.38%, 5/4/2001 44,575 44,575
Windmill Funding Corp.,
69,000 69,000 5.26%, 3/21/2001 68,790 68,790
8,000 8,000 5.28%, 3/19/2001 7,977 7,977
25,000 25,000 5.34%, 3/13/2001 24,953 24,953
110,800 110,800 5.51%, 3/7/2001 110,699 110,699
40,000 40,000 5.52%, 3/7/2001 39,963 39,963
75,000 75,000 5.52%, 3/20/2001 74,782 74,782
------------------------------------
TOTAL COMMERCIAL PAPER 12,287,567 13,183,427 - 25,470,994
-------------------------------
CORPORATE BONDS & NOTES 21.63%
-------------------------------
ASSET BACK SECURITIES 3.65%
ACE Overseas Corp., FRN,
47,000 47,000 6.51%, 3/16/2001 46,999 46,999
Beta Finance Corp.,
Inc., (Channel Islands),
75,000 75,000 FRN, 5.56%, 8/14/2001 74,998 74,998
30,000 30,000 MTN, #, 6.90%, 3/30/2001 30,000 30,000
85,000 85,000 MTN, #, 6.94%, 5/2/2001 85,000 85,000
MTN, FRN, 5.36%,
50,000 50,000 4/30/2001 50,000 50,000
MTN, FRN, #, 5.55%,
125,000 125,000 5/8/2001 125,000 125,000
MTN, FRN, #, 6.11%,
50,000 50,000 3/30/2001 50,000 50,000
CC USA Inc., (Centauri
0 Corp.),
100,000 100,000 MTN, #, 7.07%, 7/25/2001 100,000 100,000
35,000 35,000 MTN, #, 7.12%, 5/7/2001 35,000 35,000
75,000 75,000 MTN, #, 7.48%, 6/7/2001 75,000 75,000
MTN, FRN, #, 5.56%,
50,000 50,000 4/20/2001 50,000 50,000
Ciesco L.P., Ser. A,
MTN, FRN, 5.54%,
120,000 120,000 10/15/2001 120,000 120,000
MTN, FRN, #, 5.54%,
80,000 80,000 9/20/2001 80,000 80,000
Dorada Finance Inc.,
70,000 70,000 MTN, #, 7.06%, 7/17/2001 70,000 70,000
K2 (USA) LLC,
MTN, FRN, #, 5.57%,
55,000 55,000 7/16/2001 55,000 55,000
14
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JP MORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
MTN, FRN, #, 5.57%,
100,000 100,000 8/15/2001 100,000 100,000
Liberty Lighthouse U.S.
Capital Co., MTN, FRN,
120,000 120,000 #, 5.36%, 3/5/2001 120,000 120,000
Links Finance LLC, MTN,
75,000 75,000 FRN, #, 5.55%, 5/11/2001 74,998 74,998
Restructured Asset
Securities with Enhanced
Returns (RACERS), 1999
Ser. MM-35, FRN, #,
37,000 37,000 5.60%, 12/17/2001 37,000 37,000
Restructured Asset
Securities with Enhanced
Returns (RACERS), 2000
Ser. MM-7, FRN, #,
90,000 90,000 5.40%, 5/30/2001 89,988 89,988
Restructured Asset
Securities with Enhanced
Returns (RACERS), 2000
Ser. MM-10, FRN, #,
100,000 100,000 5.59%, 6/22/2001 100,000 100,000
Sigma Finance Corp.,
(Channel Islands),
MTN, FRN, #, 5.46%,
100,000 100,000 5/2/2001 100,000 100,000
MTN, FRN, #, 5.56%,
75,000 75,000 3/5/2001 75,000 75,000
MTN, FRN, #, 5.57%,
100,000 100,000 5/15/2001 100,000 100,000
------------------------------------
TOTAL ASSET BACKED
SECURITIES 1,843,983 - - 1,843,983
AUTOMOTIVE 0.48%
American Honda Finance
Corp., MTN, FRN, #,
60,000 60,000 6.55%, 6/19/2001 60,000 60,000
General Motors
Acceptance Corp.,
MTN, FRN, 5.61%,
5,000 5,000 7/27/2001 5,000 5,000
MTN, FRN, 5.81%,
30,000 30,000 4/30/2001 30,006 30,006
Toyota Motor Credit
Corp., MTN, FRN, 6.37%,
150,000 150,000 4/23/2001 149,992 149,992
------------------------------------
TOTAL AUTOMOTIVE 244,998 - - 244,998
BANKING 6.92%
ABBEY NATIONAL TREASURY
SERVICES PLC (UNITED
KINGDOM), (YANKEE),
210,000 210,000 FRN, 5.44%, 10/25/2001 209,932 209,932
MTN, FRN, 5.47%,
350,000 350,000 6/15/2001 349,921 349,921
American Express
Centurion Bank,
100,000 100,000 FRN, 5.54%, 2/14/2002 100,000 100,000
MTN, FRN, 5.53%,
50,000 50,000 4/12/2001 49,999 49,999
200,000 200,000 MTN, FRN, 5.54%, 5/8/2001 200,000 200,000
MTN, FRN, 5.56%,
50,000 50,000 11/20/2001 50,000 50,000
Bank of America, N.A.,
50,000 50,000 5.13%, 7/17/2001 50,000 50,000
23,600 23,600 6.60%, 10/30/2001 23,775 23,775
50,000 50,000 FRN, 6.71%, 9/6/2001 50,019 50,019
MTN, FRN, 5.66%,
70,000 70,000 7/11/2001 70,002 70,002
Bank One, N.A.,
39,000 39,000 FRN, 5.60%, 12/17/2001 39,011 39,011
100,000 100,000 FRN, 5.60%, 9/10/2001 100,013 100,013
85,000 85,000 FRN, 5.62%, 2/15/2002 85,040 85,040
MTN, FRN, 5.64%,
85,000 85,000 12/12/2001 84,981 84,981
Bayerische Landesbank
Girozentrale, FRN,
(Germany), (Yankee),
190,000 190,000 5.64%, 3/1/2001 190,000 190,000
15
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
Commerzbank AG
(Germany), (Yankee),
160,000 160,000 FRN, 5.34%, 6/29/2001 159,968 159,968
200,000 500,000 700,000 FRN, 5.48%, 4/26/2001 199,991 499,985 699,976
240,000 240,000 FRN, 5.50%, 3/19/2001 239,994 239,994
Credit Suisse First
Boston Inc.
(Switzerland), MTN, FRN,
100,000 100,000 5.54%, 5/9/2001 99,998 99,998
Dexia Bank (Belgium),
(Yankee), FRN, 5.63%,
100,000 100,000 3/1/2001 100,000 100,000
Dresdner Bank AG,
(Germany), (Yankee),
246,000 246,000 FRN, 5.31%, 3/28/2001 245,993 245,993
Fleet National Bank,
MTN, FRN, 5.77%,
85,000 85,000 5/24/2001 85,019 85,019
National City Bank,
44,000 44,000 6.98%, 8/2/2001 43,993 43,993
70,000 70,000 FRN, 5.54%, 12/4/2001 70,000 70,000
50,000 50,000 MTN, FRN, 6.27%, 7/5/2001 49,992 49,992
Wachovia Bank, N.A.,
50,000 50,000 FRN, 5.55%, 1/7/2002 50,000 50,000
------------------------------------
TOTAL BANKING 2,953,648 543,978 - 3,497,626
DIVERSIFIED 0.37%
Abbott Labs, 5.25%,
100,000 100,000 3/1/2002 100,000 100,000
General Electric Capital
Corp., Series A, 7.38%,
85,000 85,000 5/23/2001 85,000 85,000
------------------------------------
TOTAL DIVERSIFIED - 185,000 - 185,000
FINANCIAL SERVICES 7.71%
Associates Corp. of
North America,
26,000 26,000 FRN, 5.48%, 2/22/2002 26,045 26,045
75,000 75,000 FRN, 6.46%, 6/26/2001 75,000 75,000
SUB, FRN, 6.58%,
110,000 110,000 3/15/2001 110,000 110,000
Bear Stearns Companies,
Inc., FRN, 5.78%,
85,000 85,000 8/1/2001 85,065 85,065
Bollingbrent L.P., Ser.
1999, FRDO, 5.67%,
5,000 5,000 3/6/2001 5,000 5,000
Citigroup Inc.,
175,000 140,000 315,000 MTN, FRN, 5.52%, 4/4/2001 175,000 140,000 315,000
250,000 150,000 400,000 MTN, FRN, 5.54%, 6/6/2001 250,000 150,000 400,000
Goldman Sachs Group,
Inc.,
244,000 244,000 FRN, #, 5.80%, 3/15/2002 244,000 244,000
MTN, FRN, 5.59%,
67,000 67,000 2/11/2002 67,113 67,113
Homeside Lending, Inc.,
MTN, FRN, 5.68%,
5,000 5,000 4/24/2001 5,001 5,001
Household Finance Corp.,
MTN, FRN, 5.36%,
50,000 50,000 3/30/2001 49,995 49,995
MTN, FRN, 5.76%,
25,000 25,000 7/16/2001 25,004 25,004
MTN, FRN, 6.62%,
100,000 100,000 6/22/2001 100,027 100,027
MTN, FRN, 6.65%,
37,000 37,000 6/21/2001 37,011 37,011
Merrill Lynch & Co.,
Inc.,
MTN, FRN, 5.48%,
4,885 4,885 8/10/2001 4,887 4,887
350,000 350,000 MTN, FRN, 5.52%, 3/6/2001 349,999 349,999
MTN, FRN, 5.56%,
75,000 75,000 11/19/2001 75,000 75,000
70,000 70,000 MTN, FRN, 5.64%,1/4/2002 69,98 69,982
16
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
MTN, FRN, 5.65%,
70,000 70,000 3/11/2002 70,065 70,065
Morgan Stanley Dean
Witter & Co.,
260,000 260,000 FRN, 5.59%, 3/15/2002 260,000 260,000
50,000 50,000 FRN, 6.73%, 12/17/2001 50,124 50,124
MTN, FRN, 5.55%,
150,000 150,000 3/16/2001 150,000 150,000
MTN, FRN, 6.62%,
50,000 50,000 9/14/2001 50,061 50,061
MTN, FRN, 5.64%,
55,000 55,000 5/15/2001 55,000 55,000
MTN, FRN, 6.67%,
35,000 35,000 3/13/2001 35,000 35,000
MTN, FRN, 6.68%,
75,000 75,000 3/15/2001 75,000 75,000
Wells Fargo Bank, N.A.,
MTN, FRN, 5.51%,
175,000 30,000 205,000 7/24/2001 174,973 29,995 204,968
MTN, FRN, 5.55%,
330,000 500,000 830,000 3/15/2002 329,999 500,000 829,999
Westpac Banking Corp.,
(Australia), (Yankee),
75,000 75,000 FRN, 5.43%, 5/8/2001 75,005 75,005
------------------------------------
TOTAL FINANCIAL SERVICES 3,079,356 819,995 - 3,899,351
INSURANCE 0.10%
Prudential Funding
Corp., MTN, FRN, 5.82%,
50,000 50,000 4/17/2001 50,004 - 50,004
------------------------------------
MACHINERY & ENGINEERING
EQUIPMENT 0.18%
Caterpillar Financial
Services Corp.,
10,000 10,000 MTN, FRN, 5.83%, 7/9/2001 10,003 10,003
75,000 75,000 MTN, FRN, 5.92%, 7/9/2001 75,001 75,001
5,000 5,000 MTN, FRN, 6.79%, 6/1/2001 5,000 5,000
------------------------------------
TOTAL MACHINERY &
ENGINEERING EQUIPMENT 90,004 - - 90,004
TELECOMMUNICATION 2.23%
AT&T Corp.,
250,000 250,000 FRN, #, 5.51%, 3/8/2001 249,999 249,999
273,000 273,000 FRN, #, 5.61%, 7/19/2001 273,000 273,000
BellSouth
Telecommunications,
250,000 250,000 Inc., FRN, 6.56%,1/4/2002 250,00 250,000
SBC Communications,
Inc., FRN, #, 5.34%,
356,000 356,000 5/15/2001 355,986 355,986
------------------------------------
TOTAL TELECOMMUNICATION 1,128,985 - - 1,128,985
------------------------------------
TOTAL CORPORATE NOTES &
BONDS 21.63% 9,390,978 1,548,973 - 10,939,951
-------------------------------
FLOATING RATE NOTES 8.17%
-------------------------------
American Express
Centurion,
21,500 21,500 5.54%, 3/16/2001 21,500 21,500
100,000 100,000 5.67%, 3/1/2001 100,000 100,000
25,000 25,000 MTN, 5.53%, 4/12/2001 25,000 25,000
Associates Corp. NA,
325,000 325,000 6.43%, 3/29/2001 325,000 325,000
Bank of America Corp.,
130,000 130,000 5.65%, 3/1/2001 129,997 129,997
470,000 470,000 5.67%, 3/1/2001 470,000 470,000
Bank of Scotland
(Scotland), 144A, 6.65%,
384,500 384,500 3/5/2001 384,500 384,500
17
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
Bayerische Hypo
Vereinsbank (Germany),
300,000 300,000 5.59%, 3/1/2001 299,919 299,919
Bayerische Landesbank
Girozentrale (Germany),
200,000 200,000 5.61%, 3/1/2001 199,957 199,957
Commerzbank AG
(Germany), 5.80%,
10,000 10,000 3/1/2001 10,000 10,000
First Union National
Bank,
45,000 45,000 5.66%, 3/1/2001 45,000 45,000
500,000 500,000 5.67%, 3/1/2001 500,000 500,000
Household Bank FSB,
15,000 15,000 5.88%, 4/9/2001 15,003 15,003
5,000 5,000 6.55%, 4/3/2001 5,001 5,001
Lehman RACERS 144A,
Series 1999-35-MM,
165,000 165,000 5.60%, 3/15/01 165,000 165,000
Lehman RACERS 144A,
Series 2000-15-MM-MBS,
175,000 175,000 5.59%, 3/13/2001 175,000 175,000
SPARCS, Series 2000-1,
447,000 447,000 5.70%, 4/24/2001 447,000 447,000
Unilever (Netherlands),
135,000 135,000 6.71%, 3/7/2001 135,000 135,000
US Bank NA Minnesota,
75,000 75,000 5.63%, 3/1/2001 74,997 74,997
US Bank North Dakota,
100,000 100,000 5.65%, 3/1/2001 99,997 99,997
Wells Fargo & Co.,
8,000 8,000 6.78%, 3/15/2001 8,010 8,010
52,000 52,000 MTN, 6.49%, 3/19/2001 51,994 51,994
Wells Fargo Financial
Inc., MTN, Series C,
100,000 100,000 5.62%, 3/1/2001 99,981 99,981
Westdeutsche Landesbank
New York (Germany),
Series CD, 5.48%,
342,000 342,000 3/23/2001 341,989 341,989
------------------------------------
TOTAL FLOATING RATE NOTES - 4,129,845 - 4,129,845
-------------------------------
FUNDING AGREEMENT/GIC 1.74%
-------------------------------
50,000 50,000 AIG Funding Inc., 50,000 50,000
Floating Rate, 6.63%,
10/1/2001
First Allmerica
Financial Life Insurance
Co., Floating Rate,
25,000 25,000 5.72%, 4/6/2001 25,000 25,000
G E Financial Assurance,
Floating Rate, 6.81%,
150,000 150,000 3/1/2001 150,000 150,000
Jackson National Life
Insurance Co.,
Floating Rate, 5.83%,
100,000 100,000 1/18/2002 100,000 100,000
Floating Rate, 5.86%,
80,000 80,000 9/1/2003 80,000 80,000
MetLife Funding Inc.,
Floating Rate, #, 6.81%,
100,000 100,000 6/1/2001 100,000 100,000
Security Life of Denver
Insurance Co., Floating
275,000 275,000 Rate, 5.43%, 2/27/2002 275,000 275,000
Travelers Insurance Co.,
Floating Rate, 5.71%,
50,000 50,000 4/24/2001 50,000 50,000
United of Omaha Life
Insurance Company,
Floating Rate, 5.72%,
50,000 50,000 5/17/2002 50,000 50,000
------------------------------------
TOTAL FUNDING
AGREEMENT/GIC 880,000 - - 880,000
-------------------------------
REPURCHASE AGREEMENT 0.69%
-------------------------------
18
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
51,206 51,206 Deutsche Bank 51,206 51,206
Securities, Tri-Party,
5.47%, due 3/1/2001
(Dated 2/28/2001,
Proceeds $51,214,
Secured by Federal
National Mortgage
Association, $51,808,
5.75%, due 2/15/2008,
Market Value $52,230)
Goldman Sachs Repurchase
Agreement, 5.41%,
300,000 300,000 3/1/2001 300,000 300,000
------------------------------------
TOTAL REPURCHASE
AGREEMENT 51,206 300,000 - 351,206
-------------------------------
RESIDENTIAL MORTGAGE
BACKED SECURITIES 0.57%
-------------------------------
COLLATERALIZED MORTGAGE
OBLIGATIONS
Merrill Lynch Mortgage Investors,
Ser. 2000-WM2, Class A1, FRN,
231,069 231,069 5.41%, 11/27/2001 231,069 231,069
Ser. 2000-WM2, Class A2, 6.68%,
57,583 57,583 11/27/2001 57,583 57,583
------------------------------------
TOTAL RESIDENTIAL MORTGAGE BACKED
SECURITIES 288,652 - - 288,652
-------------------------------
STATE AND MUNICIPAL
OBLIGATIONS 0.31%
-------------------------------
California Housing Finance
Agency, Single Family Housing,
Home Mortgage, Taxable, Ser. M,
Rev.,
20,205 20,205 FRDO, 5.31%, 3/5/2001 20,205 20,205
33,530 33,530 FRDO, 5.31%, 3/5/2001 33,530 33,530
California Pollution Control
Financing Authority,
Environmental Improvement, Shell
Oil Co. Project, Taxable, Ser. B,
20,000 20,000 Rev., FRDO, 5.46%, 3/7/2001 20,000 20,000
Sacramento County, California,
Taxable, Rev., FRDO, 5.45%,
22,000 22,000 3/7/2001 22,000 22,000
Sault Sainte Marie, Michigan,
Tribe Building Authority,
Taxable, Rev., FRDO, 7.04%,
3,636 3,636 6/1/2001 3,636 3,636
SSM Healthcare, Missouri Health
Facilities, Taxable, Ser. E,
16,200 16,200 Rev., FRDO, 5.50%, 3/6/2001 16,200 16,200
Texas State, Veterans Housing
Assistance, Taxable, Ser. A-2,
32,500 32,500 GO, FRDO, 5.45%, 3/7/2001 32,500 32,500
Wake Forest University, Series
1997, 5.28%, 3/7/2001 (LOC:
6,200 6,200 Wachovia Bank) 6,200 6,200
------------------------------------
TOTAL STATE AND MUNICIPAL
OBLIGATIONS 148,071 6,200 - 154,271
-------------------------------
TIME DEPOSITS 6.12%
-------------------------------
ABN AMRO Bank N.V. (Netherlands),
300,000 (300,000)(a) - 5.54%, 3/1/2001 300,000 (300,000) (a) -
Allied Irish Banks PLC (United
50,000 50,000 Kingdom), 6.66%, 3/30/2001 50,000 50,000
Bank of Brussels (Belgium),
250,000 250,000 5.56%, 3/1/2001 250,000 250,000
Bank of Ireland (Ireland), 5.38%,
120,000 120,000 7/2/2001 120,000 120,000
Bank of Nova Scotia (Canada),
100,000 100,000 5.50%, 7/16/2001 100,000 100,000
Banque & Caisse d'Epargne de
460,896 460,896 l'Etat, 5.53%, 3/1/2001 460,896 460,896
Bayerische Hypo-und Vereinsbank
AG (Germany), (Yankee), 5.66%,
134,000 134,000 3/1/2001 134,000 134,000
Caisse des Depots et
Consignations (France), -
750,000 (750,000)(a) - 5.53%, 3/1/2001 750,000 (750,000) (a) -
19
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
300,000 (300,000)(a) - 5.54%, 3/1/2001 300,000 (300,000) (a) -
Caja De Madrid Bank (Spain), -
59,000 59,000 5.38%, 7/10/2001 59,000 59,000
60,000 60,000 6.64%, 4/27/2001 60,000 60,000
37,000 37,000 6.65%, 4/24/2001 37,000 37,000
110,000 110,000 6.65%, 7/24/2001 110,000 110,000
75,000 75,000 6.67%, 11/19/2001 75,000 75,000
Canadian Bank (Canada), 5.66%,
200,000 (200,000)(a) - 3/1/2001 200,000 (200,000) (a) -
Credit Suisse First Boston (Swiss
Bank), (Switzerland), 5.56%,
200,000 (200,000)(a) - 3/1/2001 200,000 (200,000) (A) -
Deutsche Bank (Germany), 5.53%,
375,000 (375,000)(a) - 3/1/2001 375,000 (375,000) (a) -
ING Bank N.V. (Netherlands),
275,000 (275,000)(a) - 5.63%, 3/1/2001 275,000 (275,000) (a) -
Landesbank Baden-Wuerttemberg
100,000 (67,646)(a) 32,354 (Germany), 5.56%, 3/1/2001 100,000 (65,646) 34,354
Landesbank Schleswig Holstein
100,000 100,000 (Germany), 6.69%, 4/17/2001 100,000 100,000
Societe Generale, (France),
192,050 192,050 5.53%, 3/1/2001 192,050 192,050
250,000 250,000 5.53%, 3/1/2001 250,000 250,000
200,280 200,280 5.63%, 3/1/2001 200,280 200,280
417,044 417,044 5.63%, 3/1/2001 417,044 417,044
Svenska Handelsbanken, Inc.
175,000 175,000 (Sweden), 5.53%, 3/1/2001 175,000 175,000
223,500 223,500 Swedbank (Sweden), 5.59%, 3/1/2001 223,500 223,500
Wells Fargo Bank, N.A., 5.55%,
48,000 48,000 4/30/2001 48,000 48,000
------------------------------------
TOTAL TIME DEPOSITS 3,883,544 1,678,226 (2,465,646) 3,096,124
-------------------------------
U.S. GOVERNMENT AGENCY
SECURITIES 2.90%
-------------------------------
25,000 25,000 Federal Farm Credit Bank, DN, 24,426 24,426
4.86%, 8/22/2001
Federal Home Loan Bank,
13,702 13,702 DN, 4.95%, 8/3/2001 13,416 13,416
5,488 5,488 DN, 4.96%, 8/10/2001 5,368 5,368
20,375 20,375 DN, 4.96%, 8/15/2001 19,917 19,917
10,105 10,105 DN, 4.97%, 8/17/2001 9,875 9,875
40,456 40,456 DN, 4.97%, 8/24/2001 39,497 39,497
75,000 75,000 DN, 6.51%, 3/15/2001 74,822 74,822
Federal Home Loan Mortgage Corp.,
160,000 160,000 DN, 4.86%, 7/27/2001 156,869 156,869
23,000 23,000 DN, 4.86%, 8/16/2001 22,482 22,482
165,000 165,000 DN, 4.92%, 7/27/2001 161,734 161,734
39,295 39,295 DN, 4.95%, 7/13/2001 38,578 38,578
192,000 192,000 DN, 4.95%, 8/16/2001 187,671 187,671
Federal National Mortgage
Association,
100,000 100,000 DN, 4.83%, 7/30/2001 98,003 98,003
20,000 20,000 DN, 4.84%, 8/16/2001 19,556 19,556
334,120 334,120 DN, 4.89%, 8/23/2001 326,298 326,298
100,000 100,000 DN, 4.95%, 8/16/2001 97,741 97,741
98,856 98,856 DN, 4.97%, 8/2/2001 96,801 96,801
76,762 76,762 DN, 4.97%, 8/9/2001 75,094 75,094
-----------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT
AGENCY SECURITIES 823,979 644,169 1,466,148
-----------------------------------------------------------------------------------------
20
THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINED SCHEDULE OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- ------------------------------------------ ----------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN
PRIME PRIME PRIME PRIME PRIME PRIME
MONEY MONEY MONEY MONEY MONEY MONEY
MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET
FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND
- ------------------------------------------ ----------------------------------------------------
-----------------------------------------------------------------------------------------
TOTAL INVESTMENTS 100.55% $29,704,751 $23,618,293 $(2,465,646) $50,857,398
-----------------------------------------------------------------------------------------
TOTAL COST $29,704,751 $23,618,293 $(2,465,646) $50,857,398
-----------------------------------------------------------------------------------------
TOTAL NET ASSETS $50,576,945
-----------------------------------------------------------------------------------------
DN - Discount Notes
ECN - Extendible Commercial Note. The maturity date shown is the call date. The
interest rate shown is the effective yield at the date of purchase.
FRDO - Floating Rate Demand Obligation. The maturity date shown is the actual
maturity date. The rate shown is the rate in effect at February 28, 2001.
FRN - Floating Rate Note. The maturity shown is the actual Maturity date. The
rate shown is the rate in effect at February 28, 2001.
FSB -
GIC - Guaranteed Insurance Contract
GO - General Obligation
LOC - Letter of Credit MM-MBS
MTN - Medium Term Note
RACERS - Restructured Asset Certificates
Rev. - Revenue Bond Ser. - Series
SPARCS - Structured Product Asset Return
144A - Securities restricted for resale to Qualified Institutional Buyers
# - SECURITY MAY ONLY BE SOLD TO QUALIFIED INSTITUTIONAL BUYERS
(a) REFLECTS THE REDEMPTION OF SHORT-TERM SECURITIES OF THE J.P. MORGAN
MANAGER'S MONEY MARKET FUND, JPM INSTITUTIONAL MONEY MARKET FUND, LTD. AND
J.P. MORGAN INSTITUTIONAL SERVICE MONEY MARKET FUND, LTD.
21
J.P. MORGAN PRIME MONEY MARKET FUND / J.P. MORGAN INSTITUTIONAL PRIME MONEY
MARKET FUND / J.P. MORGAN INSTITUTIONAL SERVICE PRIME MONEY MARKET FUND
J.P. MORGAN PRIME MONEY MARKET RESERVES FUND / J.P. MORGAN INSTITUTIONAL
DIRECT PRIME MONEY MARKET FUND
J.P. MORGAN PRIME CASH MANAGEMENT FUND / THE PRIME MONEY MARKET
PORTFOLIO/ JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AS OF FEBRUARY 28, 2001 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
J.P. MORGAN J.P. MORGAN
J.P. MORGAN INSTITUTIONAL J.P. MORGAN INSTITUTIONAL
J.P. MORGAN INSTITUTIONAL SERVICE PRIME DIRECT
PRIME PRIME PRIME MONEY PRIME
MONEY MONEY MONEY MARKET MONEY
MARKET MARKET MARKET RESERVES MARKET
FUND FUND FUND FUND FUND
ASSETS:
Investment Securities, at Value $ - $ - $ - $ - $ -
Investment in The Prime Money Market
Portfolio ("Portfolio"), at Value 4,681,811 14,165,871 1,368,882 280,538 20,431
Cash - - - - -
Deferred Organization Expenses - - 4 - -
Prepaid Trustees' Fees and Expenses 4 8 2 - -
Other Assets 4 4 1 - -
Receivable: - - - - -
Interest - - - - -
Fund Shares Sold - - - - -
Expense Reimbursements - 1,561 105 38 17
------------------------------------------------------------------------------
Total Assets 4,681,819 14,167,444 1,368,994 280,576 20,448
------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment Securities Purchased - - - - -
Fund Shares Redeemed - - - - -
Dividends 18,639 63,295 7,351 1,189 85
Accrued Liabilities:
Investment Advisory Fees - - - - -
Administrative Services Fees 80 274 30 6 -
Shareholder Servicing Fees 865 1,208 67 14 1
Distribution Fees - - - 67 -
Custody Fees - - - - -
Administration Fees 5 7 2 - -
Service Organization Fees - - 335 67 2
Fund Services Fees - 3 - - -
Other 143 45 112 73 53
------------------------------------------------------------------------------
Total Liabilities 19,732 64,832 7,897 1,416 141
------------------------------------------------------------------------------
NET ASSETS:
Paid-in Capital 4,662,391 14,102,966 1,361,171 279,169 20,307
Accumulated Undistributed /(Distributions
in Excess of) Net Investment Income - 62 5 - -
Accumulated Net Realized Loss on Investment (304) (416) (79) (9) -
------------------------------------------------------------------------------
Net Assets $4,662,087 $14,102,612 $ 1,361,097 $ 279,160 $ 20,307
==============================================================================
PRO FORMA
COMBINED
J.P. MORGAN THE JPMORGAN JPMORGAN
PRIME PRIME PRIME PRIME
CASH MONEY MONEY MONEY
MANAGEMENT MARKET MARKET PRO FORMA MARKET
FUND PORTFOLIO FUND II ADJUSTMENT FUND
ASSETS:
Investment Securities, at Value $ - $23,618,293 $29,704,751 $ (2,465,646)(f) $50,857,398
Investment in The Prime Money Market
Portfolio("Portfolio"), at Value 535,496 - - (21,053,029)(a) -
Cash - 1 146 - 147
Deferred Organization Expenses - - - (4)(b) -
Prepaid Trustees' Fees and Expenses - 18 - - 32
Other Assets 1 12 143 - 165
Receivable: - - - - -
Interest - 101,001 116,304 - 217,305
Fund Shares Sold - - 13 - 13
Expense Reimbursements - - 7 4(b) 1,732
---------------------------------------------------------------------------------
Total Assets 535,497 23,719,325 29,821,364 (23,518,675) 51,076,792
---------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment Securities Purchased - 198,003 70,252 - 268,255
Fund Shares Redeemed - - 31 - 31
Dividends 1,806 - 122,404 - 214,769
Accrued Liabilities:
Investment Advisory Fees - 2,024 2,331 - 4,355
Administrative Services Fees 8 446 2,096 - 2,940
Shareholder Servicing Fees 91 - 3,718 - 5,964
Distribution Fees 183 - 7 - 257
Custody Fees - 103 204 - 307
Administration Fees 1 20 - - 35
Service Organization Fees - - - - 404
Fund Services Fees - 4 - - 7
Other 69 50 1,978 - 2,523
---------------------------------------------------------------------------------
Total Liabilities 2,158 200,650 203,021 - 499,847
---------------------------------------------------------------------------------
NET ASSETS:
Paid-in Capital 533,344 - 29,619,555 - 50,578,903
Accumulated Undistributed / (Distributions
in Excess of) Net Investment Income - - (152) - (85)
Accumulated Net Realized Loss on Investment (5) - (1,060) - (1,873)
---------------------------------------------------------------------------------
Net Assets $ 533,339 $ 23,518,675 $29,618,343 $(23,518,675) $50,576,945
=================================================================================
(a) Reflects reallocation of investment from the feeder funds to master
portfolio.
(b) Reflects write-off of deferred organization expense.
(c) Reflects the additional number of shares outstanding due to the Concurrent
Reorganization.
(d) Reallocation of the fund's shares of beneficial interest outstanding to
Cash Management, Reserves, Morgan, Premier, Retail, Agency, Class B, Class
C, and Institutional Shares due to the Concurrent Reorganization.
(e) Reallocation of the fund's shares outstanding to Cash Management,
Reserves, Morgan, Premier, Retail, Agency, Class B, Class C, and
Institutional Shares due to the Concurrent Reorganization.
(f) Reflects the redemption in short-term investments of J.P. Morgan
Manager's Money Market Fund, JPM Institutional Money Market Fund, Ltd.
and J.P. Morgan Institutional Service Money Market Fund, Ltd.
* All classes
See Notes to Pro Forma Financial Statements
22
J.P. MORGAN J.P. MORGAN
J.P. MORGAN INSTITUTIONAL J.P. MORGAN INSTITUTIONAL
J.P. MORGAN INSTITUTIONAL SERVICE PRIME DIRECT
PRIME PRIME PRIME MONEY PRIME
MONEY MONEY MONEY MARKET MONEY
MARKET MARKET MARKET RESERVES MARKET
FUND FUND FUND FUND FUND
Shares of Beneficial Interest Outstanding
($.001 par value; unlimited number of
shares authorized) 4,662,032 14,102,955 1,361,177 279,169 20,307
Shares Outstanding
Premier
Vista (renamed Morgan)
Class B
Class C
Institutional (renamed Agency)
Reserves
Net Asset Value Per Share $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
PRO FORMA WITH CONCURRENT REORGANIZATION
JP MORGAN PRIME MONEY MARKET FUND
SHARES OUTSTANDING
Cash Management - - - - -
Reserves - - - - -
Morgan - - - - -
Premier - - - - -
Retail - - - - -
Agency - - - - -
Class B - - - - -
Class C - - - - -
Institutional - - - - -
NET ASSET VALUE PER SHARE
Cash Management - - - -
Reserves - - - -
Morgan - - - -
Premier - - - -
Retail - - - -
Agency - - - -
Class B - - - -
Class C - - - -
Institutional - - - -
------------------------------------------------------------------------------
Cost of Investments $ - $ - $ - $ - $ -
==============================================================================
PRO FORMA
COMBINED
J.P. MORGAN THE JPMORGAN JPMORGAN
PRIME PRIME PRIME PRIME
CASH MONEY MONEY MONEY
MANAGEMENT MARKET MARKET PRO FORMA MARKET
FUND PORTFOLIO FUND II ADJUSTMENT FUND
Shares of Beneficial Interest Outstanding
($.001 par value; unlimited number of
shares authorized) 533,344 - - (20,958,984)(d) -
Shares Outstanding
Premier 2,059,160 (2,059,160)(e) -
Vista (renamed Morgan) 10,213,350 (10,213,350)(e) -
Class B 12,496 (12,496)(e) -
Class C 309 (309)(e) -
Institutional (renamed Agency) 17,334,106 (17,334,106)(e) -
Reserves 123 (123)(e) -
Net Asset Value Per Share $ 1.00 - $ 1.00* - $ -
PRO FORMA WITH CONCURRENT REORGANIZATION
JP MORGAN PRIME MONEY MARKET FUND
SHARES OUTSTANDING
Cash Management - - - 533,344(c) 533,344
Reserves - - - 279,169(c) 279,169
Morgan - - - 10,213,473(c) 10,213,473
Premier - - - 3,420,337(c) 3,420,337
Retail - - - 4,662,032(c) 4,662,032
Agency - - - 17,354,413(c) 17,354,413
Class B - - - 12,496(c) 12,496
Class C - - - 309(c) 309
Institutional - - - 14,102,955(c) 14,102,955
NET ASSET VALUE PER SHARE
Cash Management - - - - $ 1.00
Reserves - - - - $ 1.00
Morgan - - - - $ 1.00
Premier - - - - $ 1.00
Retail - - - - $ 1.00
Agency - - - - $ 1.00
Class B - - - - $ 1.00
Class C - - - - $ 1.00
Institutional - - - - $ 1.00
---------------------------------------------------------------------------------
Cost of Investments $ - $23,618,293 $ 29,704,751 - $53,323,044
=================================================================================
(a) Reflects reallocation of investment from the feeder funds to master
portfolio.
(b) Reflects write-off of deferred organization expense.
(c) Reflects the additional number of shares outstanding due to the Concurrent
Reorganization.
(d) Reallocation of the fund's shares of beneficial interest outstanding to
Cash Management, Reserves, Morgan, Premier, Retail, Agency, Class B, Class
C, and Institutional Shares due to the Concurrent Reorganization.
(e) Reallocation of the fund's shares outstanding to Cash Management,
Reserves, Morgan, Premier, Retail, Agency, Class B, Class C, and
Institutional Shares due to the Concurrent Reorganization.
(f) Reflects the redemption in short-term investments of J.P. Morgan
Manager's Money Market Fund, JPM Institutional Money Market Fund, Ltd.
and J.P. Morgan Institutional Service Money Market Fund, Ltd.
* All classes
See Notes to Pro Forma Financial Statements
23
J.P. MORGAN PRIME MONEY MARKET FUND /
J.P. MORGAN INSTITUTIONAL PRIME MONEY MARKET FUND /
J.P. MORGAN INSTITUTIONAL SERVICE PRIME MONEY MARKET FUND /
J.P. MORGAN PRIME MONEY MARKET RESERVES FUND /
J.P. MORGAN INSTITUTIONAL PRIME DIRECT MONEY MARKET FUND /
J.P. MORGAN PRIME CASH MANAGEMENT FUND / THE PRIME MONEY MARKET PORTFOLIO /
JPMORGAN PRIME MONEY MARKET FUND II
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED FEBRUARY 28, 2001 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
J.P. MORGAN J.P. MORGAN
J.P. MORGAN INSTITUTIONAL J.P. MORGAN INSTITUTIONAL
J.P. MORGAN INSTITUTIONAL SERVICE PRIME DIRECT
PRIME PRIME PRIME MONEY PRIME
MONEY MONEY MONEY MARKET MONEY
MARKET MARKET MARKET RESERVES MARKET
FUND FUND FUND FUND FUND
INCOME:
Interest Income $ - $ - $ - $ - $ -
Allocated Interest Income 263,803 646,625 125,099 23,337 1,186
Allocated Portfolio Expenses (5,766) (14,196) (2,722) (508) (25)
----------------------------------------------------------------------------
Investment Income 258,037 632,429 122,377 22,829 1,161
----------------------------------------------------------------------------
EXPENSES:
Shareholder Servicing Fees 10,161 10,027 957 179 9
Investment Advisory Fees - - - - -
Administrative Services Fees 974 2,238 457 85 5
Service Organization Fee/Distribution Fee - - 4,789 1,786 18
Registration Expenses 394 1,684 250 77 41
Custodian Fees - - - - -
Transfer Agent Fees 4 1 18 2 4
Trustees' Fees and Expenses 47 105 20 1 -
Professional Fees 27 53 16 12 14
Fund Services Fee 60 143 27 5 -
Printing and Postage 15 13 13 11 17
Administration Fees 42 97 20 3 -
Financial and Fund Accounting Services Fee 5 5 19 5 5
Amortization of Organizational Expenses - - 2 - -
Other 263 195 32 46 27
----------------------------------------------------------------------------
Total Expenses 11,992 14,561 6,620 2,212 140
----------------------------------------------------------------------------
Less: Amounts Waived - - - - -
Less: Earnings Credits - - - - -
Less: Expense Reimbursements - 8,703 721 219 112
----------------------------------------------------------------------------
Net Expenses 11,992 5,858 5,899 1,993 28
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net Investment Income 246,045 626,571 116,478 20,836 1,133
----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net Realized Gain (Loss) on Investments (91) (167) (20) (9) 1
Change in Net Unrealized Appreciation/
(Depreciation) of Investments - - - - -
----------------------------------------------------------------------------
Net Realized and Unrealized Appreciation/
(Depreciation) on Investments Allocated
from Portfolio (91) (167) (20) (9) 1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
from Operations $ 245,954 $ 626,404 $ 116,458 $ 20,827 $ 1,134
============================================================================
PRO FORMA
COMBINED
J.P. MORGAN THE JPMORGAN JPMORGAN
PRIME PRIME PRIME PRIME
CASH MONEY MONEY MONEY
MANAGEMENT MARKET MARKET PRO FORMA MARKET
FUND PORTFOLIO FUND II ADJUSTMENT FUND
INCOME:
Interest Income $ - $ 1,259,669 $ 1,076,858 $ (187,055)(e) $2,149,472
Allocated Interest Income 12,602 - - (1,072,652)(c) -
Allocated Portfolio Expenses (275) - - 23,492(b) -
-----------------------------------------------------------------------------
Investment Income 12,327 1,259,669 1,076,858 (1,236,215) 2,149,472
-----------------------------------------------------------------------------
EXPENSES:
Shareholder Servicing Fees - - 29,798 7,055(a) 58,186
Investment Advisory Fees - 20,487 16,596 (3,665)(a,e) 33,418
Administrative Services Fees 45 4,509 16,596 8,509(a) 33,418
Service Organization Fee/Distribution Fee 1,453 1,824 115 (8,046)(a) 1,939
Registration Expenses 145 - 612 - 3,203
Custodian Fees - - 987 2,795(f) 3,782
Transfer Agent Fees 4 - 1,196 - 1,229
Trustees' Fees and Expenses - 205 809 - 1,187
Professional Fees 17 127 294 (68)(g) 492
Fund Services Fee 2 279 - - 516
Printing and Postage 13 13 238 (21)(g) 312
Administration Fees 2 116 - - 280
Financial and Fund Accounting Services Fee 5 - - (44)(f) -
Amortization of Organizational Expenses - - - - 2
Other 14 20 1,337 - 1,934
-----------------------------------------------------------------------------
Total Expenses 1,700 27,580 68,578 6,515 139,898
-----------------------------------------------------------------------------
Less: Amounts Waived - - 7,896 6,514 14,410
Less: Earnings Credits - - 164 164
Less: Expense Reimbursements 96 - 11 436 10,298
-----------------------------------------------------------------------------
Net Expenses 1,604 27,580 60,507 (435) 115,026
-----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net Investment Income 10,723 1,232,089 1,016,351 (1,235,780) 2,034,446
-----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net Realized Gain (Loss) on Investments (5) (356) (143) 291(d) (499)
Change in Net Unrealized Appreciation/
(Depreciation) of Investments - - - -
Net Realized and Unrealized Appreciation/
(Depreciation) on Investments
Allocated from Portfolio (5) (356) (143) 291 (499)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
from Operations $ 10,718 $1,231,733 $ 1,016,208 $(1,235,489) $2,033,947
=============================================================================
(a) Reflects adjustments to investment advisory fee, administrative fees and
shareholder servicing fees and/or related waivers based on the surviving
Fund's revised fee schedule.
(b) Reflects the elimination of master portfolio expenses which have been
(c) Reallocation of investments income to feeder funds
(d) Reallocation of realized and unrealized loss to feeder funds.
(e) Reflects elimination of J.P. Morgan Institutional Money Market Fund, Ltd,
J.P. Morgan Institutional Service Money Market Fund, Ltd. and J.P. Morgan
Manager's Money Market Fund allocated expenses/income.
(f) Reflects new combined custodial agreement.
(g) Reduction reflects expected benefits from combined operations.
See Notes to Pro Forma Statements.
24
J.P. MORGAN PRIME MONEY MARKET FUND, J.P. MORGAN INSTITUTIONAL PRIME
MONEY MARKET FUND, J.P. MORGAN INSTITUTIONAL SERVICE PRIME MONEY MARKET FUND,
J.P. MORGAN PRIME MONEY MARKET RESERVES FUND, J.P. MORGAN INSTITUTIONAL
DIRECT PRIME MONEY MARKET FUND, J.P. MORGAN PRIME CASH MANAGEMENT FUND, THE
PRIME MONEY MARKET PORTFOLIO, JPMORGAN PRIME MONEY MARKET FUND II
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF COMBINATION:
The Pro Forma Combining Statement of Assets and Liabilities, Statement of
Operations and Schedule of Investments ("Pro Forma Statements") reflect the
accounts of The Prime Money Market Portfolio ("Master Portfolio"), J.P. Morgan
Prime Money Market Fund, J.P. Morgan Institutional Prime Money Market Fund, J.P.
Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Prime Money
Market Reserves Fund, J.P. Morgan Institutional Direct Prime Money Market Fund,
J.P. Morgan Prime Cash Management Fund, (collectively the "feeder funds" of the
Master Portfolio) and JPMorgan Prime Money Market Fund II ("JPMPMMF II") as if
the proposed Concurrent Reorganization occurred as of and for the twelve months
ended February 28, 2001.
Under the Concurrent Reorganization, the Pro Forma Statements give effect to the
proposed transfer of all assets and liabilities of Master Portfolio, J.P. Morgan
Prime Money Market Fund, J.P. Morgan Institutional Prime Money Market Fund, J.P.
Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Prime Money
Market Reserves Fund, J.P. Morgan Institutional Direct Prime Money Market Fund,
J.P. Morgan Prime Cash Management Fund and JPMPMMF II in exchange for shares in
JP Morgan Prime Money Market II. The Pro Forma Statements should be read in
conjunction with the historical financial statements of each Fund, which have
been incorporated by reference in their respective Statements of Additional
Information.
2. SHARES OF BENEFICIAL INTEREST:
Immediately prior to the Concurrent Reorganization, JPMPMMF II would commence
offering Cash Management Shares, Reserves Shares, Morgan Shares, Premier Shares,
Retail Shares, Agency Shares, Institutional Shares, Class B Shares and Class C
Shares. The net asset value per share for Cash Management Reserves, Morgan,
Premier, Retail, Agency, Institutional, Class B and Class C, at the commencement
of offering would be identical to the closing net asset value per share for the
JPMPMMF II Institutional Class prior to Concurrent Reorganization.
Under the Concurrent Reorganization, the existing shares of J.P. Morgan Prime
Cash Management Fund would be renamed Cash Management Shares, the existing
shares of J.P. Morgan Prime Money Market Reserves Fund would be renamed Reserves
Shares, the existing shares of JPMPMMF II Reserves and Vista Classes would be
renamed Morgan Class, the existing shares of J.P. Morgan Institutional Service
Prime Money Market Fund and JPMPMMF II Premier Class would be renamed as Premier
Class, the existing shares of J.P. Morgan Prime Money Market Fund would be
renamed as Retail Class, the existing shares of J.P. Morgan Institutional Direct
Prime Money Market Fund and JPMPMMF II Institutional Class would be renamed as
Agency Class, the existing shares of J.P. Morgan Institutional Prime Money
Market Fund would be renamed Institutional Class, and the existing shares of
JPMPMMF II Class B and Class C would remain as such respectively. The net asset
values per share for the following classes: Cash Management, Reserves, Morgan,
Premier, Retail, Agency, Institutional, Class B and Class C, at the commencement
of offering would be identical to the closing net asset value per share for the
JPMPMMF II Institutional Class immediately prior to the Concurrent
Reorganization.
Under the proposed Concurrent Reorganization, each shareholder of J.P. Morgan
Prime Money Market Fund, J.P. Morgan Institutional Prime Money Market Fund,
J.P. Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Prime
Money Market Reserves Fund, J.P. Morgan Institutional Direct Prime Money
Market Fund, and J.P. Morgan Prime Cash Management Fund would receive shares
of JPMPMMF II with a value equal to their holding in their respective funds.
Holders of the J.P. Morgan Prime Cash Management Fund will receive Cash
Management Shares. Holders of the J.P. Morgan Prime Money Market Reserves
Fund will receive Reserve Shares. Holders of Reserves and Vista Classes in
JPMPMMF II will receive Morgan Shares. Holders of J.P. Morgan Institutional
Service Prime Money Market Fund and holders of Premier Class in JPMPMMF II
will receive Premier Shares. Holders of J.P. Morgan Prime Money Market Fund
will receive
25
Retail Shares. Holders of J.P. Morgan Institutional Direct Prime Money Market
Fund and Institutional Class in JPMPMMF II will receive Agency Shares. Holders
of J.P. Morgan Institutional Prime Money Market Fund will receive Institutional
Shares. Holders of Class B and Class C in JPMPMMF II will receive Class B and
Class C Shares respectively. Shareholders of the J.P. Morgan Prime Money Market
Fund, J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan
Institutional Service Prime Money Market Fund, J.P. Morgan Prime Money Market
Reserves Fund, J.P. Morgan Institutional Direct Prime Money Market Fund, and
J.P. Morgan Prime Cash Management Fund will become shareholders of JPMPMMF II.
The Pro Forma net asset value per share assumes the issuance of additional
shares of JPMPMMF II, which would have been issued on February 28, 2001 in
connection with the proposed Concurrent Reorganization. The amount of additional
shares assumed to be issued under the Concurrent Reorganization was calculated
based on February 28, 2001 net assets of J.P. Morgan Prime Money Market Fund,
J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional
Service Prime Money Market Fund, J.P. Morgan Prime Money Market Reserves Fund,
J.P. Morgan Institutional Direct Prime Money Market Fund, J.P. Morgan Prime Cash
Management Fund and net asset value per share of JPMPMMF II - Institutional
Class.
JPMORGAN PRIME MONEY MARKET WITH CONCURRENT REORGANIZATION
Cash Reserves Premier Retail Agency Institutional
Management
Increase in 533,344 279,169 1,361,177 4,662,032 20,307 14,102,955
Shares
Issued
Net Assets $533,339 $279,160 $1,361,097 $4,662,087 $20,307 $14,102,612
2/28/01
Pro Forma $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Net Asset
Value
2/28/01
3. PRO FORMA OPERATIONS:
The Pro Forma Statement of Operations assumes similar rates of gross investment
income for the investments of each Fund. Accordingly, the combined gross
investment income is equal to the sum of each Fund's gross investment income.
Certain expenses have been adjusted to reflect the expected expenses of the
combined entity. The pro forma investment advisory, administration, shareholder
servicing and distribution fees of the combined Fund and/are based on the fee
schedule in effect for the Surviving Fund at the combined level of average net
assets for the twelve months ended February 28, 2001.
26
FORM N-14
PART C - OTHER INFORMATION
Item 15. Indemnification.
Reference is hereby made to Article V of the Registrant's Declaration
of Trust.
The Trustees and officers of the Registrant and the personnel of the
Registrant's investment adviser, administrator and distributor are insured under
an errors and omissions liability insurance policy. The Registrant and its
officers are also insured under the fidelity bond required by Rule 17g-1 under
the Investment Company Act of 1940.
Under the terms of the Registrant's Declaration of Trust, the
Registrant may indemnify any person who was or is a Trustee, officer or employee
of the Registrant to the maximum extent permitted by law; provided, however,
that any such indemnification (unless ordered by a court) shall be made by the
Registrant only as authorized in the specific case upon a determination that
indemnification of such persons is proper in the circumstances. Such
determination shall be made (i) by the Trustees, by a majority vote of a quorum
which consists of Trustees who are neither described in Section 2(a)(19) of the
Investment Company Act of 1940 nor parties to the proceeding, or (ii) if the
required quorum is not obtainable or, if a quorum of such Trustees so directs,
by independent legal counsel in a written opinion. No indemnification will be
provided by the Registrant to any Trustee or officer of the Registrant for any
liability to the Registrant or shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of duty.
Insofar as the conditional advancing of indemnification monies for
actions based upon the Investment Company Act of 1940 may be concerned, such
payments will be made only on the following conditions: (i) the advances must be
limited to amounts used, or to be used, for the preparation or presentation of a
defense to the action, including costs connected with the preparation of a
settlement; (ii) advances may be made only upon receipt of a written promise by,
or on behalf of, the recipient to repay that amount of the advance which exceeds
that amount to which it is ultimately determined that he is entitled to receive
from the Registrant by reason of indemnification; and (iii) (a) such promise
must be secured by a surety bond, other suitable insurance or an equivalent form
of security which assures that any repayments may be obtained by the Registrant
without delay or litigation, which bond, insurance or other form of security
must be provided by the recipient of the advance, or (b) a majority of a quorum
of the Registrant's disinterested, non-party Trustees, or an independent legal
counsel in a written opinion, shall determine, based upon a review of readily
available facts, that the recipient of the advance ultimately will be found
entitled to indemnification.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustee, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
Item 16. Exhibits.
Declaration of Trust.
1 Declaration of Trust, as amended. (1)
2 By-laws. (1)
3 None.
4 Agreement and Plan of Reorganization filed herewith as
Appendix A to the Combined Prospectus/Proxy Statement.
5 None.
6 Form of Investment Advisory Agreement.(6)
7 Distribution and Sub-Administration Agreement dated
August 21, 1995.(6)
8(a) Retirement Plan for Eligible Trustees.(6)
8(b) Deferred Compensation Plan for Eligible Trustees.(6)
9 Custodian Agreement. (1)
10(a) Rule 12b-1 Distribution Plan of Mutual Funds including
Selected Dealer Agreement and Shareholder Service
Agreement. (1) and (3)
10(b) Rule 12b-1 Distribution Plan - Class B Shares (including
forms of Selected Dealer Agreement and Shareholder Servicing
Agreement).(6)
10(c) Form of Rule 12b-1 Distribution Plan - Class C Shares
(including forms of Shareholder Servicing Agreements).(12)
10(d) Form of Rule 18f-3 Multi-Class Plan.(12)
11 Opinion and Consent of Nixon Peabody LLP as to the Legality
of Shares to be filed by Amendment.
12 Opinion and Consent of Simpson Thacher & Bartlett as to Tax
Consequences to be filed by Amendment.
13(a) Transfer Agency Agreement. (1)
13(b) Form of Shareholder Servicing Agreement. (6)
13(c) Form of Administration Agreement.(6)
13(d) Form of Administration Agreement (to be filed by Amendment).
13(e) Form of Sub-Administration Agreement (to be filed by
Amendment).
14 Consent of PricewaterhouseCoopers LLP.
15 None.
16(a) Powers of Attorney for: Fergus Reid, III, H. Richard
Vartabedian, William J. Armstrong, John R.H. Blum, Stuart W.
Cragin, Jr., Roland R. Eppley, Jr., Joseph J. Harkins, W.D.
MacCallan, W. Perry Neff, Richard E. Ten Haken, Irving L.
Thode.
16(b) Powers of Attorney for: Sarah E. Jones and Leonard M.
Spalding, Jr.
17(a) Form of Proxy Card.
17(b) Prospectus for the Surviving Fund to be filed by Amendment.
17(c) Prospectus for the Merging Fund.
17(d) Statement of Additional Information for the Surviving Fund
to be filed by Amendment.
17(e) Statement of Additional Information for the Merging Fund.
17(f) Annual Report of the Surviving Fund dated August 31, 2000.
17(g) Semi-Annual Report of the Surviving Fund dated
February 28, 2001. (to be filed by amendment)
17(h) Annual Report of the Merging Fund and the Master Portfolio
dated November 30, 2000.
- --------------
(1) Filed as an Exhibit to the Registration Statement on Form N-1A of the
Registrant (File No. 33-75250) as filed with the Securities and
Exchange Commission on February 14, 1994.
(2) Filed as an Exhibit to Post-Effective Amendment No. 1 to the
Registration Statement on Form N-1A of the Registrant (File No.
33-75250) as filed with the Securities and Exchange Commission
on August 29, 1994.
(3) Filed as an Exhibit to Post-Effective Amendment No. 2 to the
Registration Statement on Form N-1A of the Registrant (File No.
33-75250) as filed with the Securities and Exchange Commission
on October 28, 1994.
(4) Filed as an Exhibit to Post-Effective Amendment No. 3 to the
Registration Statement on Form N-1A of the Registrant (File No.
33-75250) as filed with the Securities and Exchange Commission
on October 31, 1995.
(5) Filed as an Exhibit to Post-Effective Amendment No. 4 to the
Registration Statement on Form N-1A of the Registrant as filed
with the Securities and Exchange Commission on December 28, 1995.
(6) Filed as an Exhibit to Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A of the Registrant as filed
with the Securities and Exchange Commission on March 7, 1996.
(7) Filed as an Exhibit to Post-Effective Amendment No. 6 to the
Registration Statement on Form N-1A of the Registrant as filed
with the Securities and Exchange Commission on April 22, 1996.
(8) Filed as an exhibit to Post-Effective Amendment No. 7 to the
Registration Statement on Form N-1A of the Registrant as filed
with the Securities and Exchange Commission on September 6, 1996.
(9) Filed as an exhibit to Post-Effective Amendment No. 8 to the
Registration Statement on Form N-1A of the Registrant as filed
with the Securities and Exchange Commission on December 27, 1996.
(10) Filed herewith.
(11) Filed as an exhibit to Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A of the Registrant as filed
with the Securities and Exchange Commission on October 27, 1997.
Item 17. Undertakings.
- --------------
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is
part of this registration statement by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c) of 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.
SIGNATURES
As required by the Securities Act of 1933, this registration statement
has been signed on behalf of the registrant, in the City of New York and the
State of New York, on the 16th day of April, 2001.
MUTUAL FUND TRUST
Registrant
By: /s/ H. Richard Vartabedian
-----------------------------------------
H. Richard Vartabedian
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on April 16, 2001.
* Chairman and Trustee
- -------------------------------------
Fergus Reid, III
/s/ H. Richard Vartabedian President
- ------------------------------------- and Trustee
H. Richard Vartabedian
* Trustee
- -------------------------------------
William J. Armstrong
* Trustee
- -------------------------------------
John R.H. Blum
* Trustee
- -------------------------------------
Stuart W. Cragin, Jr.
* Trustee
- -------------------------------------
Roland R. Eppley, Jr.
* Trustee
- -------------------------------------
Joseph J. Harkins
* Trustee
- -------------------------------------
Sarah E. Jones
* Trustee
- -------------------------------------
W.D. MacCallan
* Trustee
- -------------------------------------
W. Perry Neff
* Trustee
- -------------------------------------
Leonard M. Spalding, Jr.
* Trustee
- -------------------------------------
Irv Thode
* Trustee
- -------------------------------------
Richard E. Ten Haken
/s/ Martin R. Dean Treasurer and
- ------------------------------------ Principal Financial
Martin R. Dean Officer
/s/ H. Richard Vartabedian Attorney in Fact
- -------------------------------------
H. Richard Vartabedian
EXHIBITS
ITEM DESCRIPTION
- ---- -----------
(14) Consent of PricewaterhouseCoopers LLP.
(16) Powers of Attorney.
(17) (a) Form of Proxy Card.
(c) Prospectus for J.P. Morgan Prime Cash Management Fund.
(e) Statement of Additional Information for J.P. Morgan Prime
Cash Management Fund
(f) Annual Report of JPMorgan Prime Money Market Fund II
(formerly, Chase Vista Prime Money Market Fund) dated
August 31, 2000.
(h) Annual Report of J.P. Morgan Prime Cash Management Fund and
The Prime Money Market Portfolio dated November 30, 2000.