As filed with the Securities and Exchange Commission on May 11, 2001
Registration No. 333-58898/811-07342
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U.S. Securities and Exchange Commission
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 1 Post-Effective Amendment No.___
(Check appropriate box or boxes)
Exact Name of Registrant as Specified in Charter:
J.P. MORGAN INSTITUTIONAL FUNDS
Area Code and Telephone Number:
1-800-766-7722
Address of Principal Executive Offices:
522 Fifth Avenue
New York, NY 10036
Name and Address of Agent for Service:
Sharon Weinberg
522 Fifth Avenue
New York, NY 10036
Copies to:
JOSEPH J. BERTINI, ESQ. SARAH E. COGAN, ESQ. JOHN E. BAUMGARDNER, JR.,
PETER B. ELDRIDGE, ESQ. Simpson Thacher & Bartlett ESQ.
c/o J.P. Morgan Fleming Asset 425 Lexington Avenue Sullivan & Cromwell
Management (USA) Inc. New York, NY 10017-3954 125 Broad Street
522 Fifth Avenue New York, NY 10004
New York, NY 10036
Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective under the Securities Act of 1933.
It is proposed that this filing will become effective on May 13, 2001 pursuant
to Rule 488 under the Securities Act of 1933.
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is required because an indefinite number of shares have previously been
registered on Form N-1A (Registration No. 033-54642/811-07342) pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Registrant's
Form 24f-2 for the fiscal year ended November 30, 2000 was filed on February 28,
2001. Pursuant to Rule 429, this Registration Statement relates to the aforesaid
Registration Statement on Form N-1A.
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J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND
A SERIES OF J.P. MORGAN FUNDS
522 FIFTH AVENUE
NEW YORK, NY 10036
1-800-521-5411
May 13, 2001
Dear Shareholder:
A special meeting of the shareholders of J.P. Morgan International
Opportunities Fund (the "Merging Fund"), a series of J.P. Morgan Funds ("JPMF"),
will be held on July 3, 2001 at 9:00 a.m., Eastern time. Formal notice of the
meeting appears after this letter, followed by materials regarding the meeting.
As you may be aware, The Chase Manhattan Corporation has recently completed
a merger with J.P. Morgan & Co. Incorporated, the former corporate parent of the
investment adviser of the Merging Fund's assets, to form J.P. Morgan Chase & Co.
("JPMC"). As a result of this merger, JPMC is seeking to reorganize parts of its
investment management business and funds advised by its subsidiaries. At the
special meeting (the "Meeting"), shareholders will be asked to consider and vote
upon the proposed reorganization of the Merging Fund into J.P. Morgan
Institutional International Opportunities Fund (the "Surviving Fund"), a series
of J.P. Morgan Institutional Funds ("JPMIF") (the "Reorganization"). After the
Reorganization, shareholders of the Merging Fund will hold Select Class Shares
of the Surviving Fund. The investment objective and policies of the Surviving
Fund are identical to those of the Merging Fund. Both the Merging Fund and the
Surviving Fund currently invest all of their investable assets in The
International Opportunities Portfolio (the "Master Portfolio"). In connection
with the Reorganization, the Surviving Fund will cease to operate under a
"master/feeder" structure and instead will invest directly in portfolio
securities. In connection with the Reorganization, the Surviving Fund will be
renamed "JPMorgan Fleming International Opportunities Fund."
The Surviving Fund has also entered into agreements and plans of
reorganization with JPMorgan Fleming International Equity Fund (formerly, Chase
Vista International Equity Fund), a series of Mutual Fund Group ("MFSG") with
similar investment objectives and policies to the Merging Fund (the "Chase Fund
Reorganization" or the "Concurrent Reorganization"). If the Concurrent
Reorganization is approved by its shareholders and certain other conditions are
met, The JPMorgan Fleming International Equity Fund will be reorganized into the
Surviving Fund. The consummation of the Chase Fund Reorganization is contingent
upon the consummation of the Reorganization.
At the Meeting, you will also be asked to consider and vote upon the
election of Trustees of JPMF.
The investment adviser for the assets of both the Merging Fund and the
Surviving Fund is JPMIM.
Please see the enclosed Combined Prospectus/Proxy Statement for detailed
information regarding the proposed Reorganization, the Concurrent
Reorganizations and a comparison of the Merging Fund and JPMF to the Surviving
Fund and JPMIF. The cost and expenses associated with the Reorganization,
including costs of soliciting proxies, will be borne by JPMC and not by the
Merging Fund, JPMF, the Surviving Fund, JPMIF or their shareholders.
If approval of the Reorganization is obtained, you will automatically
receive Select Class shares of the Surviving Fund.
The Proposals have been carefully reviewed by the Board of Trustees of JPMF,
which has approved the Proposals.
THE BOARD OF TRUSTEES OF JPMF UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
EACH OF THE PROPOSALS.
Following this letter is a list of commonly asked questions. If you have any
additional questions on voting of proxies and/or the meeting agenda, please call
us at 1-800-521-5411.
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 THE NUMBER PROVIDED ON THE PROXY CARD IN ORDER TO VOTE 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,
/s/ Matthew Healey
Matthew Healey
Chairman
SPECIAL NOTE: Certain shareholders may receive a telephone call from our
proxy solicitor, D.F. King & Co., Inc., or us to answer any questions they 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 the number provided on the proxy card in order to vote.
WHY IS THE REORGANIZATION BEING PROPOSED?
The Reorganization is being proposed because each Fund's board believes that
it is in the best interests of its shareholders.
IF THE REORGANIZATION IS APPROVED, WHAT WILL HAPPEN?
In connection with the Reorganization, the Merging Fund will transfer all of
its assets and liabilities to the Surviving Fund and will receive, in exchange,
Select Class shares of the Surviving Fund. The Merging Fund will then be
liquidated and the Select Class shares of the Surviving Fund will be distributed
pro rata to shareholders. After the Reorganization, you will own Select Class
shares of the Surviving Fund rather than shares of the Merging Fund.
WHAT WILL BE THE EFFECT ON THE INVESTMENT STRATEGIES ASSOCIATED WITH MY
INVESTMENT IF THE PROPOSED CHANGES ARE APPROVED?
The Surviving Fund has identical investment objectives and policies to those
of the Merging Fund. Both the Merging Fund and the Surviving Fund currently
invest all of their investable assets in the Master Portfolio. In connection
with the Reorganization, the Surviving Fund will cease to operate under a
"master/feeder" structure and will instead invest its assets directly in
portfolio securities.
HOW WILL THE FEES AND EXPENSES ASSOCIATED WITH MY INVESTMENT BE AFFECTED?
As a result of the Reorganization, the contractual (or pre-waiver) and
actual (or post-waiver) total expense ratios will be the same or less for your
shares in the Surviving Fund than they are for your shares in the Merging Fund.
If an increase does occur, Morgan Guaranty Trust Company of New York, the
Surviving Fund's administrator, has contractually agreed to waive fees payable
to it and reimburse expenses so that the actual total operating expenses will
remain the same for THREE YEARS after the Reorganization.
WILL THERE BE ANY CHANGE IN WHO MANAGES MY INVESTMENT?
No. JPMIM will continue to manage the assets of the Surviving Fund after the
Reorganization.
WHO WILL PAY FOR THE REORGANIZATION?
The cost and expenses associated with the Reorganization, including costs of
soliciting proxies, will be borne by JPMC and not by either the Merging Fund or
the Surviving Fund (or shareholders of either fund).
WHAT IF I DO NOT VOTE OR VOTE AGAINST THE REORGANIZATION, YET APPROVAL OF THE
REORGANIZATION IS OBTAINED?
You will automatically receive Select Class shares of the Surviving Fund.
HOW WILL THE PROPOSED CONCURRENT REORGANIZATION AFFECT MY INVESTMENT IF IT IS
APPROVED BY THE SHAREHOLDERS OF THE OTHER FUND?
If the Concurrent Reorganization is approved and certain other conditions
are met, the assets and liabilities of this other merging fund will become
assets and liabilities of the Surviving Fund. The consummation of the
Reorganization is contingent upon the consummation of the Feeder Reorganization,
but not the Chase Fund Reorganization.
WHY AM I BEING ASKED TO VOTE ON THE ELECTION OF TRUSTEES FOR JPMF IF AFTER THE
REORGANIZATION I WILL OWN SHARES IN THE SURVIVING FUND, A SERIES OF JPMIF?
Even if the Reorganization is approved, other mutual funds that are series
of JPMF will continue to exist and operate. All shareholders of any series of
JPMF as of the record date (April 6, 2001) are required to be given a vote on
proposals regarding Trustees. Because as of the record date you are still a
shareholder in JPMF, you are entitled to vote on this proposal. Shareholders of
JPMIF are being asked to approve the same Trustees that are proposed for JPMF.
AS A HOLDER OF SHARES OF THE MERGING FUND, WHAT DO I NEED TO DO?
Please read the enclosed Combined Prospectus/Proxy Statement and vote. Your
vote is important! Accordingly, please sign, date and mail the proxy card(s)
promptly in the enclosed return envelope as soon as possible after reviewing the
enclosed Combined Prospectus/Proxy Statement.
MAY I ATTEND THE MEETING IN PERSON?
Yes, you may attend the Meeting in person. If you complete a proxy card and
subsequently attend the Meeting, your proxy can be revoked. Therefore, to ensure
that your vote is counted, we strongly urge you to mail us your signed, dated
and completed proxy card(s) even if you plan to attend the Meeting.
J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND
A SERIES OF J.P. MORGAN FUNDS
522 FIFTH AVENUE
NEW YORK, NY 10036
1-800-521-5411
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 3, 2001
To the Shareholders of
J.P. Morgan International Opportunities Fund:
NOTICE IS HEREBY GIVEN THAT a Special Meeting (the "Meeting") of the
shareholders ("Shareholders") of J.P. Morgan International Opportunities Fund
(the "Merging Fund"), a series of J.P. Morgan Funds ("JPMF"), will be held at
the offices of J.P. Morgan Chase & Co., 1211 Avenue of the Americas,
41st Floor, New York, New York, on July 3, 2001 at 9:00 a.m. (Eastern time), for
the following purposes:
ITEM 1. To consider and act upon a proposal to approve an Agreement and Plan
of Reorganization (the "Reorganization Plan") by and among JPMF, on
behalf of the Merging Fund, J.P. Morgan Institutional Funds ("JPMIF"),
on behalf of J.P. Morgan Institutional International Opportunities
Fund (the "Surviving Fund") and J.P. Morgan Chase & Co., and the
transactions contemplated thereby, including (a) the transfer of all
of the assets and liabilities of the Merging Fund to the Surviving
Fund in exchange for Select Class shares of the Surviving Fund (the
"Select Class Shares"), and (b) the distribution of such Select Class
Shares to the Shareholders of the Merging Fund in connection with the
liquidation of the Merging Fund.
ITEM 2. To elect eight Trustees to serve as members of the Board of Trustees
of JPMF.
ITEM 3. To transact such other business as may properly come before the
Meeting or any adjournment(s) thereof.
YOUR FUND TRUSTEES UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOR OF ITEMS 1
AND 2.
Each proposal is described in the accompanying Combined Prospectus/Proxy
Statement. Attached as Appendix A to the Combined Prospectus/Proxy Statement is
a copy of the Reorganization Plan.
Shareholders of record as of the close of business on April 6, 2001 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment(s)
thereof. The Meeting will be a joint meeting with the meetings of shareholders
of all series of JPMF, which meetings are being called for purposes of
considering proposals 1 and 2 above and certain other proposals not applicable
to you.
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY THE BOARD OF
TRUSTEES OF JPMF. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE SPECIAL MEETING.
PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO
THE MERGING FUND A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY
OR BY ATTENDING THE SPECIAL MEETING AND VOTING IN PERSON.
/s/ Sharon Weinberg
SHARON WEINBERG
SECRETARY
May 13, 2001
COMBINED PROSPECTUS/PROXY STATEMENT
DATED MAY 13, 2001
ACQUISITION OF THE ASSETS AND LIABILITIES OF
J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND
A SERIES OF J.P. MORGAN FUNDS
522 FIFTH AVENUE
NEW YORK, NY 10036
1-800-521-5411
BY AND IN EXCHANGE FOR SELECT CLASS SHARES OF
J.P. MORGAN INSTITUTIONAL INTERNATIONAL OPPORTUNITIES FUND
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
522 FIFTH AVENUE
NEW YORK, NY 10036
1-800-766-7722
This Combined Prospectus/Proxy Statement relates to the proposed
reorganization of J.P. Morgan International Opportunities Fund (the "Merging
Fund"), a series of J.P. Morgan Funds ("JPMF"), into J.P. Morgan Institutional
International Opportunities Fund (the "Surviving Fund"), a series of
J.P. Morgan Institutional Funds ("JPMIF"). If approved by shareholders of the
Merging Fund, the proposed reorganization will be effected by transferring all
of the assets and liabilities of the Merging Fund to the Surviving Fund, which
has identical investment objectives and policies to those of the Merging Fund,
in exchange for Select Class shares of the Surviving Fund (the
"Reorganization"). Therefore, as a result of the proposed Reorganization,
current shareholders of the Merging Fund (the "Merging Fund Shareholders") will
become shareholders of the Surviving Fund ("Surviving Fund Shareholders"). JPMF
and JPMIF are both open-end management investment companies offering shares in
several portfolios. In connection with the Reorganization, the J.P. Morgan
Institutional International Opportunities Fund will be renamed "JPMorgan Fleming
International Opportunities Fund."
In connection with the proposed Reorganization, the Surviving Fund will
implement a new multi-class structure under which it will offer Class A,
Class B, Select Class, and Institutional Class. If the proposed Reorganization
is approved by Merging Fund Shareholders, each Merging Fund Shareholder will
receive Select Class shares (the "Select Class Shares") of the Surviving Fund
with a value equal to such Merging Fund Shareholder's holdings in the Merging
Fund. Merging Fund Shareholders will not pay a sales charge on Select Class
Shares received in the Reorganization or on subsequent purchases or exchanges of
Select Class Shares of the Surviving Fund or other JPMorgan Funds.
At the Meeting, you will also be asked to consider and vote upon the
election of Trustees of JPMF.
The terms and conditions of these transactions are more fully described in
this Combined Prospectus/ Proxy Statement and in the Agreement and Plan of
Reorganization (the "Reorganization Plan") among JPMF, on behalf of the Merging
Fund, JPMIF, on behalf of the Surviving Fund and J.P.Morgan Chase & Co.,
attached to this Combined Prospectus/Proxy Statement as Appendix A.
The Board of Trustees for JPMF is soliciting proxies in connection with a
Special Meeting (the "Meeting") of Shareholders to be held on July 3, 2001 at
9:00 a.m., Eastern time, at the offices of J.P. Morgan Chase & Co., 1211 Avenue
of the Americas, 41st Floor, New York, NY, at which meeting shareholders in the
Merging Fund will be asked to consider and approve the proposed Reorganization
Plan, certain transactions contemplated by the Reorganization Plan and certain
other proposals. This Combined Prospectus/Proxy Statement constitutes the proxy
statement of the Merging Fund for the meeting of its Shareholders and also
constitutes JPMIF's prospectus for Select Class Shares that have been registered
with the Securities and Exchange Commission (the "Commission") and are to be
issued in connection with the Reorganization.
This Combined Prospectus/Proxy Statement, which should be retained for
future reference, sets forth concisely the information about JPMF and JPMIF that
an investor should know before voting on the proposals. The current Prospectus,
Statement of Additional Information and Annual Reports (including the Annual
Report of The International Opportunities Portfolio) of the Merging Fund and the
preliminary Prospectus, Statement of Additional Information and the current
Annual Report of the Surviving Fund are
incorporated herein by reference, and the preliminary Prospectus and current
Annual Report (including the Annual Report of The International Opportunities
Portfolio) for the Surviving Fund are enclosed with this Combined
Prospectus/Proxy Statement. A Statement of Additional Information relating to
this Combined Prospectus/Proxy Statement dated May 13, 2001 containing
additional information about JPMF 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 may be
obtained without charge by writing to JPMF at its address noted above or by
calling 1-800-521-5411.
This Combined Prospectus/Proxy Statement is expected to first be sent to
shareholders on or about May 13, 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 JPMF OR JPMIF.
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.
TABLE OF CONTENTS
Page
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INTRODUCTION...................................... 1
PROPOSAL 1: REORGANIZATION PLAN................... 1
SUMMARY........................................... 1
COMPARATIVE FEE AND EXPENSE TABLES................ 4
RISK FACTORS...................................... 5
INFORMATION RELATING TO THE PROPOSED
REORGANIZATION................................... 6
PURCHASES, REDEMPTIONS AND EXCHANGES.............. 10
DISTRIBUTIONS AND TAXES........................... 12
COMPARISON OF THE MERGING FUND'S AND THE SURVIVING
FUND'S ORGANIZATION STRUCTURE.................... 13
INFORMATION RELATING TO THE ADVISORY CONTRACTS AND
OTHER SERVICES................................... 14
PROPOSAL 2: ELECTION OF TRUSTEES.................. 17
INFORMATION RELATING TO VOTING MATTERS............ 21
ADDITIONAL INFORMATION ABOUT JPMF................. 22
ADDITIONAL INFORMATION ABOUT JPMIF................ 23
FINANCIAL STATEMENTS AND EXPERTS.................. 23
OTHER BUSINESS.................................... 24
LITIGATION........................................ 24
SHAREHOLDER INQUIRIES............................. 24
APPENDIX A--AGREEMENT AND PLAN OF
REORGANIZATION................................... A-1
INTRODUCTION
GENERAL
This Combined Prospectus/Proxy Statement is being furnished to the
shareholders of the Merging Fund, an open-end management investment company, in
connection with the solicitation by the Board of Trustees of JPMF of proxies to
be used at a Special Meeting of Shareholders of the Merging Fund to be held on
July 3, 2001 at 9:00 a.m., Eastern time, at the offices of J.P. Morgan
Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, New York,
(together with any adjournments thereof, the "Meeting"). The Meeting will be a
joint meeting with the meetings of shareholders of all series of JPMF, which
meetings are being called for purposes of considering proposals 1 and 2 above
and certain other proposals not applicable to you. It is expected that the
mailing of this Combined Prospectus/Proxy Statement will be made on or about
May 13, 2001.
PROPOSAL 1:
REORGANIZATION PLAN
At the Meeting, Merging Fund Shareholders will consider and vote upon the
Agreement and Plan of Reorganization (the "Reorganization Plan") dated May 11,
2001 among JPMF, on behalf of the Merging Fund, JPMIF, on behalf of the
Surviving Fund (the Merging Fund and the Surviving Fund are collectively defined
as the "Funds") and J.P. Morgan Chase & Co., pursuant to which all of the assets
and liabilities of the Merging Fund will be transferred to the Surviving Fund in
exchange for Select Class Shares of the Surviving Fund. As a result of the
Reorganization, Merging Fund Shareholders will become shareholders of the
Surviving Fund and will receive Select Class Shares equal in value to their
holdings in the Merging Fund on the date of the Reorganization. In connection
with the Reorganization, the Surviving Fund will be renamed "JPMorgan Fleming
International Opportunities Fund." Further information relating to the Surviving
Fund is set forth herein, and the Surviving Fund's preliminary Prospectus and
current Annual Report (including the Annual Report of The International
Opportunities Portfolio) is enclosed with this Combined Prospectus/Proxy
Statement.
THE JPMF BOARD UNANIMOUSLY RECOMMENDS 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 voting shares of the
Merging Fund present at the joint meeting if the holders of more than 50% of the
outstanding voting shares of the Merging Fund are present or represented by
proxy and (ii) more than 50% of all outstanding voting shares of the Merging
Fund. If the Reorganization Plan is not approved by the Merging Fund
Shareholders, the JPMF Board will consider other appropriate courses of action.
SUMMARY
The following is a summary of certain information relating to the proposed
Reorganization, the parties thereto and the transactions contemplated thereby,
and is qualified by reference to the more complete information contained
elsewhere in this Combined Prospectus/Proxy Statement, the Prospectus, Statement
of Additional Information and Annual Report (including the Annual Report of The
International Opportunities Portfolio) in respect of each of the Surviving Fund
and the Merging Fund, the preliminary Prospectus and Statement of Additional
Information and the current Annual Report of the Surviving Fund, and the
Reorganization Plan attached to this Combined Prospectus/Proxy Statement as
Appendix A.
PROPOSED REORGANIZATION
Each of the Surviving Fund and the Merging Fund currently invests all of its
investable assets in The International Opportunities Portfolio (the "Master
Portfolio"), which has identical investment objectives and policies as the
Surviving Fund and the Merging Fund and which is advised by J.P. Morgan
Investment Management Inc. ("JPMIM"). The Surviving Fund has also entered into
plans of reorganization with J.P. Morgan Fleming International Equity Fund
(formerly, Chase Vista International Equity Fund), a series of Mutual Fund Group
("MFG") with similar investment objectives and policies to the Merging Fund (the
"Chase Fund Reorganization" or "Concurrent Reorganization").
If the Concurrent Reorganization and the Reorganization are approved by the
shareholders of the respective funds and certain other conditions are met, the
Merging Fund and these other funds will be
1
reorganized into the Surviving Fund. The consummation of the Reorganization,
however, is not contingent upon the Chase Fund Reorganization.
In connection with the proposed Reorganization, the Surviving Fund will
implement a new multi-class structure under which it will offer Class A,
Class B, Select Class Shares and Institutional Class Shares. Pursuant to the
proposed Reorganization, the Merging Fund will transfer all of its assets and
liabilities to the Surviving Fund in exchange for Select Class Shares.
Under the proposed Reorganization, each Merging Fund Shareholder will
receive a number of Select Class Shares of the Surviving Fund with an aggregate
net asset value equal on the date of the exchange to the aggregate net asset
value of such shareholder's Merging Fund Shares on such date. Therefore,
following the proposed Reorganization, Merging Fund Shareholders will be
Surviving Fund Shareholders. Merging Fund Shareholders will not pay a sales load
in connection with the Reorganization. See "Information Relating to the Proposed
Reorganization."
The Surviving Fund has investment objectives, policies and restrictions
identical to those of the Merging Fund. However, while the Merging Fund and the
Surviving Fund currently invest all of their assets in the Master Portfolio
(which in turn invests in portfolio securities), after the Reorganization the
Surviving Fund will invest directly in portfolio securities. Following the
Reorganization the Surviving Fund will have substantially similar purchase,
redemption and dividend policies as the Merging Fund.
Based upon their evaluation of the relevant information presented to them,
including an analysis of the operation of the Surviving Fund both before and
after the Reorganization, the terms of the Reorganization Plan, the opportunity
to combine the two Funds in an effort with identical investment objectives and
policies, and the fact that the Reorganization will be tax-free, and in light of
their fiduciary duties under federal and state law, the JPMF Board and the JPMIF
Board, including a majority of the Board's members who are not "interested
persons" within the meaning of the Investment Company Act of 1940, as amended
(the "1940 Act"), have each determined that the proposed Reorganization is in
the best interests of its respective Fund and shareholders and that the
interests of such shareholders will not be diluted as a result of such
Reorganization.
REASONS FOR THE REORGANIZATION
The Reorganization is being proposed because each Fund's board believes that
it is in the best interest of its shareholders.
FEDERAL INCOME TAX CONSEQUENCES
Simpson Thacher & Bartlett will issue an opinion (based on certain
assumptions) as of the effective time of the Reorganization to the effect that
the transaction will not give rise to the recognition of income, gain or loss
for federal income tax purposes to the Merging Fund, the Surviving Fund or the
shareholders of the Merging Fund. A shareholder's holding period and tax basis
of Select Class Shares received by a Shareholder of the Merging Fund will be the
same as the holding period and tax basis of the shareholder's shares of the
Merging Fund. In addition, the holding period and tax basis of those assets
owned by the Merging Fund and transferred to the Surviving Fund will be
identical for the Surviving Fund. See "Information Relating to the Proposed
Reorganization--Federal Income Tax Consequences."
INVESTMENT ADVISER
The investment adviser for the Master Portfolio (and therefore the assets of
the Merging Fund and the Surviving Fund) is JPMIM. Following the Reorganization,
JPMIM will serve as the Surviving Fund's investment adviser. JPMIM is a
wholly-owned subsidiary of J.P. Morgan Chase & Co. ("JPMC").
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Surviving Fund and the Merging Fund is to
provide high total return from a portfolio of equity securities of foreign
companies in developed and, to a lesser extent, emerging markets. Total return
consists of capital growth and current income. See "Risk Factors." Both Funds
have identical investment policies, and the Surviving Fund's investment policies
will not change as a result of the Reorganization, although, as mentioned above,
the Surviving Fund will invest directly in portfolio securities rather than the
Master Portfolio. For more information regarding the Surviving Fund's investment
policies, see the Surviving Fund's Prospectus enclosed with this Combined
Prospectus/Proxy Statement. Each Fund may change its objective without
shareholder approval.
Each Fund's assets are invested primarily in companies from developed
markets other than the U.S. The Surviving Fund's assets may also be invested to
a limited extent in companies from emerging markets.
2
Developed countries include Australia, Canada, Japan, New Zealand, the United
Kingdom, and most of the countries of western Europe; emerging markets include
most other countries in the world.
PRINCIPAL RISKS OF INVESTING IN THE SURVIVING FUND
The value of your investment in the Surviving Fund will fluctuate in
response to movements in international stock markets and currency exchange
rates. In general, international investing involves higher risks than investing
in U.S. markets but offers attractive opportunities for diversification. Foreign
markets tend to be more volatile than those of the U.S., and changes in currency
exchange rates could reduce market performance. These risks are higher in
emerging markets. Foreign stocks are generally riskier than their domestic
counterparts. See "Risk Factors."
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS
ADVISORY SERVICES
The investment adviser for the Surviving Fund's and the Merging Fund's
assets is JPMIM. JPMIM oversees the asset management of both Funds. As
compensation for its services, JPMIM receives a management fee indirectly from
both Funds at an annual rate of 0.60% of average daily net assets. Following the
Reorganization, JPMIM will manage the Surviving Fund's assets directly and will
receive a fee at an annual rate of 0.60% of average daily net assets.
OTHER SERVICES
J.P. Morgan Fund Distributors, Inc. (the "Distributor") is the distributor
for the Surviving Fund. Morgan Guaranty Trust Company of New York ("Morgan")
currently serves as administrator and shareholder servicing agent and an
affiliate of the Distributor currently serves as sub-administrator. The Bank of
New York ("BONY") currently serves as fund accountant and custodian, and DST
Systems, Inc. ("DST") currently serves as transfer agent and dividend disbursing
agent for the Surviving Fund. It is anticipated that subsequent to the
consummation of the Reorganization, The Chase Manhattan Bank ("Chase") will
become the Surviving Fund's fund accountant and custodian.
PricewaterhouseCoopers LLP serves as the Surviving Fund's independent
accountants.
ADMINISTRATOR
In connection with the Reorganization, the administration fee paid to Morgan
will be increased on August 11, 2001, to 0.15% of average daily net assets for
complex wide non-money market fund assets up to $25 billion and 0.075% on assets
in excess of $25 billion (currently such assets are less than $25 billion). The
Merging Fund currently pays Morgan, its administrator, an administration fee at
an effective rate of 0.048% of its average daily net assets.
ORGANIZATION
Each of JPMF and JPMIF is organized as a Massachusetts business trust. The
Merging Fund is organized as a series of JPMF and the Surviving Fund is
organized as a series of JPMIF.
PURCHASES, REDEMPTIONS AND EXCHANGES
After the Reorganization, the procedures for making purchases, redemptions
and exchanges of Select Class Shares of the Surviving Fund will be substantially
similar to those with respect to shares of the Merging Fund, as described in
this Combined Prospectus/Proxy Statement and the Surviving Fund's Prospectus and
Statement of Additional Information.
3
COMPARATIVE FEE AND EXPENSE TABLES
The table below shows (i) information regarding the fees and expenses paid
by the Merging Fund for the most recent fiscal year that reflect current expense
reimbursement arrangements; (ii) estimated fees and expenses on a pro forma
basis after giving effect to the Feeder Reorganization but not the Chase Fund
Reorganization; and (iii) estimated fees and expenses on a pro forma basis for
the Surviving Fund after giving effect to the proposed Feeder Reorganization and
Chase Fund Reorganization. Under the proposed Reorganization, holders of Shares
in the Merging Fund will receive Select Class Shares in the Surviving Fund.
Please note that the Surviving Fund currently has one class of shares (which
class will not be distributed to Merging Fund Shareholders as a result of the
Reorganization and therefore no information on this class is shown in the table
below). In connection with the Reorganization and the Concurrent Reorganization,
this class will be re-named "Institutional Class" and the Class A share class,
the Class B share class and the Select Class share class will be introduced.
The table indicates that both contractual (pre-waiver) and actual
(post-waiver) total expense ratios for current shareholders of the Merging Fund
will be less or stay the same for at least three years following the
Reorganization. In addition, Morgan, the Surviving Fund's administrator, has
contractually agreed to waive certain fees and/or reimburse certain expenses to
ensure that actual total operating expenses do not increase for three years
after the Reorganization.
THE MERGING FUND
----------------
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 0.60%
Distribution (12b-1) Fees None
Other Expenses 0.61%
----
Total Annual Fund Operating Expenses 1.21%
====
THE SURVIVING FUND
PRO FORMA WITH REORGANIZATION
-----------------------------
SELECT CLASS SHARES
-----------------------------
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (Load) When You Buy Shares,
Shown As %
Of The Offering Price None
Maximum Deferred Sales Charge (Load) Shown As
Lower Of
Original Purchase Price Or Redemption Proceeds None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees 0.60%
Distribution (12b-1) Fees None
Other Expenses 0.60%
----
Total Annual Fund Operating Expenses (A) 1.20%
====
- ---------------------
(A) Reflects an agreement by Morgan, a wholly owned subsidiary of JPMC, to
reimburse the Surviving Fund to the extent operating expenses (excluding
interest, taxes, extraordinary expenses and expenses related to the
deferred compensation plan) exceed 1.20% of Select Class Shares, of the
Fund's average daily net assets for three years after the Reorganization.
4
THE SURVIVING FUND
PRO FORMA WITH
CONCURRENT REORGANIZATION
-------------------------
SELECT CLASS SHARES
-------------------------
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOU 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 0.60%
Distribution (12b-1) Fees None
Other Expense 0.60%
----
Total Annual Fund Operating Expense(A) 1.20%
====
- ---------------------
(A) Reflects an agreement by Morgan, a wholly owned subsidiary of JPMC, to
reimburse the Surviving Fund to the extent operating expenses (which
exclude interest, taxes, extraordinary expenses and expenses related to the
deferred compensation plan) exceed 1.20% of Select Class Shares, of the
Fund's average daily net assets 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
- you pay net expenses for three years after the Reorganization and total
operating expenses as indicated in the table above.
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 $123 $384 $665 $1,466
PRO FORMA THE SURVIVING FUND
WITH CONCURRENT
REORGANIZATIONS
Select Class Shares $122 $381 $660 $1,455
RISK FACTORS
The following discussion highlights the principal risk factors associated
with an investment in the Surviving Fund. The Surviving Fund has investment
policies and investment restrictions, and therefore risks, identical to those of
the Merging Fund. This discussion is qualified in its entirety by the more
extensive discussion of risk factors set forth in the Prospectus and Statement
of Additional Information of the Surviving Fund, which are incorporated herein
by reference.
All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Surviving Fund. The Surviving Fund may not achieve its
objective if JPMIM's expectations regarding particular securities or markets are
not met. The Surviving Fund could underperform its benchmark due to JPMIM's
securities and asset allocation choices.
The value of your investment in the Surviving Fund will fluctuate in
response to movements in international stock markets and currency exchange
rates. Fund performance will also depend on the effectiveness of JPMIM's
research and the management team's stock picking and currency management
decisions.
5
In general, international investing involves higher risks than investing in
U.S. markets but offers attractive opportunities for diversification. Foreign
markets tend to be more volatile than those of the U.S., and changes in currency
exchange rates could reduce market performance. Additionally, the Surviving Fund
could lose money because of foreign government actions, political instability or
lack of adequate and/or accurate information. These risks are higher in emerging
markets. To the extent that the Surviving Fund hedges its currency exposure into
the U.S. dollar, it may reduce the effects of currency fluctuations. The Fund
may also hedge from one foreign currency to another. However, the Surviving Fund
does not typically use this strategy for its emerging markets currency exposure.
Foreign stocks are generally riskier than their domestic counterparts. You
should be prepared to ride out periods of under-performance.
Adverse market conditions may from time to time cause the Surviving Fund to
take temporary defensive positions that are inconsistent with its principal
investment strategies and may hinder the Fund from achieving its investment
objective.
The Surviving Fund may buy when-issued and delayed delivery securities.
The Surviving Fund may invest in derivatives such as futures, options, swaps
and forward foreign currency contracts that are used for hedging the portfolio
or specific securities. These derivatives may not fully offset the underlying
positions. This could result in losses to the Fund that would not have otherwise
occurred. Derivatives used for risk management may not have the intended effects
and may result in losses or missed opportunities. The counterparty to a
derivatives contract could default. Certain types of derivatives involve costs
to the Fund which can reduce returns. Derivatives that involve leverage could
magnify losses.
The Surviving Fund may lend some of its portfolio securities in order to
earn income. When the Surviving Fund lends a security, there is a risk that the
loaned securities may not be returned if the borrower defaults. The collateral
the Surviving Fund receives from the borrower will be subject to the risks of
the securities in which it is invested. While both the Surviving Fund and the
Merging Fund may engage in securities lending, neither generally does so.
The Surviving Fund may invest in illiquid securities. The Surviving Fund
could have difficulty valuing these holdings precisely. The Surviving Fund could
be unable to sell these securities at the time or price desired.
The Surviving Fund may use short-term trading to take advantage of
attractive or unexpected opportunities or to meet demands generated by
shareholder activity. Increased trading would raise the Surviving Fund's
transaction costs. Increased short-term capital gains distributions would raise
shareholders' income tax liability.
An investment in the Surviving Fund is not a deposit of any bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. You could lose money if you sell when the Surviving Fund's
share price is lower than when you invested.
INFORMATION RELATING TO THE PROPOSED REORGANIZATION
GENERAL
The terms and conditions under which the Reorganization may be consummated
are set forth in the Reorganization Plan. Significant provisions of the
Reorganization Plan are summarized below; however, this summary is qualified in
its entirety by reference to the Reorganization Plan, a copy of which is
attached as Appendix A to this Combined Prospectus/Proxy Statement and which is
incorporated herein by reference.
DESCRIPTION OF THE REORGANIZATION PLAN
In connection with the Reorganization and the Concurrent Reorganization, the
Merging fund will cease investing in the Merging Fund Master Portfolio. The
Reorganization Plan provides that at the Effective Time (as defined in the
Reorganization Plan) of the Reorganization, the assets and liabilities of the
Merging Fund will be transferred to and assumed by the Surviving Fund. In
exchange for the transfer of the assets and the assumption of the liabilities of
the Merging Fund, JPMIF will issue at the Effective Time of the Reorganization
full and fractional Select Class Shares of the Surviving Fund equal in aggregate
dollar value to the aggregate net asset value of full and fractional outstanding
shares of the Merging Fund as determined at the valuation time specified in the
Reorganization Plan. The Reorganization Plan provides that the Merging Fund will
declare a dividend or dividends prior to the Effective Time of the
Reorganization which, together with all previous dividends, will have the effect
of distributing to Merging Fund Shareholders all
6
undistributed net investment income earned and net capital gain realized up to
and including the Effective Time of the Reorganization.
Following the transfer of assets to, and the assumption of the liabilities
of the Merging Fund by, the Surviving Fund, the Merging Fund will distribute
Select Class Shares received by it to the Merging Fund Shareholders in
liquidation of the Merging Fund. Each Merging Fund Shareholder at the Effective
Time of the Reorganization will receive an amount of Select Class Shares with a
total net asset value equal to the net asset value of their Merging Fund Shares
plus the right to receive any dividends or distributions which were declared
before the Effective Time of the Reorganization but that remained unpaid at that
time with respect to the shares of the Merging Fund.
The Surviving Fund expects to maintain most of the portfolio investments of
the Merging Fund in light of the identical investment policies of the Merging
Fund and the Surviving Fund. Concurrently with the Reorganization, the Surviving
Fund will cease to operate under a "master/feeder" structure and will instead
invest directly in portfolio securities rather than in the Master Portfolio.
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
September 1, 2001 or such other date as is agreed to by the parties.
The expenses of the Funds in connection with the Reorganization will be
borne by JPMC or one of its affiliates.
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 Merging Fund and the Surviving Fund currently exist in a "master/feeder"
format, pursuant to which each fund (the feeders) invests its assets in a common
portfolio--the "master"--and shares of each fund are sold to different
categories of investors with different distribution and shareholder services and
fees. Among other reasons for the creation of this structure was the opportunity
to obtain the economies of scale from an investment and expense perspective that
might come from the investment and administration of a larger pool of assets
than any one fund could expect to have on its own. An important factor in the
decision to structure the funds in this way was that non-U.S. investors' assets
would be invested alongside those of U.S. investors within the master portfolio
on a basis that was not disadvantageous to the non-U.S. investors from a U.S.
tax perspective. For various reasons, non-U.S. feeders in the Fund Complex
withdrew their assets from the masters commencing in 1997, thereby eliminating
one of the principal reasons for the master/ feeder format. Nevertheless, the
funds continued in that format and, the JPMF Board believes, conducted their
operations on a basis at least as favorable to the funds as would have obtained
if the format had been abandoned, as is now proposed.
Following the announcement of the merger of the Chase Manhattan Corporation
and J.P. Morgan & Co., JPMIM and Morgan and their counterparts within the Chase
organization reviewed the compatibilities of their various mutual fund groups,
including their respective organizational structures, service providers,
distribution arrangements and methodologies, and fees and expenses. The proposed
Reorganization of the Merging Fund into the Surviving Fund is a part of the more
general integration of the J.P. Morgan funds complex with the Chase Vista funds
complex to create a single mutual fund complex with substantially similar
arrangements for the provision of advisory, administration, distribution,
custody and fund accounting and transfer agency services.
7
The JPMF Board believes that the conversion by way of the proposed
Reorganization of the current master/feeder format into the multiclass format
discussed in this Combined Prospectus/Proxy Statement and the adoption of the
service arrangements by the Surviving Fund described herein (the "Service
Arrangements") are in the best interests of the Merging Fund and its
shareholders and that the interests of shareholders will not be diluted as a
result of the Reorganization.
In considering the proposed Reorganization and Service Arrangements on
January 23 and 24 2001 and on March 26 and 27, 2001 the JPMF Board also noted
that there were important benefits expected to arise out of the integration of
the J.P. Morgan and Chase Vista mutual funds complexes. Among these benefits,
the Board considered (1) investor and shareholder confusion should be mitigated
if not eliminated by the adoption by both the J.P. Morgan and the Chase Vista
mutual funds of common organizational structures and common service providers;
(2) Surviving Fund shareholders would be able to exchange into a larger number
and greater variety of funds without paying sales charges, (3) to the extent
that additional share classes are subsequently offered by the Surviving Fund it
should have a positive effect on asset growth, which in turn over time could
result in a lower total expense ratio as economies of scale were realized;
(4) JPMIM advised the Board that it believes that the outsourcing of many
functions to the sub-administrator will (a) upgrade the quality of services
currently being provided to the Funds, and (b) enhance Morgan's ability
effectively to monitor and oversee the quality of all Fund service providers,
including the investment adviser, distributor, custodian and transfer agent;
(5) Morgan's undertaking for three years to waive fees or reimburse the
Surviving Fund's expenses in order that the total expense ratios of the Select
and Institutional Classes do not exceed those of the Merging Fund and the
Surviving Fund, respectively; (6) the fact that all costs and expenses of the
Reorganization and implementation of the Service Arrangements would be borne by
JPMC and (7) the fact that the Reorganization would constitute a tax-free
reorganization.
In addition, each Board took into account that, notwithstanding the increase
in the administration fee paid to Morgan, Morgan agreed to cap the total
expenses as set forth in the expense table above and to institute a breakpoint
in the administration fee from 0.15% of average daily net assets for complex
wide non-money market fund assets up to $25 billion to 0.075% on assets in
excess of $25 billion (currently such assets are less than $25 billion). The
Merging Fund currently pays its administrator, Morgan, an administration fee at
an effective rate of 0.048% of its average daily net assets. Moreover, JPMIM
agreed that, notwithstanding its proposed increase to $1 million of the minimum
investment in the Select Class, all current shareholders of the Merging Fund
(for which the current minimum is $2,500) will be entitled to make additional
investments in the Select Class of the Surviving Fund or of any other fund in
the integrated fund complex or to exchange shares of the Select Class of the
Surviving Fund for Select Shares of any other such fund. The Board also noted
that Morgan did not propose, and advised that it does not expect to propose, the
imposition of any distribution (12b-1) fees or shareholder servicing fees on the
Select or Institutional Class that are not already in place. Finally the Board
was advised that the custody and fund accounting fees to be charged by Chase
will be lower than those currently charged by The Bank of New York. It should be
recognized that, at current asset levels and in consequence of the expense cap,
the lower custody and fund accounting fees will not have an immediate effect on
the Surviving Fund's total expense ratio but should have some positive effect in
the future.
Based upon their evaluation of the relevant information provided to them,
the changes effected in the Service Arrangements in the negotiations between the
Trustees and J.P. Morgan, and in light of their fiduciary duties under federal
and state law, the Trustees, including a majority who are not interested persons
of the Funds or JPMC as defined in the 1940 Act, determined that the proposed
Reorganization is in the best interests of the Merging and Surviving Fund, as
applicable, that the interests of their respective shareholders would not be
diluted as a result of the Reorganization, and that the Service Arrangements are
in the best interests of the Surviving Fund.
THE JPMF BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
PROPOSAL.
The JPMF Board has not determined what action the Merging Fund will take in
the event shareholders do not approve the Reorganization Plan or for any reason
the Reorganization is not consummated. In either such event, the Board will
consider other appropriate courses of action.
INFORMATION RELATING TO THE CONCURRENT REORGANIZATION
The terms and conditions under which the Concurrent Reorganization may be
consummated are set forth in a reorganization plan which is substantially
similar to the Reorganization Plan you are in
8
considering. Concurrently with the Reorganization, the Surviving Fund will cease
to operate under a "master/ feeder" structure and will instead invest directly
in portfolio securities rather than in the Master Portfolio.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the Reorganization is subject to the condition that JPMF
receives an opinion from Simpson Thacher & Bartlett to the effect that for
federal income tax purposes: (i) the transfer of all of the assets and
liabilities of the Merging Fund to the Surviving Fund in exchange for the Select
Class Shares and the liquidating distributions to shareholders of the Select
Class Shares so received, as described in the Reorganization Plan, will
constitute a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and with respect to the
Reorganization, the Merging Fund and the Surviving Fund will each be considered
"a party to a reorganization" within the meaning of Section 368(b) of the Code;
(ii) no gain or loss will be recognized by the Merging Fund as a result of such
transaction; (iii) no gain or loss will be recognized by the Surviving Fund as a
result of such transaction; (iv) no gain or loss will be recognized by the
Merging Fund Shareholders on the distribution to the Merging Fund Shareholders
of the Select Class Shares solely in exchange for their Merging Fund Shares;
(v) the aggregate basis of shares of the Surviving Fund received by a
shareholder of the Merging Fund will be the same as the aggregate basis of such
Merging Fund Shareholder's Merging Fund Shares immediately prior to the
Reorganization; (vi) the basis of the Surviving Fund in the assets of the
Merging Fund received pursuant to such transaction will be the same as the basis
of such assets in the hands of the Merging Fund immediately before such
transaction; (vii) a Merging Fund Shareholder's holding period for the Select
Class Shares will be determined by including the period for which such Merging
Fund Shareholder held the Merging Fund Shares exchanged therefor, provided that
the Merging Fund Shareholder held such Merging Fund Shares as a capital asset;
and (viii) the Surviving Fund's holding period with respect to the assets
received in the Reorganization will include the period for which such assets
were held by the Merging Fund.
JPMF has not sought a tax ruling from the Internal Revenue Service (the
"IRS"), but is acting in reliance upon the opinion of counsel discussed in the
previous paragraph. That opinion is not binding on the IRS and does not preclude
the IRS from adopting a contrary position. Shareholders should consult their own
advisers concerning the potential tax consequences to them, including state and
local income taxes.
9
CAPITALIZATION
Because the Merging Fund will be combined with the Surviving Fund in the
Reorganization as a result of the Concurrent Reorganization, the total
capitalization of the Surviving Fund after the Reorganization is expected to be
greater than the current capitalization of the Merging Fund. The following table
sets forth as of November 30, 2000: (i) the capitalization of the Merging Fund
and the Surviving Fund; and (ii) the pro forma capitalization of the Surviving
Fund as adjusted to give effect to the Chase Fund Reorganization. There is, of
course, no assurance that the Reorganization and the Concurrent Reorganization
will be consummated. Moreover, if consummated, the capitalizations of the
Surviving Fund and the Merging Fund are likely to be different at the Effective
Time of the Reorganization as a result of fluctuations in the value of portfolio
securities of each Fund and daily share purchase and redemption activity in each
Fund. The Surviving Fund currently has one class of shares. In connection with
the Reorganization, this class will be renamed Institutional Class and the Class
A share class, Class B share class, and the Select Class share class will be
introduced.
CAPITALIZATION
PRO FORMA WITH REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
BENEFICIAL NET ASSET
INTEREST SHARES VALUE PER
OUTSTANDING OUTSTANDING NET ASSETS SHARE
----------- ----------- ---------- ---------
J.P. MORGAN FUNDS
J.P. Morgan International 6,995 -- $ 79,408 $11.35
Opportunities Fund
(Merging Fund)
J.P. Morgan Institutional
International
Opportunities Fund 40,484 -- $461,016 $11.39
PRO FORMA THE SURVIVING FUND
WITH REORGANIZATION
Select -- 6,973 $ 79,408 $11.39
Institutional -- 40,484 $461,016 $11.39
CAPITALIZATION
PRO FORMA WITH CONCURRENT REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
BENEFICIAL NET ASSET
INTEREST SHARES VALUE PER
OUTSTANDING OUTSTANDING NET ASSETS SHARE
----------- ----------- ---------- ---------
J.P. MORGAN FUNDS
J.P. Morgan International 6,995 -- $ 79,408 $11.35
Opportunities Fund
(Merging Fund)
J.P. Morgan Institutional 40,484 -- $461,016 $11.39
International
Opportunities Fund
JPMORGAN FLEMING INTERNATIONAL
EQUITY FUND
Class A -- 2,295 $ 29,752 $12.96
Class B -- 502 $ 6,340 $12.63
PRO FORMA THE SURVIVING FUND
WITH CONCURRENT
REORGANIZATION
Class A -- 2,613 $ 29,752 $11.39
Class B -- 557 $ 6,340 $11.39
Select -- 6,973 $ 79,408 $11.39
Institutional -- 40,484 $461,016 $11.39
PURCHASES, REDEMPTIONS AND EXCHANGES
Following the Reorganization, the procedures for purchases, redemptions and
exchanges of shares of the Surviving Fund will be substantially similar to those
of the Merging Fund. The Surviving Fund currently has one class of shares. In
connection with the Reorganization and the Concurrent Reorganization, this class
will be renamed "Institutional Class" and the Class A share class, Class B share
class, and Select Class share class will be introduced. The following discussion
reflects the new class structure. This section is qualified in
10
its entirety by the discussion in the preliminary Prospectus and Statement of
Additional Information of the Surviving Fund, which are incorporated herein by
reference.
BUYING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF THE SELECT CLASS SHARES
THAT YOU MIGHT MAKE AFTER THE REORGANIZATION AND REFLECTS THE NEW CLASS
STRUCTURE.
The price shareholders pay for their shares is the net asset value per share
(NAV). NAV is the value of everything the Surviving Fund owns, minus everything
it owes, divided by the number of shares held by investors. The Surviving Fund
generally values its assets at fair market values but may use fair value if
market prices are unavailable.
The NAV of each class of the Surviving Fund's shares is generally calculated
once each day as of the close of regular trading on the New York Stock Exchange.
A shareholder will pay the next NAV calculated after the J.P. Morgan Funds
Service Center (the "Center") receives that shareholder's order in proper form.
An order is in proper form only after payment is converted into federal funds.
The Center accepts purchase orders on any business day that the New York
Stock Exchange is open. If an order is received in proper form by the close of
regular trading on the New York Stock Exchange (or such other time as determined
by your financial intermediary), it will be processed at that day's price and
the purchaser will be entitled to all dividends declared on that day. If an
order is received after that time, it will generally be processed at the next
day's price. If a purchaser pays by check for Surviving Fund shares before the
close of regular trading on the New York Stock Exchange, it will generally be
processed the next day the Surviving Fund is open for business.
If a shareholder buys through an agent and not directly from the Center, the
agent could set earlier cut-off times. Each shareholder must provide a Social
Security Number or Taxpayer Identification Number when opening an account.
The Surviving Fund has the right to reject any purchase order for any
reason.
The investment minimum for Select Class Shares is $1,000,000. However,
shareholders who receive Select Class Shares as a result of the Reorganization
may purchase new Select Class Shares in the Surviving Fund and may purchase
Select Class Shares in other JPMorgan Funds with an investment minimum of
$2,500. For Select Class Shares, checks should be made out to J.P. Morgan Funds
in U.S. dollars. Credit cards, cash, or checks from a third party will not be
accepted. Shares bought by check may not be sold for 15 calendar days. Shares
bought through an automated clearing house cannot be sold until the payment
clears. This could take more than seven business days. Purchase orders will be
canceled if a check does not clear and the investor will be responsible for any
expenses and losses to the Fund. Orders by wire will be canceled if the Center
does not receive payment by 4:00 p.m., Eastern time, on the day the shareholder
buys.
Shareholders seeking to buy Select Class Shares through an investment
representative should instruct their representative to contact the Surviving
Fund. Such representatives may charge investors a fee and may offer additional
services, such as special purchase and redemption programs, "sweep" programs,
cash advances and redemption checks. Such representative may set different
minimum investments and earlier cut-off times.
SELLING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO SALES OF THE SELECT CLASS SHARES THAT
YOU MIGHT MAKE AFTER THE REORGANIZATION AND REFLECTS THE NEW CLASS STRUCTURE.
Select Class Shares of the Surviving Fund may be sold on any day the Center
is open for trading, either directly to the Fund or through an investment
representative. Shareholders of the Surviving Fund will receive the next NAV
calculated after the Center accepts his or her sale order.
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 only when permitted
by federal securities laws.
Generally, proceeds are sent by check, electronic transfer or wire for
Select Class Shares. However, if a shareholder's address of record has changed
within the 30 days prior to the sale request or if more than $25,000 of shares
is sold by phone, proceeds will be sent by electronic transfer or wire only to
the bank account on the Surviving Fund's records.
11
For Select Class Shares, a shareholder will need to have his or her
signature guaranteed if he or she wants payment to be sent to an address other
than the one in the Surviving Fund's records. Additional documents or a letter
from a surviving joint owner may also be needed. A shareholder who purchased
through an investment representative, or through a financial service firm,
should contact that representative, who will send the necessary documents to the
Center. The representative might charge a fee for this service.
Shareholders may also sell their shares by contacting the Center directly by
calling 1-800-622-4273 or by contacting their financial intermediary.
EXCHANGING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF THE SELECT CLASS SHARES
THAT YOU MIGHT MAKE AFTER THE REORGANIZATION.
Select Class Shares of the Surviving Fund may be exchanged for shares of the
same class in certain other J.P. Morgan 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.
The exchange privilege is not a means of short-term trading as this could
increase management cost and affect all shareholders of the Surviving Fund. The
Fund reserves the right to limit the number of exchanges or refuse an exchange.
Each exchange privilege may also be terminated. The 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 Select Class Shares, if the balance falls below the applicable
investment minimum for 30 days as a result of selling shares (and not because of
performance), then the Surviving Fund reserves the right to request that you buy
more shares or close your account. 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 Surviving Fund may modify or cancel the
sale of shares by phone without notice.
JPMIF, on behalf of the Survivng Fund has entered into agreements with
certain shareholder servicing agents (including Chase) under which the
shareholder servicing agents agree to provide certain support services to their
customers. For performing these services, each shareholder servicing agent will
receive an annual fee of up to 0.25% of the average daily net assets of the
Select Class Shares held by investors serviced by the shareholder servicing
agent. The Merging Fund likewise has similar arrangements with respect to its
Shares.
JPMIM and/or The Distributor may, at their own expense, make additional
payments to certain selected dealers or other shareholder servicing agents for
performing administrative services for their customers.
The Surviving Fund issues multiple classes of shares. Each class may have
different requirements for who may invest, and may have different sales charges
and expense levels. A person who gets compensated for selling Select Class
Shares may receive a different amount for each class.
DISTRIBUTIONS AND TAXES
The Surviving Fund can earn income and realize capital gain. The Surviving
Fund will deduct from these earnings any expenses and then pay to shareholders
the distributions.
12
The Surviving Fund typically distributes any net investment income annually.
Net capital gain, if any, is distributed annually. You have three options for
your Surviving Fund distributions. You may:
- reinvest all of them in additional Surviving Fund shares;
- take distributions of net investment income in cash or as a deposit in a
pre-assigned bank account and reinvest distributions of net capital gain
in additional shares; or
- take all distributions in cash or as a deposit in a pre-assigned bank
account.
If you don't notify us otherwise, we'll reinvest all distributions. If your
distributions are reinvested, they will be in the form of shares of the same
class. The taxation of dividends won't be affected by the form in which you
receive them.
Dividends of net investment income are usually taxable as ordinary income at
the federal, state and local levels.
If you receive distributions of net capital gain, the tax rate will be based
on how long the Surviving Fund held a particular asset, not on how long you have
owned your shares. If you buy shares just before a distribution, you will pay
tax on the entire amount of the taxable distribution you receive, even though
the NAV will be higher on that date because it includes the distribution amount.
Early in each calendar year, the Surviving Fund will send its shareholders a
notice showing the amount of distributions received in the preceding year and
the tax status of those distributions.
The above is only a general summary of tax implications of investing in the
Surviving Fund. Shareholders should consult their tax advisors to see how
investing in the Surviving Fund will affect their own tax situation.
COMPARISON OF THE MERGING FUND'S
AND THE SURVIVING FUND'S ORGANIZATION STRUCTURE
There are no material differences in the organizational structure of the
Merging Fund and the Surviving Fund. Set forth below are descriptions of the
structure, voting rights, shareholder liability and the liability of Trustees.
STRUCTURE OF THE MERGING FUND
The Merging Fund is organized as a series of JPMF, which is organized under
the law of the Commonwealth of Massachusetts. As a Massachusetts business trust,
JPMF's operations are governed by JPMF's Declaration of Trust and By-Laws and
applicable Massachusetts law. The operations of the Merging Fund are also
subject to the provisions of the 1940 Act and the rules and regulations
thereunder.
STRUCTURE OF THE SURVIVING FUND
The Surviving Fund is organized as a series of 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 Surviving Fund
are also subject to the provisions of the 1940 Act and the rules and regulations
thereunder.
TRUSTEES AND OFFICERS
Subject to the provisions of its trust documents, the business of the
Merging Fund is managed by JPMF's Trustees and the business of the Surviving
Fund is managed by JPMIF's Trustees, who serve indefinite terms (subject to
mandatory retirement age) and have all powers necessary or convenient to carry
out their responsibilities.
Information concerning the current Trustees and officers of JPMF and JPMIF
is set forth in the Funds' respective Statements of Additional Information,
which are incorporated herein by reference.
SHARES OF FUNDS
Each of JPMF 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 JPMF 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 JPMF or JPMIF that are not
13
attributable to a specific series or class will be allocated to all the series
of that trust in a manner believed by its board to be fair and equitable.
Generally, shares of each series will be voted separately, for example, to
approve an investment advisory agreement. Likewise, shares of each class of each
series will be voted separately, for example, to approve a distribution plan,
but shares of all series and classes vote together, to the extent required by
the 1940 Act, including for the election of Trustees. Neither JPMF 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 JPMF or JPMIF.
SHAREHOLDER VOTING RIGHTS
With respect to all matters submitted to a vote of shareholders,
shareholders of each of JPMF and JPMIF are entitled to the number of votes (or
"voting shares") equal to the product of the number of shares owned multiplied
by the net asset value per share on the record date.
A vacancy in the Board of either JPMF 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 voting
shares representing two-thirds of the outstanding voting shares of each
portfolio of that trust. A meeting of shareholders shall be held upon the
written request of the holders of voting shares representing not less than 10%
of the outstanding voting 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 JPMF 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 JPMF 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 JPMF 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 exists and the trust itself is unable to meet
its obligations.
LIABILITY OF DIRECTORS AND TRUSTEES
Under the Declaration of Trust of each of JPMF 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 JPMF 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 JPMF and JPMIF are available without charge upon
written request to that trust.
INFORMATION RELATING TO THE ADVISORY CONTRACTS AND OTHER SERVICES
GENERAL INFORMATION
As noted above, the assets of the Surviving Fund currently invested in the
Master Portfolio are managed by JPMIM pursuant to an Advisory Agreement between
JPMIM and the Master Portfolio, and JPMIM is responsible for the day-to-day
management of the Surviving Fund's assets. Following the Reorganization and the
Concurrent Reorganization, the Surviving Fund's assets will be managed directly
by JPMIM pursuant to an Advisory Agreement substantially similar to the
agreement between the Master Portfolio and JPMIM.
DESCRIPTION OF JPMIM
JPMIM is an indirect wholly-owned subsidiary of JPMC incorporated under the
laws of Delaware. JPMIM's principal executive offices are located at 522 Fifth
Avenue, New York, New York 10036. JPMIM, a registered investment adviser,
manages employee benefit funds of corporations, labor unions and state and local
governments and the accounts of other institutional investors, including
investment companies. As of
14
March 31, 2001, JPMIM and certain of its affiliates provided investment
management services with respect to assets of approximately $607.7 billion.
Under the Advisory Agreement, JPMIM will be responsible for making decisions
with respect to, and placing orders for, all purchases and sales of the
portfolio securities of the Surviving Fund. JPMIM's responsibilities under the
Advisory Agreement will include supervising the Surviving Fund's investments and
maintaining a continuous investment program, placing purchase and sale orders
and paying costs of certain clerical and administrative services involved in
managing and servicing the Surviving Fund's investments and complying with
regulatory reporting requirements. The services to be provided to the Surviving
Fund by JPMIM are substantially similar to the services currently provided to
the Master Portfolio and, therefore, indirectly to the Merging Fund by JPMIM.
EXPENSES AND MANAGEMENT FEES. The Advisory Agreement provides that the
Surviving Fund will pay JPMIM a monthly management fee based upon the net assets
of the Surviving Fund. The annual rate of this management fee is 0.30%. The
Master Portfolio and, therefore, indirectly the Merging Fund also currently pay
0.30% of average net assets to JPMIM for its advisory services. JPMIM may waive
fees from time to time.
Under the Advisory Agreement, except as indicated above, the Surviving Fund
is responsible for its operating expenses including, but not limited to, taxes;
interest; fees (including fees paid to its Trustees who are not affiliated with
JPMIM or any of its affiliates); fees payable to the Commission; state
securities qualification fees; association membership dues; costs of preparing
and printing prospectuses for regulatory purposes and for distribution to
existing shareholders; management and administrative fees; charges of the
custodian and transfer agent; insurance premiums; auditing and legal expenses;
costs of shareholders' reports and shareholder meetings; any extraordinary
expenses; and brokerage fees and commissions, if any, in connection with the
purchase or sale of portfolio securities.
LIMITATION ON LIABILITY. The Advisory Agreement provides that JPMIM will not
be liable for any error of judgment or mistake of law or for any act or omission
or loss suffered by JPMIF 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 JPMIF
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 JPMIF Board or by vote of the majority of the Surviving Fund's outstanding
voting securities upon 60 days' written notice to JPMIM, and by JPMIM on 90
days' written notice to JPMIF.
PORTFOLIO MANAGER
The portfolio management team for the Surviving Fund is led by Andrew C.
Cormie, managing director, who has been an international equity portfolio
manager since 1997 and employed by JPMIM since 1984, and by Nigel F. Emmett,
vice president, who has been on the team since joining JPMIM in August 1997, and
by Jenny C. Sicat, vice president, who joined the team in August 2000 and has
been at JPMIM since 1995. Previously, Mr. Emmett was an assistant manager at
Brown Brothers Harriman and Co. and a portfolio manager at Gartmore Investment
Management. Prior to joining the team, Ms. Sicat was a portfolio manager in
Emerging Markets focusing on currencies and derivatives.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
JPMIM places orders for the Surviving Fund for all purchases and sales of
portfolio securities, enters into repurchase agreements, and may enter into
reverse repurchase agreements and execute loans of portfolio securities on
behalf of the Surviving Fund. Fixed income and debt securities and municipal
bonds and notes are generally traded at a net price with dealers acting as
principal for their own accounts without a stated commission. The price of the
security usually includes profit to the dealers. In underwritten offerings,
securities are purchased at a fixed price which includes an amount of
compensation to the
15
underwriter, generally referred to as the underwriter's concession or discount.
On occasion, certain securities may be purchased directly from an issuer, in
which case no commissions or discounts are paid.
Portfolio transactions for the Surviving Fund will be undertaken principally
to accomplish the Surviving Fund's objective in relation to expected movements
in the general level of interest rates. The Surviving Fund may engage in
short-term trading consistent with its objectives.
In connection with portfolio transactions, JPMIM intends to seek best
execution on a competitive basis for both purchases and sales of securities.
Subject to the overriding objective of obtaining the best execution of orders,
JPMIM may allocate a portion of the Surviving Fund's brokerage transactions to
affiliates of JPMIM. Under the 1940 Act, persons affiliated with the Surviving
Fund and persons who are affiliated with such persons are prohibited from
dealing with the fund as principal in the purchase and sale of securities unless
a permissive order allowing such transactions is obtained from the Commission.
However, affiliated persons of the fund may serve as its broker in listed or
over-the-counter transactions conducted on an agency basis provided that, among
other things, the fee or commission received by such affiliated broker is
reasonable and fair compared to the fee or commission received by non-affiliated
brokers in connection with comparable transactions. In addition, the Surviving
Fund may not purchase securities during the existence of any underwriting
syndicate for such securities of which JPMIM or an affiliate is a member or in a
private placement in which JPMIM or an affiliate serves as placement agent
except pursuant to procedures adopted by the Board of Trustees that either
comply with rules adopted by the Commission or with interpretations of the
Commission's staff.
Investment decisions made by JPMIM are the product of many factors in
addition to basic suitability for the particular fund or other client in
question. Thus, a particular security may be bought or sold for certain clients
even though it could have been bought or sold for other clients at the same
time. Likewise, a particular security may be bought for one or more clients when
one or more other clients are selling the same security. The Surviving Fund may
only sell a security to other portfolios or accounts managed by JPMIM or its
affiliates in accordance with procedures adopted by the Trustees.
It also sometimes happens that two or more clients simultaneously purchase
or sell the same security. On those occasions when JPMIM deems the purchase or
sale of a security to be in the best interests of the Surviving Fund, as well as
other clients including other funds, JPMIM, to the extent permitted by
applicable laws and regulations, may, but is not obligated to, aggregate the
securities to be sold or purchased for the Surviving Fund with those to be sold
or purchased for other clients in order to obtain best execution, including
lower brokerage commissions if appropriate. In such event, allocation of the
securities so purchased or sold as well as any expenses incurred in the
transaction will be made by JPMIM in the manner it considers to be most
equitable and consistent with JPMIM's fiduciary obligations to the Surviving
Fund. In some instances, this procedure might adversely affect the Surviving
Fund.
OTHER SERVICES
The Distributor is a wholly owned, indirect subsidiary of BISYS Fund
Services, Inc., which currently serves as the distributor for both the Surviving
Fund and the Merging Fund. An affiliate of the Distributor is the
sub-administrator for both the Surviving Fund and the Merging Fund. The
Distributor is unaffiliated with JPMC or any of its subsidiaries.
Morgan serves as administrator and shareholder servicing agent, BONY serves
as fund accountant and custodian, and DST serves as transfer agent and dividend
disbursing agent for the Surviving Fund. The services provided by Morgan and
BONY include day-to-day maintenance of certain books and records, calculation of
the offering price of the shares and preparation of reports. In its role as
custodian, BONY will be responsible for the daily safekeeping of securities and
cash held by the Surviving Fund. It is anticipated that subsequent to the
consummation of the Reorganization, Chase will become the Surviving Fund's fund
accountant and custodian.
In connection with the Reorganization, the administration fee paid to Morgan
will be increased on August 11, 2001 to 0.15% of average daily net assets for
complex wide non-money market fund assets up to $25 billion and 0.075% on assets
in excess of $25 billion (currently such assets are less than $25 billion). The
Merging Fund currently pays Morgan, its administrator, an administration fee at
an effective rate of 0.048% of its average daily net assets.
16
PROPOSAL 2:
ELECTION OF TRUSTEES
It is proposed that shareholders of the Merging Fund consider the election
of the individuals listed below (the "Nominees") to the Board of Trustees of
JPMF, which is currently organized as a Massachusetts business trust. Even if
the Reorganization described in Proposal 1 is approved, other mutual funds that
are series of JPMF will continue to exist and operate. All shareholders of any
series of JPMF as of the record date (April 6, 2001) are required to be given a
vote on the proposal regarding Trustees. Because as of the record date you were
still a shareholder in JPMF, you are entitled to vote on this proposal.
Shareholders of JPMIF are being asked to approve the same Trustees as are being
proposed for JPMF.
In connection with the recent merger of J.P. Morgan & Co. Incorporated and
The Chase Manhattan Corporation, it has been proposed, subject to shareholder
approval, that the Boards of Trustees of the investment companies managed by
JPMIM and their affiliates be rationalized in order to obtain additional
operating efficiencies by having the same Board of Trustees for all of the
funds. Therefore, the Nominees include certain current Trustees of JPMF, certain
current Trustees of JPMIF, certain members of their respective Advisory Boards
and certain Trustees of the former Chase Vista Funds. Each Nominee has consented
to being named in this Combined Prospectus/Proxy Statement and has agreed to
serve as a Trustee if elected. Each Trustee will hold office for a term of
unlimited duration subject to the current retirement age of 70(1). The Trustees
have no reason to believe that any Nominee will be unavailable for election.
Shareholders of JPMIF are concurrently considering the election of the same
individuals to the Board of Trustees of JPMIF. Biographical information about
the Nominees and other relevant information is set forth below. More information
regarding the current Trustees of JPMIF and JPMF is contained in the Funds'
Statements of Additional Information, which are incorporated herein by
reference.
The persons named in the accompanying form of proxy intend to vote each such
proxy "FOR" the election of the Nominees, unless shareholders specifically
indicate on their proxies the desire to withhold authority to vote for elections
to office. It is not contemplated that any Nominee will be unable to serve as a
Board member for any reason, but if that should occur prior to the Meeting, the
proxy holders reserve the right to substitute another person or persons of their
choice as nominee or nominees.
(1) Each Nominee is grandfathered with respect to the mandatory retirement age
for three years from the date of election.
THE JPMF BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH OF
THE NOMINEES LISTED BELOW
VOTE REQUIRED
The affirmative vote of the holders of more than 50% of the voting shares of
JPMF present, in person or by proxy, at the joint meeting is required to elect a
Trustee of JPMF, provided that at least one-third of the outstanding shares of
JPMF is represented at the joint meeting, either in person or by proxy. In the
event that the requisite vote is not reached, the current Trustees would remain
as the only Trustees of JPMF.
The following are the nominees:
NAME OF NOMINEE AND TRUSTEE BUSINESS EXPERIENCE AND
CURRENT POSITION WITH FUND COMPLEX SINCE AGE PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS
- ---------------------------------- ------- -------- ------------------------------------------------
William J. Armstrong--Trustee of Nominee 59 Retired; formerly Vice President and Treasurer,
certain other trusts in the Fund Ingersoll-Rand Company. Address: 287 Hampshire
Complex. Ridge, Park Ridge, NJ 07656.
Roland R. Eppley, Jr.--Trustee of Nominee 68 Retired; formerly President and Chief Executive
certain other trusts in the Fund Officer, Eastern States Bankcard Association
Complex. Inc. (1971-1988); Director, Janel
Hydraulics, Inc.; formerly Director of The
Hanover Funds, Inc. Address: 105 Coventry
Place, Palm Beach Gardens, FL 33418.
17
NAME OF NOMINEE AND TRUSTEE BUSINESS EXPERIENCE AND
CURRENT POSITION WITH FUND COMPLEX SINCE AGE PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS
- ---------------------------------- ------- -------- ------------------------------------------------
Ann Maynard Gray--Member of Advisory Nominee 55 Former President, Diversified Publishing Group
Board of certain the Trust and and Vice President, Capital Cities/ABC, Inc.
certain other trusts in the Fund Address: 1262, Rockrimmon Road, Stamford, CT
Complex. 06903.
Matthew Healey--Chairman of the Trust 1982 63 Former Chief Executive Officer of the Trust
and certain other trusts in the through April 2001; Chairman, Pierpont Group,
Fund Complex. since prior to 1993. Address: Pine Tree Country
Club Estates, 10286 Saint Andrews Road, Boynton
Beach, Florida 33436.
Fergus Reid, III*--Chairman of other Nominee 68 Chairman and Chief Executive Officer, Lumelite
trusts in the Fund Complex. Corporation, since September 1985; Trustee,
Morgan Stanley Funds. Address: 202 June Road,
Stamford, CT 06903.
James J. Schonbachler--Member of Nominee 58 Retired; Prior to September, 1998, Managing
Advisory Board of the Trust and Director, Bankers Trust Company and Group Head
certain other trusts in the Fund and Director, Bankers Trust A.G., Zurich and BT
Complex. Brokerage Corp. Address: 3711 Northwind Court,
Jupiter, FL 33477.
Leonard M. Spalding, Jr.*--Trustee of Nominee 65 Retired; formerly Chief Executive Officer of
certain other trusts in the Fund Chase Mutual Funds Corp.; formerly President and
Complex. Chief Executive Officer of Vista Capital
Management; and formerly Chief Investment
Executive of The Chase Manhattan Private Bank.
Address: 2025 Lincoln Park Road, Springfield, KY
40069.
H. Richard Vartabedian--Trustee of Nominee 65 Former President of certain other trusts in the
certain other trusts in the Fund Fund Complex through April 2001; Investment
Complex. Management Consultant; formerly, Senior
Investment Officer, Division Executive of the
Investment Management Division of The Chase
Manhattan Bank, N.A., 1980-1991. Address:
P.O. Box 296, Beach Road, Hendrick's Head,
Southport, ME 04576.
- ---------------------
* Mr. Spalding is deemed to be an "interested person" (as defined in the 1940
Act) due to his ownership of equity securities of affiliates of JPMC. It is
anticipated that Mr. Reid will be named Chairman of the Trust and therefore
will be deemed to be an "interested person" of the Trust.
The Board of Trustees and Advisory Board Members of JPMF each met five times
during the 2000 calendar year, and each of these individuals attended at least
75% of the meetings of the Board and any committee on which he or she serves.
The Board of Trustees of JPMF presently has an Audit Committee. The members
of the Audit Committee are Messrs. Addy (Chairman), Eschenlauer, Mallardi, Burns
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 2000 calendar year.
The Board of Trustees of JPMF presently has a Nominating Committee. The
members of the Nominating Committee are Messrs. Addy, Eschenlauer, Burns and
Mallardi. The function of the Nominating Committee is to nominate trustees for
the Board to consider. The Nominating Committee met one time during the 2000
calendar year.
REMUNERATION OF TRUSTEES AND CERTAIN EXECUTIVE OFFICERS:
Each current Trustee is reimbursed for expenses incurred in attending each
meeting of the Board of Trustees or any committee thereof. Each Trustee who is
not an affiliate of JPMIM is compensated for his or her services according to a
fee schedule which recognizes the fact that each Trustee also serves as a
Trustee
18
of other investment companies advised by JPMIM. Each Trustee receives an annual
fee of $75,000, which is allocated among all investment companies for which the
Trustee serve.
Set forth below is information regarding compensation paid or accrued during
the calendar year ended December 31, 2000 for each nominee of JPMF:
COMPENSATION
FROM
"MORGAN PENSION OR
FUND RETIREMENT BENEFITS TOTAL COMPENSATION
COMPLEX"(1) ACCRUED FROM "FUND COMPLEX"(2)
------------ ------------------- ------------------------
William J. Armstrong NA $ 41,781 $ 90,000(10)(3)
Roland R. Eppley, Jr. NA $ 58,206 $ 91,000(10)(3)
Ann Maynard Gray, $75,000 NA $ 75,000(17)(3)
Matthew Healey(4) $75,000 NA $ 75,000(17)(3)
Fergus Reid, III NA $110,091 $202,750(10)(3)
James J. Schonbachler $75,000 NA $ 75,000(17)(3)
Leonard M. Spalding, Jr. NA $ 35,335 $ 89,000(10)(3)
H. Richard Vartabedian NA $ 86,791 $134,350(10)(3)
- ---------------------
1 The Morgan Fund Complex means registered investment companies advised by
JPMIM.
2 A Fund Complex generally 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 (as used herein, registered
investment companies advised by JPMIM and JPMFAM).
3 Total number of investment company boards with respect to Trustees, or
Advisory Boards with respect to Advisory Board members, served on within
the Fund Complex.
4 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.
Inasmuch as the Morgan Fund Complex does not have any retirement plan for
its Trustees and JPMC will also benefit from the administrative efficiencies of
a consolidated board, JPMC has agreed to pay a one-time retirement package to
the Trustees of the Morgan Fund Complex and the Advisory Board members who have
volunteered to leave the Board of Trustees or Advisory Board of the Morgan Fund
Complex prior to the their normal retirement date. For each retiring Trustee,
the retirement package is equal to three times the annual fee (which may
increase) for the new combined Board per Trustee; for each retiring Advisory
Board member, the retirement package is one and a half times the annual fee
(which may increase) for the new combined Board per Trustee.
FORMER CHASE VISTA FUNDS' RETIREMENT PLAN AND DEFERRED COMPENSATION PLAN FOR
ELIGIBLE TRUSTEES
Effective August 21, 1995, the Trustees of the former Chase Vista Funds also
instituted a Retirement Plan for Eligible Trustees (the "Plan") pursuant to
which each Trustee (who is not an employee of the former Chase Vista Funds'
adviser, administrator or distributor or any of their affiliates) may be
entitled to certain benefits upon retirement from the Board of Trustees.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible Trustee has attained age 65 and has completed at least five years of
continuous service with one or more of the investment companies advised by the
adviser of certain former Chase Vista Funds and its affiliates (collectively,
the "Covered Funds"). Each Eligible Trustee is entitled to receive from the
Covered Funds an annual benefit commencing on the first day of the calendar
quarter coincident with or following his date of retirement equal to the sum of
(1) 8% of the highest annual compensation received from the Covered Funds
multiplied by the number of such Trustee's years of service (not in excess of 10
years) completed with respect to any Covered Funds and (2) 4% of the highest
annual compensation received from the Covered Funds for each year of service in
excess of 10 years, provided that no Trustee's annual benefit will exceed the
highest annual compensation received by that Trustee from the Covered Funds.
Such benefit is payable to each eligible Trustee in monthly installments for the
life of the Trustee. On February 22, 2001, the Board of Trustees voted to
terminate the Plan and in furtherance of this
19
determination agreed to pay Trustees an amount equal, in the aggregate, to
$10.95 million, of which $5.3 million had been previously accrued by the Covered
Funds. The remaining $5.65 million was paid by Chase. Mssrs. Armstrong, Eppley,
Reid, Spalding and Vartabedian, who are Nominees, received $1,027,673, $800,600,
$2,249,437, $463,798 and $1,076,927, respectively, in connection with the
termination. Each nominee has elected to defer receipt of such amount pursuant
to the Deferred Compensation Plan for Eligible Trustees.
Effective August 21, 1995, the Trustees instituted a Deferred Compensation
Plan for Eligible Trustees (the "Deferred Compensation Plan") pursuant to which
each Trustee (who is not an employee of the former Chase Vista Funds' advisor,
administrator or distributor or any of their affiliates) may enter into
agreements with such Funds whereby payment of the Trustees' fees are deferred
until the payment dated elected by the Trustee (or the Trustee's termination of
service). The deferred amounts are deemed invested in shares of funds as elected
by the Trustee at the time of deferral. If a deferring Trustee dies prior to the
distribution of amounts held in the deferral account, the balance of the
deferral account will be distributed to the Trustee's designated beneficiary in
a single lump sum payment as soon as practicable after such deferring Trustee's
death. Messrs. Armstrong, Eppley, Reid, Spalding and Vartabedian are the only
Nominees who have elected to defer compensation under such plan.
The Trustees decide upon general policies and are responsible for overseeing
JPMF's business affairs. To assist the Trustees in exercising their overall
supervisory responsibilities each of JPMF and the Master Portfolio has entered
into a Fund Services Agreement with Pierpont Group, Inc. to assist the Trustees
in exercising their overall supervisory responsibilities. Pierpont Group, Inc.
was organized in July 1989 to provide services for the J.P. Morgan Family of
Funds (formerly "The Pierpont Family of Funds"), and the Trustees are the equal
and sole shareholders of Pierpont Group, Inc. JPMF paid Pierpont Group, Inc. a
fee in an amount representing its reasonable costs in performing these services.
As part of the overall integration and rationalization of the Funds within the
Fund Complex, it is anticipated that the Surviving Fund and the Merging Fund
will terminate its agreement with Pierpont Group, Inc. in connection with the
Reorganization. The Consolidated Board of Trustees will instead look to counsel,
auditors, Morgan and other service providers, as necessary.
The aggregate fees paid to Pierpont Group, Inc. by the Merging Fund, the
Surviving Fund and the Master Portfolio during the indicated fiscal periods are
set forth below:
MERGING FUND--For the fiscal years ended November 30, 1998, 1999 and 2000:
$2,245, $1,073 and $1,282, respectively.
SURVIVING FUND--For the fiscal years ended November 30, 1998, 1999 and 2000:
$11,566, $3,334 and $2,806, respectively.
MASTER PORTFOLIO--For the fiscal years ended November 30, 1998, 1999 and
2000: $13,264, $6,949 and $8,347, respectively.
PRINCIPAL EXECUTIVE OFFICERS:
JPMF's principal executive officers are listed below. The officers conduct
and supervise the business operations of JPMF. The business address of each of
the officers, unless otherwise noted, is J.P. Morgan Fund Distributors, Inc.,
1211 Avenue of Americas, New York, New York, 10036. The principal executive
officers of JPMF are as follows:
NAME AND POSITION AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ----------------- -------- ------------------------------------------
David Wezdenko, 37 Vice President, J.P. Morgan Investment
President and Management Inc. Mr. Wezdenko is the Chief
Treasurer Operating Officer for the U.S. Mutual
Funds and Financial Intermediaries
Business. Since joining J.P. Morgan in
1996, he has held numerous financial and
operations related positions supporting
the J.P. Morgan pooled funds business.
Sharon Weinberg, 41 Vice President, J.P. Morgan Investment
Vice-President and Management Inc. Ms. Weinberg is head of
Secretary Business and Product Strategy for the U.S.
Mutual Funds and Financial Intermediaries
business. Since joining J.P. Morgan in
1996 in New York, she has held numerous
positions throughout the asset management
business in mutual funds marketing, legal
and product development.
20
ACCOUNTANTS
PricewaterhouseCoopers LLP serves as the Merging Fund's, the Surviving
Fund's, and the Master Portfolio's independent accountants, auditing and
reporting on the annual financial statements of each Fund and reviewing certain
regulatory reports and each Fund's federal income tax returns.
PricewaterhouseCoopers LLP also performs other professional accounting,
auditing, tax and advisory services when JPMF 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 $47,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. There were no
financial systems design and implementation services rendered by
PricewaterhouseCoopers LLP to the Merging Fund, JPMIM and JPMIM's affiliates
that provide services to the Fund for the calendar year ended December 31, 2000.
ALL OTHER FEES. The aggregate fees billed for all other non-audit services,
including fees for tax-related services, rendered by PricewaterhouseCoopers LLP
to the Merging Fund, JPMIM and JPMIM's affiliates that provide services to the
Fund for the calendar year ended December 31, 2000 was $11,029,400.
The Audit Committee has considered whether the provision of non-audit
services is compatible with maintaining the independence of
PricewaterhouseCoopers LLP.
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION
This Combined Prospectus/Proxy Statement is being furnished in connection
with the solicitation of proxies by the JPMF Board for use at the Meeting. It is
expected that the solicitation of proxies will be primarily by mail. JPMF's
officers and service providers may also solicit proxies by telephone, facsimile
machine, telegraph, the Internet or personal interview. In addition JPMF may
retain the services of professional solicitors to aid in the solicitation of
proxies for a fee. It is anticipated that banks, brokerage houses and other
custodians will be requested on behalf of JPMF to forward solicitation materials
to their principals to obtain authorizations for the execution of proxies. Any
Merging Fund Shareholder giving a proxy may revoke it at any time before it is
exercised by submitting to JPMF a written notice of revocation or a subsequently
executed proxy or by attending the Meeting and electing to vote in person.
Only the Merging Fund Shareholders of record at the close of business on
April 6, 2001 will be entitled to vote at the Meeting. On that date, there were
outstanding and entitled to be voted 7,702,739.864 Merging Fund voting shares.
Each shareholder of the Merging Fund is entitled to the number of votes equal to
the product of the number of shares owned multiplied by the net asset value per
share on the record date.
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 voting 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 voting 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 voting 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 voting shares represented by each properly signed proxy
received prior to the Meeting will be voted at the Meeting. If a Merging Fund
Shareholder specifies how the proxy is to be voted on any of the business to
come before the Meeting, it will be voted in accordance with such
specifications. If a Merging Fund Shareholder returns its proxy but no direction
is made on the proxy, the proxy will be voted FOR each Proposal described in
this Combined Prospectus/Proxy Statement. The Merging Fund Shareholders voting
to ABSTAIN on the Proposals will be treated as present for purposes of achieving
a
21
quorum and in determining the votes cast on the Proposals, but not as having
voted FOR (and therefore will have the effect of a vote against) 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 (and therefore will have the effect of
a vote against) the Proposals.
A proxy granted by any Merging Fund Shareholder may be revoked by such
Merging Fund Shareholder at any time prior to its use by written notice to JPMF,
by submission of a later dated Proxy or by voting in person at the Meeting. If
any other matters come before the Meeting, proxies will be voted by the persons
named as proxies in accordance with their best judgment.
EXPENSES OF PROXY SOLICITATION
JPMC, and not the Merging Fund or the Surviving Fund (or shareholders of
either Fund) will pay the cost of the preparation, printing and mailing to its
shareholders of the Combined Prospectus/Proxy Statement, accompanying Notice of
Meeting, form of proxy and any supplementary solicitation of its shareholders.
It is expected that the cost of retaining D. F. King & Co., Inc., to assist
in the proxy solicitation process for the fund complex will not exceed $200,000,
which cost will be borne by JPMC.
ABSTENTIONS AND BROKER NON-VOTES
In tallying the Merging Fund Shareholder votes, abstentions and broker
non-votes (i.e., proxies sent in by brokers and other nominees that cannot be
voted on a proposal because instructions have not been received from the
beneficial owners) will be counted for purposes of determining whether or not a
quorum is present for purposes of convening the Meeting. Abstentions and broker
non-votes will be considered to be a vote against each proposal.
INTERESTED PARTIES
On the record date, the Trustees and officers of JPMF as a group owned less
than 1% of the outstanding shares of the Merging Fund and there were no of the
persons who owned beneficially more than 5% of the shares of the Merging Fund.
On the record date, the Trustees and officers of JPMIF as a group owned less
than 1% of the outstanding shares of the Surviving Fund. On the record date, the
name, address and share ownership of the persons who owned beneficially more
than 5% of shares of the Surviving Fund and the percentage of shares of the
Surviving Fund that would be owned by such person upon consummation of the
Reorganization based upon their holdings at April 6, 2001 were as follows:
PERCENTAGE OF PERCENTAGE OF
AMOUNT OF SURVIVING FUND SURVIVING FUND
SHARES OWNED ON OWNED UPON
NAME AND ADDRESS OWNED RECORD DATE CONSUMMATION
- -------------------------------------------------- -------------- -------------- --------------
JPMIM As Agent for the American Chemical Society 4,657,293.4970 8.44% 7.97%
ATTN: Janet Valsechi
522 5th Avenue
New York, NY 10036-7601
JPMorgan FSB As Agent For JMD Delaware Inc., 3,311,709.1060 6.00% 5.67%
Trustee for Micky Arison
ATTN: Special Products 2/OPS3
500 Stanton Christiana Rd
Newark DE 19713-2107
ADDITIONAL INFORMATION ABOUT JPMF
Information about the Merging Fund is included in its Prospectus, which is
incorporated by reference herein. Additional information about the Merging Fund
is also included in JPMF's Statement of Additional Information which has been
filed with the Commission and which is incorporated herein by reference. Copies
of the Prospectus and Statement of Additional information may be obtained
without charge by calling 1-800-521-5411. JPMF is subject to the requirements of
the 1940 Act and, in accordance with such requirements, files reports and other
information with the Commission. These materials can be inspected and copied at
the Public Reference Facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
at 7 World Trade Center, Suite 1300,
22
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 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 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
each of the Merging Fund and the Surviving Fund for the fiscal year ended
November 30, 2000, and the audited financial statements, notes thereto and
supplementary data of 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
supplemental data, as applicable, of the Merging Fund, the Surviving Fund and
the Master Portfolio have been incorporated herein by reference in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on
their authority as experts in auditing and accounting.
OTHER BUSINESS
The JPMF Board knows of no other business to be brought before the Meeting.
However, if any other matters come before the Meeting, it is the intention of
the JPMF Board that proxies that do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of proxy.
LITIGATION
Neither JPMF nor JPMIF is involved in any litigation that would have any
material adverse effect upon either the Merging Fund or the Surviving Fund.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to JPMF in writing at the address on
the cover page of this Combined Prospectus/Proxy Statement or by telephoning
1-800-521-5411.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE REQUESTED
TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
23
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Plan") made this 11th day of
May, 2001 by and among J.P. Morgan Funds (the "Transferor Trust"), a
Massachusetts business trust, on behalf of the J.P. Morgan International
Opportunities Fund (the "Transferor Portfolio"), J.P. Morgan Institutional Funds
(the "Acquiring Trust"), a Massachusetts business trust, on behalf of the
J.P. Morgan Institutional International Opportunities Fund (the "Acquiring
Portfolio") and J.P. Morgan Chase & Co.
WHEREAS, the Board of Trustees of each of the Transferor Trust and the
Acquiring Trust has determined that the transfer of all of the assets and
liabilities of the Transferor Portfolio to the Acquiring Portfolio is in the
best interests of the Transferor Portfolio and the Acquiring Portfolio, as well
as the best interests of shareholders of the Transferor Portfolio and the
Acquiring Portfolio, and that the interests of existing shareholders would not
be diluted as a result of this transaction;
WHEREAS, each of the Transferor Trust and the Acquiring Trust intends to
provide for the reorganization of the Transferor Portfolio (the
"Reorganization") through the acquisition by the Acquiring Portfolio of all of
the assets, subject to all of the liabilities, of the Transferor Portfolio in
exchange for shares of beneficial interest of the Acquiring Portfolio (the
"Acquiring Portfolio Shares"), the liquidation of the Transferor Portfolio and
the distribution to Transferor Portfolio shareholders of such Acquiring
Portfolio Shares, all pursuant to the provisions of Section 368(a)(1) of the
Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. TRANSFER OF ASSETS OF THE TRANSFEROR PORTFOLIO IN EXCHANGE FOR THE ACQUIRING
PORTFOLIO SHARES AND LIQUIDATION AND TERMINATION OF THE TRANSFEROR PORTFOLIO
(a) PLAN OF REORGANIZATION.
(i) The Transferor Trust on behalf of the Transferor Portfolio listed
above, will convey, transfer and deliver to the Acquiring Portfolio all of the
then existing assets of the Transferor Portfolio (consisting, without
limitation, of portfolio securities and instruments, dividend and interest
receivables, cash and other assets). In consideration thereof, the Acquiring
Trust on behalf of the Acquiring Portfolio will (A) assume and pay, to the
extent that they exist on or after the Effective Time of the Reorganization (as
defined in Section 1(b)(i) hereof), all of the obligations and liabilities of
the Transferor Portfolio and (B) issue and deliver to the Transferor Portfolio
full and fractional shares of beneficial interest of the Acquiring Portfolio,
with respect to the Acquiring Portfolio equal to that number of full and
fractional Acquiring Portfolio Shares as determined in Section 1(c) hereof. The
Acquiring Portfolio Shares issued and delivered to the Transferor Portfolio
shall be of the Select Class share class in exchange for Shares of the
Transferor Portfolio, with the amounts of shares to be determined by the
parties. Any 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 their respective custodians and J.P.
Morgan Chase & Co. The determination of said parties 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.
A-1
(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 September 1, 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 custom of brokers, and
shall be accompanied by all necessary federal and state stock transfer stamps or
a check for the appropriate purchase price thereof.
(c) VALUATION.
(i) The net asset value of the shares of the Acquiring Portfolio and the
net value of the assets of the Transferor Portfolio to be transferred in
exchange therefore shall be determined as of the Effective Time of the
Reorganization. The net asset value of the Acquiring Portfolio Shares shall be
computed by the Custodian in the manner set forth in the Acquiring Trust's
Declaration of Trust or By-laws and then current prospectus and statement of
additional information and shall be computed to not less than two decimal
places. The net value of the assets of the Transferor Portfolio to be
transferred shall be computed by the Custodian by calculating the value of the
assets transferred by the Transferor Portfolio and by subtracting therefrom the
amount of the liabilities assigned and transferred to the Acquiring Portfolio,
said assets and liabilities to be valued in the manner set forth in the
Transferor Trust's Declaration of Trust or By-laws and then current prospectus
and statement of additional information.
(ii) The number of Select Class shares of the Acquiring Portfolio to be
issued (including fractional shares, if any) by the Acquiring Portfolio in
exchange for the Transferor Portfolio's assets attributable to the Transferor
Portfolio's shares shall be determined by an exchange ratio computed by dividing
the net value of the Transferor Portfolio's assets attributable to its shares by
the net asset value per share of the Select Class shares of the Acquiring
Portfolio, both as determined in accordance with Section 1(c)(i). All
computations of value shall be made by the Custodian in accordance with its
regular practice as pricing agent for the Acquiring Portfolio and the Transferor
Portfolio.
2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING TRUST
The Acquiring Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Acquiring Trust is a business trust
that is duly organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts and has the power to carry on its business as
it is now being conducted. The Acquiring Portfolio is a validly existing series
of shares of such business trust representing interests therein under the laws
of Massachusetts. Each of the Acquiring Portfolio and the Acquiring Trust have
all necessary federal, state and local authorization to own all of its
properties and assets and to carry on its business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Acquiring Trust is registered
under the Investment Company Act of 1940, as amended (the "Act") as an open-end
investment company of the management type; such registration has not been
revoked or rescinded and is in full force and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectuses and statements of
additional information of the Acquiring Trust, as amended, included in the
Acquiring Trust's registration statement on Form N-1A
A-2
filed with the Securities and Exchange Commission, comply in all material
respects with the requirements of the Securities Act of 1933, as amended (the
"Securities Act") and the Act and do not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(d) CAPITALIZATION. The Acquiring Trust has an unlimited number of
authorized shares of beneficial interest, of which as of November 30, 2000 there
were outstanding 40,484,000 shares of the Acquiring Portfolio, and no shares of
such Portfolio were held in the treasury of the Acquiring Trust. All of the
outstanding shares of the Acquiring Trust have been duly authorized and are
validly issued, fully paid and nonassessable (except as disclosed in the
Acquiring Trust's prospectus and recognizing that under Massachusetts law,
shareholders of an Acquiring Trust portfolio could, under certain circumstances,
be held personally liable for the obligations of such Acquiring Trust
portfolio). Because the Acquiring Trust is an open-end investment company
engaged in the continuous offering and redemption of its shares, the number of
outstanding shares may change prior to the Effective Time of the Reorganization.
All of the issued and outstanding shares of the Acquiring Portfolio have been
offered and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable state securities
laws.
(e) FINANCIAL STATEMENTS. The financial statements of the Acquiring Trust
with respect to the Acquiring Portfolio and The International Opportunities
Portfolio for the fiscal year ended November 30, 2000, which have been audited
by PricewaterhouseCoopers LLP, fairly present the financial position of the
Acquiring Portfolio and The International Opportunities Portfolio as of the
dates thereof and the respective results of operations and changes in net assets
for each of the periods indicated in accordance with generally accepted
accounting principles ("GAAP").
(f) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring Portfolio Shares
to be issued in connection with the Reorganization will be duly authorized and
upon consummation of the Reorganization will be validly issued, fully paid and
nonassessable (except as disclosed in the Trust's prospectus and recognizing
that under Massachusetts law, shareholders of an Acquiring Trust portfolio
could, under certain circumstances, be held personally liable for the
obligations of such portfolio).
(g) AUTHORITY RELATIVE TO THIS PLAN. The Acquiring Trust, on behalf of the
Acquiring Portfolio, has the power to enter into this Plan and to carry out its
obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Acquiring Trust's Board of Trustees and no other proceedings by the
Acquiring Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Acquiring Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
(h) LIABILITIES. There are no liabilities of the Acquiring Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Acquiring Trust's
financial statements with respect to the Acquiring Portfolio and liabilities
incurred in the ordinary course of business subsequent to October 31, 2000 or
otherwise previously disclosed to the Acquiring Trust with respect to the
Acquiring Portfolio, none of which has been materially adverse to the business,
assets or results of operations of the Acquiring Portfolio.
(i) NO MATERIAL ADVERSE CHANGE. Since October 31, 2000, there has been no
material adverse change in the financial condition, results of operations,
business, properties or assets of the Acquiring Portfolio, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
(j) LITIGATION. There are no claims, actions, suits or proceedings pending
or, to the knowledge of the Acquiring Trust, threatened which would adversely
affect the Acquiring Trust or the Acquiring Portfolio's assets or business or
which would prevent or hinder consummation of the transactions contemplated
hereby, there are no facts which would form the basis for the institution of
administrative proceedings against the Acquiring Trust or the Acquiring
Portfolio and, to the knowledge of the Acquiring Trust, there are no regulatory
investigations of the Acquiring Trust or the Acquiring Portfolio, pending or
threatened, other than routine inspections and audits.
(k) CONTRACTS. No default exists under any material contract or other
commitment to which the Acquiring Trust, on behalf of the Acquiring Portfolio,
is subject.
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(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.
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 prospectuses and statements 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 November 30, 2000 there
were outstanding 6,995,000 shares of the Transferor Portfolio, and no shares of
such Portfolio were held in the treasury of the Transferor Trust. All of the
outstanding shares of the Transferor Trust have been duly authorized and are
validly issued, fully paid and nonassessable (except as disclosed in the
Transferor Trust's prospectus and recognizing that under Massachusetts law,
shareholders of a Trust portfolio could, under certain circumstances, be held
personally liable for the obligations of such Trust portfolio). Because the
Transferor Trust is an open-end investment company engaged in the continuous
offering and redemption of its shares, the number of outstanding shares may
change prior to the Effective Time of the Reorganization. All such shares will,
at the Exchange Date, be held by the shareholders of record of the Transferor
Portfolio as set forth on the books and records of the Transferor Trust in the
amounts set forth therein, and as set forth in any list of shareholders of
record provided to the Acquiring Portfolio for purposes of the Reorganization,
and no such shareholders of record will have any preemptive rights to purchase
any Transferor Portfolio shares, and the Transferor Portfolio does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any Transferor Portfolio shares (other than any existing dividend reinvestment
plans of the Transferor Portfolio or as set forth in this Plan), nor are there
outstanding any securities convertible into any shares of the Transferor
Portfolio (except pursuant to any existing exchange privileges described in the
current prospectus and statement of additional information of the Transferor
Trust). All of the Transferor Portfolio's issued and outstanding shares have
been offered and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable state securities
laws.
(e) FINANCIAL STATEMENTS. The financial statements for the Transferor Trust
with respect to the Transferor Portfolio and The International Opportunities
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 International Opportunities Portfolio as of the
dates thereof and the respective results of operations and changes in net assets
for each of the periods indicated in accordance with GAAP.
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(f) AUTHORITY RELATIVE TO THIS PLAN. The Transferor Trust, on behalf of the
Transferor Portfolio, has the power to enter into this Plan and to carry out its
obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Transferor Trust's Board of Trustees and no other proceedings by the
Transferor Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Transferor Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
(g) LIABILITIES. There are no liabilities of the Transferor Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Transferor Trust's
Financial Statements with respect to the Transferor Portfolio and liabilities
incurred in the ordinary course of business subsequent to 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 October 31, 2000, there has been no
material adverse change in the financial condition, results of operations,
business, properties or assets of the Transferor Portfolio, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
(i) LITIGATION. There are no claims, actions, suits or proceedings pending
or, to the knowledge of the Transferor Trust, threatened which would adversely
affect the Transferor Trust or the Transferor Portfolio's assets or business or
which would prevent or hinder consummation of the transactions contemplated
hereby, there are no facts which would form the basis for the institution of
administrative proceedings against the Transferor Trust or the Transferor
Portfolio and, to the knowledge of the Transferor Trust, there are no regulatory
investigations of the Transferor Trust or the Transferor Portfolio, pending or
threatened, other than routine inspections and audits.
(j) CONTRACTS. The Transferor Trust, on behalf of the Transferor Portfolio,
is not subject to any contracts or other commitments (other than this Plan)
which will not be terminated with respect to the Transferor Portfolio without
liability to the Transferor Trust or the Transferor Portfolio as of or prior to
the Effective Time of the Reorganization.
(k) TAXES. The federal income tax returns of the Transferor Trust with
respect to the Transferor Portfolio, and all other income tax returns required
to be filed by the Transferor Trust with respect to the Transferor Portfolio,
have been filed, and all taxes payable pursuant to such returns have been paid.
To the knowledge of the Transferor Trust, no such return is under audit and no
assessment has been asserted in respect of any such return. All federal and
other taxes owed by the Transferor Trust with respect to the Transferor
Portfolio have been paid so far as due. The Transferor Portfolio has elected to
qualify as a "regulated investment company" under Subchapter M of the Code, as
of and since its first taxable year, and shall continue to so qualify until the
Effective Time of the Reorganization.
(l) NO APPROVALS REQUIRED. Except for the Registration Statement (as
defined in Section 4(a) hereof) and the approval of the Transferor Portfolio's
shareholders referred to in Section 6(a) hereof, no consents, approvals,
authorizations, registrations or exemptions under federal or state laws are
necessary for the consummation by the Transferor Trust of the Reorganization,
except such as have been obtained as of the date hereof.
4. COVENANTS OF THE ACQUIRING TRUST
The Acquiring Trust covenants to the following:
(a) REGISTRATION STATEMENT. On behalf of the Acquiring Portfolio, the
Acquiring Trust shall file with the Commission a Registration Statement on Form
N-14 (the "Registration Statement") under the Securities Act relating to the
Acquiring Portfolio Shares issuable hereunder and the proxy statement of the
Transferor Portfolio relating to the meeting of the Transferor Portfolio's
shareholders referred to in Section 5(a) herein. At the time the Registration
Statement becomes effective, the Registration Statement (i) will comply in all
material respects with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder (the "Regulations") and (ii) will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and at the time the Registration Statement becomes effective, at the
time of the Transferor
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Portfolio shareholders' meeting referred to in Section 5(a) hereof, and at the
Effective Time of the Reorganization, the prospectus/proxy statement (the
"Prospectus") and statement of additional information (the "Statement of
Additional Information") included therein, as amended or supplemented by any
amendments or supplements filed by the Trust, will not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(b) COOPERATION IN EFFECTING REORGANIZATION. The Acquiring Trust agrees to
use all reasonable efforts to effectuate the Reorganization, to continue in
operation thereafter, and to obtain any necessary regulatory approvals for the
Reorganization. The Acquiring Trust shall furnish such data and information
relating to the Acquiring Trust as shall be reasonably requested for inclusion
in the information to be furnished to the Transferor Portfolio shareholders in
connection with the meeting of the Transferor Portfolio's shareholders for the
purpose of acting upon this Plan and the transactions contemplated herein.
(c) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise contemplated by
this Plan, the Acquiring Trust shall conduct the business of the 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.
5. COVENANTS OF THE TRANSFEROR TRUST
The Transferor Trust covenants to the following:
(a) MEETING OF THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor
Trust shall call and hold a meeting of the shareholders of the Transferor
Portfolio for the purpose of acting upon this Plan and the transactions
contemplated herein.
(b) PORTFOLIO SECURITIES. With respect to the assets to be transferred in
accordance with Section 1(a), the Transferor Portfolio's assets shall consist of
all property and assets of any nature whatsoever, including, without limitation,
all cash, cash equivalents, securities, claims and receivables (including
dividend and interest receivables) owned, and any deferred or prepaid expenses
shown as an asset on the Transferor Trust's books maintained on behalf of the
Transferor Portfolio. At least five (5) business days prior to the Exchange
Date, the Transferor Portfolio will provide the Acquiring Trust, for the benefit
of the Acquiring Portfolio, with a list of its assets and a list of its stated
liabilities. The Transferor Portfolio shall have the right to sell any of the
securities or other assets shown on the list of assets prior to the Exchange
Date but will not, without the prior approval of the Acquiring Trust, on behalf
of the Acquiring Portfolio, acquire any additional securities other than
securities which the Acquiring Portfolio is permitted to purchase, pursuant to
its investment objective and policies or otherwise (taking into consideration
its own portfolio composition as of such date). In the event that the Transferor
Portfolio holds any investments that the Acquiring Portfolio would not be
permitted to hold, the Transferor Portfolio will dispose of such securities
prior to the Exchange Date to the extent practicable, to the extent permitted by
its investment objective and policies and to the extent that its shareholders
would not be materially affected in an adverse manner by such a disposition. In
addition, the Transferor Trust will prepare and deliver immediately prior to the
Effective Time of the Reorganization, a Statement of Assets and Liabilities of
the Transferor Portfolio, prepared in accordance with GAAP (each, a "Schedule").
All securities to be listed in the Schedule for the Transferor Portfolio as of
the Effective Time of the Reorganization will be owned by the Transferor
Portfolio free and clear of any liens, claims, charges, options and
encumbrances, except as indicated in such Schedule, and, except as so indicated,
none of such securities is or, after the Reorganization as contemplated hereby,
will be subject to any restrictions, legal or contractual, on the disposition
thereof (including restrictions as to the public offering or sale thereof under
the Securities Act) and, except as so indicated, all such securities are or will
be readily marketable.
(c) REGISTRATION STATEMENT. In connection with the preparation of the
Registration Statement, the Transferor Trust will cooperate with the Acquiring
Trust and will furnish to the Acquiring Trust the information relating to the
Transferor Portfolio required by the Securities Act and the Regulations to be
set forth in the Registration Statement (including the Prospectus and Statement
of Additional Information). At the time the Registration Statement becomes
effective, the Registration Statement, insofar as it relates to the Transferor
Portfolio, (i) will comply in all material respects with the provisions of the
Securities Act and the Regulations and (ii) will not contain an untrue statement
of a material fact or omit to state a material fact required 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
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Additional Information, as amended or supplemented by any amendments or
supplements filed by the Transferor Trust, insofar as they relate to the
Transferor Portfolio, will not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall apply
only to statements in or omissions from the Registration Statement, Prospectus
or Statement of Additional Information made in reliance upon and in conformity
with information furnished by the Transferor Portfolio for use in the
registration statement, prospectus or statement of additional information as
provided in this Section 5(c).
(d) COOPERATION IN EFFECTING REORGANIZATION. The Transferor Trust agrees to
use all reasonable efforts to effectuate the Reorganization and to obtain any
necessary regulatory approvals for the Reorganization.
(e) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise contemplated by
this Plan, the Transferor Trust shall conduct the business of the Transferor
Portfolio in the ordinary course until the consummation of the Reorganization,
it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions.
(f) STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but in
any case within 60 days after the Exchange Date, the Transferor Trust on behalf
of the Transferor Portfolio, shall prepare a statement of the earnings and
profits of the Transferor Portfolio for federal income tax purposes, and of any
capital loss carryovers and other items that the Acquiring Portfolio will
succeed to and take into account as a result of Section 381 of the Code.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRANSFEROR TRUST
The obligations of the Transferor Trust with respect to the consummation of the
Reorganization are subject to the satisfaction of the following conditions:
(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. This Plan and the
transactions contemplated by the Reorganization shall have been approved by the
requisite vote of the shares of the Transferor Portfolio entitled to vote on the
matter ("Transferor Shareholder Approval").
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Acquiring Trust shall
have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all material
respects as of the Effective Time of the Reorganization (except as otherwise
contemplated herein), and there shall have been no material adverse change (as
described in Section 2(i)) in the financial condition, results of operations,
business, properties or assets of the Acquiring Portfolio since October 31,
2000.
(c) REGULATORY APPROVAL. The Registration Statement shall have been
declared effective by the Commission and no stop orders under the Securities Act
pertaining thereto shall have been issued, and all other approvals,
registrations, and exemptions under federal and state 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 the 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
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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 JPMorgan Fleming
International Equity Fund, a series of Mutual Fund Group, into the Acquiring
Portfolio shall have been consummated.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING TRUST
The obligations of the Acquiring Trust with respect to the consummation of the
Reorganization are subject to the satisfaction of the following conditions:
(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor
Shareholder Approval shall have been obtained.
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Transferor Trust shall
have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all material
respects as of the Effective Time of the Reorganization (except as otherwise
contemplated herein), and there shall have been no material adverse change (as
described in Section 3(h)) in the financial condition, results of operations,
business, properties or assets of the Transferor Portfolio since October 31,
2000.
(c) PORTFOLIO SECURITIES. All securities to be acquired by the Acquiring
Portfolio in the Reorganization shall have been approved for acquisition by
J.P. Morgan Investment Management Inc. ("JPMIM"), in its capacity as investment
adviser to the Acquiring Portfolio, as consistent with the investment policies
of the Acquiring Portfolio.
(d) REGULATORY APPROVAL. The Regulatory Approvals shall have been obtained.
(e) DISTRIBUTION OF INCOME AND GAINS. The Transferor Trust on behalf of the
Transferor Portfolio shall have distributed to the shareholders of the
Transferor Portfolio all of the Transferor Portfolio's investment company
taxable income (determined without regard to the deduction for dividends paid)
as defined in Section 852(b)(2) of the Code for its taxable year ending on the
Exchange Date and all of its net capital gain as such term is used in
Section 852(b)(3) of the Code, after reduction by any capital loss carry
forward, for its taxable year ending on the Exchange Date.
(f) TAX OPINION. The Acquiring Trust shall have received the Tax Opinion.
(g) CONCURRENT REORGANIZATION. The reorganization of JPMorgan Fleming
International Equity Fund, a series of Mutual Fund Group, into the Acquiring
Portfolio shall have been consummated.
8. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS, WARRANTIES AND
REPRESENTATIONS
(a) AMENDMENTS The parties hereto may, by agreement in writing authorized
by their respective Board of Trustees amend this Plan at any time before or
after approval hereof by the shareholders of the Transferor Portfolio, but after
such approval, no amendment shall be made which substantially changes the terms
hereof.
(b) WAIVERS. At any time prior to the Effective Time of the Reorganization,
either the Transferor Trust or the Acquiring Trust may by written instrument
signed by it (i) waive any inaccuracies in the representations and warranties
made to it contained herein and (ii) waive compliance with any of the covenants
or conditions made for its benefit contained herein, except that conditions set
forth in Sections 6(c) and 7(d) may not be waived.
(c) TERMINATION BY THE TRANSFEROR TRUST. The Transferor Trust, on behalf of
the Transferor Portfolio, may terminate this Plan with respect to the Transferor
Portfolio at any time prior to the Effective Time of the Reorganization by
notice to the Acquiring Trust and JPMIM if (i) a material condition to the
performance of the Transferor Trust hereunder or a material covenant of the
Acquiring Trust contained herein shall not be fulfilled on or before the date
specified for the fulfillment thereof or (ii) a material default or material
breach of this Plan shall be made by the Acquiring Trust. In addition, this Plan
may be terminated by the Transferor Trust at any time prior to the Effective
Time of the Reorganization, whether before or after approval of this Plan by the
shareholders of the Transferor Portfolio, without liability on the part of any
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party hereto, its Trustees, officers or shareholders or JPMIM on notice to the
other parties in the event that the Board of Trustees determines that proceeding
with this Plan is not in the best interests of the shareholders of the
Transferor Portfolio.
(d) TERMINATION BY THE ACQUIRING TRUST. The Acquiring Trust, on behalf of
the Acquiring Portfolio, may terminate this Plan with respect to the Acquiring
Portfolio at any time prior to the Effective Time of the Reorganization by
notice to the Transferor Trust and JPMIM if (i) a material condition to the
performance of the Acquiring Trust hereunder or a material covenant of the
Transferor Trust contained herein shall not be fulfilled on or before the date
specified for the fulfillment thereof or (ii) a material default or material
breach of this Plan shall be made by the Transferor Trust. In addition, this
Plan may be terminated by the Acquiring Trust at any time prior to the Effective
Time of the Reorganization, whether before or after approval of this Plan by the
shareholders of the Transferor Portfolio, without liability on the part of any
party hereto, its Trustees, officers or shareholders or JPMIM on notice to the
other parties in the event that the Board of Trustees determines that proceeding
with this Plan is not in the best interests of the shareholders of the Acquiring
Portfolio.
(e) SURVIVAL. No representations, warranties or covenants in or pursuant to
this Plan, except for the provisions of Section 5(f) and Section 9 of this Plan,
shall survive the Reorganization.
9. EXPENSES
The expenses of the Reorganization will be borne by J.P. Morgan Chase & Co.
("JPMC"). Such expenses include, without limitation, (i) expenses incurred in
connection with the entering into and the carrying out of the provisions of this
Plan; (ii) expenses associated with the preparation and filing of the
Registration Statement; (iii) fees and expenses of preparing and filing such
forms as are necessary under any applicable state securities laws in connection
with the Reorganization; (iv) postage; (v) printing; (vi) accounting fees;
(vii) legal fees and (viii) solicitation costs relating to the Reorganization.
In addition, JPMC or an affiliate will waive fees payable to it or reimburse
expenses to the extent necessary such that the actual (post-waiver) total
expense ratios of the Select Class Shares and the Institutional Class Shares of
the Acquiring Portfolio are not higher than those set forth in the Registration
Statement for a period of three years, or one year with respect to the Class A
Shares and Class B Shares, after the Exchange Date.
10. NOTICES
Any notice, report, statement or demand required or permitted by any provision
of this Plan shall be in writing and shall be given by hand, certified mail or
by facsimile transmission, shall be deemed given when received and shall be
addressed to the parties hereto at their respective addresses listed below or to
such other persons or addresses as the relevant party shall designate as to
itself from time to time in writing delivered in like manner:
if to the Transferor Trust (for itself or on behalf of the Transferor
Portfolio):
60 State Street
Suite 1300
Boston, Massachusetts 02109
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: John E. Baumgardner, Jr., Esq.
if to the Acquiring Trust (for itself or on behalf of the Acquiring Portfolio):
60 State Street
Suite 1300
Boston, Massachusetts 02109
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: John E. Baumgardner, Jr., Esq.
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if to the adviser of the Transferor Trust:
522 Fifth Avenue
New York, NY 10036
if to the adviser of the Acquiring Trust:
522 Fifth Avenue
New York, NY 10036
if to J.P. Morgan Chase & Co.:
522 Fifth Avenue
New York, NY 10036
11. RELIANCE
All covenants and agreements made under this Plan shall be deemed to have been
material and relied upon by the Transferor Trust and the Acquiring Trust
notwithstanding any investigation made by such party or on its behalf.
12. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
(a) The section and paragraph headings contained in this Plan are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Plan.
(b) This Plan may be executed in any number of counterparts, each of which
shall be deemed an original.
(c) This Plan shall be governed by and construed in accordance with the laws of
The State of New York.
(d) This Plan shall bind and inure to the benefit of the Transferor Trust, the
Transferor Portfolio, the Acquiring Trust and the Acquiring Portfolio and their
respective successors and assigns, but no assignment or transfer hereof or of
any rights or obligations hereunder shall be made by any party without the
written consent of the other parties. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give any person, firm or
corporation, other than the parties hereto and their respective successors and
assigns, any rights or remedies under or by reason of this Plan.
(e) The name "J.P. Morgan Funds" is the designation of its Trustees under a
Declaration of Trust dated November 4, 1992, as amended, and all persons dealing
with the Transferor Trust must look solely to the Transferor Trust's property
for the enforcement of any claims against the Transferor Trust, as none of
Transferor Trustees, officers, agents or shareholders assumes any personal
liability for obligations entered into on behalf of the Transferor Trust. No
series of the Transferor Trust shall be liable for claims against any other
series of the Transferor Trust.
(f) The name "J.P. Morgan Institutional Funds" is the designation of its
Trustees under a Declaration of Trust dated November 4, 1992, as amended, and
all persons dealing with the Acquiring Trust must look solely to the Acquiring
Trust's property for the enforcement of any claims against the Acquiring Trust,
as none of the Acquiring Trustees, officers, agents or shareholders assumes any
personal liability for obligations entered into on behalf of the Acquiring
Trust. No series of the Acquiring Trust shall be liable for claims against any
other series of the Acquiring Trust.
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IN WITNESS WHEREOF, the undersigned have executed this Plan as of the date first
above written.
J.P. MORGAN INSTITUTIONAL FUNDS
on behalf of J.P. Morgan Institutional
International Opportunities Fund
By: /s/ Sharon Weinberg
--------------------------------------------
Name: Sharon Weinberg
Title: Vice President and Assistant
Secretary
J.P. MORGAN FUNDS
on behalf of J.P. Morgan International
Opportunities Fund
By: /s/ Sharon Weinberg
--------------------------------------------
Name: Sharon Weinberg
Title: Vice President and Assistant
Secretary
Agreed and acknowledged with respect to
Section 9:
J.P. MORGAN CHASE & CO.
By: /s/ George Gatch
--------------------------------------------
Name: George Gatch
Title: Managing Director
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STATEMENT OF ADDITIONAL INFORMATION
(SPECIAL MEETING OF SHAREHOLDERS OF
J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND
A SERIES OF J.P. MORGAN FUNDS)
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Combined Prospectus/Proxy Statement dated May
12, 2001 for the Special Meeting of Shareholders of J.P. Morgan International
Opportunities Fund (the "Merging Fund"), a series of J.P. Morgan Funds ("JPF"),
to be held on July 3, 2001. Copies of the Combined Prospectus/Proxy Statement
may be obtained at no charge by calling J.P. Morgan International Opportunities
Fund at 1-800-521-5411
Unless otherwise indicated, capitalized terms used herein and not
otherwise defined have the same meanings as are given to them in the Combined
Prospectus/Proxy Statement.
Further information about the Surviving Fund and the Merging Fund is
contained in JPMF's Statement of Additional Information which is 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 May 11, 2001 by and among JPF, on behalf
of the Merging Fund, and JPMF, on behalf of the Surviving Fund and JPMC, and
the transactions contemplated thereby, the Reorganization Plan contemplates
the transfer of all of the assets and liabilities of the Merging Fund to the
Surviving Fund in exchange for shares issued by JPMF in the Surviving Fund
that will have an aggregate net asset value equal to the aggregate net asset
value of the shares of the Merging Fund that are outstanding immediately
before the Effective Time of the Reorganization.
Following the exchange, the Merging Fund will make a liquidating
distribution of the Surviving Fund shares to its Shareholders, so that a holder
of Shares in the Merging Fund will receive Select Class Shares of the Surviving
Fund of equal value, plus the right to receive any unpaid dividends and
distributions that were declared before the Effective Time of the
Reorganization.
At the Meeting, shareholders will also be asked to consider and vote
upon the election of Trustees of JPF.
A Special Meeting of Shareholders of the Merging Fund to consider the
proposals and the related transaction will be held at the offices of J.P. Morgan
Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, NY, on July 3,
2001 at 9:00 a.m., Eastern time. For further information about the transaction,
see the Combined Prospectus/Proxy Statement.
-2-
FINANCIAL STATEMENTS
The audited financial highlights, financial statements and notes
thereto of each of the Merging Fund and the Surviving Fund contained in their
respective Annual Reports dated November 30, 2000, and the audited financial
statements, notes thereto and supplementary data of 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 highlights, financial
statements, notes thereto and supplementary data, as applicable, which appear in
each of the Surviving Fund's, the Master Portfolio's and the Merging Fund's
Annual Report have been audited by PricewaterhouseCoopers LLP, whose reports
thereon also appear in such Annual Reports and are also incorporated herein by
reference. The financial highlights, financial statements, notes thereto and
supplementary data, as applicable, for the Merging Fund, the Surviving Fund and
the Master Portfolio for the fiscal year ended November 30, 2000 have been
incorporated herein by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on their authority as
experts in auditing and accounting.
-3-
PRO FORMA FINANCAL STATEMENTS
THE INTERNATIONAL OPPORTUNITIES PORTFOLIO /
THE INTERNATIONAL EQUITY PORTFOLIO
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
NOVEMBER 30, 2000
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
SHARES MARKET VALUE
-------------------------------------------- --------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN JPMORGAN
THE FLEMING THE FLEMING
THE INTERNA- INTERNA- THE INTERNA- INTERNA-
INTERNA- TIONAL TIONAL INTERNA- TIONAL TIONAL
TIONAL OPPORTU- OPPORTU- TIONAL OPPORTU- OPPORTU-
EQUITY NITIES PRO FORMA NITIES EQUITY NITIES PRO FORMA NITIES
PORTFOLIO PORTFOLIO ADJUSTMENTS FUND PORTFOLIO PORTFOLIO ADJUSTMENTS FUND
------------ --------- ----------- ------- ----------- --------- ----------- -----------
COMMON STOCKS - 89.7%
- ---------------
AUSTRALIA - 3.7%
AMP Ltd.(s) 306 - 306 $ - $ 3,019 $ - $ 3,019
Brambles Industries Ltd. 13 - - 13 317 - - 317
Commonwealth Bank of Australia 14 - - 14 235 - - 235
News Corp., Ltd. 22 - - 22 194 - - 194
Santos Ltd.(s) - 2,271 - 2,271 - 7,368 - 7,368
Southern Pacific Petroleum(s)+ - 2,100 - 2,100 - 2,374 - 2,374
Telstra Corp., Ltd. 43 - - 43 142 - - 142
WMC Ltd.(s) - 1,961 - 1,961 - 7,465 - 7,465
Woodside Petroleum Ltd. 18 - - 18 139 - 139
-----------------------------------------
1,026 20,226 - 21,252
-----------------------------------------
BELGIUM - 0.1%
Dexia + 3 - - 3 468 - 468
-----------------------------------------
CANADA - 0.8%
Nortel Networks Corp.(s) - 121 - 121 - 4,550 - 4,550
-----------------------------------------
DENMARK - 0.6%
Novo Nordisk A/S Cl B(s) - 18 - 18 - 3,401 - 3,401
-----------------------------------------
FINLAND - 1.5%
Nokia Oyj 25 - - 25 1,026 - - 1,026
Sampo Insurance Co. Ltd.,
A Shares(s) - 73 - 73 - 3,588 - 3,588
Sonera Oyj 16 - 16 308 - - 308
Stora Enso Oyj, R Shares(s) - 402 - 402 - 3,970 - 3,970
-----------------------------------------
1,334 7,558 - 8,892
-----------------------------------------
FRANCE - 12.9%
Air France(s) - 160 - 160 - 2,976 - 2,976
Alcatel Optronics(s)+ - 40 - 40 - 2,016 - 2,016
Alcatel S.A.(s) 3 214 - 217 157 10,603 - 10,760
Aventis SA 7 - - 7 511 - - 511
AXA 6 - - 6 798 - - 798
BNP Paribas S.A.(s) 4 132 - 136 336 10,173 - 10,510
Cap Gemini SA 3 - - 3 389 - - 389
Cie Generale D'Optique Essilor
International S.A.(s) - 1 - 1 - 389 - 389
Coflexip Stena Offshore(s) - 61 - 61 - 7,226 - 7,226
Compagnie de Saint-Gobain S.A.(s) 3 11 - 13 373 1,458 - 1,831
Imerys 2 - - 2 217 - - 217
Sidel S.A.(s) - 55 - 55 - 2,714 - 2,714
Suez Lyonnaise des Eaux S.A.(s) - 38 - 38 - 6,423 - 6,423
Total Fina Elf S.A.(s)+ - 13 - 13 - 0 - 0
Total Fina Elf S.A., B Shares(s) 7 114 - 121 939 16,318 - 17,258
Vivendi S.A.(s) - 172 - 172 - 10,612 - 10,612
-----------------------------------------
3,720 70,911 - 74,630
-----------------------------------------
-4-
PRO FORMA FINANCAL STATEMENTS
THE INTERNATIONAL OPPORTUNITIES PORTFOLIO /
THE INTERNATIONAL EQUITY PORTFOLIO
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
NOVEMBER 30, 2000
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
SHARES MARKET VALUE
-------------------------------------------- --------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN JPMORGAN
THE FLEMING THE FLEMING
THE INTERNA- INTERNA- THE INTERNA- INTERNA-
INTERNA- TIONAL TIONAL INTERNA- TIONAL TIONAL
TIONAL OPPORTU- OPPORTU- TIONAL OPPORTU- OPPORTU-
EQUITY NITIES PRO FORMA NITIES EQUITY NITIES PRO FORMA NITIES
PORTFOLIO PORTFOLIO ADJUSTMENTS FUND PORTFOLIO PORTFOLIO ADJUSTMENTS FUND
------------ --------- ----------- ------- ----------- --------- ----------- -----------
GERMANY - 3.9% - -
Allianz AG(s) - 23 - 23 - 8,078 - 8,078
Bayer AG 11 - - 11 487 - - 487
Bayerische Motoren Werke AG 13 - - 13 381 - - 381
Commerzbank AG(s) - 214 - 214 - 5,421 - 5,421
Deutsche Bank AG 10 - - 10 692 - - 692
Deutsche Post AG 5 - - 5 106 - - 106
Dresdner Bank AG(s) - 75 - 75 - 2,772 - 2,772
Heidelberger Zement AG 9 - - 9 399 - - 399
Merck KGaA(s) - 44 - 44 - 1,716 - 1,716
Schering AG(s) - 43 - 43 - 2,352 - 2,352
Siemens AG 3 - - 3 350 - - 350
-----------------------------------------
2,415 20,339 - 22,754
-----------------------------------------
HONG KONG - 2.6%
Cheung Kong Holdings Ltd. 38 - - 38 428 - - 428
China Unicom + 120 - - 120 171 - - 171
DAO Heng Bank Group Ltd.(s) - 632 - 632 - 3,087 - 3,087
Hong Kong Electric Holdings Ltd.(s) - 2,869 - 2,869 - 9,895 - 9,895
i-Cable Communications Ltd.(s)+ - 2 - 2 - 1 - 1
MTR Corp. + 8 - - 8 12 - - 12
Sunevision Holdings Ltd.(s)+ - 3,668 - 3,668 - 1,481 - 1,481
-----------------------------------------
610 14,464 - 15,074
-----------------------------------------
INDIA - 0.9%
-----------------------------------------
Reliance Industries Ltd. GDR(s) - 361 - 361 - 4,939 - 4,939
-----------------------------------------
IRELAND - 0.5%
Greencore Group Plc(s) - 271 - 271 - 578 - 578
Trintech Group Plc(s)+ - 201 - 201 - 1,413 - 1,413
Trintech Group Plc ADR(s)+ - 99 - 99 - 718 - 718
-----------------------------------------
2,710 - 2,710
-----------------------------------------
ITALY - 1.0%
Banca Fideuram SPA 23 - - 23 299 - - 299
Enel SPA 54 - - 54 201 - - 201
ENI-Ente Nazionale Idrocarburi SPA 143 - - 143 870 - - 870
Seat-Pagine Gialle SPA 3 - - 3 8 - - 8
Telecom Italia SPA 59 - - 59 682 - - 682
Unicredito Italiano SPA(s) - 712 - 712 - 3,564 - 3,564
-----------------------------------------
2,060 3,564 - 5,624
-----------------------------------------
JAPAN - 18.0%
Acom Co., Ltd. 3 - - 3 195 - - 195
Canon, Inc. 13 - - 13 510 - - 510
Chugai Pharmaceutical Co., Ltd. 13 - - 13 230 - - 230
Chuo Mitsui Trust & Banking Co.(s) - 1,026 - 1,026 - 3,242 - 3,242
DDI Corp. 0 - - 0 146 - - 146
Fujitsu Ltd. 18 - - 18 287 - - 287
-5-
PRO FORMA FINANCAL STATEMENTS
THE INTERNATIONAL OPPORTUNITIES PORTFOLIO /
THE INTERNATIONAL EQUITY PORTFOLIO
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
NOVEMBER 30, 2000
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
SHARES MARKET VALUE
-------------------------------------------- --------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN JPMORGAN
THE FLEMING THE FLEMING
THE INTERNA- INTERNA- THE INTERNA- INTERNA-
INTERNA- TIONAL TIONAL INTERNA- TIONAL TIONAL
TIONAL OPPORTU- OPPORTU- TIONAL OPPORTU- OPPORTU-
EQUITY NITIES PRO FORMA NITIES EQUITY NITIES PRO FORMA NITIES
PORTFOLIO PORTFOLIO ADJUSTMENTS FUND PORTFOLIO PORTFOLIO ADJUSTMENTS FUND
------------ --------- ----------- ------- ----------- --------- ----------- -----------
Hirose Electric Co., Ltd. 2 - - 2 256 - - 256
Hitachi, Ltd.(s) - 760 - 760 - 7,252 - 7,252
Hoya Corp. 4 - - 4 340 - - 340
KAO Corp. 10 - - 10 307 - - 307
Kyocera Corp. 3 - - 3 379 - - 379
Mabuchi Motor Co., Ltd. 2 - - 2 277 - - 277
Macnica Inc.(s) - 22 - 22 - 2,544 - 2,544
Matsushita Electric Industrial Co. Ltd.(s) - 412 - 412 - 10,340 - 10,340
Mitsubishi Chemical Corp.(s) - 2,068 - 2,068 - 5,787 - 5,787
Mitsubishi Corp.(s) - 936 - 936 - 7,165 - 7,165
Murata Manufacturing Co., Ltd. 3 - - 3 400 - - 400
Nikko Securities Co., Ltd. 59 - - 59 452 - - 452
Nippon Telegraph & Telephone Corp. 0 - - 0 508 - - 508
Nippon Yusen Kabushiki Kaisha(s) - 1,017 - 1,017 - 4,361 - 4,361
NTT DoCoMo, Inc. 0 - - 0 740 - - 740
Orix Corp. 2 - - 2 229 - - 229
Promise Co., Ltd.(s) - 130 - 130 - 9,547 - 9,547
Ricoh Co., Ltd.(s) - 355 - 355 - 6,310 - 6,310
Rohm Co. Ltd.(s) 2 45 - 46 385 10,774 - 11,159
Sony Corp. 6 - - 6 422 - - 422
Sumitomo Bank Ltd. 18 - - 18 179 - - 179
Sumitomo Corp. 30 - - 30 237 - - 237
Taiheiyo Cement Corp.(s) - 98 - 98 - 163 - 163
Takeda Chemical Industries Ltd.(s) 5 177 - 182 309 10,961 - 11,270
TDK Corp. 2 - - 2 206 - - 206
Terumo Corp. 7 - - 7 129 - - 129
Tokio Marine & Fire Insurance Co., Ltd.(s) - 613 - 613 - 6,912 - 6,912
Tokyo Electron Ltd. 2 - - 2 142 - - 142
Toshiba Corp. 24 - - 24 170 - - 170
Tostem Corp.(s) - 465 - 465 - 6,666 - 6,666
West Japan Railway Co.(s) - 1 - 1 - 4,136 - 4,136
Yamanouchi Pharmaceutical Co., Ltd. 4 - - 4 194 - - 194
-----------------------------------------
7,629 96,159 - 103,788
-----------------------------------------
MEXICO - 0.8%
Consorcio ARA S.A. de C.V.(s)+ - 1,745 - 1,745 - 2,132 - 2,132
TV Azteca S.A. de C.V. ADR(s) - 220 - 220 - 2,200 - 2,200
-----------------------------------------
- 4,332 - 4,332
-----------------------------------------
NETHERLANDS - 5.2%
ABN Amro Holding NV 18 - - 18 370 - - 370
Akzo Nobel NV(s) - 85 - 85 - 4,036 - 4,036
Elsevier NV 28 - - 28 351 - - 351
Fortis (NL) NV 9 - - 9 256 - - 256
Heineken Holding NV(s) - 239 - 239 - 8,675 - 8,675
ING Groep NV 10 - - 10 697 - - 697
Koninklijke (Royal) Philips Electronics NV(s) 19 451 - 470 625 14,911 - 15,536
-----------------------------------------
2,299 27,622 - 29,921
-----------------------------------------
-6-
PRO FORMA FINANCAL STATEMENTS
THE INTERNATIONAL OPPORTUNITIES PORTFOLIO /
THE INTERNATIONAL EQUITY PORTFOLIO
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
NOVEMBER 30, 2000
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
SHARES MARKET VALUE
-------------------------------------------- --------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN JPMORGAN
THE FLEMING THE FLEMING
THE INTERNA- INTERNA- THE INTERNA- INTERNA-
INTERNA- TIONAL TIONAL INTERNA- TIONAL TIONAL
TIONAL OPPORTU- OPPORTU- TIONAL OPPORTU- OPPORTU-
EQUITY NITIES PRO FORMA NITIES EQUITY NITIES PRO FORMA NITIES
PORTFOLIO PORTFOLIO ADJUSTMENTS FUND PORTFOLIO PORTFOLIO ADJUSTMENTS FUND
------------ --------- ----------- ------- ----------- --------- ----------- -----------
PHILIPPINES - 0.5% - -
ABS-CBN Broadcasting Corp. PDR(s) - 2,200 - 2,200 - 2,061 - 2,061
First Philippine Holdings Corp.(s)+ - 1,581 - 1,581 - 693 - 693
--------------------------------------
- 2,754 - 2,754
--------------------------------------
PORTUGAL - 0.1% - -
Brisa-Auto Estradas de Portugal SA 25 - - 25 209 - 209
Telecel-Comunicacoes Pessoai + 16 - - 16 165 - 165
--------------------------------------
375 - - 375
--------------------------------------
RUSSIAN FEDERATION - 0.9%
OAO Lukoil Holding(s) 146 - 146 - 5,320 - 5,320
--------------------------------------
SINGAPORE - 2.7% - -
DBS Group Holdings Ltd.(s) 555 - 555 - 6,301 - 6,301
Neptune Orient Lines Ltd.(s)+ 3,002 - 3,002 - 2,361 - 2,361
Singapore Press Holdings Ltd.(s) 448 - 448 - 6,973 - 6,973
--------------------------------------
- 15,636 - 15,636
--------------------------------------
SOUTH KOREA - 0.8%
Pohang Iron & Steel Co. ADR 18 - - 18 257 - - 257
H&CB ADR(s)(+) - 155 - 155 - 1,578 - 1,578
Hyundai Motor Co. Ltd. GDR(s) - 492 - 492 - 2,829 - 2,829
Samsung Electronics GDR 144A(s) - 0 - 0 - 29 - 29
--------------------------------------
257 4,435 - 4,692
--------------------------------------
SPAIN - 5.5%
Acerinox S.A.(s) - 81 - 81 - 2,103 - 2,103
Altadis SA 19 - - 19 271 - - 271
Banco Bilbao Vizcaya Argentaria S.A.(s) - 593 - 593 - 7,934 - 7,934
Banco Popular Espanol 11 - - 11 367 - - 367
Endesa S.A.(s) - 342 - 342 - 5,530 - 5,530
Indra Sistemas S.A.(s) - 77 - 77 - 604 - 604
Repsol YPF S.A.(s) - 390 - 390 - 6,376 - 6,376
Telefonica S.A.(s)+ - 552 - 552 - 8,673 - 8,673
--------------------------------------
638 31,219 - 31,857
--------------------------------------
SWEDEN - 2.2%
Autoliv, Inc. SDR(s) - 131 - 131 - 2,699 - 2,699
Nordic Baltic Holding AB 67 - - 67 476 - - 476
Skandia Forsakrings AB(s) - 402 - 402 - 6,137 - 6,137
Skandinaviska Enskilda Banken Cl A(s) - 275 - 275 - 2,943 - 2,943
Telefonaktiebolaget LM Ericson, Class B 67 - - 67 763 - - 763
--------------------------------------
1,239 11,779 - 13,018
------------------------------------
SWITZERLAND - 13.7%
Barry Callebaut AG(s) - 6 - 6 - 848 - 848
Compagnie Financiere Richemont AG A Units(s) - 3 - 3 - 9,053 - 9,053
Credit Suisse Group(s) - 39 - 39 - 6,797 - 6,797
-7-
PRO FORMA FINANCAL STATEMENTS
THE INTERNATIONAL OPPORTUNITIES PORTFOLIO /
THE FLEMING INTERNATIONAL EQUITY PORTFOLIO
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
NOVEMBER 30, 2000
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
SHARES MARKET VALUE
-------------------------------------------- --------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN JPMORGAN
THE FLEMING THE FLEMING
THE INTERNA- INTERNA- THE INTERNA- INTERNA-
INTERNA- TIONAL TIONAL INTERNA- TIONAL TIONAL
TIONAL OPPORTU- OPPORTU- TIONAL OPPORTU- OPPORTU-
EQUITY NITIES PRO FORMA NITIES EQUITY NITIES PRO FORMA NITIES
PORTFOLIO PORTFOLIO ADJUSTMENTS FUND PORTFOLIO PORTFOLIO ADJUSTMENTS FUND
------------ --------- ----------- ------- ----------- --------- ----------- -----------
Nestle S.A.(s) 0 7 - 7 410 14,758 - 15,168
Novartis AG(s) 0 5 - 5 770 7,576 - 8,346
Roche Holding AG(s) 0 1 - 1 594 13,328 - 13,922
Swiss Re(s) - 2 - 2 - 5,430 - 5,430
Syngenta AG(s)+ 0 5 - 5 21 210 - 231
UBS AG(s) 3 44 - 47 389 6,146 - 6,535
Zurich Financial Services AG(s) 1 24 - 24 360 12,731 - 13,091
------------------------------------
2,546 76,877 - 79,422
------------------------------------
TAIWAN - 0.0%
United Microelectronics Corp. ADR 18 - - 18 154 - 154
------------------------------------
UNITED KINGDOM - 10.3%
Autonomy Corp. Plc 4 - - 4 119 - - 119
BAE Systems Plc 127 - - 127 653 - - 653
Barclays Plc 18 - - 18 518 - - 518
Bass Plc 24 - - 24 257 - - 257
BBA Group Plc(s) - 456 - 456 - 2,493 - 2,493
BG Group Plc 108 - - 108 441 - - 441
Blue Circle Industries Plc 66 - - 66 433 - - 433
BOC Group Plc 11 - - 11 160 - - 160
BP Amoco Plc 63 - - 63 494 - - 494
British American Tobacco Plc(s) 35 287 - 322 249 2,040 - 2,290
British Land Company Plc 45 - - 45 293 - - 293
Cable & Wireless Plc(s) - 236 - 236 - 2,916 - 2,916
CGNU Plc 37 - - 37 553 - - 553
Enterprise Oil Plc 26 - - 26 217 - - 217
Glaxo Wellcome Plc 25 - - 25 734 - - 734
Granada Compass Plc + 38 - - 38 363 - - 363
Invensys Plc(s) - 5,080 - 5,080 - 12,349 - 12,349
Lattice Group Plc + 108 - - 108 230 - - 230
Legal & General Group Plc 90 - - 90 230 - - 230
Reuters Group Plc 25 - - 25 375 - - 375
Rio Tinto Plc 20 - - 20 306 - - 306
Schroders Plc 12 - - 12 204 - - 204
SmithKline Beecham Plc 2 - - 2 27 - - 27
Stolt Nielson ADR(s) - 106 - 106 - 1,855 - 1,855
Tesco Plc(s) 151 2,344 - 2,495 606 9,404 - 10,010
Unilever Plc 58 - - 58 480 - - 480
Vodafone Group Plc(s) 490 5,420 - 5,910 1,680 18,535 - 20,215
Wolseley Plc 45 - - 45 246 - - 246
-------------------------------------
9,868 49,593 - 59,461
-------------------------------------
VENEZUELA 0.5%
Compania Anonima Nacional Telefonos de Venezuela ADR(s) - 171 - 171 - 2,725 - 2,725
-------------------------------------
TOTAL COMMON STOCKS - - 36,637 481,114 - 517,751
-------------------------------------
-8-
PRO FORMA FINANCAL STATEMENTS
THE INTERNATIONAL OPPORTUNITIES PORTFOLIO /
THE INTERNATIONAL EQUITY PORTFOLIO
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
NOVEMBER 30, 2000
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
SHARES MARKET VALUE
-------------------------------------------- --------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN JPMORGAN
THE FLEMING THE FLEMING
THE INTERNA- INTERNA- THE INTERNA- INTERNA-
INTERNA- TIONAL TIONAL INTERNA- TIONAL TIONAL
TIONAL OPPORTU- OPPORTU- TIONAL OPPORTU- OPPORTU-
EQUITY NITIES PRO FORMA NITIES EQUITY NITIES PRO FORMA NITIES
PORTFOLIO PORTFOLIO ADJUSTMENTS FUND PORTFOLIO PORTFOLIO ADJUSTMENTS FUND
------------ --------- ----------- ------- ----------- --------- ----------- -----------
REDEEMABLE UNSECURED LOAN STOCK - 0.0%
- ---------------------------------
MALAYSIA - 0.0%
Sunway Building Technology, BHD, 3.00%, 07/30/01 60 - - 60 15 - - 15
-------------------------------------
CONVERTIBLE BONDS - 0.1%
- -------------------
GERMANY - 0.0%
DaimlerChysler AG, 5.75%, 06/14/02 11 - - 11,440 5 - 5
HONG KONG - 0.1%
China Mobile (Hong Kong) Ltd., 2.25%, 11/3/05 633 - 633 622 - 622
-------------------------------------
TOTAL CONVERTIBLE BONDS - 5 622 - 627
-------------------------------------
PREFERRED STOCKS - 1.7% -
- ------------------
AUSTRALIA 1.7% -
News Corp. Ltd.(s) 1,236 - 1,236,100 - 9,525 - 9,525
-------------------------------------
- ------------------------------------------------------
SHORT TERM INVESTMENTS - 8.5% PRINCIPAL AMOUNT MARKET VALUE
------------------------------------- -------------------------------------
- ------------------------------------------------------
INVESTMENT COMPANIES - 3.7%
Hamilton Money Fund 21,151 (507) (a) 20,644 - 21,151 (507) (a) 20,644
TIME DEPOSITS - 4.3%
Bank of New York, 6.43%, 12/4/00(s) 25,000 - 25,000 - 25,000 - 25,000
U.S. TREASURY SECURITIES - 0.5%
U.S. Treasury Bills, 6.19%, 3/22/01(s)(y) 3,140 - 3,140 - 3,082 - 3,082
TOTAL SHORT-TERM INVESTMENTS - 49,233 (507) 48,726
---------------------------------------
TOTAL INVESTMENTS - 100% $ 36,657 $540,494 $ (507) $576,644
(Cost $589,620) =======================================
- ----------------------------------------------
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- ---------------------------------------------- --------------------------------- -------------------------------
-9-
PRO FORMA FINANCAL STATEMENTS
THE INTERNATIONAL OPPORTUNITIES PORTFOLIO /
THE INTERNATIONAL EQUITY PORTFOLIO
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
NOVEMBER 30, 2000
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
SHARES MARKET VALUE
-------------------------------------------- --------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN JPMORGAN
THE FLEMING THE FLEMING
THE INTERNA- INTERNA- THE INTERNA- INTERNA-
INTERNA- TIONAL TIONAL INTERNA- TIONAL TIONAL
TIONAL OPPORTU- OPPORTU- TIONAL OPPORTU- OPPORTU-
EQUITY NITIES PRO FORMA NITIES EQUITY NITIES PRO FORMA NITIES
PORTFOLIO PORTFOLIO ADJUSTMENTS FUND PORTFOLIO PORTFOLIO ADJUSTMENTS FUND
------------ --------- ----------- ------- ----------- --------- ----------- -----------
UNREALIZED
CONTRACTS TO SETTLEMENT CONTRACTUAL VALUE APPRECIATION
BUY DATE VALUE AT 11/30/00 (DEPRECIATION)
---------------------------------------------------------------- -------------------------------
3,690 AUD for
2,989 CAD 1/24/2001 $ 1,942 $ 1,936 $ (6)
4,031 EUR for -
6,109 CHF 1/24/2001 3,430 3,410 (20)
9,000 EUR for -
5,408 GBP 1/24/2001 7,611 7,791 180
1,899 GBP for -
4,791 CHF 1/24/2001 2,665 2,586 (79)
66,988 HKD for -
6,073 GBP 1/29/2001 8,601 8,579 (22)
308,659 JPY for -
3,359 EUR 1/24/2001 2,916 2,798 (118)
62,700 JPY for -
689 EUR 1/24/2001 592 563 (30)
243,437 JPY for -
2,670 EUR 1/24/2001 2,305 2,193 (112)
7,448 SGD for -
3,003 GBP 1/26/2001 4,309 4,318 8
34,049 CAD 1/24/2001 22,594 22,185 (409)
55,000 DKK 1/24/2001 6,336 6,434 97
55,025 DKK 12/4/2000 6,405 6,423 19
10,467 EUR 1/24/2001 8,785 9,136 351
7,010 EUR 1/24/2001 5,897 6,118 221
6,672 EUR 1/24/2001 5,647 5,823 176
4,703 EUR 1/24/2001 3,989 4,105 116
6,722 EUR 1/24/2001 5,810 5,867 57
3,970 EUR 1/24/2001 3,423 3,465 42
8,000 EUR 1/24/2001 6,896 6,982 86
3,305 EUR 1/24/2001 2,832 2,885 53
3,305 EUR 1/24/2001 2,826 2,885 59
1,300 EUR 1/24/2001 1,107 1,135 27
3,000 EUR 1/24/2001 2,558 2,618 60
3,000 EUR 1/24/2001 2,607 2,611 4
33,124 GBP 1/24/2001 48,211 47,016 (1,196)
8,000 GBP 1/24/2001 11,404 11,355 (49)
2,836 GBP 1/24/2001 4,104 4,025 (79)
1,200 GBP 1/24/2001 1,707 1,703 (4)
25,793 HKD 1/29/2001 3,312 3,311 (1)
1,323,246 JPY 1/24/2001 12,413 12,061 (352)
500,000 JPY 1/24/2001 4,695 4,557 (138)
548,500 JPY 1/24/2001 5,000 4,999 (1)
45,580 SEK 1/24/2001 4,461 4,564 102
---------------- -------------------------------
$ 217,392 $ 216,438 $ (954)
---------------- -------------------------------
-10-
PRO FORMA FINANCAL STATEMENTS
THE INTERNATIONAL OPPORTUNITIES PORTFOLIO /
THE INTERNATIONAL EQUITY PORTFOLIO
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
NOVEMBER 30, 2000
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
SHARES MARKET VALUE
-------------------------------------------- --------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN JPMORGAN
THE FLEMING THE FLEMING
THE INTERNA- INTERNA- THE INTERNA- INTERNA-
INTERNA- TIONAL TIONAL INTERNA- TIONAL TIONAL
TIONAL OPPORTU- OPPORTU- TIONAL OPPORTU- OPPORTU-
EQUITY NITIES PRO FORMA NITIES EQUITY NITIES PRO FORMA NITIES
PORTFOLIO PORTFOLIO ADJUSTMENTS FUND PORTFOLIO PORTFOLIO ADJUSTMENTS FUND
------------ --------- ----------- ------- ----------- --------- ----------- -----------
UNREALIZED
CONTRACTS TO SETTLEMENT CONTRACTUAL VALUE APPRECIATION
SELL DATE VALUE AT 11/30/00 (DEPRECIATION)
---------------------------------------------------------------- -------------------------------
39,608 AUD 1/24/2001 $ 20,912 $ 20,842 $ (70)
66,240 CHF 1/24/2001 37,193 38,360 1,167
65,000 DKK 1/24/2001 7,541 7,603 63
55,025 DKK 1/24/2001 6,416 6,437 21
6,000 EUR 1/24/2001 4,980 5,237 257
14,635 EUR 1/24/2001 12,789 12,774 (16)
2,020 EUR 1/24/2001 1,737 1,763 26
6,000 EUR 1/24/2001 5,196 5,237 41
3,000 EUR 1/24/2001 2,613 2,618 5
3,170 GBP 1/24/2001 4,441 4,499 58
85,668 HKD 1/29/2001 11,000 10,997 (3)
80,458 HKD 1/23/2001 10,335 10,327 (7)
937,105 JPY 1/24/2001 8,672 8,541 (131)
472,751 JPY 1/24/2001 4,338 4,309 (29)
998,339 JPY 1/24/2001 9,160 9,099 (61)
1,000,000 JPY 1/24/2001 9,200 9,115 (85)
359,746 JPY 1/24/2001 3,306 3,279 (27)
484,920 JPY 1/24/2001 4,444 4,420 (24)
146,524 JPY 1/24/2001 1,343 1,336 (7)
219,146 JPY 1/24/2001 2,007 1,997 (10)
400,000 JPY 1/24/2001 3,774 3,646 (128)
229,697 JPY 1/24/2001 2,090 2,094 4
31,737 SEK 1/24/2001 3,164 3,178 14
25,415 SGD 1/26/2001 14,623 14,575 (48)
---------------- -------------------------------
$ 191,273 $ 192,283 $ 1,010
================ ===============================
- -----------------------------
FUTURES CONTRACTS
- -----------------------------
UNREALIZED
UNDERLYING FACE APPRECIATION
PURCHASED EXPIRATION DATE AMOUNT AT VALUE (DEPRECIATION)
- --------------------------------------------------------------------------------------------- -----------------
0.424 D.J. EURO STOXX 50 Index December 2000 $ 17,731 $ (805)
0.122 FTSE 100 Index December 2000 10,627 (452)
0.088 TOPIX Index December 2000 10,856 (231)
---------------- -----------------
$ 39,213 $ (1,488)
================ =================
ADR - American Depositary Receipt
AUD - Australian Dollar
CAD - Canadian Dollar
CHF - Swiss Franc
DKK - Danish Krone
EUR - Euro
-11-
PRO FORMA FINANCAL STATEMENTS
THE INTERNATIONAL OPPORTUNITIES PORTFOLIO /
THE INTERNATIONAL EQUITY PORTFOLIO
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
NOVEMBER 30, 2000
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
SHARES MARKET VALUE
-------------------------------------------- --------------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN JPMORGAN
THE FLEMING THE FLEMING
THE INTERNA- INTERNA- THE INTERNA- INTERNA-
INTERNA- TIONAL TIONAL INTERNA- TIONAL TIONAL
TIONAL OPPORTU- OPPORTU- TIONAL OPPORTU- OPPORTU-
EQUITY NITIES PRO FORMA NITIES EQUITY NITIES PRO FORMA NITIES
PORTFOLIO PORTFOLIO ADJUSTMENTS FUND PORTFOLIO PORTFOLIO ADJUSTMENTS FUND
------------ --------- ----------- ------- ----------- --------- ----------- -----------
GBP - British Pound
GDR - Global Depositary Receipt
HKD - Hong Kong Dollar
JPY - Japanese Yen
PDR - Philippine Depositary Receipt
SEK - Swedish Krona
SDR - Swedish Depositary Receipt
SGD - Singapore Dollar
144A - Securities restricted for resale to Qualified Institutional Buyers
(s) Security is fully or partially segregated with custodian as collateral for
futures or with brokers as initial margin for futures contracts
(y) Yield to maturity
(z) Category is less than 0.05%.
+ Non-income producing security
(a) Reflects the redemption in short term investments of the J.P. Morgan
International Opportunities Fund Advisor Series Fund.
-12-
J.P. Morgan International Opportunities Fund /
J.P. Morgan Institutional International Opportunities Fund /
The International Opportunities Portfolio /
JPMorgan Fleming International Equity Fund (1)/
The International Equity Portfolio
Pro Forma Combining Statement of Assets and Liabilities
As of November 30, 2000 (Unaudited)
(Amounts in Thousands, Except Per Share Amounts)
J.P. MORGAN J.P. MORGAN THE INTERNATIONAL JPMORGAN FLEMING
INTERNATIONAL INSTITUTIONAL OPPORTUNITIES INTERNATIONAL
OPPORTUNITIES FUND INTERNATIONAL PORTFOLIO EQUITY FUND(1)
OPPORTUNITIES
FUND
------------------------------------------------------------------------
ASSETS:
Investments in The International Opportunities Portfolio, at value $ 79,231 $ 462,287 $ - $ -
Investments in The International Equity Portfolio, at value - - - 36,335
Investments at Value - - 540,494 -
Foreign Currency at Value - - 7,068 -
Cash - - - -
Receivable for Investments Sold - - 17,598 -
Unrealized Appreciation of Forward Foreign Currency Contracts - - 2,305 -
Tax Reclaim Receivable - - 1,452 -
Dividend and Interest Receivable - - 476 -
Receivable for Shares of Beneficial Interest Sold 311 60 - -
Deferred Organization Expense 3 4 3 -
Prepaid Trustees' Fees and Expenses - 1 1 -
Prepaid Expenses and Other Assets - 1 1 -
------------------------------------------------------------------------
Total Assets 79,545 462,353 569,398 36,335
------------------------------------------------------------------------
LIABILITIES:
Due to Custodian - - 11,556 -
Payable for Investments Purchased - - 10,435 -
Unrealized Depreciation of Forward Foreign Currency Contracts - - 4,269 -
Payable for Shares of Beneficial Interest Redeemed 74 1,212 - 41
Variation Margin Payable - - 630 -
Advisory Fee Payable - - 276 -
Transfer Agent Fee Payable - - 47
Shareholder Servicing Fee Payable 18 39 - 26
Accrued Printing and Postage - 64
Accrued Audit & Legal Fees - - - 11
Fund Services Fee Payable - 1 1 15
Administration Services Fee Payable - 9 11 2
Accrued Trustee Fees - - 1 3
Administration Fee Payable 2 - - 2
Accrued Expenses and Other Liabilities 43 76 194 32
------------------------------------------------------------------------
Total Liabilities 137 1,337 27,373 243
------------------------------------------------------------------------
NET ASSETS:
Paid-in Capital 79,260 468,697 33,863
Undistributed (Distributions in Excess of) Net Investment Income 592 1,277 (421)
Accumulated Net Realized Gain (Loss) 1,765 3,688 (1,491)
Net Unrealized Appreciation of Investment (2,209) (12,646) 4,141
------------------------------------------------------------------------
Net Assets $ 79,408 $ 461,016 $ 542,025 $ 36,092
========================================================================
Shares of Beneficial Interest Outstanding 6,995 40,484
2,295(A)*
502(B)*
Net Asset Per Share $ 11.35 $ 11.39 $ 12.96(A)*
$ 12.63(B)*
Pro Forma with Concurrent Reorganization
Shares Outstanding
Class A
Class B
Select
Institutional
Net Assets Value Per Share
Class A
Class B
Select
Institutional
------------------------------------------------------------------------
Cost of Investments $ 551,493
========================================================================
PRO FORMA
COMBINED
JPMORGAN FLEMING
THE PRO FORM INTERNATIONAL
INTERNATIONAL EQUITY ADJUSTMENT OPPORTUNITIES
PORTFOLIO FUND
-------------------------------------------------- -----------------
ASSETS:
Investments in The International Opportunities Portfolio, at value $ - $ (541,518) (a) $ -
Investments in The International Equity Portfolio, at value (36,335) (a) -
Investments at Value 36,657 (507) (d) 576,644
Foreign Currency at Value 1 - 7,069
Cash 96 96
Receivable for Investments Sold 2 - 17,600
Unrealized Appreciation of Forward Foreign Currency Contracts - - 2,305
Tax Reclaim Receivable - - 1,452
Dividend and Interest Receivable 47 - 523
Receivable for Shares of Beneficial Interest Sold - - 371
Deferred Organization Expense - (10) (b) -
Prepaid Trustees' Fees and Expenses - - 2
Prepaid Expenses and Other Assets 7 10 (b) 19
----------------------------------------------- --------------
Total Assets 36,810 (578,360) 606,081
-------------------------------------------------- --------------
LIABILITIES:
Due to Custodian - 11,556
Payable for Investments Purchased 319 - 10,754
Unrealized Depreciation of Forward Foreign Currency Contracts - - 4,269
Payable for Shares of Beneficial Interest Redeemed - - 1,327
Variation Margin Payable - - 630
Advisory Fee Payable 16 - 292
Transfer Agent Fee Payable - - 47
Shareholder Servicing Fee Payable - - 83
Accrued Printing and Postage - - 64
Accrued Audit & Legal Fees 51 - 62
Fund Services Fee Payable 9 - 26
Administration Services Fee Payable - - 22
Accrued Trustee Fees 4 - 8
Administration Fee Payable 2 - 6
Accrued Expenses and Other Liabilities 74 - 419
----------------------------------------------- --------------
Total Liabilities 475 - 29,565
-------------------------------------------------- --------------
NET ASSETS:
Paid-in Capital - 581,820
Undistributed (Distributions in Excess of) Net Investment Income 1,442
Accumulated Net Realized Gain (Loss) - 3,962
Net Unrealized Appreciation of Investment - (10,714)
-------------------------------------------------- --------------
Net Assets $ 36,335 $ (578,360) $ 576,516
================================================== ==============
Shares of Beneficial Interest Outstanding (47,533) (d)
(2,295) (d)
(502) (d)
Net Asset Per Share
Pro Forma with Concurrent Reorganization
Shares Outstanding
Class A 2,613 (c) 2,613
Class B 557 (c) 557
Select 6,973 (c) 6,973
Institutional 40,484 (c) 40,484
Net Assets Value Per Share
Class A $ 11.39 (c) $ 11.39
Class B $ 11.39 (c) $ 11.39
Select $ 11.39 (c) $ 11.39
Institutional $ 11.39 (c) $ 11.39
-----------------------------------------------------------------------
Cost of Investments $ 38,127 $ 589,620
=======================================================================
(a) Reallocation of investments from the feeder funds to master portfolio.
(b) Write-off of deferred organization expenses of the portfolio and JPMorgan
International Opportunity Fund.
(c) The difference in number of shares outstanding due to the Reorganization.
(d) Reallocation of feeder fund's beneficial interest to Class A, Class B,
Select, Institutional Shares due to the Reorganization.
(e) Reflects the redemption in short term investments of the J.P. Morgan
International Opportunities Fund Advisor Series Fund.
(1) Formerly, Chase Vista International Equity Fund
-13-
J.P. Morgan International Opportunities Fund /
J.P. Morgan Institutional International Opportunities Fund /
The International Opportunities Portfolio /
JPMorgan Fleming International Equity Fund (1) /
The International Equity Portfolio (2)
Pro Forma Combining Statement of Operations
For the Twelve Months Ended November 30, 2000 (Unaudited)
(Amounts in thousands)
J.P. MORGAN J.P. MORGAN INSTITUTIONAL THE INTERNATIONAL JPMORGAN FLEMING
INTERNATIONAL INTERNATIONAL OPPORTUNITIES INTERNATIONAL
OPPORTUNITIES FUND OPPORTUNITIES FUND PORTFOLIO EQUITY FUND(1)
------------------------------------------------------------------------------
INCOME:
Allocated Investment Income From Portfolio $ 1,456 $ 8,083 $ - $ 491
Interest Income - - 1,532
Dividend Income - - 8,008
Other Income
Allocated Portfolio Expenses (623) (3,478) - (317)
------------------------------------------------------------------------------
Investment Income 833 4,605 9,540 174
------------------------------------------------------------------------------
EXPENSES:
Advisory Fees - - 3,269 -
Administrative Services Fee 20 112 132 41
Shareholder Servicing Fee 207 462 - 110
Custodian Fees and Expenses - - 616 -
Transfer Agent Fees 36 33 - 158
Distribution Fees 156
Registration Fees 39 37 - 46
Professional Fees 12 15 53 11
Financial and Fund Accounting Services Fee 43 43 - 38
Printing Expenses 11 8 - 29
Fund Services Fee 1 7 8
Amortization of Organizational Expenses 2 3 3
Trustees' Fees and Expenses 1 4 5 1
Administration Fee 1 5 4 -
Interest Expense - (4)
Miscellaneous 8 15 12 29
------------------------------------------------------------------------------
Total Expenses 381 744 4,102 615
------------------------------------------------------------------------------
Less: Amounts Waived
Less: Reimbursement of Expenses - - - (25)
------------------------------------------------------------------------------
Net Expenses 381 744 4,102 590
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Net Investment Income 452 3,861 5,438 (416)
------------------------------------------------------------------------------
REALIZED and UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investment Transactions 4,097 11,839 17,984 3,445
Futures Contracts - - 622
Foreign Currency Transactions - - (2,676)
------------------------------------------------------------------------------
Net Realized Gain (Loss) 4,097 11,839 15,930 3,445
Net Change in Unrealized
Appreciation/Depreciation of
Investment Transactions (14,120) (75,487) (84,288) (8,088)
Futures and Forward Contracts - - (2,539)
Foreign Currency Contracts and Translations - - (2,793)
------------------------------------------------------------------------------
Net Change in Unrealized
Appreciation/Depreciation of Investments (14,120) (75,487) (89,620) (8,088)
------------------------------------------------------------------------------
Net (decrease) in net assets from operations $ (9,571) $ (59,787) $ (68,252) $ (5,059)
==============================================================================
PRO FORMA
COMBINED
JPMORGAN FLEMING
THE PRO FORMA INTERNATIONAL
INTERNATIONAL ADJUSTMENTS OPPORTUNITIES
EQUITY PORTFOLIO FUND
--------------------------------------------------------------
INCOME:
Allocated Investment Income From Portfolio $ - $ (10,030) (c) $ -
Interest Income 91 - 1,623
Dividend Income 391 - 8,399
Other Income 9 - 9
Allocated Portfolio Expenses - 4,418 (b) -
--------------------------------------------------------------
Investment Income 491 (5,612) 10,031
--------------------------------------------------------------
EXPENSES:
Advisory Fees 430 (165) (a) 3,534
Administrative Services Fee 21 558 (a) 884
Shareholder Servicing Fee - - 779
Custodian Fees and Expenses 73 (279) (f,g) 410
Transfer Agent Fees - - 227
Distribution Fees - 156
Registration Fees - - 122
Professional Fees 47 (52) (g) 86
Financial and Fund Accounting Services Fee 54 (178) (f) -
Printing Expenses - (17) (g) 31
Fund Services Fee - - 16
Amortization of Organizational Expenses - 6 (e) 14
Trustees' Fees and Expenses 1 - 12
Administration Fee - - 10
Interest Expense (4) (8)
Miscellaneous 27 - 91
--------------------------------------------------------------
Total Expenses 649 (127) 6,364
--------------------------------------------------------------
Less: Amounts Waived 127 (a) 127
Less: Reimbursement of Expenses (332) (47) (a) (404)
--------------------------------------------------------------
Net Expenses 317 (47) 6,087
--------------------------------------------------------------
--------------------------------------------------------------
Net Investment Income 174 (5,565) 3,944
--------------------------------------------------------------
REALIZED and UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investment Transactions 3,884 (19,381) (d) 21,868
Futures Contracts 236 - 858
Foreign Currency Transactions (675) - (3,351)
--------------------------------------------------------------
Net Realized Gain (Loss) 3,445 (19,381) 19,375
Net Change in Unrealized
Appreciation/Depreciation of
Investment Transactions (8,042) 97,695 (d) (92,330)
Futures and Forward Contracts (47) - (2,586)
Foreign Currency Contracts and Translations 1 - (2,792)
--------------------------------------------------------------
Net Change in Unrealized
Appreciation/Depreciation of Investments (8,088) 97,695 (97,708)
--------------------------------------------------------------
Net (decrease) in net assets from operations $ (4,469) $ 72,749 $ (74,389)
==============================================================
(a) Reflects adjustments to investment advisory fee, administrative fees and
shareholder servicing fees and/or related waivers based on the surviving
Fund's revised fee schedule.
(b) Reflects the elimination of master portfolio expenses which have been
disclosed under feeder expenses.
(c) Reallocation of investment income to feeder funds
(d) Reallocation of realized and unrealized loss to feeder funds.
(e) Reflects write-off of deferred organization expenses of the portfolio
(f )Reclassification of fund accounting charge into combined custodial charge.
(g) Reduction reflects expected benefits of combined operations.
(1) Formerly, Chase Vista International Equity Fund
-14-
THE INTERNATIONAL OPPORTUNITIES PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOVEMBER 30, 2000
SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS - 89.0%
AUSTRALIA - 3.7%
306,000 AMP LTD.(s) $ 3,019,457
2,271,200 Santos Ltd.(s) 7,367,668
2,100,000 Southern Pacific Petroleum(s)+ 2,373,817
1,961,000 WMC Ltd.(s) 7,464,585
---------------------------
20,225,527
---------------------------
CANADA - 0.8%
121,400 Nortel Networks Corp.(s) 4,549,834
---------------------------
DENMARK - 0.6%
17,552 Novo Nordisk A/S Cl B(s) 3,401,153
---------------------------
FINLAND - 1.4%
72,700 Sampo Insurance Co. Ltd., A Shares(s) 3,588,170
402,164 Stora Enso Oyj, R Shares(s) 3,969,911
---------------------------
7,558,081
---------------------------
FRANCE - 13.1%
160,000 Air France(s) 2,976,323
40,000 Alcatel Optronics(s)+ 2,016,017
213,700 Alcatel S.A.(s) 10,603,151
131,610 BNP Paribas S.A.(s) 10,173,196
1,336 Cie Generale D'Optique Essilor
International S.A.(s) 388,891
60,597 Coflexip Stena Offshore(s) 7,226,488
10,570 Compagnie de Saint-Gobain S.A.(s) 1,458,343
54,700 Sidel S.A.(s) 2,714,049
37,900 Suez Lyonnaise des Eaux S.A.(s) 6,423,337
13,050 Total Fina Elf S.A.(s)+ 114
114,100 Total Fina Elf S.A., B Shares(s) 16,318,445
171,711 Vivendi S.A.(s) 10,612,363
---------------------------
70,910,717
---------------------------
GERMANY - 3.8%
23,400 Allianz AG(s) 8,078,377
214,000 Commerzbank AG(s) 5,420,787
75,000 Dresdner Bank AG(s) 2,772,023
44,100 Merck KGaA(s) 1,715,938
43,114 Schering AG(s) 2,352,355
---------------------------
20,339,480
---------------------------
HONG KONG - 2.7%
632,000 DAO Heng Bank Group Ltd.(s) 3,087,156
2,869,100 Hong Kong Electric Holdings Ltd.(s) 9,894,971
2,000 i-Cable Communications Ltd.(s)+ 763
3,668,000 Sunevision Holdings Ltd.(s)+ 1,481,346
---------------------------
14,464,236
---------------------------
INDIA - 0.9%
360,500 Reliance Industries Ltd. GDR(s) 4,938,850
---------------------------
IRELAND - 0.5%
271,100 Greencore Group Plc(s) 578,164
201,435 Trintech Group Plc(s)+ 1,413,271
99,100 Trintech Group Plc ADR(s)+ 718,475
---------------------------
2,709,910
---------------------------
ITALY - 0.7%
712,000 Unicredito Italiano SPA(s) 3,563,719
---------------------------
JAPAN - 17.8%
1,026,000 Chuo Mitsui Trust & Banking Co.(s) 3,241,706
760,000 Hitachi, Ltd.(s) 7,251,818
22,000 Macnica Inc.(s) 2,544,076
412,000 Matsushita Electric Industrial Co. Ltd.(s) 10,339,517
2,068,000 Mitsubishi Chemical Corp.(s) 5,787,226
936,000 Mitsubishi Corp.(s) 7,165,228
1,017,000 Nippon Yusen Kabushiki Kaisha(s) 4,360,867
129,600 Promise Co., Ltd.(s) 9,546,703
355,000 Ricoh Co., Ltd.(s) 6,310,043
44,700 Rohm Co. Ltd.(s) 10,774,002
98,000 Taiheiyo Cement Corp.(s) 162,780
177,000 Takeda Chemical Industries Ltd.(s) 10,961,137
613,000 Tokio Marine & Fire Insurance Co., Ltd.(s) 6,911,641
465,000 Tostem Corp.(s) 6,665,944
920 West Japan Railway Co.(s) 4,135,951
---------------------------
96,158,639
---------------------------
MEXICO - 0.8%
1,745,000 Consorcio ARA S.A. de C.V.(s)+ 2,132,458
220,000 TV Azteca S.A. de C.V. ADR(s) 2,200,000
---------------------------
4,332,458
---------------------------
NETHERLANDS - 5.1%
85,000 Akzo Nobel NV(s) 4,036,168
238,700 Heineken Holding NV(s) 8,674,900
450,658 Koninklijke (Royal) Philips
Electronics NV(s) 14,910,786
---------------------------
27,621,854
---------------------------
PHILIPPINES - 0.5%
2,200,000 ABS-CBN Broadcasting Corp. PDR(s) 2,061,461
1,581,220 First Philippine Holdings Corp.(s)+ 693,028
---------------------------
2,754,489
---------------------------
RUSSIAN FEDERATION - 1.0%
146,000 OAO Lukoil Holding(s) 5,320,240
---------------------------
SINGAPORE - 2.9%
555,414 DBS Group Holdings Ltd.(s) 6,301,447
3,001,500 Neptune Orient Lines Ltd.(s)+ 2,361,499
448,000 Singapore Press Holdings Ltd.(s) 6,972,862
---------------------------
15,635,808
---------------------------
SOUTH KOREA - 0.8%
154,852 H&CB ADR(s)+ 1,577,555
492,000 Hyundai Motor Co. Ltd. GDR(s) 2,829,000
454 Samsung Electronics GDR 144A(s) 28,897
---------------------------
4,435,452
---------------------------
The Accompanying Notes are an Integral Part of the Financial Statements.
-15-
THE INTERNATIONAL OPPORTUNITIES PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 2000
SHARES/PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------
SPAIN - 5.8%
80,800 Acerinox S.A.(s) $ 2,102,994
593,400 Banco Bilbao Vizcaya Argentaria S.A.(s) 7,934,039
341,726 Endesa S.A.(s) 5,529,845
77,060 Indra Sistemas S.A.(s) 603,708
390,000 Repsol YPF S.A.(s) 6,375,522
552,000 Telefonica S.A.(s)+ 8,673,050
---------------------------
31,219,158
---------------------------
SWEDEN - 2.2%
131,400 AUTOLIV, INC. SDR(s) 2,699,013
402,264 Skandia Forsakrings AB(s) 6,136,842
274,600 Skandinaviska Enskilda Banken Cl A(s) 2,943,414
---------------------------
11,779,269
---------------------------
SWITZERLAND - 14.2%
6,400 Barry Callebaut AG(s) 848,024
3,280 Compagnie Financiere Richemont AG A Units(s) 9,053,163
39,000 Credit Suisse Group(s) 6,796,578
6,795 Nestle S.A.(s) 14,758,123
4,670 Novartis AG(s) 7,576,173
1,345 Roche Holding AG(s) 13,327,573
2,440 Swiss Re(s) 5,430,188
4,670 Syngenta AG(s)+ 209,851
44,450 UBS AG(s) 6,145,869
23,610 Zurich Financial Services AG(s) 12,731,283
---------------------------
76,876,825
---------------------------
UNITED KINGDOM - 9.2%
456,000 BBA Group Plc(s) 2,493,296
287,300 British American Tobacco Plc(s) 2,040,217
235,900 Cable & Wireless Plc(s) 2,915,731
5,080,000 Invensys Plc(s) 12,348,972
106,000 Stolt Nielson ADR(s) 1,855,000
2,344,400 Tesco Plc(s) 9,404,184
5,420,378 Vodafone Group Plc(s) 18,535,310
---------------------------
49,592,710
---------------------------
VENEZUELA - 0.5%
171,000 Compania Anonima Nacional Telefonos
de Venezuela ADR(s) 2,725,313
---------------------------
TOTAL COMMON STOCKS 481,113,722
(Cost $491,869,955) ---------------------------
CONVERTIBLE BONDS - 0.1%
HONG KONG - 0.1%
$633,000 China Mobile (Hong Kong) Ltd.,
2.25%, 11/3/05 621,923
(Cost $633,000) ---------------------------
PREFERRED STOCKS - 1.8%
AUSTRALIA - 1.8%
1,236,100 News Corp. Ltd.(s) $ 9,524,859
(Cost $9,756,563) ---------------------------
SHORT-TERM INVESTMENTS - 9.1%
INVESTMENT COMPANIES - 3.9%
21,151,193 Hamilton Money Fund 21,151,193
---------------------------
TIME DEPOSITS - 4.6%
$25,000,000 Bank of New York, 6.43%,
12/4/00(s) 25,000,000
---------------------------
U.S. TREASURY SECURITIES - 0.6%
3,140,000 U.S. Treasury Bills, 6.19%,
3/22/01(s)(y) 3,081,815
---------------------------
TOTAL SHORT-TERM INVESTMENTS 49,233,008
---------------------------
(Cost $49,233,504)
TOTAL INVESTMENT SECURITIES - 100.0% $ 540,493,512
(Cost $551,493,022) ===========================
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
UNREALIZED
CONTRACTS SETTLEMENT CONTRACTUAL VALUE AT APPRECIATION
TO BUY DATE VALUE 11/30/00 (DEPRECIATION)
- --------------------------------------------------------------------------------
3,690,000 AUD for
2,989,084 CAD 01/24/01 $ 1,941,716 $ 1,935,906 $ (5,810)
4,031,000 EUR for
6,109,182 CHF 01/24/01 3,429,663 3,410,098 (19,565)
9,000,000 EUR for
5,407,650 GBP 01/24/01 7,611,392 7,791,147 179,755
1,898,938 GBP for
4,791,021 CHF 01/24/01 2,665,305 2,586,121 (79,184)
66,988,083 HKD for
6,073,262 GBP 01/29/01 8,600,819 8,579,102 (21,717)
308,658,510 JPY for
3,359,000 EUR 01/24/01 2,916,391 2,797,932 (118,459)
62,700,378 JPY for
689,000 EUR 01/24/01 592,431 562,556 (29,875)
243,437,250 JPY for
2,670,000 EUR 01/24/01 2,304,745 2,193,184 (111,561)
7,448,334 SGD for
3,003,360 GBP 01/26/01 4,309,309 4,317,803 8,494
34,049,421 CAD 01/24/01 22,594,174 22,184,756 (409,418)
55,000,000 DKK 01/24/01 6,336,406 6,433,602 97,196
55,024,892 DKK 12/04/00 6,404,574 6,423,189 18,615
10,467,070 EUR 01/24/01 8,784,698 9,135,731 351,033
The Accompanying Notes are an Integral Part of the Financial Statements.
-16-
THE INTERNATIONAL OPPORTUNITIES PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 2000
UNREALIZED
CONTRACTS SETTLEMENT CONTRACTUAL VALUE AT APPRECIATION
TO BUY DATE VALUE 11/30/00 (DEPRECIATION)
- --------------------------------------------------------------------------------
7,010,000 EUR 01/24/01 $ 5,897,303 $ 6,118,376 $ 221,073
6,672,000 EUR 01/24/01 5,647,448 5,823,367 175,919
4,703,000 EUR 01/24/01 3,988,614 4,104,811 116,197
6,722,000 EUR 01/24/01 5,810,228 5,867,008 56,780
3,970,000 EUR 01/24/01 3,423,291 3,465,043 41,752
8,000,000 EUR 01/24/01 6,896,000 6,982,455 86,455
3,305,000 EUR 01/24/01 2,831,592 2,884,627 53,035
3,305,000 EUR 01/24/01 2,825,544 2,884,627 59,083
1,300,000 EUR 01/24/01 1,107,444 1,134,649 27,205
3,000,000 EUR 01/24/01 2,558,100 2,618,421 60,321
3,000,000 EUR 01/24/01 2,607,000 2,611,421 4,421
33,124,055 GBP 01/24/01 48,211,400 47,015,599 (1,195,801)
8,000,000 GBP 01/24/01 11,404,000 11,355,035 (48,965)
2,836,000 GBP 01/24/01 4,103,891 4,025,360 (78,531)
1,200,000 GBP 01/24/01 1,707,312 1,703,255 (4,057)
25,793,400 HKD 01/29/01 3,311,856 3,311,155 (701)
1,323,245,984 JPY 01/24/01 12,413,189 12,060,860 (352,329)
500,000,000 JPY 01/24/01 4,694,836 4,557,301 (137,535)
548,500,000 JPY 01/24/01 5,000,000 4,999,359 (641)
45,579,508 SEK 01/24/01 4,461,406 4,563,868 102,462
------------------------------------------------
$ 217,392,077 $216,437,724 $ (954,353)
================================================
UNREALIZED
CONTRACTS SETTLEMENT SETTLEMENT VALUE AT APPRECIATION
TO SELL DATE VALUE 11/30/00 (DEPRECIATION)
- --------------------------------------------------------------------------------
39,607,823 AUD 01/24/01 $ 20,912,336 $ 20,842,040 $ 70,296
66,239,854 CHF 01/24/01 37,192,506 38,359,744 (1,167,238)
65,000,000 DKK 01/24/01 7,540,603 7,603,348 (62,745)
55,024,892 DKK 01/24/01 6,415,775 6,436,514 (20,739)
6,000,000 EUR 01/24/01 4,980,000 5,236,841 (256,841)
14,635,000 EUR 01/24/01 12,789,234 12,773,528 15,706
2,020,000 EUR 01/24/01 1,736,756 1,763,070 (26,314)
6,000,000 EUR 01/24/01 5,196,000 5,236,841 (40,841)
3,000,000 EUR 01/24/01 2,613,135 2,618,421 (5,286)
3,170,000 GBP 01/24/01 4,441,392 4,499,432 (58,040)
85,668,000 HKD 01/29/01 11,000,000 10,997,388 2,612
80,457,995 HKD 01/23/01 10,334,870 10,327,375 7,495
937,104,992 JPY 01/24/01 8,672,000 8,541,339 130,661
472,750,902 JPY 01/24/01 4,338,000 4,308,936 29,064
998,339,240 JPY 01/24/01 9,160,000 9,099,464 60,536
1,000,000,000 JPY 01/24/01 9,199,632 9,114,602 85,030
359,745,696 JPY 01/24/01 3,306,000 3,278,939 27,061
484,920,392 JPY 01/24/01 4,444,000 4,419,856 24,144
146,523,986 JPY 01/24/01 1,343,000 1,335,508 7,492
219,146,337 JPY 01/24/01 2,007,000 1,997,432 9,568
400,000,000 JPY 01/24/01 3,773,585 3,645,841 127,744
229,697,270 JPY 01/24/01 2,090,000 2,093,599 (3,599)
31,736,628 SEK 01/24/01 3,164,170 3,177,783 (13,613)
25,414,600 SGD 01/26/01 14,622,900 14,575,113 47,787
------------------------------------------------
$ 191,272,894 $192,282,954 $(1,010,060)
================================================
FUTURES CONTRACTS
UNREALIZED
UNDERLYING FACE APPRECIATION
PURCHASED EXPIRATION DATE AMOUNT AT VALUE (DEPRECIATION)
- --------------------------------------------------------------------------------
424 D.J. EURO STOXX 50
Index December 2000 $17,730,641 $ (805,256)
122 FTSE 100 Index December 2000 10,627,229 (451,955)
88 TOPIX Index December 2000 10,855,518 (231,142)
-------------------------------------
$39,213,388 $(1,488,353)
=====================================
% OF TOTAL
MARKET SECTOR INVESTMENTS
INDUSTRIAL CYCLICAL 18.7%
FINANCE 12.9%
SHORT-TERM INVESTMENTS 9.1%
INSURANCE 8.5%
PHARMACEUTICALS 7.3%
ENERGY 7.0%
TELECOMMUNICATIONS 6.5%
CONSUMER CYCLICAL 5.7%
SEMICONDUCTORS 5.5%
CONSUMER STABLE 5.0%
CONSUMER SERVICES 3.8%
SOFTWARE & SERVICES 3.7%
RETAIL 3.4%
UTILITIES 2.9%
ADR - American Depositary Receipt
AUD - Australian Dollar
CAD - Canadian Dollar
CHF - Swiss Franc
DKK - Danish Krone
EUR - Euro
GBP - British Pound
GDR - Global Depositary Receipt
HKD - Hong Kong Dollar
JPY - Japanese Yen
PDR - Philippine Depositary Receipt
SEK - Swedish Krona
SDR - Swedish Depositary Receipt
SGD - Singapore Dollar
144A - Securities restricted for resale to Qualified Institutional Buyers
(s) Security is fully or partially segregated with custodian as collateral for
futures or with brokers as initial margin for futures contracts.
(y) Yield to maturity
(z) Category is less than 0.05%.
+ Non-income producing security
The Accompanying Notes are an Integral Part of the Financial Statements.
-17-
J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND / J.P. MORGAN INSTITUTIONAL
INTERNATIONAL OPPORTUNITIES FUND / THE INTERNATIONAL OPPORTUNITIES PORTFOLIO
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AS OF NOVEMBER 30, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
PRO FORMA
COMBINED
THE J.P. MORGAN
J.P. MORGAN J.P. MORGAN INTERNATIONAL PRO FORMA INSTITUTIONAL
INTERNATIONAL INSTITUTIONAL OPPORTUNITIES ADJUSTMENTS INTERNATIONAL
OPPORTUNITIES INTERNATIONAL PORTFOLIO OPPORTUNITIES
FUND OPPORTUNITIES FUND
FUND
ASSETS:
Investments in The International
Opportunities Portfolio, at value $79,231 $462,287 $ - $(541,518) (a) $ -
Investments at Value - - 540,494 (507) (e) 539,987
Foreign Currency at Value - - 7,068 - 7,068
Receivable for Investments Sold - - 17,598 - 17,598
Unrealized Appreciation of
Forward Foreign Currency Contracts - - 2,305 - 2,305
Tax Reclaim Receivable - - 1,452 - 1,452
Dividend and Interest Receivable - - 476 - 476
Receivable for Shares of Beneficial Interest Sold 311 60 - - 371
Deferred Organization Expense 3 4 3 (10) (b) -
Prepaid Trustees' Fees and Expenses - 1 1 - 2
Prepaid Expenses and Other Assets - 1 1 10 (b) 12
--------------------------------------------- -------
Total Assets 79,545 462,353 569,398 (542,025) 569,271
--------------------------------------------- -------
LIABILITIES:
Due to Custodian - - 11,556 - 11,556
Payable for Investments Purchased - - 10,435 - 10,435
Unrealized Depreciation of
Forward Foreign Currency Contracts - - 4,269 - 4,269
Payable for Shares of Beneficial Interest Redeemed 74 1,212 - - 1,286
Variation Margin Payable - - 630 - 630
Advisory Fee Payable - - 276 - 276
Shareholder Servicing Fee Payable 18 39 - - 57
Administration Services Fee Payable - 9 11 - 20
Fund Services Fee Payable - 1 1 - 2
Administration Fee Payable 2 - - - 2
Accrued Trustee Fees - - 1 - 1
Accrued Expenses and Other Liabilities 43 76 194 - 313
--------------------------------------------- -------
Total Liabilities 137 1,337 27,373 - 28,847
--------------------------------------------- -------
NET ASSETS:
Paid-in Capital 79,260 468,697 - - 547,957
Undistributed (Distributions
in Excess of) Net Investment Income 592 1,277 - - 1,869
Accumulated Net Realized Loss 1,765 3,688 - - 5,453
Net Unrealized Appreciation of Investment (2,209) (12,646) - - (14,855)
--------------------------------------------- -------
Net Assets 79,408 461,016 542,025 (542,025) 540,424
============================================= =======
Shares of Beneficial Interest Outstanding 6,995 40,484 - (47,533) (d) -
Net Asset Per Share $11.35 $11.39 - - -
PRO FORMA WITH REORGANIZATION
SHARES OUTSTANDING
Select - - - 6,973 (c) 6,973
Institutional - - - 40,484 (c) 40,484
NET ASSETS VALUE PER SHARE
Select - - - $11.39 (c) $11.39
Institutional - - - $11.39 (c) $11.39
--------------------------------------------- -------
Cost of Investments - - $551,493 - $551,493
============================================= =======
(a)Reallocation of investments from the
feeder funds to master portfolio.
(b)Write-off of deferred organization
expenses of the portfolio and
JPMorgan International Opportunities
Fund.
(c)The difference in number of shares
outstanding due to the
Reorganization.
(d)Reallocation of feeder fund's
beneficial interest to Select and
Institutional Shares due to the
Reorganization
(e)Reflects the redemption in short term
investments of the J.P. Morgan
International Opportunities Fund
Advisor Series Fund.
-18-
J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND / J.P. MORGAN INSTITUTIONAL
INTERNATIONAL OPPORTUNITIES FUND / THE INTERNATIONAL OPPORTUNITIES PORTFOLIO
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED NOVEMBER 30, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
PRO FORMA
COMBINED
J.P. MORGAN J.P. MORGAN THE PRO FORMA J.P. MORGAN
INTERNATIONAL INSTITUTIONAL INTERNATIONAL ADJUSTMENTS INSTITUTIONAL
OPPORTUNITIES INTERNATIONAL OPPORTUNITIES INTERNATIONAL
FUND OPPORTUNITIES PORTFOLIO OPPORTUNITIES
FUND FUND
INCOME:
Allocated Investment Income From Portfolio $1,456 $8,083 $ - $(9,539) (c) $ 0
Interest Income - - 1,532 - 1,532
Dividend Income - - 8,008 - 8,008
Allocated Portfolio Expenses (623) (3,478) - 4,101 (b) (0)
-------------------------------------------------------------------------
Investment Income 833 4,605 9,540 (5,438) 9,540
-------------------------------------------------------------------------
EXPENSES:
Shareholder Servicing Fee 207 462 - - 669
Registration Fees 39 37 - - 76
Financial and Fund Accounting Services Fee 43 43 - (86) (f) -
Administrative Services Fee 20 112 132 555 (a) 819
Transfer Agent Fees 36 33 - - 69
Professional Fees 12 15 53 (22) (g) 58
Printing Expenses 11 8 - (7) (g) 12
Trustees' Fees and Expenses 1 4 5 - 10
Fund Services Fee 1 7 8 - 16
Administration Fee 1 5 4 - 10
Advisory Fees - - 3,269 - 3,269
Custodian Fees and Expenses - - 616 (206) (f,g) 410
Amortization of Organizational Expenses 2 3 3 6 (e) 14
Miscellaneous 8 15 12 - 35
------------------------------------------------------------------------
Total Expenses 381 744 4,102 240 5,467
-------------------------------------------------------------------------
Less: Amounts Waived (240) (240)
Less: Reimbursement of Expenses - - - - -
-------------------------------------------------------------------------
Net Expenses 381 744 4,102 - 5,227
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net Investment Income 452 3,861 5,438 (5,438) 4,313
-------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS):
NET REALIZED GAIN (LOSS) ON:
Investment Transactions 4,097 11,839 17,984 (15,936) (d) 17,984
Futures Contracts 622 - 622
Foreign Currency Transactions (2,676) (2,676)
--------------------------------------------------------------------------
Net Realized Gain (Loss) 4,097 11,839 15,930 (15,936) 15,930
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION OF
Investment Transactions (14,120) (75,487) (84,288) 89,607 (d) (84,288)
Futures and Forward Contracts (2,539) (2,539)
Foreign Currency Contracts and Translations (2,793) (2,793)
--------------------------------------------------------------------------
Net Change in Unrealized Appreciation/Depreciation of
Investments (14,120) (75,487) (89,620) 89,607 (89,620)
--------------------------------------------------------------------------
Net (decrease) in net assets from operations $(9,571) $(59,787) $(68,252) $68,233 $(69,377)
==========================================================================
(a)Reflects adjustments to investment
advisory fee, administrative fees and
shareholder servicing fees and/or
related waivers based on the
surviving Fund's revised fee
schedule.
(b)Reflects the elimination of master
portfolio expenses which have been
disclosed under feeder expenses.
(c)Reallocation of investments income
to feeder funds
(d)Reallocation of realized and
unrealized loss to feeder funds.
(e)Reflects write-off of deferred
organization expenses of the
portfolio
(f)Reclassification of fund accounting
charge into combined custodial
charge.
(g)Reduction reflects expected benefits
of combined operations.
-19-
J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND / J.P. MORGAN INSTITUTIONAL
INTERNATIONAL OPPORTUNITIES FUND / THE INTERNATIONAL OPPORTUNITIES PORTFOLIO /
CHASE VISTA INTERNATIONAL EQUITY FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF COMBINATION:
The Pro Forma Combining Statement of Assets and Liabilities, Statement
of Operations and Schedule of Investments ("Pro Forma Statements") reflect the
accounts of The International Opportunities Portfolio ("Master Portfolio"), J.P.
Morgan Institutional International Opportunities Fund ("Institutional Fund"),
and J.P. Morgan International Opportunities Fund ("International Opportunities
Fund"), (collectively the "feeder funds" of the Master Portfolio) as if the
proposed reorganization occurred as of and for the twelve months ended November
30, 2000.
The Pro Forma Combining Statement of Assets and Liabilities,
Statement of Operations and Schedule of Investments ("Pro Forma Statements")
reflect the accounts of the Master Portfolio, the feeder funds, and JPMorgan
Fleming International Equity Fund ("JPFIEF") as if the proposed concurrent
reorganization occurred as of and for the twelve months ended November 30,
2000.
Under the Reorganization, the Pro Forma Statements give effect to the
proposed transfer of all assets and liabilities of the Master Portfolio, and
International Opportunities Fund in exchange for shares in Institutional Fund.
Under the Concurrent Reorganization, the Pro Forma Statements give effect to the
proposed transfer of all assets and liabilities of Master Portfolios,
International Opportunities Fund, and JPFIEF in exchange for shares in
Institutional Fund. 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:
Under the Reorganization, the existing shares of Institutional Fund
would be renamed Institutional Class Shares, the existing shares of
International Opportunities Fund would be renamed Select Class Shares. The net
asset values per share for Select Class Shares at the commencement of offering
would be identical to the closing net asset value per share for the
Institutional Class Shares immediately prior to the reorganization.
Under the proposed reorganization, each shareholder of International
Opportunities Fund would receive shares of Institutional Fund with a value equal
to their holding in their respective
-20-
funds. Holders of International Opportunities Fund will receive Select Class
Shares in Institutional Fund. Therefore, as a result of the proposed
Reorganization, current shareholders of International Opportunities Fund will
become shareholders of Institutional Fund.
Under the proposed Concurrent Reorganization, each shareholder of
International Opportunities Fund and CVIEF would receive shares of Institutional
Fund with a value equal to their holding in their respective funds. Holders of
Class A Shares in CVIEF will receive Class A Shares and holders of Class B
Shares in CVIEF will receive Class B Shares. Therefore, as a result of the
proposed Concurrent Reorganization, current holders of International
Opportunities and CVIEF will become shareholders of Institutional Fund.
The Pro Forma net asset value per share assumes the issuance of
additional shares of Institutional Fund, which would have been issued on
November 30, 2000 in connection with the proposed Reorganization and the
proposed Concurrent Reorganization. The amount of additional shares assumed to
be issued under the Reorganization was calculated based on the November 30, 2000
net assets of International Opportunities Fund and net assets values per share
of Institutional Fund. The amount of additional shares assumed to be issued
under the Concurrent Reorganization was calculated based on November 30, 2000
net assets of International Opportunities Fund and CVIEF and the net asset value
per share of Institutional Fund.
J.P. MORGAN INSTITUTIONAL INTERNATIONAL OPPORTUNITIES FUND WITH REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Select Class Shares
Increase in Shares Issued 6,973
Net Assets 11/30/00 79,408
Pro Forma Net Asset 11.39
Value 11/30/00
JPMORGAN FLEMING INTERNATIONAL OPPORTUNITIES FUND WITH CONCURRENT REORGANIZATION
Select
Increase in Shares Issued 6,973
Net Assets 11/30/00 79,408
Pro Forma Net Asset 11.39
Value 11/30/00
3. PRO FORMA OPERATIONS:
The Pro Forma Statements of Operations assumes similar rates of gross
investment income for the investments of each Fund. Accordingly, the combined
gross investment income is equal to the sum of each Fund's gross investment
income. Certain expenses have been adjusted to reflect the expected expenses
of the combined entity including the change in administrative fee and the
expected expense cap. The pro forma investment advisory, shareholder
servicing and distribution fees of the combined Fund are based on the fee
schedule in effect for the Surviving Fund at the combined level of average
net assets for the twelve months ended November 30, 2000.
-21-
FORM N-14
PART C - OTHER INFORMATION
Item 15. Indemnification.
---------------
Reference is made to Section 5.3 of Registrant's Declaration of Trust
and Section 5 of Registrant's Distribution Agreement.
Registrant, its Trustees and officers are insured against certain
expenses in connection with the defense of claims, demands, actions, suits, or
proceedings, and certain liabilities that might be imposed as a result of such
actions, suits or proceedings.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "1933 Act"), may be permitted to directors,
trustees, officers and controlling persons of the Registrant and the principal
underwriter pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the 1933 Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, trustee, officer, or controlling person of the
Registrant and the principal underwriter in connection with the successful
defense of any action, suit or proceeding) is asserted against the Registrant by
such director, trustee, officer or controlling person or principal underwriter
in connection with the shares being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
Item 16. Exhibits.
---------------
1 Declaration of Trust.
(a) Declaration of Trust, as amended, was filed as Exhibit No. 1 to
Post-Effective Amendment No. 25 to the Registrant's Registration Statement on
Form N-1A (File No. 033-54642) (the "Registration Statement") filed on
September 26, 1996 (Accession Number 0000912057-96-021281).
(b) Amendment No. 5 to Declaration of Trust; Amendment and Fifth
Amended and Restated Establishment and Designation of Series of Shares of
Beneficial Interest. Incorporated herein by reference to Post-Effective
Amendment No. 29 to the Registration Statement filed on December 26, 1996
(Accession Number 0001016964-96-000061).
Part C-1
(c) Amendment No. 6 to Declaration of Trust; Amendment and Sixth
Amended and Restated Establishment and Designation of Series of Shares of
Beneficial Interest was filed as Exhibit No. 1(b) to Post-Effective Amendment
No. 31 to the Registration Statement on February 28, 1997 (Accession Number
0001016964-97-000041).
(d) Amendment No. 7 to Declaration of Trust; Amendment and Seventh
Amended and Restated Establishment and Designation of Series of Shares of
Beneficial Interest was filed as Exhibit No. 1(c) to Post-Effective Amendment
No. 32 to the Registration Statement on April 15, 1997 (Accession Number
0001016964-97-000053).
(e) Amendment No. 8 to Declaration of Trust; Amendment and Eighth
Amended and Restated Establishment and Designation of Series of Shares of
Beneficial Interest was filed as Exhibit No. l(d) to Post-Effective Amendment
No. 40 to the Registration Statement on October 9, 1997 (Accession Number
0001016964-97-000158).
(f) Amendment No. 9 to Declaration of Trust; Amendment and Ninth
Amended and Restated Establishment and Designation of Series of Shares of
Beneficial Interest was filed as Exhibit No. l(e) to Post-Effective Amendment
No. 50 to the Registration Statement on December 29, 1997 (Accession Number
0001041455-97-000014).
(g) Amendment No. 10 to Declaration of Trust; Amendment and Tenth
Amended and Restated Establishment and Designation of Series of Shares of
Beneficial Interest and change voting procedures to dollar-based voting was
filed as Exhibit No. (a)6 to Post-Effective Amendment No. 60 to the
Registration Statement on December 31, 1998 (Accession Number
0001041455-98-000097).
(h) Amendment No. 11 to Declaration of Trust. Incorporated herein by
reference to Post-Effective Amendment No. 63 to the Registration Statement
filed on April 29, 1999 (Accession Number 00001041455-99-000041).
(i) Amendment No. 12 to Declaration of Trust. Incorporated herein by
reference to Post-Effective Amendment No. 72 to the Registration Statement
filed on April 3, 2000 (Accession Number 0001041455-00-000084).
(j) Amendment No. 13 to Declaration of Trust, incorporated herein by
reference to Post-Effective Amendment No. 78 to the Registration Statement
filed on August 1, 2000 (Accession Number 0000894088-00-000008).
(k) Amendment No. 14 to Declaration of Trust incorporated herein by
reference to Post-Effective Amendment No. 78 to the Registration Statement
filed on August 1, 2000 (Accession Number 0000894088-00-000008).
2 By-laws.
(a) Restated By-Laws of Registrant. Incorporated herein by reference
to Post-Effective Amendment No. 29 to the Registration Statement filed on
December 26, 1996 (Accession Number 0001016964-96-000061).
Part C-2
(b) Amendment to Restated By-laws of Registrant. Incorporated herein
by reference to Post-Effective Amendment No. 71 to the Registration Statement
filed on February 28, 2000 (Accession Number 0001041455-00-000056).
3 Not Applicable
4 Agreement and Plan of Reorganization filed herewith as
Appendix A to the Combined Prospectus/Proxy Statement.
5 Not Applicable
6 Not Applicable
7 Distribution Agreement filed herewith.
8 Not Applicable
9 Custodian Agreement
(c) Custodian Contract between Registrant and State Street Bank and
Trust Company ("State Street"). Incorporated herein by reference to
Post-Effective Amendment No. 29 to the Registration Statement filed on
December 26, 1996 (Accession Number 0001016964-96-000061).
(d) Custodian Contract between Registrant and The Bank of New York.
Incorporated herein by reference to Post-Effective Amendment No. 71 to the
Registration Statement filed on February 28, 2000 (Accession Number
0001041455-00-000056).
10 None
11 None
12 Opinion and Consent of Simpson Thacher & Bartlett as to Tax
Consequences to be filed by Amendment.
13 Material Contracts.
(e) Co-Administration Agreement between Registrant and FDI.
Incorporated herein by reference to Post-Effective Amendment No. 29 to the
Registration Statement filed on December 26, 1996 (Accession Number
0001016964-96-000061).
(f) Restated Shareholder Servicing Agreement between Registrant and
Morgan Guaranty Trust Company of New York ("Morgan Guaranty") filed as
Exhibit (h)2 to Post Effective Amendment No. 54 to the Registration Statement
on August 25, 1998 (Accession No. 0001041455-98-000053).
Part C-3
(g) Transfer Agency and Service Agreement between Registrant and
State Street. Incorporated herein by reference to Post-Effective Amendment
No. 29 to the Registration Statement filed on December 26,1996 (Accession
Number 0001016964-96-000061).
(h) Restated Administrative Services Agreement between Registrant
and Morgan Guaranty. Incorporated herein by reference to Post-Effective
Amendment No. 29 to the Registration Statement filed on December 26, 1996
(Accession Number 0001016964-96-000061).
(i) Fund Services Agreement, as amended, between Registrant and
Pierpont Group, Inc. Incorporated herein by reference to Post-Effective
Amendment No. 29 to the Registration Statement filed on December 26, 1996
(Accession Number 0001016964-96-000061).
(j) Service Plan with respect to Registrant's Service Money Market
Funds. Incorporated herein by reference to Post-Effective Amendment No. 33 to
the Registration Statement filed on April 30, 1997 (Accession Number
00001016964-97-000059).
(k) Service Plan with respect to Registrant's Small Company Fund
Advisor Series, Small Company Opportunities Fund -- Advisor Series,
International Equity Fund -- Advisor Series, International Opportunities Fund
- -- Advisor Series, U.S. Equity Fund -- Advisor Series, Diversified Fund --
Advisor Series incorporated herein by reference to Post-Effective Amendment
No. 78 to the Registration Statement filed on August 1, 2000 (Accession
Number 0000894088-00-000008).
(l) Amended Service Plan with respect to Registrant's Disciplined
Equity -- Advisor series and Direct Prime Money Market Funds. Incorporated
herein by reference to Post-Effective Amendment No. 72 to the Registration
Statement filed on April 3, 2000 (Accession Number 0001041455-00-000084).
(m) Amended Service Plan with respect to Registrant's J.P. Morgan
Prime Cash Management Fund. Incorporated herein by reference to
Post-Effective Amendment No. 75 to Registration Statement filed on May 17,
2000 (Accession Number 0001041455-00-000122).
(n) Form of Administration Agreement filed herewith.
14 Consent of PricewaterhouseCoopers LLP.
15 None
16 Powers of Attorney filed herewith.
17(a) Form of Proxy Card.
17(b) Preliminary Prospectus for the Surviving Fund filed herewith.
17(c) Prospectus for the Merging Fund Incorporated herein by
reference to the Registration Statement on Form N-14 filed
on April 13, 2001 (Accession Number 0000912057-01-508608).
Part C-4
17(d) Preliminary Statement of Additional Information for the
Surviving Fund filed herewith.
17(e) Statement of Additional Information for the Merging Fund
Incorporated herein by reference to the Registration
Statement on Form N-14 filed on April 13, 2001 (Accession
Number 0000912057-01-508608).
17(f) Annual Report of the Surviving Fund (including the Annual
Report of the Master Portfolio) dated November 30, 2000
Incorporated herein by reference to the Registration
Statement on Form N-14 filed on April 13, 2001 (Accession
Number 0000912057-01-508608).
17(g) Annual Report of the Merging Fund (including the Annual
Report of the Master Portfolio) dated November 30, 2000
Incorporated herein by reference to the Registration
Statement on Form N-14 filed on April 13, 2001 (Accession
Number 0000912057-01-508608).
Item 17. Undertakings.
---------------
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus which is
part of this registration statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the Securities Act of 1933,
as amended (the "1933 Act"), the reoffering prospectus will contain the
information called for by the applicable registration form for reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
Part C-5
SIGNATURES
As required by the Securities Act of 1933, this registration statement
has been signed on behalf of the registrant, in the City of New York and the
State of New York, on the 11th day of May, 2001.
J.P. MORGAN INSTITUTIONAL FUNDS
Registrant
By: /s/ Joseph J. Bertini
-----------------------------------------
Joseph J. Bertini
Vice President and Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on May 11, 2001.
George Rio*
- -------------------------------------
George Rio
President and Treasurer
Matthew Healey*
- -------------------------------------
Matthew Healey
Trustee, Chairman and Chief Executive Officer (Principal Executive Officer)
Frederick S. Addy*
- -------------------------------------
Frederick S. Addy
Trustee
William G. Burns*
- -------------------------------------
William G. Burns
Trustee
Arthur C. Eschenlauer*
- -------------------------------------
Arthur C. Eschenlauer
Trustee
Michael P. Mallardi*
- -------------------------------------
Michael P. Mallardi
Trustee
*By /s/ Joseph J. Bertini
- -------------------------------------
Joseph J. Bertini
as attorney-in-fact pursuant to a power of attorney.
EXHIBITS
ITEM DESCRIPTION
- ---- -----------
(7) Form of Distribution Agreement.
13 (n) Form of Administration Agreement.
(16) Powers of Attorney.
(17)(a) Form of Proxy Card.
(b) Preliminary Prospectus for the Surviving Fund.
(d) Preliminary Statement of Additional Information for Surviving Fund.