As filed with the Securities and Exchange Commission on May 11, 2001
Registration No. 333-58920/811-7841
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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:
MUTUAL FUND SELECT TRUST
Area Code and Telephone Number:
1-800-348-4782
Address of Principal Executive Offices:
522 Fifth Avenue
New York, NY 10036
Name and Address of Agent for Service:
Lisa Hurley
c/o BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, Ohio 43219
Copies to:
JOSEPH J. BERTINI, ESQ. SARAH E. COGAN, ESQ. JOHN E. BAUMGARDNER, JR., ESQ.
PETER B. ELDRIDGE, ESQ. Simpson Thacher & Bartlett Sullivan & Cromwell
c/o J.P. Morgan Fleming Asset Management 425 Lexington Avenue 125 Broad Street
(USA) Inc. 522 Fifth Avenue New York, NY 10017-3954 New York, NY 10004
New York, NY 10036
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Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective under the Securities Act of 1933.
It is proposed that this filing will become effective on May 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. 333-13319/811-7841) pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Registrant's
Form 24f-2 for the fiscal year ended August 31, 2000 was filed on November 27,
2000. Pursuant to Rule 429, this Registration Statement relates to the aforesaid
Registration Statement on Form N-1A.
J.P. MORGAN NEW YORK TAX EXEMPT BOND 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 New York Tax Exempt
Bond 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, J.P. Morgan & Co. Incorporated, the former corporate
parent of the investment adviser of the Merging Fund's assets, recently
completed a merger with The Chase Manhattan Corporation to form J.P. Morgan
Chase & Co. ("JPMC"). As a result of this merger, JPMC is seeking to reorganize
parts of its investment management business 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
JPMorgan New York Intermediate Tax Free Income Fund (formerly, Chase Vista New
York Intermediate Tax Free Income Fund) (the "Surviving Fund"), a series of
Mutual Fund Select Trust ("MFST") (the "Reorganization"). After the
Reorganization, shareholders of the Merging Fund will hold shares of the
Surviving Fund. The investment objective and policies of the Surviving Fund
generally are similar to those of the Merging Fund.
After the proposed Reorganization, your investment will be in a larger
combined fund with similar investment policies.
The Surviving Fund has also entered into an agreement and plan of
reorganization with JPMorgan Institutional New York Tax Exempt Bond Fund, a fund
whose assets are managed by J.P. Morgan Investment Management Inc. ("JPMIM") and
which has identical investment objectives and policies to the Merging Fund (the
"Concurrent Reorganization"). If the Concurrent Reorganization is approved by
the shareholders of J.P. Morgan Institutional New York Tax Exempt Bond Fund and
certain other conditions are met, this other fund will be reorganized into the
Surviving Fund. The consummation of the Reorganization is contingent upon the
simultaneous consummation of the Concurrent 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 the Merging Fund is JPMIM. The
investment adviser for the Surviving Fund is J.P. Morgan Fleming Asset
Management (USA) Inc. ("JPMFAM"). After the Reorganization, JPMFAM, the same
investment adviser that currently is responsible for the Surviving Fund, will
make the day-to-day investment decisions for your portfolio.
Please see the enclosed Combined Prospectus/Proxy Statement for detailed
information regarding the proposed Reorganization, the Concurrent Reorganization
and a comparison of the Merging Fund and JPMF to the Surviving Fund and MFST.
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, MFST or their shareholders.
If approval of the Reorganization is obtained, you will automatically
receive 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 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. 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 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,
shares of the Surviving Fund. The Merging Fund will then be liquidated and those
shares of the Surviving Fund will be distributed pro rata to shareholders such
as you. After the Reorganization, you will own shares of the Surviving Fund
rather than shares of the Merging Fund. The Surviving Fund invests directly in
portfolio securities rather than in a master portfolio.
WHAT WILL BE THE EFFECT ON THE INVESTMENT STRATEGIES ASSOCIATED WITH MY
INVESTMENT IF THE PROPOSED CHANGES ARE APPROVED?
The Surviving Fund generally has similar investment objectives and policies
to those of the Merging Fund. The principal differences are as follows:
SURVIVING FUND MERGING FUND
- -------------- --------------------------------------------------
- -Investment objective is to seek to provide -Investment objective is to provide a high level
monthly dividends that are excluded from gross of tax exempt income for New York residents
income and are exempt from New York State and New consistent with moderate risk of capital.
York City personal income taxes. The Fund also
seeks to protect the value of your investment.
- -Invests in securities rated investment grade or -May invest up to 10% of its assets in non-
unrated securities of comparable quality. investment grade securities (sometimes called
"junk bonds") rated B or BB/Ba.
- -The average dollar-weighted maturity of the -Portfolio securities may be of any maturity.
portfolio will be between three and 10 years.
The Reorganization is not intended to have any immediate significant impact
on the investment strategy implemented in respect of your investment. However,
please note that while the Merging Fund invests all of its assets in The New
York Tax Exempt Bond Portfolio (the "Master Portfolio") (which in turn invests
in portfolio securities), the Surviving Fund invests directly in portfolio
securities.
HOW WILL THE FEES AND EXPENSES ASSOCIATED WITH MY INVESTMENT BE AFFECTED?
As a result of the Reorganization, the contractual (or pre-waiver) total
expense ratios are expected to be higher for your shares in the Surviving Fund
than they are for your shares in the Merging Fund. However, the actual (or
post-waiver) total expense ratios are expected to be the same or less for your
shares in the Surviving Fund than they are for your shares in the Merging Fund.
This is because The Chase Manhattan Bank, the Surviving Fund's administrator,
has contractually agreed to waive fees payable to it and reimburse expenses so
that the actual total operating expense will remain the same for at least THREE
YEARS after the Reorganization.
WILL THERE BE ANY CHANGE IN WHO MANAGES MY INVESTMENT?
Yes. JPMFAM, the investment adviser that currently manages the day-to-day
investment activities of the Surviving Fund, will continue to manage that fund
after the Reorganization.
WHO WILL PAY FOR THE REORGANIZATION?
The cost and expenses associated with the Reorganization, including costs of
soliciting proxies, will be borne by JPMC and not by either the Merging Fund or
the Surviving Fund (or shareholders of either fund).
WHAT IF I DO NOT VOTE OR VOTE AGAINST THE REORGANIZATION, YET APPROVAL OF THE
REORGANIZATION IS OBTAINED?
You will automatically receive shares 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 the other merging fund will become the
assets and liabilities of the Surviving Fund. The consummation of the
Reorganization is contingent upon the simultaneous consummation of the
Concurrent 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 MFST?
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 were still a
shareholder in JPMF, you are entitled to vote on this proposal. Shareholders of
MFST 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 NEW YORK TAX EXEMPT BOND 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 New York Tax Exempt Bond Fund:
NOTICE IS HEREBY GIVEN THAT a Special Meeting (the "Meeting") of the
shareholders ("Shareholders") of J.P. Morgan New York Tax Exempt Bond 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, NY, on July 3, 2001 at 9:00 a.m. (Eastern time), for the following
purposes:
ITEM 1. To consider and act upon a proposal to approve an Agreement and Plan
of Reorganization (the "Reorganization Plan") by and among JPMF, on
behalf of the Merging Fund, Mutual Fund Select Trust ("MFST"), on
behalf of JPMorgan New York Intermediate Tax Free Income Fund
(formerly, Chase Vista New York Intermediate Tax Free Income 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
"Surviving Fund Shares"); and (b) the distribution of such Surviving
Fund Shares to the Shareholders of the Merging Fund in connection with
the liquidation of the Merging Fund.
ITEM 2. To elect 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 NEW YORK TAX EXEMPT BOND FUND,
A SERIES OF J.P. MORGAN FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
1-800-521-5411
BY AND IN EXCHANGE FOR SELECT CLASS SHARES OF
JPMORGAN NEW YORK INTERMEDIATE TAX FREE INCOME FUND
(FORMERLY, CHASE VISTA NEW YORK INTERMEDIATE TAX FREE INCOME FUND),
A SERIES OF MUTUAL FUND SELECT TRUST
522 FIFTH AVENUE
NEW YORK, NY 10036
1-800-348-4782
This Combined Prospectus/Proxy Statement relates to the proposed
reorganization of J.P. Morgan New York Tax Exempt Bond Fund (the "Merging
Fund"), a series of J.P. Morgan Funds ("JPMF"), into JPMorgan New York
Intermediate Tax Free Income Fund (formerly, Chase Vista New York Intermediate
Tax Free Income Fund) (the "Surviving Fund"), a series of Mutual Fund Select
Trust ("MFST"). 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 generally
similar investment objectives and policies to those of the Merging Fund, in
exchange for shares of the Surviving Fund (the "Reorganization"). Therefore, as
a result of the proposed Reorganization, current shareholders of the Merging
Fund (the "Merging Fund Shareholders") will become shareholders of the Surviving
Fund ("Surviving Fund Shareholders"). JPMF and MFST are both open-end management
investment companies offering shares in several portfolios.
Under the proposed Reorganization, each Merging Fund Shareholder will
receive Select Class shares (the "Surviving Fund Shares") of the Surviving Fund
with a value equal to such Merging Fund Shareholder's holdings in the Merging
Fund. The Surviving Fund currently has a multi-class structure under which it
offers three classes of shares: Class A, Class B and Institutional Class shares.
In connection with the Reorganization and the Concurrent Reorganization (as
defined below), the Surviving Fund will rename the Institutional Class "Select
Class" and will introduce a new Institutional Class.
At the Meeting, you also will 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, MFST, 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 MFST's prospectus for Surviving Fund Shares that have been
registered with the Securities and Exchange Commission (the "Commission") and
are to be issued in connection with the Reorganization.
This Combined Prospectus/Proxy Statement, which should be retained for
future reference, sets forth concisely the information about MFST and JPMF that
an investor should know before voting on the proposals. The current Prospectus,
Statement of Additional Information and Annual and Semi-Annual Reports of the
Merging Fund (including the Annual and Semi-Annual Reports of The New York Tax
Exempt Bond Portfolio) and the preliminary Prospectus and Statement of
Additional Information and the current Annual Report for the Surviving Fund, are
incorporated herein by reference, and the preliminary Prospectus
and current Annual Report for the Surviving Fund are enclosed with this Combined
Prospectus/Proxy Statement. A Statement of Additional Information relating to
this Combined Prospectus/Proxy Statement containing additional information about
MFST and JPMF has been filed with the Commission and is incorporated by
reference into this Combined Prospectus/Proxy Statement. A copy of the Statement
of Additional Information as well as the Prospectus, Statement of Additional
Information, Annual Report and Semi-Annual Report of the Merging Fund (including
the Annual Report and Semi-Annual Report for the New York Tax-Exempt Bond
Portfolio) may be obtained without charge by writing to JPMF at its address
noted above or by calling 1-800-348-4782.
This Combined Prospectus/Proxy Statement is expected to first be sent to
shareholders on or about May 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 MFST OR JPMF.
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
-----
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
INVESTMENT POLICIES............................... 9
PURCHASES, REDEMPTIONS AND EXCHANGES.............. 13
DISTRIBUTIONS AND TAXES........................... 15
COMPARISON OF THE MERGING FUND'S AND THE SURVIVING
FUND'S ORGANIZATION STRUCTURE.................... 16
INFORMATION RELATING TO THE ADVISORY CONTRACTS AND
OTHER SERVICES................................... 17
PROPOSAL 2: ELECTION OF TRUSTEES.................. 19
INFORMATION RELATING TO VOTING MATTERS............ 24
ADDITIONAL INFORMATION ABOUT MFST................. 26
ADDITIONAL INFORMATION ABOUT JPMF................. 26
FINANCIAL STATEMENTS AND EXPERTS.................. 26
OTHER BUSINESS.................................... 26
LITIGATION........................................ 26
SHAREHOLDER INQUIRIES............................. 27
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, NY (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, MFST, on behalf of the Surviving
Fund (the Merging Fund and the Surviving Fund are collectively defined as the
"Funds"), and J.P. Morgan Chase & Co. ("JPMC"), pursuant to which all of the
assets and liabilities of the Merging Fund will be transferred to the Surviving
Fund in exchange for Surviving Fund Shares. As a result of the Reorganization,
Merging Fund Shareholders will become shareholders of the Surviving Fund and
will receive Surviving Fund Shares equal in value to their holdings in the
Merging Fund on the date of the Reorganization. In connection with the
Reorganization, the Surviving Fund will be renamed "JPMorgan NY Tax Free Bond
Fund." Further information relating to the Surviving Fund is set forth herein,
and the Surviving Fund's preliminary Prospectus and current Annual Report are
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 and Semi-Annual Reports and the Merging
Fund (including the Annual and Semi-Annual Reports of The New York Tax Exempt
Bond Portfolio), 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
Pursuant to the proposed Reorganization, the Merging Fund will transfer all
of its assets and liabilities to the Surviving Fund in exchange for shares of
the Surviving Fund.
Under the proposed Reorganization, each Merging Fund Shareholder will
receive a number of 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. See "Information Relating to the Proposed
Reorganization."
The Surviving Fund has investment objectives, policies and restrictions
generally similar to the Merging Fund.
1
Based upon their evaluation of the relevant information presented to them,
including an analysis of the operation of the Surviving Fund both before and
after the Reorganization, the terms of the Reorganization Plan, the opportunity
to combine the two Funds with generally similar investment objectives and
policies, and the fact that the Reorganization will be tax-free, and in light of
their fiduciary duties under federal and state law, the MFST Board and the JPMF
Board, including a majority of each Board's members who are not "interested
persons" within the meaning of the Investment Company Act of 1940, as amended
(the "1940 Act"), have each determined that the proposed Reorganization is in
the best interests of 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 it
is in the best interests of its shareholders.
CONCURRENT REORGANIZATION
The Merging Fund currently invests all of its investable assets in The New
York Tax Exempt Bond Portfolio (the "Master Portfolio"), which has identical
investment objectives and policies as the Merging Fund and which is advised by
J.P. Morgan Investment Management Inc. ("JPMIM"). J.P. Morgan Institutional New
York Tax Exempt Bond Fund, a series of JPMorgan Institutional Funds with
identical investment objectives and policies as the Merging Fund (the "Feeder
Portfolio") also currently invests all of its investable assets in the Master
Portfolio. The Surviving Fund has entered into a substantially similar agreement
and plan of reorganization with the Feeder Portfolio (the "Concurrent
Reorganization"). If each of the Reorganization and the Concurrent
Reorganization is approved by the shareholders of the Merging Fund and the
Feeder Portfolio, respectively, and certain other conditions are met, the
Merging Fund and the Feeder Portfolio will be reorganized into the Surviving
Fund and those funds will no longer invest their assets in the Master Portfolio.
The consummation of the Reorganization is contingent upon the simultaneous
consummation of the Concurrent Reorganization.
FEDERAL INCOME TAX CONSEQUENCES
Simpson Thacher & Bartlett will issue an opinion (based on certain
assumptions) as of the effective time of the Reorganization to the effect that
the transaction will not give rise to the recognition of income, gain or loss
for federal income tax purposes to the Merging Fund, the Surviving Fund or the
shareholders of the Merging Fund. A shareholder's holding period and tax basis
of Surviving Fund Shares received by a Shareholder of the Merging Fund will be
the same as the holding period and tax basis of the shareholder's shares of the
Merging Fund. In addition, the holding period and tax basis of those assets
owned by the Merging Fund and transferred to the Surviving Fund will be
identical for the Surviving Fund. See "Information Relating to the Proposed
Reorganization--Federal Income Tax Consequences."
INVESTMENT ADVISERS
The investment adviser for the Master Portfolio (and therefore the assets of
the Merging Fund and the Feeder Portfolio) is JPMIM. The investment adviser for
the Surviving Fund is J.P. Morgan Fleming Asset Management (USA) Inc.
("JPMFAM"). JPMFAM and JPMIM are each wholly-owned subsidiaries of JPMC. JPMFAM
will continue to serve as investment adviser for the Surviving Fund following
the Reorganization.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of the Surviving Fund is to seek to provide monthly
dividends that are excluded from gross income and are exempt from New York State
and New York City personal income taxes. The Fund also seeks to protect the
value of your investment. The investment objective of the Merging Fund is to
provide a high level of tax exempt income for New York residents consistent with
moderate risk of capital. See "Risk Factors" and "Investment Policies."
The investment policies of the Surviving Fund are generally similar to those
of the Merging Fund. However, there are certain important differences. The
Surviving Fund invests its assets directly in portfolio securities, while the
Merging Fund invests its assets in the Master Portfolio, which in turn invests
in portfolio securities. As a fundamental policy, the Surviving Fund normally
invests at least 80% of its total assets in New York municipal obligations whose
interest payments are (i) excluded from gross income and exempt from New York
State and New York City income taxes and (ii) excluded from the federal
alternative minimum tax on individuals. UNDER NORMAL CIRCUMSTANCES, THE MERGING
FUND INVESTS AT LEAST 65% OF ITS TOTAL ASSETS IN NEW YORK MUNICIPAL SECURITIES.
THIS POLICY IS NON-FUNDAMENTAL, WHICH MEANS IT CAN BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
2
The average dollar-weighted maturity of the Surviving Fund's portfolio will
be between three and 10 years. THE MERGING FUND'S SECURITIES MAY BE OF ANY
MATURITY.
PRINCIPAL RISKS OF INVESTING IN THE SURVIVING FUND
The principal risk factors associated with an investment in the Surviving
Fund are those typically associated with investing in a managed portfolio of
fixed income securities. In particular, the value of shares of the Surviving
Fund will be influenced by the performance of the securities selected for its
portfolio. The principal value of fixed-income investments tends to fall when
prevailing interest rates rise. The Surviving Fund invests primarily in New York
State and its municipalities and public authorities. A number of municipal
issuers, including the State of New York and New York City, have a history of
financial problems. If more than 5% of the Surviving Fund's assets are invested
in any one municipality, this risk could increase. The Surviving Fund is not
diversified. It may invest a greater percentage of its assets in a particular
issuer or group of issuers than a diversified fund would. That makes the value
of its shares more sensitive to economic problems among those issuing the
securities. See "Risk Factors."
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS
ADVISORY SERVICES
The investment adviser for the Surviving Fund is JPMFAM. JPMFAM oversees the
asset management of the Surviving Fund. As compensation for its services, JPMFAM
receives a management fee from the Surviving Fund at an annual rate of 0.30% of
average daily net assets. The Merging Fund currently pays a management fee
indirectly at an annual rate of 0.30% of average daily net assets. Following the
Reorganization, JPMFAM will manage the Surviving Fund's assets and will receive
a fee at an annual rate of 30% of average daily net assets.
OTHER SERVICES
J.P. Morgan Fund Distributors, Inc. (the "Distributor") is the distributor
for the Surviving Fund. The Chase Manhattan Bank ("Chase") serves as shareholder
servicing agent, administrator, fund accountant and custodian, an affiliate of
the Distributor serves as sub-administrator and DST Systems, Inc. ("DST") serves
as transfer agent and dividend disbursing agent for the Surviving Fund.
PricewaterhouseCoopers LLP serves as the Surviving Fund's independent
accountants.
ADMINISTRATOR
As of August 11, 2001, Chase will receive an administration fee from the
Surviving Fund of 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 pays
Morgan, its administrator, a fee at an effective rate of 0.048% of its average
daily net assets.
ORGANIZATION
Each of MFST and JPMF 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 MFST.
PURCHASES, REDEMPTIONS AND EXCHANGES
After the Reorganization, the procedures for making purchases, redemptions
and exchanges of shares of the Surviving Fund will be as described in this
Combined Prospectus/Proxy Statement and in the Surviving Fund's Prospectus and
Statement of Additional Information.
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 and (ii) estimated fees and expenses on a pro forma
basis for the Surviving Fund after giving effect to the proposed Reorganization
and the Concurrent Reorganization. Under the proposed Reorganization, holders of
shares of the Merging Fund will receive Select Class shares of the Surviving
Fund. The Surviving Fund currently has three classes of shares: Class A, Class B
and Institutional Class Shares (which will not be distributed to Merging Fund
shareholders as a result of the Reorganization and, therefore, no information on
these classes is shown in the table below). In connection with the
Reorganization and Concurrent Reorganization, the Surviving Fund will rename the
Institutional Class "Select Class" and will introduce a new Institutional Class.
The table indicates that while the contractual (pre-waiver) total expense
ratio for current shareholders of the Merging Fund will be higher following the
Reorganization, the actual (post-waiver) total expense ratio for current
shareholders of the Merging Fund is anticipated to be less or stay the same for
at least three years following the Reorganization. This is because Chase, 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 at least three years after the Regorganization.
THE
MERGING FUND
SHARES
-------------
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (Load) When You Buy Shares,
Shown As % Of The Offering Price (1) None
Maximum Deferred Sales Charge (Load) shown as
lower of original purchase price or redemption
proceeds None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees 0.30%
Distribution (12b-1) Fees None
Other Expenses 0.43%
----
Total Annual Fund Operating Expenses 0.73%
====
- ---------------------
The table does not reflect charges or credits which you might incur if you
invest through a financial institution.
(1) The offering price is the net asset value of the shares purchased plus any
sales charge.
4
THE SURVIVING FUND
-------------------------
PRO FORMA WITH
CONCURRENT 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 (1) None
Maximum Deferred Sales Charge (Load) Shown as
lower of original purchase price or redemption
proceeds None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees 0.30%
Distribution (12b-1) Fees None
Other Expenses 0.46%
---------------
Total Annual Fund Operating Expenses 0.76%
===============
Fee Waivers and Expense Reimbursements (a) 0.04%
---------------
Net Expenses 0.72%
===============
- ---------------------
(a) Reflects an agreement by Chase, an affiliate of JPMC, to reimburse the
Surving Fund to the extent operating expenses (excluding interest, taxes,
extraordinary expenses and expenses related to the deferred compensation
plan) exceed 0.72% of Select Class Shares for three years after the
Reorganization.
(1) The offering price is the net asset value of the shares purchased plus any
sales charges.
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
annual operating expenses thereafter 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 $ 75 $233 $ 406 $ 906
PRO FORMA THE SURVIVING FUND
WITH
CONCURRENT REORGANIZATION
Select Class Shares $ 74 $230 $ 410 $ 930
RISK FACTORS
The following discussion highlights the principal risk factors associated
with an investment in the Surviving Fund. The Surviving Fund has investment
policies and investment restrictions generally similar to those of the Merging
Fund. Therefore, there should be similarities between the risk factors
associated with the Surviving Fund and the Merging Fund. This discussion is
qualified in its entirety by the more extensive discussion of risk factors set
forth in the Prospectus and Statement of Additional Information of the Surviving
Fund, which are incorporated herein by reference.
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 JPMFAM's expectations regarding
5
particular securities or markets are not met. Adverse market conditions may from
time to time cause the 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 principal value of fixed-income investments tends to fall when
prevailing interest rates rise.
The Surviving Fund invests primarily in New York State and its
municipalities and public authorities. A number of municipal issuers, including
the State of New York and New York City, have a history of financial problems.
If the state, or any of the local government bodies, gets into financial
trouble, it could have trouble paying interest and principal. This would hurt
the Fund's returns and its ability to preserve capital and liquidity. If more
than 5% of the Fund's assets are invested in any one municipality, this risk
could increase.
Under some circumstances, municipal lease obligations might not pay interest
unless the state or municipal legislature authorizes money for that purpose.
Some securities, including municipal lease obligations, carry additional risks.
For example, they may be difficult to trade or interest payments may be tied
only to a specific stream of revenue.
Normally, the Surviving Fund may invest up to 20% of its total assets in
securities whose interest is subject to the federal alternative minimum tax.
Consult your tax professional for more information.
Since some municipal obligations may be secured or guaranteed by banks and
other institutions, the risk to the Surviving Fund could increase if the banking
or financial sector suffers an economic downturn.
The Surviving Fund may invest in municipal obligations backed by foreign
institutions. This could carry more risk than securities backed by U.S.
institutions, because of political or economic instability, the imposition of
government controls, or regulations that don't match U.S. standards.
The value of zero coupon securities, inverse floaters and interest rate caps
tends to fluctuate according to interest rate changes significantly more than
the value of ordinary interest-paying debt securities. The price of a security
with an interest rate cap will change more often and to a greater degree than a
municipal security without one.
A forward commitment could lose value if the underlying security falls in
value before the settlement date or if the other party fails to meet its
obligation to complete the transaction.
Derivatives may be more risky than other types of investments because they
may respond more to changes in economic conditions than other types of
investments. If they are used for non-hedging purposes, they could cause losses
that exceed the Surviving Fund's original investment.
The Surviving Fund is not diversified. It may invest a greater percentage of
its assets in a particular issuer or group of issuers than a diversified fund
would. That makes the value of its shares more sensitive to economic problems
among those issuing the securities. In addition, more than 25% of the Surviving
Fund's total assets may be invested in securities that rely on similar projects
for their income stream. As a result, the Surviving Fund could be more
susceptible to developments that affect those projects.
Investments in the Surviving Fund are not bank deposits or obligations of,
or guaranteed or endorsed by, any bank and are not insured or guaranteed by the
Federal Deposit Insurance Corporation, the Federal Reserve Board or any other
government agency.
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 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, MFST
will issue at the Effective Time of the
6
Reorganization full and fractional Select Class shares of the Surviving Fund
equal in aggregate dollar value to the aggregate net asset value of full and
fractional outstanding shares of the Merging Fund as determined at the valuation
time specified in the Reorganization Plan. The Reorganization Plan provides that
the Merging Fund will declare a dividend or dividends prior to the Effective
Time of the Reorganization which, together with all previous dividends, will
have the effect of distributing to Merging Fund Shareholders all undistributed
net investment income earned and net capital gain realized up to and including
the Effective Time of the Reorganization.
Following the transfer of assets to, and the assumption of the liabilities
of the Merging Fund by, the Surviving Fund, the Merging Fund will distribute
Select Class Shares received by it to the Merging Fund Shareholders in
liquidation of the Merging Fund. Each Merging Fund Shareholder at the Effective
Time of the Reorganization will receive an amount of Select Class shares with a
total net asset value equal to the net asset value of their Merging Fund Shares
plus the right to receive any dividends or distributions which were declared
before the Effective Time of the Reorganization but that remained unpaid at that
time with respect to the shares of the Merging Fund.
The Surviving Fund expects to maintain most of the portfolio investments of
the Merging Fund in light of the similar investment policies of the Merging Fund
and the Surviving Fund.
After the Reorganization, all of the issued and outstanding shares of the
Merging Fund shall be canceled on the books of the Merging Fund and the stock
transfer books of the Merging Fund will be permanently closed.
The Reorganization is subject to a number of conditions, including without
limitation: approval of the Reorganization Plan and the transactions
contemplated thereby described in this Combined Prospectus/Proxy Statement by
the Merging Fund Shareholders; the receipt of a legal opinion from Simpson
Thacher & Bartlett with respect to certain tax issues, as more fully described
in "Federal Income Tax Consequences" below; and the parties' performance in all
material respects of their respective agreements and undertakings in the
Reorganization Plan. Assuming satisfaction of the conditions in the
Reorganization Plan, the Effective Time of the Reorganization will be on
September 1, 2001 or such other date as is agreed to by the parties.
In addition, the consummation of the Reorganization is contingent upon the
simultaneous consummation of the Concurrent Reorganization.
The expenses of the Funds in connection with the Reorganization will be
borne by JPMC.
The Reorganization Plan and the Reorganization described herein may be
abandoned at any time prior to the Effective Time of the Reorganization by
either party if a material condition to the performance of such party under the
Reorganization Plan or a material covenant of the other party is not fulfilled
by the date specified in the Reorganization Plan or if there is a material
default or material breach of the Reorganization Plan by the other party. In
addition, either party may terminate the Reorganization Plan if its trustees
determine that proceeding with the Reorganization Plan is not in the best
interests of their Fund's shareholders.
BOARD CONSIDERATIONS
The JPMF Board met on January 23 and 24 and on March 26 and 27, 2001 and the
MFST Board met on February 22nd and April 3, 2001, and each considered and
discussed the proposed Reorganization. The Trustees of each Board discussed the
advantages of reorganizing the Merging Fund into the Surviving Fund.
The Board of each trust has determined that it is in the interests of its
Fund's shareholders to combine the Merging Fund with the Surviving Fund. This
Reorganization is part of the general integration of the J.P. Morgan and former
Chase Vista funds into a single mutual fund complex. In reaching the conclusion
that the Reorganization is in the interests of the Fund's shareholders, each
Board considered a number of factors including, among others: the terms of the
Reorganization Plan; a comparison of each Fund's historical and projected
expense ratios; the comparative investment performance of the Merging Fund and
the Surviving Fund; the anticipated effect of such Reorganization on the
relevant Fund and its shareholders; investment advisory services supplied by the
Surviving Fund's investment adviser; the management and other fees payable by
the Surviving Fund; the similarities and differences in the investment
objectives and policies of the Merging Fund and the Surviving Fund; and the
recommendations of the relevant Fund's current investment adviser with respect
to the proposed Reorganization. In addition, each Board took into account that,
notwithstanding the fact that the Surviving Fund currently pays a higher
administration fee than the Merging Fund, Chase agreed to cap the total expenses
as set forth in the expense table above and to
7
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 pays its administrator, Morgan, a fee at an effective
rate of 0.048% of its average daily net assets.
Each Board also considered additional benefits expected to arise out of the
integration of the J.P. Morgan and Chase Vista mutual fund complexes. Among
these benefits, the Boards considered: (1) Surviving Fund shareholders would be
able to exchange into a larger number and greater variety of funds; (2) the
administrator's intent to enhance its ability effectively to monitor and oversee
the quality of all Fund service providers, including the investment adviser,
distributor, custodian and transfer agent; (3) the administrator's undertaking
to waive fees or reimburse the Surviving Fund's expenses in order that the total
expense ratio of each share class of the Merging Fund does not increase during
the period specified in the expense table; (4) the fact that all costs and
expenses of the Reorganization would be borne by JPMC; and (5) the fact that the
Reorganization would constitute a tax-free reorganization.
After considering the foregoing factors, together with such information as
it believed to be relevant, and in light of its fiduciary duties under federal
and state law, each Board determined that the proposed Reorganization is in the
best interests of the applicable Fund and its shareholders, determined the
interests of the shareholders would not be diluted as a result of the
Reorganization, approved the Reorganization Plan and directed that the
Reorganization Plan be submitted to the Merging Fund Shareholders for approval.
THE 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 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 considering. Concurrently with the
Reorganization and the Concurrent Reorganization, the Merging Fund and the
Feeder Portfolio will no longer invest their assets in the Master Portfolio. The
consummation of the Reorganization is contingent upon the simultaneous
consummation of the Concurrent Reorganization.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the Reorganization is subject to the condition that JPMF
receive an opinion from Simpson Thacher & Bartlett to the effect that for
federal income tax purposes: (i) the transfer of all of the assets and
liabilities of the Merging Fund to the Surviving Fund in exchange for the
Surviving Fund Shares and the liquidating distributions to shareholders of the
Surviving Fund Shares so received, as described in the Reorganization Plan, will
constitute a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and with respect to the
Reorganization, the Merging Fund and the Surviving Fund will each be considered
"a party to a reorganization" within the meaning of Section 368(b) of the Code;
(ii) no gain or loss will be recognized by the Merging Fund as a result of such
transaction; (iii) no gain or loss will be recognized by the Surviving Fund as a
result of such transaction; (iv) no gain or loss will be recognized by the
Merging Fund Shareholders on the distribution to the Merging Fund Shareholders
of the Surviving Fund Shares solely in exchange for their Merging Fund Shares;
(v) the aggregate basis of shares of the Surviving Fund received by a
shareholder of the Merging Fund will be the same as the aggregate basis of such
Merging Fund Shareholder's Merging Fund Shares immediately prior to the
Reorganization; (vi) the basis of the Surviving Fund in the assets of the
Merging Fund received pursuant to such transaction will be the same as the basis
of such assets in the hands of the Merging Fund immediately before such
transaction; (vii) a Merging Fund Shareholder's holding period for the Surviving
Fund Shares will be determined by including the period for which such Merging
Fund Shareholder held the Merging Fund Shares exchanged therefor, provided that
the Merging Fund Shareholder held such Merging Fund Shares as a capital asset;
and (viii) the Surviving Fund's holding period with respect to the assets
received in the Reorganization will include the period for which such assets
were held by the Merging Fund.
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
8
IRS and does not preclude the IRS from adopting a contrary position.
Shareholders should consult their own advisers concerning the potential tax
consequences to them, including state and local income taxes.
CAPITALIZATION
Because the Merging Fund will be combined with the Surviving Fund in the
Reorganization as well as another fund as a result of the Concurrent
Reorganization, the total capitalization of the Surviving Fund after the
Reorganization and the Concurrent Reorganization is expected to be greater than
the current capitalization of the Merging Fund. The following table sets forth
as of February 28, 2001: (i) the capitalization of the Merging Fund; (ii) the
capitalization of the Surviving Fund; and (iii) the pro forma capitalization of
the Surviving Fund as adjusted to give effect to the Reorganization and the
Concurrent Reorganization. There is, of course, no assurance that the
Reorganization and the Concurrent Reorganization will be consummated. Moreover,
if consummated, the capitalizations of the Surviving Fund and the Merging Fund
are likely to be different at the Effective Time of the Reorganization as a
result of fluctuations in the value of portfolio securities of each Fund and
daily share purchase and redemption activity in each Fund. The Surviving Fund
currently has three classes of shares: Class A, Class B and Institutional Class
Shares. In connection with the Reorganization and the Concurrent Reorganization,
the Surviving Fund will rename the Institutional Class "Select Class" and will
introduce a new Institutional Class.
CAPITALIZATION
PRO FORMA WITH CONCURRENT REORGANIZATION
(AMOUNTS IN THOUSANDS)
BENEFICIAL
INTEREST SHARES NET ASSET VALUE
OUTSTANDING OUTSTANDING NET ASSETS PER SHARE
----------- ----------- ----------- ---------------
J.P. MORGAN FUNDS
J.P. Morgan New York Tax 12,442 -- 132,943 10.68
Exempt Bond Fund
(the Merging Fund)
J.P. Morgan Institutional 19,583 -- 210,595 10.75
New York Tax Exempt
Bond Fund
THE SURVIVING FUND
Class A Class -- 10,744 77,421 7.21
Class B Class -- 1,764 12,713 7.21
Institutional (Renamed -- 40,992 295,456 7.21
Select)
PRO FORMA COMBINED
Class A Class -- 10,744 77,421 7.21
Class B Class -- 1,764 12,713 7.21
Select Class -- 59,423 428,399 7.21
Institutional Class -- 29,198 210,595 7.21
INVESTMENT POLICIES
The following discussion summarizes some of the investment policies of the
Surviving Fund. Except as noted below, the Merging Fund generally has similar
investment policies to those of the Surviving Fund. This section is qualified in
its entirety by the discussion in the preliminary Prospectus and Statement of
Additional Information of the Surviving Fund, which are incorporated herein by
reference.
OBJECTIVE
The investment objective of the Surviving Fund is to seek to provide monthly
dividends that are excluded from gross income and are exempt from New York State
and New York City personal income taxes. The Surviving Fund also seeks to
protect the value of your investment. THE INVESTMENT OBJECTIVE OF THE MERGING
FUND IS TO PROVIDE A HIGH LEVEL OF TAX EXEMPT INCOME FOR NEW YORK RESIDENTS
CONSISTENT WITH MODERATE RISK OF CAPITAL. Both Funds may change their objective
without shareholder approval.
MAIN INVESTMENT STRATEGIES
The Surviving Fund invests its assets directly in portfolio securities. THE
MERGING FUND INVESTS ITS ASSETS IN THE MASTER PORTFOLIO, WHICH IN TURN INVESTS
IN PORTFOLIO SECURITIES.
9
As a fundamental policy, the Surviving Fund normally invests at least 80% of
its total assets in New York municipal obligations whose interest payments are:
- excluded from gross income and exempt from New York State and New York
City income taxes, and
- excluded from the federal alternative minimum tax on individuals.
New York municipal obligations are those issued by New York State, its political
subsidiaries, as well as Puerto Rico, other U.S. territories and their political
subdivisions.
UNDER NORMAL CIRCUMSTANCES, THE MERGING FUND INVESTS AT LEAST 65% OF ITS
TOTAL ASSETS IN NEW YORK MUNICIPAL SECURITIES. THIS POLICY IS NON-FUNDAMENTAL,
WHICH MEANS IT CAN BE CHANGED WITHOUT SHAREHOLDER APPROVAL.
The Surviving Fund invests in securities that are rated as investment grade
by Moody's Investors Service, Inc., Standard & Poor's Corporation or Fitch
Investors Service Inc. It may also invest in unrated securities of comparable
quality. THE MERGING FUND MAY INVEST UP TO 10% OF ITS ASSETS IN NON-INVESTMENT
GRADE SECURITIES (SOMETIMES CALLED "JUNK BONDS") RATED B OR BB/BA OR THE UNRATED
EQUIVALENT.
The Surviving Fund may also invest in derivatives, inverse floaters and
interest rate caps, swaps, zero coupon securities and forward commitments. These
instruments may be used to increase the Fund's income or gain. Derivatives,
which are financial instruments whose value is based on another security, index
or exchange rate, might also be used to hedge various market risks.
The Surviving Fund seeks to develop an appropriate portfolio by comparing,
among other factors, credit quality, yields and call provisions of different
municipal issuers, and examining structural changes along the yield curve in an
attempt to maximize investment returns while minimizing risk.
The average dollar-weighted maturity of the Surviving Fund's portfolio will
be between three and 10 years. THE MERGING FUND'S SECURITIES MAY BE OF ANY
MATURITY, BUT IT'S DURATION GENERALLY WILL RANGE BETWEEN THREE AND SEVEN YEARS.
Under normal market conditions, the Surviving Fund reserves the right to
invest up to 20% of its total assets in securities that pay interest subject to
federal income tax, the federal alternative minimum tax on individuals or New
York State and New York City personal income taxes. To temporarily defend the
value of its assets during unusual market conditions, the Fund may exceed this
limit.
No more than 25% of total assets may be invested in any one industry, other
than governments and public authorities.
The Surviving Fund may invest in money market funds so that it can easily
convert investments into cash without losing a significant amount of money in
the process.
The Surviving Fund may also invest in municipal lease obligations. These
allow the Surviving Fund to participate in municipal lease agreements and
installment purchase contracts. The Surviving Fund may invest up to 25% of its
total assets in municipal lease obligations backed by letters of credit or
guarantees from U.S. and foreign banks and other foreign institutions. There may
be times when there are not enough securities available to meet the Surviving
Fund's needs. On these occasions, the Surviving Fund may invest in repurchase
agreements or Treasury securities that may be subject to federal income tax.
The Surviving Fund may change any of its non-fundamental investment policies
(including its investment objective) without shareholder approval.
How frequently the Surviving Fund buys and sells securities will vary from
year to year, depending on market conditions.
10
INVESTMENT RESTRICTIONS
The Surviving Fund and the Merging Fund have each adopted the following
investment restrictions which may not be changed without approval by a "majority
of the outstanding shares" of a Fund, which means the vote of the lesser of (i)
67% or more of the voting shares of a Fund present at a meeting, if the holders
of more than 50% of the outstanding voting shares of a Fund are present or
represented by proxy, and (ii) more than 50% of the outstanding voting shares of
a Fund.
SURVIVING FUND MERGING FUND
- -------------- --------------------------------------------------
The Surviving Fund may not purchase the securities The Merging Fund may not purchase any security
of any issuer (other than securities issued or which would cause it to concentrate its
guaranteed by the U.S. government or any of its investments in the securities of issuers primarily
agencies or instrumentalities, or repurchase engaged in any particular industry except as
agreements secured thereby) if, as a result, more permitted by the Commission.
than 25% of the Surviving Fund's total assets
would be invested in the securities of companies
whose principal business activities are in the
same industry. Notwithstanding the foregoing, with
respect to the Surviving Fund's permissible
futures and options transactions in U.S.
Government securities, positions in such options
and futures shall not be subject to this
restriction. This restriction is not applicable to
investments in municipal obligations where the
issuer is regarded as a state, city, municipality
or other public authority since such entities are
not members of any "industry."
The Surviving Fund may not borrow money, except The Merging Fund may not borrow money, except to
for temporary or emergency purposes, or by the extent permitted by applicable law.
engaging in reverse repurchase transactions, in an
amount not exceeding 33 1/3% of the value of its
total assets at the time when the loan is made and
may pledge, mortgage or hypothecate no more than
1/3 of its net assets to secure such borrowings.
Any borrowings representing more than 5% of the
Surviving Fund's total assets must be repaid
before the Surviving Fund may make additional
investments.
The Surviving Fund may not purchase or sell The Merging Fund may not purchase or sell
physical commodities unless acquired as a result commodities or commodity contracts unless acquired
of ownership of securities or other instruments as a result of ownership of securities or other
but this shall not prevent the Fund from (i) instruments issued by persons that purchase or
purchasing or selling options and futures sell commodities or commodities contracts; but
contracts or from investing in securities or other this shall not prevent the Merging Fund from
instruments backed by physical commodities or (ii) purchasing, selling and entering into financial
engaging in forward purchases or sales of foreign futures contracts (including futures contracts on
currencies or securities. indices of securities, interest rates and
currencies), options on financial futures
contracts (including futures contracts on indices
of securities, interest rates and currencies),
warrants, swaps, forward contracts, foreign
currency spot and forward contracts or other
derivative instruments that are not related to
physical commodities.
11
SURVIVING FUND MERGING FUND
- -------------- --------------------------------------------------
The Surviving Fund may not make loans, except that The Merging Fund may make loans to other persons,
the Surviving Fund may: (i) purchase and hold debt in accordance with the Fund's investment objective
instruments (including without limitation, bonds, and policies and to the extent permitted by
notes, debentures or other obligations and applicable law.
certificates of deposit, bankers' acceptances and
fixed time deposits) in accordance with its
investment objectives and policies; (ii) enter
into repurchase agreements with respect to
portfolio securities; and (iii) lend portfolio
securities with a value not in excess of one-third
of the value of its total assets. Shareholders of
the Surviving Fund currently are considering a
proposal that, if passed at a shareholder meeting
to be held the same day as the Meeting of the
Merging Fund, would adopt a fundamental investment
restriction regarding loans that is identical to
the Merging Fund's restriction.
Neither Fund may issue senior securities, except as permitted under the 1940
Act or any rule, order or interpretation thereunder.
Neither Fund may underwrite securities of other issuers, except to the
extent that the Fund, in disposing of portfolio securities, may be deemed an
underwriter within the meaning of the Securities Act of 1933, as amended.
Neither Fund may purchase or sell real estate (including, for the Surviving
Fund, real estate limited partnerships), except that, to the extent permitted by
applicable law, each Fund may (a) invest in securities or other instruments
directly or indirectly secured by real estate, (b) invest in securities or other
instruments issued by issuers that invest in real estate and (c) make direct
investments in mortgages.
The Merging Fund is not subject to a similar fundamental restriction.
However, the Merging Fund currently does invest all of its investable assets in
the Master Portfolio, following the Reorganization, the Merging Fund will invest
directly in Portfolio Securities. Notwithstanding any other investment policy or
restriction, the Surviving Fund may seek to achieve its investment objective by
investing all of its investable assets in another investment company having
substantially the same investment objective and policies as the Surviving Fund.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The investment restrictions
described below are not fundamental policies of the Surviving Fund and/or the
Merging Fund and may be changed by their respective Trustees.
SURVIVING FUND MERGING FUND
- -------------- --------------------------------------------------
The Surviving Fund may not invest more than 15% of The Merging Fund may not acquire any illiquid
its net assets in illiquid securities. securities, such as repurchase agreements with
more than seven days to maturity or fixed time
deposits with a duration of over seven calendar
days, if as a result thereof, more than 15% of the
market value of the Merging Fund's net assets
would be in investments which are illiquid.
The Surviving Fund may not make short sales of The Merging Fund may not purchase securities on
securities, other than short sales "against the margin, make short sales of securities, or
box," or purchase securities on margin except for maintain a short position, provided that this
short-term credits necessary for clearance of restriction shall not be deemed to be applicable
portfolio transactions, provided that this to the purchase or sale of when-issued or delayed
restriction will not be applied to limit the use delivery securities, or to short sales that are
of options, futures contracts and related options, covered in accordance with Commission rules.
in the manner otherwise permitted by the
investment restrictions, policies and investment
program of the Fund. The Surviving Fund does not
have the current intention of making short sales
against the box.
12
SURVIVING FUND MERGING FUND
- -------------- --------------------------------------------------
The Surviving Fund may invest up to 5% of its The Merging Fund may not acquire securities of
total assets in the securities of any one other investment companies, except as permitted by
investment company, but may not own more than 3% the 1940 Act or any order pursuant thereto.
of the securities of any one investment company or
invest more than 10% of its total assets in the
securities of other investment companies.
The Surviving Fund may not purchase or sell The Merging Fund is not subject to a similar non-
interests in oil, gas or mineral leases. fundamental restriction.
The Surviving Fund may not write, purchase or sell The Merging Fund is not subject to a similar non-
any put or call option or any combination thereof, fundamental restriction.
provided that this shall not prevent (i) the
writing, purchasing or selling of puts, calls or
combinations thereof with respect to portfolio
securities or (ii) with respect to the Surviving
Fund's permissible futures and options
transactions, the writing, purchasing, ownership,
holding or selling of futures and options
positions or of puts, calls or combinations
thereof with respect to futures.
The Surviving Fund may not, with respect to 50% of The Merging Fund is not subject to a similar non-
its assets, hold more than 10% of the outstanding fundamental restriction.
voting securities of any issuer.
There will be no violation of any investment restriction if that restriction
is complied with at the time the relevant action is taken notwithstanding a
later change in market value of an investment, in net or total assets, in the
securities rating of the investment, or any other later change.
PURCHASES, REDEMPTIONS AND EXCHANGES
Following the Reorganization, the procedures for purchases, redemptions and
exchanges of shares will be those of the Surviving Fund, which are generally
similar to those of the Merging Fund. Please note that the Surviving Fund
currently has three classes of shares: Class A, Class B and Institutional Class
Shares. In connection with the Reorganization and Concurrent Reorganization, the
Surviving Fund will rename the Institutional Class "Select Class" and will
introduce a new Institutional Class. The following discussion applies to Select
Class shares. This section is qualified in its entirety by the discussion in the
preliminary Prospectus and Statement of Additional Information of the Surviving
Fund, which are incorporated herein by reference.
SALES CHARGES
There is no sales charge to buy or sell Select Class Shares.
12B-1 FEES
There is no Rule 12b-1 distribution plan for Select Class Shares of the
Surviving Fund.
BUYING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF SELECT CLASS SHARES THAT
YOU MIGHT MAKE AFTER THE REORGANIZATION.
The price shareholders pay for their shares is the net asset value per share
(NAV). NAV is the value of everything the Surviving Fund owns, minus everything
it owes, divided by the number of shares held by investors. The Surviving Fund
generally values its assets at fair market values but may use fair value if
market prices are unavailable.
The NAV of each class of the Surviving Fund's shares is generally calculated
once each day at the close of regular trading on the New York Stock Exchange. A
shareholder will pay the next NAV calculated after the JPMorgan Funds Service
Center (the "Center") receives that shareholder's order in proper form. An order
is in proper form only after payment is converted into federal funds.
The Center accepts purchase orders on any business day that the New York
Stock Exchange is open. If an order is received in proper form by the close of
regular trading on the New York Stock Exchange (or
13
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 such 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 or in other JPMorgan
Funds without regard to such investment minimum. Shares bought by check will be
processed on the next business day and may not be sold for 15 calendar days.
Shares bought through an automated clearing house cannot be sold until the
payment clears. This could take more than seven business days. Purchase orders
will be canceled if a check does not clear and the investor will be responsible
for any expenses and losses to the Surviving Fund. Orders by wire will be
canceled if the Center does not receive payment by 4:00 p.m., Eastern time, on
the day the shareholder buys.
Shareholders seeking to buy 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.
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 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. 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 only to the bank account on the Surviving Fund's
records.
For Select Class shares, a shareholder will need to have his or her
signature guaranteed if he or she wants payment to be sent to an address other
than the one in the Surviving Fund's records. Additional documents or a letter
from a surviving joint owner may also be needed.
A shareholder who purchased through an investment representative or through
a financial service firm, should contact that representative, who will send the
necessary documents to the Center. The representative might charge a fee for
this service.
Shareholders may also sell their shares by contacting the Center directly by
calling 1-800-622-4273 or contact your financial intermediary.
EXCHANGING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF SELECT CLASS SHARES THAT
YOU MIGHT MAKE AFTER THE REORGANIZATION.
Select Class Shares of the Surviving Fund may be exchanged for Select Class
Shares in certain other JPMorgan Funds.
For tax purposes, an exchange is treated as a sale of those shares.
Shareholders should carefully read the prospectus of the fund into which they
want to exchange. Shareholders who exchange must meet any minimum investment
requirements and may have to pay a sales commission.
14
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 and 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.
MFST, on behalf of the Surviving Fund, has entered into agreements with
certain shareholder servicing agents (including Chase) under which the
shareholder servicing agents agree to provide certain support services to their
customers. For performing these services, each shareholder servicing agent will
receive an annual fee of up to 0.25% of the average daily net assets of the
Select Class Shares held by investors serviced by the shareholder servicing
agent.
JPMFAM and/or JFD may, at their own expense, make additional payments to
certain selected dealers or other shareholder servicing agents for performing
administrative services for their customers.
The Surviving Fund issues multiple classes of shares. Each class may have
different requirements for who may invest, and may have different sales charges
and expense levels. A person who gets compensated for selling Fund shares may
receive a different amount for each class.
DISTRIBUTIONS AND TAXES
The Surviving Fund can earn income and realize capital gain. The Surviving
Fund will deduct from these earnings any expenses and then pay to shareholders
the distributions.
The Surviving Fund distributes any net investment income at least monthly.
Net capital gain is distributed annually. You have three options for your
Surviving Fund distributions. You may:
- reinvest all of them in additional Fund shares;
- take distributions of net investment income in cash or as a deposit in a
pre-assigned bank account and reinvest distributions of net capital gain
in additional shares; or
- 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. Dividends of tax-exempt interest income are
not subject to federal income taxes but will generally be subject to state and
local taxes. However, for the Surviving Fund, New York residents will not have
to pay New York State or New York City personal income taxes on tax-exempt
income from New York municipal obligations. The state or municipality where you
live may not charge you state and local taxes on
15
tax-exempt interest earned on certain bonds. Dividends earned on bonds issued by
the U.S. government and its agencies may also be exempt from some types of state
and local taxes.
If you receive distributions of net capital gain, the tax rate will be based
on how long the Surviving Fund held a particular asset, not on how long you have
owned your shares. If you buy shares just before a distribution, you will pay
tax on the entire amount of the taxable distribution you receive, even though
the NAV will be higher on that date because it includes the distribution amount.
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 Funds. 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 MFST, which is organized
under the law of the Commonwealth of Massachusetts. As a Massachusetts business
trust, MFST's operations are governed by MFST'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 MFST's Trustees, who serve indefinite terms and have all
powers necessary or convenient to carry out their responsibilities.
Information concerning the current Trustees and officers of MFST and JPMF is
set forth in the Funds' respective Statements of Additional Information, which
are incorporated herein by reference.
SHARES OF FUNDS
Each of MFST and JPMF is a trust with an unlimited number of authorized
shares of beneficial interest which may be divided into series or classes
thereof. Each Fund is one series of a trust and may issue multiple classes of
shares. Each share of a series or class of a trust represents an equal
proportionate interest in that series or class with each other share of that
series or class. The shares of each series or class of either MFST or JPMF
participate equally in the earnings, dividends and assets of the particular
series or class. Fractional shares have proportionate rights to full shares.
Expenses of MFST or JPMF that are not attributable to a specific series or class
will be allocated to all the series of that trust in a manner believed by its
board to be fair and equitable. Generally, shares of each series will be voted
separately, for example, to approve an investment advisory agreement. Likewise,
shares of each class of each series will be voted separately, for example, to
approve a distribution plan, but shares of all series and classes vote together,
to the extent required by the 1940 Act, including for the election of Trustees.
Neither MFST nor JPMF is required to hold regular annual meetings of
shareholders, but may hold special meetings from time to time. There are no
conversion or preemptive rights in connection with shares of either MFST or
JPMF.
SHAREHOLDER VOTING RIGHTS
With respect to all matters submitted to a vote of shareholders,
shareholders of MFST are entitled to one vote (or a fraction thereof) for each
share (or a fraction thereof) owned on the record date, and shareholders of JPMF
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.
16
A vacancy in the Board of either MFST or JPMF resulting from the resignation
of a Trustee or otherwise may be filled similarly by a vote of a majority of the
remaining Trustees then in office, subject to the 1940 Act. In addition,
Trustees may be removed from office by a vote of two-thirds of the outstanding
shares (in the case of MFST), or voting shares (in the case of JPMF) of each
portfolio of that trust. A meeting of shareholders shall be held upon the
written request of not less than 10% of the outstanding shares (in the case of
MFST), or voting shares (in the case of JPMF) 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 MFST or JPMF could, under
certain circumstances, be held personally liable as partners for the obligations
of that trust. However, the Declaration of Trust of each of MFST and JPMF
disclaims shareholder liability for acts or obligations of that trust and
provides for indemnification and reimbursement of expenses out of trust property
for any shareholder held personally liable for the obligations of that trust.
Each of MFST and JPMF may maintain appropriate insurance (for example, fidelity
bonding and errors and omissions insurance) for the protection of that trust,
its shareholders, Trustees, officers, employees and agents covering possible
tort and other liabilities. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability generally is limited to circumstances
in which both inadequate insurance existed and the trust itself was unable to
meet its obligations.
LIABILITY OF DIRECTORS AND TRUSTEES
Under the Declaration of Trust of each of MFST and JPMF, the Trustees of
that trust are personally liable only for bad faith, willful misfeasance, gross
negligence or reckless disregard of their duties as Trustees. Under the
Declaration of Trust of each of MFST and JPMF, a Trustee or officer will
generally be indemnified against all liability and against all expenses
reasonably incurred or paid by such person in connection with any claim, action,
suit or proceeding in which such person becomes involved as a party or otherwise
by virtue of such person being or having been a Trustee or officer and against
amounts paid or incurred by such person in the settlement thereof.
The foregoing is only a summary of certain organizational and governing
documents and Massachusetts business trust law. It is not a complete
description. Shareholders should refer to the provisions of these documents and
state law directly for a more thorough comparison. Copies of the Declaration of
Trust and By-Laws of each of MFST and JPMF are available without charge upon
written request to that trust.
INFORMATION RELATING TO THE ADVISORY CONTRACTS AND OTHER SERVICES
GENERAL INFORMATION
As noted above, the investment adviser of the Master Portfolio (and
therefore the Merging Fund's assets) is JPMIM. Pursuant to an Advisory
Agreement, the investment adviser of the Surviving Fund is JPMFAM. JPMFAM is
responsible for the day-to-day management of the Surviving Fund.
DESCRIPTION OF JPMFAM
JPMFAM is an indirect wholly-owned subsidiary of JPMC incorporated under the
laws of Delaware. JPMFAM's principal executive offices are located at 522 Fifth
Avenue, New York, New York 10036. As of March 31, 2001, JPMFAM and certain of
its affiliates (including JPMIM) provided investment management services with
respect to assets of approximately $607.7 billion.
Under the Advisory Agreement, JPMFAM is responsible for making decisions
with respect to, and placing orders for, all purchases and sales of the
portfolio securities of the Surviving Fund. JPMFAM's responsibilities under the
Advisory Agreement include supervising the Surviving Fund's investments and
maintaining a continuous investment program, placing purchase and sale orders
and paying costs of certain clerical and administrative services involved in
managing and servicing the Surviving Fund's investments and complying with
regulatory reporting requirements. Under the Advisory Agreement, JPMFAM is
obligated to furnish employees, office space and facilities required for the
operation of the Surviving Fund. The services provided to the Surviving Fund by
JPMFAM are substantially similar to the services currently provided to the
Master Portfolio and, therefore, indirectly to the Merging Fund by JPMIM.
EXPENSES AND MANAGEMENT FEES. The Advisory Agreement provides that the
Surviving Fund will pay JPMFAM a monthly management fee based upon the net
assets of the Surviving Fund. The annual rate of this management fee is 0.30%.
The Master Portfolio and, therefore indirectly the Merging Fund also
17
currently pay 0.30% of average net assets with respect to its assets in the
Master Portfolio to JPMIM for its advisory services. JPMFAM may waive fees from
time to time.
Under the Advisory Agreement, except as indicated above, the Surviving Fund
is responsible for its operating expenses including, but not limited to, taxes;
interest; fees (including fees paid to its Trustees who are not affiliated with
JPMFAM or any of its affiliates); fees payable to the Commission; state
securities qualification fees; association membership dues; costs of preparing
and printing prospectuses for regulatory purposes and for distribution to
existing shareholders; advisory and administrative fees; charges of the
custodian and transfer agent; insurance premiums; auditing and legal expenses;
costs of shareholders' reports and shareholder meetings; any extraordinary
expenses; and brokerage fees and commissions, if any, in connection with the
purchase or sale of portfolio securities.
SUBCONTRACTING. JPMFAM is authorized by the Advisory Agreement to employ or
associate with such other persons or entities as it believes to be appropriate
to assist it in the performance of its duties. Any such person is required to be
compensated by JPMFAM, not by the Surviving Fund, and to be approved by the
shareholders of that Fund as required by the 1940 Act.
LIMITATION ON LIABILITY. The Advisory Agreement provides that JPMFAM will
not be liable for any error of judgment or mistake of law or for any act or
omission or loss suffered by MFST 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 MFST
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 MFST Board or by vote of the majority of the Surviving Fund's outstanding
voting securities upon 60 days' written notice to JPMFAM, and by JPMFAM on 60
days' written notice to MFST.
PORTFOLIO MANAGER
The Surviving Fund is managed by a team of individuals at JPMFAM.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
JPMFAM, as the investment adviser to the Surviving Fund, has
responsibilities with respect to the Fund's portfolio transactions and brokerage
arrangements pursuant to the Fund's policies, subject to the overall authority
of the MFST Board.
Under the Advisory Agreement, JPMFAM, subject to the general supervision of
the Board, is responsible for the placement of orders for the purchase and sale
of portfolio securities for the Surviving Fund with brokers and dealers selected
by JPMFAM. These brokers and dealers may include brokers or dealers affiliated
with JPMFAM to the extent permitted by the 1940 Act and MFST's policies and
procedures applicable to the Fund. JPMFAM shall use its best efforts to seek to
execute portfolio transactions at prices which, under the circumstances, result
in total costs or proceeds being the most favorable to such Fund. In assessing
the best overall terms available for any transaction, JPMFAM shall consider all
factors it deems relevant, including the breadth of the market in the security,
the price of the security, the financial condition and execution capability of
the broker or dealer, research services provided to JPMFAM, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. In no event shall JPMFAM be under any duty to obtain the
lowest commission or the best net price for the Fund on any particular
transaction, nor shall JPMFAM be under any duty to execute any order in a
fashion either preferential to such Fund relative to other accounts managed by
JPMFAM or otherwise materially adverse to such other accounts.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to JPMFAM, the Fund and/or the other accounts over which
JPMFAM exercises investment discretion. JPMFAM is authorized to pay a broker or
dealer who provides such
18
brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if JPMFAM
determines in good faith that the total commission is reasonable in relation to
the value of the brokerage and research services provided by such broker or
dealer, viewed in terms of either that particular transaction or the overall
responsibilities of JPMFAM with respect to accounts over which it exercises
investment discretion. JPMFAM shall report to the Board regarding overall
commissions paid by the Fund and their reasonableness in relation to the
benefits to such Fund.
In executing portfolio transactions for the Fund, JPMFAM may, to the extent
permitted by applicable laws and regulations, but shall not be obligated to,
aggregate the securities to be sold or purchased with those of other funds or
its other clients if, in JPMFAM's reasonable judgment, such aggregation (i) will
result in an overall economic benefit to such fund, taking into consideration
the advantageous selling or purchase price, brokerage commission and other
expenses, and trading requirements, and (ii) is not inconsistent with the
policies set forth in MFST's registration statement, as the case may be, and the
Fund's Prospectus and Statement of Additional Information. In such event, JPMFAM
will allocate the securities so purchased or sold, and the expenses incurred in
the transaction, in an equitable manner, consistent with its fiduciary
obligations to such Fund and such other clients.
It is possible that certain of the brokerage and research services received
will primarily benefit one or more other investment companies or other accounts
for which JPMFAM exercises investment discretion. Conversely, MFST or any of its
portfolios may be the primary beneficiary of the brokerage or research services
received as a result of portfolio transactions effected for such other accounts
or investment companies.
OTHER SERVICES
The Distributor is a wholly owned, indirect subsidiary of BISYS Fund
Services, Inc., which currently serves as the distributor for both the Surviving
and the Merging Fund and as sub-administrator for the Surving Fund. An affiliate
of the Distributor is the sub-administrator for the Merging Fund. The
Distributor is unaffiliated with JPMC or any of its subsidiaries.
Chase serves as administrator, shareholder servicing agent, fund accountant
and custodian, and DST serves as transfer agent and dividend disbursing agent,
for the Surviving Fund. The services provided by Chase include day-to-day
maintenance of certain books and records, calculation of the offering price of
the shares and preparation of reports. In its role as custodian, Chase is
responsible for the daily safekeeping of securities and cash held by the
Surviving Fund.
As of August 11, 2001, Chase will receive an administration fee from the
Surviving Fund of 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 pays
Morgan, its administrator, a fee at an effective rate of 0.048% of its average
daily net assets.
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 MFST are being asked to approve the same Trustees as are being
proposed for JPMF.
In connection with the merger of J.P. Morgan & Co. Incorporated and The
Chase Manhattan Corporation, it has been proposed, subject to shareholder
approval, that the Boards of Trustees of the investment companies managed by
JPMFAM, JPMIM and their affiliates be rationalized in order to obtain additional
operating efficiencies by having the same Board of Trustees for all of the
funds. Therefore, the Nominees include certain current Trustees of MFST, certain
current Trustees of JPMF (including certain members of JPMF's Advisory Board)
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
19
retirement age of 70.(1) The Trustees have no reason to believe that any Nominee
will be unavailable for election.
Shareholders of MFST are concurrently considering the election of the same
individuals to the Board of Trustees of MFST. Biographical information about the
Nominees and other relevant information is set forth below. More information
regarding the current Trustees of MFST 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 BUSINESS EXPERIENCE AND
CURRENT POSITION WITH PRINCIPAL OCCUPATIONS DURING
FUND COMPLEX TRUSTEE AGE THE PAST FIVE YEARS
- ------------ ------- --- -----------------------------------
William J. Armstrong -- Trustee of Nominee 59 Retired; formerly Vice President
certain other trusts in the Fund and Treasurer, Ingersoll-Rand
Complex Company. Address: 287 Hampshire
Ridge, Park Ridge, NJ 07656.
Roland R. Eppley, Jr. -- Trustee of Nominee 68 Retired; formerly President and
certain other trusts in the Fund Chief Executive Officer, Eastern
Complex States Bankcard Association Inc.
(1971-1988); Director, Janel
Hydraulics, Inc.; formerly Director
of The Hanover Funds, Inc. Address:
105 Coventry Place, Palm Beach
Gardens, FL 33418.
Ann Maynard Gray -- Member of Nominee 55 Former President, Diversified
Advisory Board of the Trust and Publishing Group and Vice
certain other trusts in the Fund President, Capital Cities/
Complex ABC, Inc. Address: 1262, Rockrimmon
Road, Stamford, CT 06903.
Matthew Healey -- Chairman of the 1982 63 Former Chief Executive Officer of
Trust and certain other trusts in the Trust through April 2001;
the Fund Complex Chairman, Pierpont Group, since
prior to 1993. Address: Pine Tree
Country Club Estates, 10286 Saint
Andrews Road, Boynton Beach,
Florida 33436.
Fergus Reid, III* -- Chairman of Nominee 68 Chairman and Chief Executive
certain other trusts in the Fund Officer, Lumelite Corporation,
Complex since September 1985; Trustee,
Morgan Stanley Funds. Address: 202
June Road, Stamford, CT 06903.
20
NAME OF NOMINEE AND BUSINESS EXPERIENCE AND
CURRENT POSITION WITH PRINCIPAL OCCUPATIONS DURING
FUND COMPLEX TRUSTEE AGE THE PAST FIVE YEARS
- ------------ ------- --- -----------------------------------
James J. Schonbachler -- Member of Nominee 58 Retired; Prior to September, 1998,
Advisory Board of the Trust and Managing Director, Bankers Trust
certain other trusts in the Fund Company and Group Head and
Complex Director, Bankers Trust A.G.,
Zurich and BT Brokerage Corp.
Address: 3711 Northwind Court,
Jupiter, FL 33477
Leonard M. Spalding, Jr.* -- Nominee 65 Retired; formerly Chief Executive
Trustee of certain other trusts Officer of Chase Mutual Funds
in the Fund Complex Corp.; formerly President and 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 Nominee 65 Former President of certain other
of certain other trusts in the trusts in the Fund Complex through
Fund Complex April 2001; Investment 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, Burns, Mallardi
and Healey. The function of the Audit Committee is to recommend independent
auditors and monitor accounting and financial matters. The Audit Committee met
four times during the 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 calendar
year.
A majority of the disinterested Trustees have adopted written procedures
reasonably appropriate to deal with potential conflicts of interest arising from
the fact that the same individuals are Trustees of JPMF, the Master Portfolio
and certain other investment companies in the Fund Complex, up to and including
creating a separate board of trustees.
REMUNERATION OF TRUSTEES AND CERTAIN EXECUTIVE OFFICERS
Each Trustee is currently paid an annual fee of $75,000 for serving as
Trustee of the investment companies in the Fund Complex, which is allocated
among all investment companies for which the Trustee serves and is reimbursed
for expenses incurred in connection with service as a Trustee. The Trustees may
hold various other directorships unrelated to these funds.
Compensation expenses paid for the calendar year ended December 31, 2000 for
each nominee are set forth below.
COMPENSATION FROM PENSION OR RETIREMENT TOTAL COMPENSATION FROM
"MORGAN FUND COMPLEX"(1) BENEFITS ACCRUED "FUND COMPLEX"(2)
-------------------------- --------------------- -----------------------
William J. Armstrong NA $ 41,781 $ 90,000(10)(3)
21
COMPENSATION FROM PENSION OR RETIREMENT TOTAL COMPENSATION FROM
"MORGAN FUND COMPLEX"(1) BENEFITS ACCRUED "FUND COMPLEX"(2)
-------------------------- --------------------- -----------------------
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 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.
SURVIVING FUND'S 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 any 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 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 date elected by the Trustee (or the Trustee's termination of
service). The deferred amounts are deemed invested in shares of
22
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 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 and the
Master Portfolio during the indicated fiscal periods are set forth below:
MERGING FUND--For the fiscal year ended March 31, 1999: $2,559. For the four
months ended July 31, 1999: $870. For the fiscal year ended July 31, 2000:
$1,907.
MASTER PORTFOLIO--For the fiscal year ended March 31, 1999: $6,630. For the
four months ended July 31, 1999: $2,300. For the fiscal year ended July 31,
2000: $4,457.
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 Management Inc. Ms. Weinberg is head of
and 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.
ACCOUNTANTS
PricewaterhouseCoopers LLP serves as the Merging Fund's, the Master
Portfolio's and the Surviving Fund's independent accountants, auditing and
reporting on the annual financial statements and reviewing certain regulatory
reports and federal income tax returns. PricewaterhouseCoopers LLP also performs
other professional accounting, auditing, tax and advisory services when MFST or
JPMF engages it to do so.
AUDIT FEES. The aggregate fees paid to PricewaterhouseCoopers LLP in
connection with the annual audit of the Merging Fund and the Master Portfolio
for the last fiscal year was $37,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. There were no
financial information systems design and implementation services rendered by
PricewaterhouseCoopers LLP to the Merging Fund, the Master Portfolio, 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, the Master Portfolio, JPMIM and
23
JPMIM's affiliates that provide services to the Fund for the calendar year ended
December 31, 2000 was $11,029,300.
The Audit committee has considered whether the provision of no-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 13,782,969.579 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 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 voting 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 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.
24
EXPENSE 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.
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. On the record date, the
name, address and percentage ownership of the persons who owned beneficially
more than 5% of the shares of the Merging Fund and the percentage of shares of
the Surviving Fund that would be owned by such persons upon consummation of the
Reorganization and the Concurrent Reorganization based upon their holdings at
April 6, 2001 are as follows:
PERCENTAGE OF PERCENTAGE OF
AMOUNT MERGING FUND SURVIVING FUND
OF SHARES OWNED ON OWNED UPON
NAME AND ADDRESS OWNED RECORD DATE CONSUMMATION
- ----------------------------------- -------------- ------------- --------------
MGT CO OF NEW YORK AS AGENT FOR 1,642,058.6010 8.10% 1.88%
TRUST U/W OF LHP KLOTZ FBO RUTH
KLOTZ
ATTN: SPECIAL PRODUCTS 2 OPS/3
500 STANTON CHRISTIANA ROAD
NEWARK DE 19713-2107
CHARLES SCHWAB & CO INC 1,628,896.0530 8.03% 1.87%
SPECIAL CUSTODY ACCOUNT FOR
BENEFIT OF CUSTOMERS
ATTN: MUTUAL FUNDS
101 MONTGOMERY STREET
SAN FRANCISCO CA 94104-4122
On the record date, the Trustees and officers of MFST as a group owned less
than 1% of the outstanding shares of the Surviving Fund. On the record date, the
name, address and percentage ownership of the persons who owned beneficially
more than 5% of the shares of the Surviving Fund or any class thereof and the
percentage of shares of the Surviving Fund or any class thereof that would be
owned by such persons upon consummation of the Reorganization and the Concurrent
Reorganization based upon their holdings at April 6, 2001 are as follows:
PERCENTAGE OF PERCENTAGE OF
AMOUNT SURVIVING FUND SURVIVING FUND
OF SHARES OWNED ON OWNED UPON
NAME AND ADDRESS OWNED RECORD DATE CONSUMMATION
- ----------------------------------- --------------- -------------- --------------
BALSA & CO REBATE ACCOUNT 17,718,295.6740 33.41% 20.34%
MUTUAL FUNDS UNIT 16 HCB 340
PO BOX 2558
HOUSTON TX 77252-2558
PENLIN & CO REBATE ACCOUNT 15,236,245.9820 28.73% 17.49%
C/O THE CHASE MANHATTAN BANK
ATTN MUT FDS/T-C
PO BOX 31412
ROCHESTER NY 14603-1412
LIVA & COMPANY REBATE ACCT 4,272,915.7740 8.06% 4.91%
C/O CHASE MANHATTAN BANK NA
ATTN MUTUAL FUND OPERATIONS
PO BOX 31412
ROCHESTER NY 14603-1412
25
ADDITIONAL INFORMATION ABOUT MFST
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 MFST's Statement of Additional Information,
which has been filed with the Commission and which is incorporated herein by
reference. Copies of the Statement of Additional information may be obtained
without charge by calling 1-800-348-4782. MFST is subject to the requirements of
the 1940 Act and, in accordance with such requirements, files reports and other
information with the Commission. These materials can be inspected and copied at
the Public Reference Facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
at 7 World Trade Center, Suite 1300, New York, NY 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can also be
obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, D.C.
20549, at prescribed rates, and are also available on the Commission's web site
at http://www.sec.gov.
ADDITIONAL INFORMATION ABOUT JPMF
Information about the 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 Statement of Additional information may be obtained without charge by
calling 1-800-521-5411. JPMF is subject to the requirements of the 1940 Act and,
in accordance with such requirements, files reports and other information with
the Commission. These materials can be inspected and copied at the Public
Reference Facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World
Trade Center, Suite 1300, New York, NY 10048 and 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can also be obtained from
the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, Washington, D.C. 20549, at
prescribed rates, and are also available on the Commission's web site at
http://www.sec.gov.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial highlights, financial statements and notes thereto of
the Merging Fund for the fiscal year ended July 31, 2000 and the Surviving Fund
for the fiscal year ended August 31, 2000 and the audited financial statements,
notes thereto and supplementary data of the Master Portfolio for the fiscal year
ended July 31, 2000 are incorporated by reference herein and into the Statement
of Additional Information related to this Combined Prospectus/Proxy Statement.
The audited financial highlights, financial statements, notes thereto and
supplementary data, as applicable, of the Merging Fund, the Surviving Fund and
the Master Portfolio have been incorporated herein by reference in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on
their authority as experts in auditing and accounting.
The unaudited financial highlights, financial statements and notes thereto
of the Merging Fund for the fiscal period ended January 31, 2001 and the
unaudited financial statements, notes thereto and supplementary data of the
Master Portfolio for the fiscal period ended January 31, 2001 are incorporated
by reference herein and into the Statement of Additional Information related to
this Combined Prospectus/ Proxy Statement.
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 MFST nor JPMF is involved in any litigation that would have any
material adverse effect upon either the Merging Fund or the Surviving Fund.
26
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.
27
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 New York Tax Exempt
Bond Fund (the "Transferor Portfolio"), Mutual Fund Select Trust (the "Acquiring
Trust"), a Massachusetts business trust, on behalf of JPMorgan New York
Intermediate Tax Free Income Fund (formerly, Chase Vista New York Intermediate
Tax Free Income 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 of each share class to be
determined by the parties. Any shares of beneficial interest (if any) of the
Transferor Portfolio ("Transferor Portfolio Shares") held in the treasury of the
Transferor Trust at the Effective Time of the Reorganization shall thereupon be
retired. Such transactions shall take place on the date provided for in
Section 1(b) hereof (the "Exchange Date"). All computations for the Transferor
Portfolio and the Acquiring Portfolio shall be performed by 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.
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(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).
(iii) All computations of value shall be made by the Custodian in
accordance with its regular practice as pricing agent for the Acquiring
Portfolio and the Transferor Portfolio.
2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING TRUST
The Acquiring Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Acquiring Trust is a business trust
that is duly organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts and has the power to carry on its business as
it is now being conducted. The Acquiring Portfolio is a validly existing series
of shares of such business trust representing interests therein under the laws
of Massachusetts. Each of the Acquiring Portfolio and the Acquiring Trust have
all necessary federal, state and local authorization to own all of its
properties and assets and to carry on its business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Acquiring Trust is registered
under the Investment Company Act of 1940, as amended (the "Act") as an open-end
investment company of the management type; such registration has not been
revoked or rescinded and is in full force and effect.
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(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 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 August 31, 2000 there
were outstanding shares 10,744,015 in Class A, 1,764,000 in Class B and
40,992,150 in the Institutional Class (renamed Select 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 for the fiscal year ended August 31,
2000, which have been audited by PricewaterhouseCoopers LLP, fairly present the
financial position of the Acquiring Portfolio as of the dates thereof and the
respective results of operations and changes in net assets for each of the
periods indicated in accordance with generally accepted accounting principles
("GAAP").
(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 August 31, 2000 or
otherwise previously disclosed to the Acquiring Trust with respect to the
Acquiring Portfolio, none of which has been materially adverse to the business,
assets or results of operations of the Acquiring Portfolio.
(i) NO MATERIAL ADVERSE CHANGE. Since August 31, 2000, there has been no
material adverse change in the financial condition, results of operations,
business, properties or assets of the Acquiring Portfolio, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
(j) LITIGATION. There are no claims, actions, suits or proceedings pending
or, to the knowledge of the Acquiring Trust, threatened which would adversely
affect the Acquiring Trust or the Acquiring Portfolio's assets or business or
which would prevent or hinder consummation of the transactions contemplated
hereby, there are no facts which would form the basis for the institution of
administrative proceedings against the Acquiring Trust or the Acquiring
Portfolio and, to the knowledge of the Acquiring Trust, there are no regulatory
investigations of the Acquiring Trust or the Acquiring Portfolio, pending or
threatened, other than routine inspections and audits.
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(k) CONTRACTS. No default exists under any material contract or other
commitment to which the Acquiring Trust, on behalf of the Acquiring Portfolio,
is subject.
(l) TAXES. The federal income tax returns of the Acquiring Trust with
respect to the Acquiring Portfolio, and all other income tax returns required to
be filed by the Acquiring Trust with respect to the Acquiring Portfolio have
been filed, and all taxes payable pursuant to such returns have been paid. To
the knowledge of the Acquiring Trust, no such return is under audit and no
assessment has been asserted in respect of any such return. All federal and
other taxes owed by the Acquiring Trust with respect to the Acquiring Portfolio
have been paid so far as due. The Acquiring Portfolio has elected to qualify and
has qualified as a "regulated investment company" under Subchapter M of the Code
as of and since its first taxable year and intends to continue to so qualify.
(m) NO APPROVALS REQUIRED. Except for the Registration Statement (as defined
in Section 4(a) hereof) and the approval of the Transferor Portfolio's
shareholders (referred to in Section 6(a) hereof), no consents, approvals,
authorizations, registrations or exemptions under federal or state laws are
necessary for the consummation by the Acquiring Trust of the Reorganization,
except such as have been obtained as of the date hereof.
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 February 28, 2001 there
were outstanding 12,442,492 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 New York Tax Exempt Bond
Portfolio for the fiscal year ended July 31, 2000 which have been audited by
PricewaterhouseCoopers LLP fairly present the financial position of the
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Transferor Portfolio and The New York Tax Exempt Bond 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. The unaudited financial
statements for the Transferor Trust with respect to the Transferor Portfolio and
The New York Tax Exempt Bond Portfolio for the fiscal period ended January 31,
2001 fairly present the financial position of the Transferor Portfolio and The
New York Tax Exempt Bond Portfolio as of the dates thereof and the respective
results of operations and changes in net assets for each of the periods
indicated in accordance with GAAP.
(f) AUTHORITY RELATIVE TO THIS PLAN. The Transferor Trust, on behalf of the
Transferor Portfolio, has the power to enter into this Plan and to carry out its
obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Transferor Trust's Board of Trustees and no other proceedings by the
Transferor Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Transferor Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
(g) LIABILITIES. There are no liabilities of the Transferor Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Transferor Trust's
Financial Statements with respect to the Transferor Portfolio and liabilities
incurred in the ordinary course of business subsequent to January 31, 2001 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 January 31, 2001, 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 for all taxable years to and including July 31, 2000, 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.
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4. COVENANTS OF THE ACQUIRING TRUST
The Acquiring Trust covenants to the following:
(a) REGISTRATION STATEMENT. On behalf of the Acquiring Portfolio, the
Acquiring Trust shall file with the Commission a Registration Statement on Form
N-14 (the "Registration Statement") under the Securities Act relating to the
Acquiring Portfolio Shares issuable hereunder and the proxy statement of the
Transferor Portfolio relating to the meeting of the Transferor Portfolio's
shareholders referred to in Section 5(a) herein. At the time the Registration
Statement becomes effective, the Registration Statement (i) will comply in all
material respects with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder (the "Regulations") and (ii) will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and at the time the Registration Statement becomes effective, at the
time of the Transferor Portfolio shareholders' meeting referred to in Section
5(a) hereof, and at the Effective Time of the Reorganization, the
prospectus/proxy statement (the "Prospectus") and statement of additional
information (the "Statement of Additional Information") included therein, as
amended or supplemented by any amendments or supplements filed by the Trust,
will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) COOPERATION IN EFFECTING REORGANIZATION. The Acquiring Trust agrees to
use all reasonable efforts to effectuate the Reorganization, to continue in
operation thereafter, and to obtain any necessary regulatory approvals for the
Reorganization. The Acquiring Trust shall furnish such data and information
relating to the Acquiring Trust as shall be reasonably requested for inclusion
in the information to be furnished to the Transferor Portfolio shareholders in
connection with the meeting of the Transferor Portfolio's shareholders for the
purpose of acting upon this Plan and the transactions contemplated herein.
(c) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise contemplated by
this Plan, the Acquiring Trust shall conduct the business of the Acquiring
Portfolio in the ordinary course until the consummation of the Reorganization,
it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions.
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
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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 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 August 31, 2000.
(c) REGULATORY APPROVAL. The Registration Statement shall have been
declared effective by the Commission and no stop orders under the Securities Act
pertaining thereto shall have been issued, and all other approvals,
registrations, and exemptions under federal and state laws considered to be
necessary shall have been obtained (collectively, the "Regulatory Approvals").
(d) TAX OPINION. The Transferor Trust shall have received the opinion of
Simpson Thacher & Bartlett, dated on or before the Exchange Date, addressed to
and in form and substance satisfactory to the Transferor Trust, as to certain of
the federal income tax consequences under the Code of the Reorganization,
insofar as it relates to the Transferor Portfolio and the Acquiring Portfolio,
and to shareholders of 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
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Plan, the Prospectus and Statement of Additional Information, and upon such
other written representations as the President or Treasurer of the Transferor
Trust will have verified as of the Effective Time of the Reorganization. The Tax
Opinion will be to the effect that, based on the facts and assumptions stated
therein, for federal income tax purposes: (i) the Reorganization will constitute
a reorganization within the meaning of section 368(a)(1) of the Code with
respect to the Transferor Portfolio and the Acquiring Portfolio; (ii) no gain or
loss will be recognized by any of the Transferor Portfolio or the Acquiring
Portfolio upon the transfer of all the assets and liabilities, if any, of the
Transferor Portfolio to the Acquiring Portfolio solely in exchange for shares of
the Acquiring Portfolio or upon the distribution of the shares of the Acquiring
Portfolio to the holders of the shares of the Transferor Portfolio solely in
exchange for all of the shares of the Transferor Portfolio; (iii) no gain or
loss will be recognized by shareholders of the Transferor Portfolio upon the
exchange of shares of such Transferor Portfolio solely for shares of the
Acquiring Portfolio; (iv) the holding period and tax basis of the shares of the
Acquiring Portfolio received by each holder of shares of the Transferor
Portfolio pursuant to the Reorganization will be the same as the holding period
and tax basis of shares of the Transferor Portfolio held by such holder
immediately prior to the Reorganization (provided the shares of the Transferor
Portfolio were held as a capital asset on the date of the Reorganization); and
(v) the holding period and tax basis of the assets of the Transferor Portfolio
acquired by the Acquiring Portfolio will be the same as the holding period and
tax basis of those assets to the Transferor Portfolio immediately prior to the
Reorganization.
(e) CONCURRENT REORGANIZATION. The reorganization of J.P. Morgan
Institutional New York Tax Exempt Bond Fund, a series of J.P. Morgan
Institutional Funds, into the Acquiring Portfolio shall have been consummated.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING TRUST
The obligations of the Acquiring Trust with respect to the consummation of the
Reorganization are subject to the satisfaction of the following conditions:
(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor
Shareholder Approval shall have been obtained.
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Transferor Trust shall
have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all material
respects as of the Effective Time of the 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 January 31,
2001.
(c) PORTFOLIO SECURITIES. All securities to be acquired by the Acquiring
Portfolio in the Reorganization shall have been approved for acquisition by J.P.
Morgan Fleming Asset Management (USA) Inc. ("JPMFAM"), in its capacity as
investment adviser to the Acquiring Portfolio, as consistent with the investment
policies of the Acquiring Portfolio.
(d) REGULATORY APPROVAL. the Regulatory Approvals shall have been obtained.
(e) DISTRIBUTION OF INCOME AND GAINS. The Transferor Trust on behalf of the
Transferor Portfolio shall have distributed to the shareholders of the
Transferor Portfolio all of the Transferor Portfolio's investment company
taxable income (determined without regard to the deduction for dividends paid)
as defined in Section 852(b)(2) of the Code for its taxable year ending on the
Exchange Date and all of its net capital gain as such term is used in Section
852(b)(3) of the Code, after reduction by any capital loss carry forward, for
its taxable year ending on the Exchange Date.
(f) TAX OPINION. The Acquiring Trust shall have received the Tax Opinion.
(g) CONCURRENT REORGANIZATION. The reorganization of J.P. Morgan
Institutional New York Tax Exempt Bond Fund, a series of J.P. Morgan
Institutional Funds, into the Acquiring Portfolio shall have been consummated.
8. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS, WARRANTIES AND
REPRESENTATIONS
(a) AMENDMENTS. The parties hereto may, by agreement in writing authorized
by their Boards of Trustees amend this Plan at any time before or after approval
hereof by the shareholders of the Transferor
A-8
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 JPMFAM if (i) a material condition to the
performance of the Transferor Trust hereunder or a material covenant of the
Acquiring Trust contained herein shall not be fulfilled on or before the date
specified for the fulfillment thereof or (ii) a material default or material
breach of this Plan shall be made by the Acquiring Trust. In addition, this Plan
may be terminated by the Transferor Trust at any time prior to the Effective
Time of the Reorganization, whether before or after approval of this Plan by the
shareholders of the Transferor Portfolio, without liability on the part of any
party hereto, its Trustees, officers or shareholders or J.P. Morgan Investment
Management Inc. ("JPMIM") on notice to the other parties in the event that the
Board of Trustees determines that proceeding with this Plan is not in the best
interests of the shareholders of the Transferor Portfolio.
(d) TERMINATION BY THE ACQUIRING TRUST. The Acquiring Trust, on behalf of
the Acquiring Portfolio, may terminate this Plan with respect to the Acquiring
Portfolio at any time prior to the Effective Time of the Reorganization by
notice to the Transferor Trust and JPMIM if (i) a material condition to the
performance of the Acquiring Trust hereunder or a material covenant of the
Transferor Trust contained herein shall not be fulfilled on or before the date
specified for the fulfillment thereof or (ii) a material default or material
breach of this Plan shall be made by the Transferor Trust. In addition, this
Plan may be terminated by the Acquiring Trust at any time prior to the Effective
Time of the Reorganization, whether before or after approval of this Plan by the
shareholders of the Transferor Portfolio, without liability on the part of any
party hereto, its Trustees, officers or shareholders or JPMIM on notice to the
other parties in the event that the Board of Trustees determines that proceeding
with this Plan is not in the best interests of the shareholders of the Acquiring
Portfolio.
(e) SURVIVAL. No representations, warranties or covenants in or pursuant to
this Plan, except for the provisions of Section 5(f) and Section 9 of this Plan,
shall survive the Reorganization.
9. EXPENSES
The expenses of the Reorganization will be borne by J.P. Morgan Chase & Co.
("JPMC"). Such expenses include, without limitation, (i) expenses incurred in
connection with the entering into and the carrying out of the provisions of this
Plan; (ii) expenses associated with the preparation and filing of the
Registration Statement; (iii) fees and expenses of preparing and filing such
forms as are necessary under any applicable state securities laws in connection
with the Reorganization; (iv) postage; (v) printing; (vi) accounting fees; (vii)
legal fees and (viii) solicitation costs relating to the Reorganization. In
addition, JPMC or an affiliate will waive fees payable to it or reimburse
expenses to the extent necessary such that the actual (post-waiver) 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
A-9
other persons or addresses as the relevant party shall designate as to itself
from time to time in writing delivered in like manner:
if to the Acquiring Trust (for itself or on behalf of the Acquiring Portfolio):
1211 Avenue of the Americas,
41st Floor
New York, New York 10036
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Sarah E. Cogan, Esq.
if to the Transferor Trust (for itself or on behalf of the Transferor
Portfolio):
60 State Street
Suite 1300
Boston, Massachusetts 02109
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: John E. Baumgardner, Jr., Esq.
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 the
Transferor Trustees, officers, agents or shareholders assumes any personal
liability for obligations entered
A-10
into on behalf of the Transferor Trust. No series of the Transferor Trust shall
be liable for claims against any other series of the Transferor Trust.
(f) The name "Mutual Fund Select Trust" is the designation of its Trustees
under a Declaration of Trust dated October 1, 1996, 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.
IN WITNESS WHEREOF, the undersigned have executed this Plan as of the date first
above written.
J.P. MORGAN FUNDS
on behalf of J.P. Morgan New York Tax Exempt Bond
Fund
By: /s/ Sharon Weinberg
--------------------------------------------
Name: Sharon Weinberg
Title: Vice President and Assistant
Secretary
MUTUAL FUND SELECT TRUST
on behalf of JPMorgan New York Intermediate Tax
Free Income Fund
By: /s/ Fergus Reid, III
--------------------------------------------
Name: Fergus Reid, III
Title: Chairman
Agreed and acknowledged with respect to
Section 9:
J.P. MORGAN CHASE & CO.
By: /s/ George Gatch
--------------------------------------------
Name: George Gatch
Title: Managing Director
A-11
STATEMENT OF ADDITIONAL INFORMATION
(SPECIAL MEETING OF SHAREHOLDERS OF
JPMORGAN NEW YORK TAX EXEMPT BOND FUND,
A SERIES OF J.P. MORGAN FUNDS)
This Statement of Additional Information is not a prospectus but should be
read in conjunction with the Combined Prospectus/Proxy Statement dated May 12,
2001 for the Special Meeting of Shareholders of JPMorgan New York Tax Exempt
Bond Fund (the "Merging Fund"), a series of J.P. Morgan Funds ("JPMF"), to be
held on July 3, 2001. Copies of the Combined Prospectus/Proxy Statement may be
obtained at no charge by calling the Merging Fund at 1-800-766-7722.
Unless otherwise indicated, capitalized terms used herein and not otherwise
defined have the same meanings as are given to them in the Combined
Prospectus/Proxy Statement.
Further information about the Surviving Fund and the Merging Fund is
contained in each of MFST's and JPMF's Statements of Additional Information,
which are incorporated herein by reference.
The date of this Statement of Additional Information is May 12, 2001.
GENERAL INFORMATION
The Shareholders of the Merging Fund are being asked to consider and vote
on two proposals.
With respect to an Agreement and Plan of Reorganization (the
"Reorganization Plan") dated as of May 11, 2001 by and among JPMF, on behalf
of the Merging Fund, MFST, 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 MFST 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 JPMF.
A Special Meeting of Shareholders of the Merging Fund to consider the
proposals and the related transaction will be held at the offices of J.P. Morgan
Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, NY, on July 3,
2001 at 9:00 a.m., Eastern time. For further information about the transaction,
see the Combined Prospectus/Proxy Statement.
2
FINANCIAL STATEMENTS
The audited financial highlights, financial statements and notes thereto of
the Merging Fund and the audited financial statements, notes thereto and
supplementary data of the Master Portfolio contained in their respective Annual
Reports, each dated July 31, 2000, are incorporated by reference into this
Statement of Additional Information related to this Combined Prospectus/Proxy
Statement. The audited financial highlights, financial statements and notes
thereto of the Surviving Fund contained in its Annual Report dated August 31,
2000 are incorporated by reference into this Statement of Additional Information
related to this Combined Prospectus/Proxy Statement.
The unaudited financial highlights, financial statements and notes thereto
of the Merging Fund and the unaudited financial statements, notes thereto and
supplementary data of the Master Portfolio contained in their respective
Semi-Annual Reports, each dated January 31, 2001, 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 Merging Fund's, the Master Portfolio's and the Surviving Fund's
Annual Report have been audited by PricewaterhouseCoopers LLP, whose reports
thereon also appear in such Annual Reports and are also incorporated herein by
reference. The financial highlights, financial statements, notes thereto and
supplementary data, as applicable, for the Merging Fund and the Master Portfolio
for the fiscal year ended July 31, 2000 and for the Surviving Fund for the
fiscal year ended August 31, 2000 have been incorporated herein by reference in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on their authority as experts in auditing and accounting.
3
J.P. MORGAN NEW YORK TAX EXEMPT BOND FUND / J.P. MORGAN INSTITUTIONAL NEW YORK
TAX EXEMPT BOND FUND / THE NEW YORK TAX EXEMPT PORTFOLIO / JPMORGAN NEW YORK
INTERMEDIATE TAX FREE INCOME FUND
PRO FORM COMBINING STATEMENT OF ASSETS AND LIABILITIES
AS OF FEBRUARY 28, 2001 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
J.P. MORGAN NEW J.P. MORGAN THE NEW
YORK TAX EXEMPT INSTITUTIONAL YORK TAX
BOND FUND NEW YORK TAX EXEMPT BOND
EXEMPT BOND PORTFOLIO
FUND
ASSETS:
Investment Securities, at Value $ - $ - $ 363,894
Investment in The New York Tax Exempt Bond Portfolio
("Portfolio"), at value 133,397 211,334 -
Cash - - -
Other Assets - - -
Receivables: - - -
Investment Securities Sold - - 27,739
Margin Account For Futures Contracts - - -
Fund Shares Sold - - -
Accrued Income Receivable - - 3,535
Expense Reimbursements - 11 -
Interest - - 311
------------------------------------------------
Total Assets 133,397 211,345 395,479
------------------------------------------------
LIABILITIES:
Payables: - - -
Due To Custodian - - 22,076
Investment Securities Purchased - - 28,536
Payable for Fund Shares Redeemed - - -
Dividends 379 677 -
Accrued Liabilities: - - -
Investment Advisory Fees - - 78
Administration Fees 2 4 6
Shareholder Servicing Fees 26 15 -
Distribution Fees - - -
Custodian Fees - - 2
Other 47 54 50
------------------------------------------------
Total Liabilities 454 750 50,748
------------------------------------------------
NET ASSETS:
Paid-in Capital 129,436 205,985 -
Undistributed (Distributions in Excess of) Net
Investment Income (39) (42) -
Accumulated Net Realized Gain/(Loss) (90) (156) -
Net Unrealized Appreciation of Investments 3,636 4,808 -
------------------------------------------------
Net Assets $ 132,943 $ 210,595 $ 344,731
================================================
Shares of beneficial interest outstanding ($.001 par
value; unlimited number of shares authorized) 12,442 19,583 -
Net Asset Value Per Share $ 10.68 $ 10.75 -
Net Asset Value: - - -
- - -
- - -
PRO FORMA WITH CONCURRENT REORGANIZATION
JPMORGAN NEW YORK INTERMEDIATE TAX FREE INCOME FUND
Shares Outstanding
Class A - - -
Class B - - -
Select - - -
Institutional - - -
Net Asset Value Per Share
Class A - - -
Class B - - -
Select - - -
Institutional - - -
------------------------------------------------
Cost of Investments $ - $ - $ 355,450
================================================
JPMORGAN NEW PRO FORMA PRO FORMA
YORK ADJUSTMENT COMBINED
INTERMEDIATE TAX JPMORGAN NEW YORK
FREE INCOME INTERMEDIATE TAX
FUND FREE INCOME FUND
ASSETS:
Investment Securities, at Value $ 385,194 $ - $ 749,088
Investment in The New York Tax Exempt Bond Portfolio
("Portfolio"), at value - (344,731)(a) -
Cash 1 - 1
Other Assets 5 - 5
Receivables: - - -
Investment Securities Sold 4,065 - 31,804
Margin Account For Futures Contracts 4,529 - 4,529
Fund Shares Sold 172 - 172
Accrued Income Receivable - - 3,535
Expense Reimbursements - - 11
Interest - - 311
--------------------------------------------
Total Assets 393,966 (344,731) 789,456
--------------------------------------------
LIABILITIES:
Payables: - - -
Due To Custodian - - 22,076
Investment Securities Purchased 6,959 - 35,495
Payable for Fund Shares Redeemed 30 - 30
Dividends 997 - 2,053
Accrued Liabilities: - - -
Investment Advisory Fees 72 - 150
Administration Fees 29 - 41
Shareholder Servicing Fees 57 - 98
Distribution Fees 2 - 2
Custodian Fees 30 - 32
Other 200 - 351
--------------------------------------------
Total Liabilities 8,376 - 60,328
--------------------------------------------
NET ASSETS:
Paid-in Capital 372,370 - 707,791
Undistributed (Distributions in Excess of) Net
Investment Income (53) - (134)
Accumulated Net Realized Gain/(Loss) (2,157) - (2,403)
Net Unrealized Appreciation of Investments 15,430 - 23,874
--------------------------------------------
Net Assets $ 385,590 $ (344,731) $ 729,128
============================================
Shares of beneficial interest outstanding ($.001 par
value; unlimited number of shares authorized) 10,744 (a)* (42,769) (c) -
1,764 (b)* (1,764) (c)
40,992 (i)* (40,992) (c)
Net Asset Value Per Share - - -
Net Asset Value: $ 7.21 (a)* - -
$ 7.21 (b)* - -
$ 7.21 (i)* - -
PRO FORMA WITH CONCURRENT REORGANIZATION
JPMORGAN NEW YORK INTERMEDIATE TAX FREE INCOME FUND
Shares Outstanding
Class A - 10,744 (b) 10,744
Class B - 1,764 (b) 1,764
Select - 59,421 (b) 59,421
Institutional - 29,198 (b) 29,198
Net Asset Value Per Share
Class A - $ 7.21
Class B - $ 7.21
Select - $ 7.21
Institutional - $ 7.21
--------------------------------------------
Cost of Investments $ 369,764 $ - $ 725,214
============================================
(a) Reflects reallocation of investment from the feeder funds to master
portfolio.
(b) Reflects the difference in number of shares outstanding due to the
Concurrent Reorganization.
(c) Reallocation of feeder fund's beneficial interest to Class A, Class B,
Select and Institutional Shares due to the Concurrent Reorganization.
(*) Share Classes of Fund.
See Notes to Pro Forma Financial Statements
4
J.P. MORGAN NEW YORK TAX EXEMPT BOND FUND / J.P. MORGAN INSTITUTIONAL NEW YORK
TAX EXEMPT BOND FUND / THE NEW YORK TAX EXEMPT PORTFOLIO / JPMORGAN NEW YORK
INTERMEDIATE TAX FREE INCOME FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED FEBRUARY 28, 2001 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
J.P. MORGAN J.P. MORGAN THE NEW
NEW YORK TAX INSTITUTIONAL YORK TAX
EXEMPT BOND NEW YORK TAX EXEMPT BOND
FUND EXEMPT BOND PORTFOLIO
FUND
INCOME:
Interest Income $ - $ - $ 14,905
Allocated Investment Income from Portfolio 6,117 8,788 -
Allocated Portfolio Expenses (439) (631) -
---------------------------------------------
Investment Income 5,678 8,157 14,905
---------------------------------------------
EXPENSES:
Investment Advisory Fees - - 897
Administration Fees 29 42 72
Shareholder Servicing Fee 306 176 -
Distribution Fee - - -
Custodian Fees and Expenses - - 40
Printing and Postage 15 13 12
Professional Fees 15 15 40
Registration Fees 1 16 -
Transfer Agent Fees 27 18 -
Trustees' Fees and Expenses 2 2 3
Financial and Fund Accounting Services Fee 35 35 -
Insurance Expense - - 1
Fund Services Fee 2 3 4
Administration Fees 1 2 2
Other 23 19
---------------------------------------------
Total Expenses 456 341 1,071
---------------------------------------------
Less: Amounts Waived
Less: Expense Reimbursements 32 94 21
---------------------------------------------
Net Expenses 424 247 1,050
---------------------------------------------
---------------------------------------------
Net Investment Income 5,254 7,910 13,855
---------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net Realized Gain (loss) on Investments 1,546 2,364 3,911
Net Change in Net Unrealized Appreciation
(depreciation) on Investments 4,815 6,597 11,411
---------------------------------------------
Net Realized and Unrealized Gain (Loss) on
Investments Allocated from Portfolio 6,361 8,961 15,322
---------------------------------------------
---------------------------------------------
Net (Decrease) Increase in Net Assets from
Operations $ 11,615 $ 16,871 $ 29,177
=============================================
JPMORGAN NEW PRO FORMA PRO FORMA
YORK ADJUSTMENTS COMBINED
INTERMEDIATE TAX JPMORGAN NEW YORK
FREE INCOME INTERMEDIATE TAX
FUND FREE INCOME FUND
INCOME:
Interest Income $ 14,163 $ - $ 29,068
Allocated Investment Income from Portfolio - (14,905)(c) -
Allocated Portfolio Expenses - 1,070 (b) -
---------------------------------------------
Investment Income 14,163 (13,835) 29,068
---------------------------------------------
EXPENSES:
Investment Advisory Fees 843 270 (a) 2,010
Administration Fees 421 308 (a,e) 872
Shareholder Servicing Fee 702 (152) (a) 1,032
Distribution Fee 7 91 (a) 98
Custodian Fees and Expenses 96 11 (f,g) 147
Printing and Postage 12 (17) (g) 35
Professional Fees 30 (52) (g) 48
Registration Fees 24 - 41
Transfer Agent Fees 23 - 68
Trustees' Fees and Expenses 14 - 21
Financial and Fund Accounting Services Fee - (70) (f) -
Insurance Expense - - 1
Fund Services Fee - - 9
Administration Fees - - 5
Other 27 - 69
---------------------------------------------
Total Expenses 2,199 389 4,456
---------------------------------------------
Less: Amounts Waived 87 389 (a) 476
Less: Expense Reimbursements 89 (a) 236
---------------------------------------------
Net Expenses 2,112 (89) 3,744
---------------------------------------------
---------------------------------------------
Net Investment Income 12,051 (13,746) 25,324
---------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on investments 564 (3,910)(d) 4,475
Net change in net unrealized appreciation
(depreciation) on investments 15,921 (11,412)(d) 27,332
---------------------------------------------
Net realized and unrealized gain (loss) on
investments Allocated from Portfolio 16,485 (15,322) 31,807
--------------------------------------------
--------------------------------------------
Net (decrease) increase in net assets from
operations $ 28,536 $ (29,068) $ 57,131
============================================
(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 adjustment to master portfolio expenses for reclass of feeder
expense reimbursements.
(f) Reflects reclassification of combined fund according and custody fees
in new agreement.
(g) Reduction reflects expected benefit of combined operations.
See Notes to Pro Forma Financial Statements
5
THE NEW YORK TAX EXEMPT BOND PORTFOLIO / JPMORGAN NEW YORK INTERMEDIATE
TAX FREE INCOME FUND
COMBINED PORTFOLIO OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE
- -------------------------------------------- --------------------------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
JPMORGAN JPMORGAN
NEW YORK NEW YORK
JPMORGAN THE INTERME- JPMORGAN THE INTERME-
NEW YORK NEW YORK DIATE TAX NEW YORK NEW YORK DIATE TAX
INTERMEDIATE TAX EXEMPT FREE INTERMEDIATE TAX EXEMPT FREE
TAX FREE BOND PRO FORMA INCOME TAX FREE BOND PRO FORMA INCOME
INCOME FUND PORTFOLIO ADJUSTMENTS FUND INCOME FUND PORTFOLIO ADJUSTMENTS FUND
- ----------- --------- ----------- --------- ----------- ---------- ----------- --------
MUNICIPALS 98.98%
GENERAL OBLIGATIONS & HOUSE
AUTHORITY 54.97%
CALIFORNIA 0.70%
Bay Area Governments
Association Lease Rev.,
Series 2001 A, (Bart SFO
Extension-FTA Capital
Grant), 4.88%,
5,000 5,000 6/15/09 (AMBAC) $ - $ 5,121 $ 5,121
--------------------------------------------
NEW YORK 47.58%
Babylon, (Waste Facilities),
3,000 3,000 9.00%, 8/1/11 (FGIC) 4,102 4,102
New York City, Series 1998 A,
6,455 6,455 5.00%, 8/1/05 6,737 6,737
New York City, Series 1999 I,
4,325 4,325 4.00%, 4/15/02 4,350 4,350
New York, Series 1993 A-1,
7,000 7,000 5.75%, 8/1/14 7,243 7,243
4,375 4,375 New York, 6.00%, 3/1/07 4,807 4,807
New York, Series 1996 A,
5,250 5,250 6.50%, 7/15/06 5,876 5,876
New York, Series 2001 A,
12,110 12,110 5.25%, 3/15/14 12,600 12,600
Yonkers, Series 1996 C, 5.50%,
3,230 3,230 8/1/04 (AMBAC) 3,407 3,407
Albany County, New York, Airport
2,000 2,000 Authority, Rev., 5.30%, 12/15/2015 2,056 2,056
Allegany County, New York, IDA, Civic
Facility, Alfred University, Rev.,
1,120 1,120 5.25%, 8/1/2011 1,192 1,192
Amherst, New York, IDA, Civic
Facility, Faculty Student Housing,
1,290 1,290 Ser. B, Rev., 5.75%, 8/1/2015 1,411 1,411
Amherst, New York, IDA, Civic
Facility, Student Housing Corp., Ser.
1,175 1,175 A, Rev., 5.50%, 8/1/2015 1,251 1,251
Amherst, New York, IDA, Civic
Facility, Student Housing Corp., Ser.
1,000 1,000 B, Rev., 5.50%, 8/1/2015 1,065 1,065
Arkport, New York, Central School
150 150 District, GO, 5.20%, 6/15/2009 160 160
Arkport, New York, Central School
50 50 District, GO, 5.20%, 6/15/2010 53 53
Attica, New York, Central School
500 500 District, GO, 5.00%, 6/15/2015 507 507
Barker, New York, Central School
420 420 District, GO,5.13%, 6/1/2004 438 438
Barker, New York, Central School
480 480 District, GO, 5.15%, 6/1/2006 507 507
Battery Park City Authority, New
2,000 2,000 York, Ser. A, Rev., 5.50%, 11/1/2026 2,045 2,045
Beacon, New York, City School
1,040 1,040 District, GO, 5.50%, 7/15/2011 1,130 1,130
Brentwood, New York, Union Free
250 250 School District, GO, 5.63%, 6/15/2011 273 273
Brentwood, New York, Union Free
100 100 School District, GO, 5.63%, 6/15/2012 109 109
Brentwood, New York, Union Free
650 650 School District, GO, 5.63%, 6/15/2013 704 704
Burnt Hills-Ballston Lake, New York,
Central School District, GO, 5.40%,
590 590 7/15/2016 616 616
Burnt Hills-Ballston Lake, New York,
Central School District, GO, 5.50%,
305 305 7/15/2017 320 320
Burnt Hills-Ballston Lake, New York,
Central School District, GO, 5.50%,
375 375 7/15/2018 392 392
Chenango Forks, New York, Central
250 250 School District, GO, 5.63%, 6/15/2011 273 273
Chenango Forks, New York, Central
850 850 School District, GO, 5.70%, 6/15/2012 930 930
Cleveland Hill, New York, Union Free
School District, Cheektowaga, GO,
1,655 1,655 5.50%, 10/15/2013 1,775 1,775
Cleveland Hill, New York, Union Free
School District, Cheektowaga, GO,
1,730 1,730 5.50%, 10/15/2014 1,844 1,844
Colonie, New York, Public
Improvement, Ser. B, GO, 5.20%,
175 175 4/1/2004 182 182
Colonie, New York, Public
Improvement, Ser. B, GO, 5.20%,
375 375 4/1/2005 394 394
East Meadow, New York, Fire District,
185 185 GO, 5.30%, 4/1/2004 193 193
East Meadow, New York, Fire District,
250 250 GO, 5.30%, 4/1/2005 263 263
East Meadow, New York, Fire District,
250 250 GO, 5.30%, 4/1/2006 265 265
Erie County, New York, Public
885 885 Improvement, GO, 6.00%, 1/15/2005 919 919
Erie County, New York, Ser. B, GO,
855 855 6.00%, 3/15/2006 889 889
See Notes to Pro Forma Financial Statements
6
Erie County, New York, Water
Authority, Improvement & Extension,
1,695 1,695 Rev., ^, 5.75%, 12/1/2008 1,815 1,815
Goshen, New York, Central School
1,050 1,050 District, GO, 5.00%, 6/15/2016 1,078 1,078
Goshen, New York, Central School
1,050 1,050 District, GO, 5.00%, 6/15/2017 1,071 1,071
Lindenhurst, New York, Union Free
1,070 1,070 School District, GO, 5.25%, 7/15/2012 1,132 1,132
Lindenhurst, New York, Union Free
1,295 1,295 School District, GO, 5.25%, 7/15/2016 1,341 1,341
Lindenhurst, New York, Union Free
1,460 1,460 School District, GO, 5.25%, 7/15/2017 1,500 1,500
Long Island Power Authority, New
York, Electric Systems, Ser. A, Rev.,
5,000 5,000 5.50%, 12/1/2011 5,508 5,508
Longwood Central School District at
Middle Island, New York, GO, 4.80%,
405 405 6/15/2011 418 418
Longwood Central School District at
Middle Island, New York, GO, 4.80%,
1,290 1,290 6/15/2013 1,311 1,311
Mahopac, New York, Central School
525 525 District, Ser. B, GO, 5.60%, 6/15/2014 568 568
Mahopac, New York, Central School
815 815 District, Ser. B, GO, 5.60%, 6/15/2015 876 876
Massapequa, New York, Union Free
School District, Ser. A, GO, 5.38%,
1,090 1,090 6/15/2009 1,179 1,179
Massapequa, New York, Union Free
School District, Ser. A, GO, 5.38%,
2,180 2,180 6/15/2012 2,341 2,341
Massapequa, New York, Union Free
School District, Ser. A, GO, 5.40%,
2,485 2,485 6/15/2013 2,653 2,653
Massapequa, New York, Union Free
School District, Ser. A, GO, 5.70%,
3,135 3,135 6/15/2016 3,374 3,374
Metropolitan Transportation
Authority, New York, Commuter
Facilities, Ser. B, Rev., 6.10%,
500 500 7/1/2009 565 565
Metropolitan Transportation
Authority, New York, Dedicated Tax
2,000 2,000 Fund, Ser. A, Rev., 5.50%, 4/1/2016 2,085 2,085
Metropolitan Transportation
Authority, New York, Transportation
Facilities, Ser. C, Rev., 4.75%,
200 200 7/1/2016 197 197
Metropolitan Transportation
Authority, New York, Transportation
Facilities, Ser. C, Rev., 5.25%,
510 510 7/1/2016 545 545
Monroe County, New York, IDA, Public
Improvement, Canal Ponds Park, Ser.
550 550 A, Rev., 7.00%, 6/15/2013 581 581
Monroe County, New York, Public
1,050 1,050 Improvement, GO, 4.50%, 6/1/2009 1,073 1,073
Monroe County, New York, Public
775 775 Improvement, GO, 4.50%, 6/1/2010 788 788
Monroe County, New York, Public
100 100 Improvement, GO, 6.00%, 3/1/2001 100 100
Monroe County, New York, Public
1,230 1,230 Improvement, GO,6.00%, 3/1/2012 1,401 1,401
Monroe County, New York, Public
1,000 1,000 Improvement, GO, 6.00%, 3/1/2014 1,140 1,140
Monroe County, New York, Public
1,000 1,000 Improvement, GO, 6.00%, 3/1/2018 1,132 1,132
Monroe County, New York, Public
1,000 1,000 Improvement, GO, 6.00%, 3/1/2019 1,129 1,129
Monticello, New York, Central School
1,020 1,020 District, GO, 5.63%, 6/15/2006 1,101 1,101
Municipal Assistance Corp. for New
York City, Ser. E, Rev., 6.00%,
2,400 2,400 7/1/2005 2,607 2,607
Municipal Assistance Corp. for New
York City, Ser. E, Rev., 6.00%,
6,740 6,740 7/1/2006 7,392 7,392
Municipal Assistance Corp. for New
York City, Ser. G, Rev., 6.00%,
6,500 6,500 7/1/2008 7,250 7,250
Nassau County, New York, General
Improvement, Ser. Q, GO, 5.20%,
2,000 2,000 8/1/2012 2,099 2,099
Nassau County, New York, General
Improvement, Ser. R, GO, 5.13%,
1,800 1,800 11/1/2003 1,870 1,870
Nassau County, New York, IDA, Civic
Facility, Hofstra University Project,
4,740 4,740 Rev., 5.25%, 7/1/2009 5,077 5,077
Nassau County, New York, IDA, Civic
Facility, Hofstra University Project,
2,010 2,010 Rev., 5.00%, 7/1/2003 2,075 2,075
Nassau County, New York, IDA, Civic
Facility, Hofstra University Project,
1,705 1,705 Rev., 5.00%, 7/1/2006 1,791 1,791
Nassau County, New York, Ser. E, GO,
1,000 1,000 7.00%, 3/1/2004 1,077 1,077
New York City, New York, IDA, Civic
Facility, Mt. St. Vincent College,
450 450 Rev., 7.00%, 5/1/2008 479 479
New York City, New York, IDA, Civic
Facility, New School for Social
Research, Ser. A, Rev., 5.75%,
1,000 1,000 9/1/2015 1,057 1,057
New York City, New York, IDA, Civic
Facility, New York Blood Center Inc.
1,430 1,430 Project, Rev., ^, 7.20%, 5/1/2012 1,577 1,577
New York City, New York, IDA, Civic
Facility, YMCA Greater New York
1,500 1,500 Project, Rev., 5.80%, 8/1/2016 1,471 1,471
New York City, New York, IDA, IDR,
Brooklyn Navy Yard Cogen Partners
3,010 3,010 Project, Rev., 6.20%, 10/1/2022 3,040 3,040
See Notes to Pro Forma Financial Statements
7
New York City, New York, Industrial
Development Agency, Civic Facility,
Polytechnic University Project, Rev.,
1,435 1,435 5.13%, 11/1/2006 1,470 1,470
New York City, New York,
Industrial Development Agency,
Civic Facility, Polytechnic
University Project, Rev.,
1,380 1,380 5.00%,11/1/2004 1,404 1,404
New York City, New York, Municipal
Water Finance Authority, Water &
2,500 2,500 Sewer Systems, Rev., 5.66%, 6/15/2033 2,571 2,571
New York City, New York, Municipal
Water Finance Authority, Water &
Sewer Systems, Ser. A, Rev., ^,
725 725 7.00%, 6/15/2009 740 740
New York City, New York, Municipal
Water Finance Authority, Water &
Sewer Systems, Ser. A, Rev., 5.75%,
3,000 3,000 6/15/2031 3,156 3,156
New York City, New York, Municipal
Water Finance Authority, Water &
Sewer Systems, Ser. A, Rev., 7.00%,
1,010 1,010 6/15/2009 1,030 1,030
New York City, New York, Municipal
Water Finance Authority, Water &
Sewer Systems, Ser. B, Rev., 5.50%,
2,000 2,000 6/15/2027 2,047 2,047
New York City, New York, Ser. A, GO,
500 500 ^, 6.10%, 8/1/2002 518 518
New York City, New York, Ser. A, GO,
475 475 ^, 6.38%, 8/1/2002 501 501
New York City, New York, Ser. A, GO,
1,000 1,000 6.25%, 8/1/2003 1,049 1,049
New York City, New York, Ser. A, GO,
1,025 1,025 6.38%, 8/1/2005 1,077 1,077
New York City, New York, Ser. D, GO,
60 60 ^, 7.65%, 2/1/2002 63 63
New York City, New York, Ser. E, GO,
2,500 2,500 6.00%, 8/1/2007 2,765 2,765
New York City, New York, Ser. F, GO,
2,000 2,000 5.75%, 2/1/2012 2,121 2,121
New York City, New York, Ser. F, GO,
400 400 8.25%, 11/15/2002 419 419
New York City, New York, Ser. G, GO,
1,250 1,250 5.75%, 2/1/2004 1,318 1,318
New York City, New York, Ser. H, GO,
975 975 ^, 7.10%, 2/1/2002 1,023 1,023
New York City, New York, Ser. H, GO,
25 25 ^, 7.10%, 2/1/2012 26 26
New York City, New York, Ser. H, GO,
460 460 ^, 7.00%, 2/1/2002 482 482
New York City, New York, Ser. H, GO,
75 75 6.88%, 2/1/2002 77 77
New York City, New York, Ser. H, GO,
40 40 7.00%, 2/1/2006 42 42
New York City, New York, Ser. I, GO,
315 315 7.75%, 8/15/2001 321 321
New York City, New York, Transit
Authority, Metropolitan
Transportation Authority, Triborough,
1,000 1,000 Ser. A, COP, 5.63%, 1/1/2012 1,090 1,090
New York City, New York, Transitional
Finance Authority, Future Tax
1,700 1,700 Secured, Ser. A, Rev., 5.5%, 2/15/2008 1,836 1,836
New York City, New York, Transitional
Finance Authority, Future Tax
Secured, Ser. A, Rev., 5.00%,
4,575 4,575 11/15/2009 4,822 4,822
New York City, New York, Trust
Cultural Resources, Museum of Modern
1,550 1,550 Art, Ser. A, Rev., 5.40%, 1/1/2012 1,596 1,596
New York State, Dorm Authority,
Canisius College, Rev., 4.75%,
100 100 7/1/2012 102 102
New York State, Dorm Authority,
Canisius College, Rev., 4.85%,
525 525 7/1/2013 536 536
New York State, Dorm Authority,
Canisius College, Rev., 4.95%,
295 295 7/1/2014 299 299
New York State, Dorm Authority,
Canisius College, Rev., 5.00%,
230 230 7/1/2015 232 232
New York State, Dorm Authority, City
University System, Ser. D, Rev.,
1,545 1,545 5.75%, 7/1/2006 1,675 1,675
New York State, Dorm Authority, City
University System, 3rd General
1,000 1,000 Reserve, Ser. 1, Rev., 5.25%, 7/1/2008 1,059 1,059
New York State, Dorm Authority, City
University System, 3rd General
2,500 2,500 Reserve, Ser. 2, Rev., 5.38%, 7/1/2013 2,637 2,637
New York State, Dorm Authority, City
University System, 3rd General
3,000 3,000 Reserve, Ser. 2, Rev., 5.00%, 7/1/2017 2,954 2,954
New York State, Dorm Authority, City
University System, Ser. A, Rev.,
3,565 3,565 5.75%, 7/1/2013 3,973 3,973
New York State, Dorm Authority, City
University System, Ser. B, Rev.,
2,000 2,000 5.75%, 7/1/2007 2,188 2,188
New York State, Dorm Authority, City
University System, Ser. D, Rev.,
3,080 3,080 7.00%, 7/1/2009 3,504 3,504
New York State, Dorm Authority, City
University System, Ser. D, Rev.,
2,470 2,470 7.00%, 7/1/2009 2,810 2,810
New York State, Dorm Authority, Long
Island University, Rev., 5.13%,
1,020 1,020 9/1/2010 1,078 1,078
See Notes to Pro Forma Financial Statements
8
New York State, Dorm Authority, Long
Island University, Rev., 5.25%,
1,000 1,000 9/1/2011 1,065 1,065
New York State, Dorm Authority, Long
Island University, Rev., 5.00%,
470 470 9/1/2012 487 487
New York State, Dorm Authority,
Memorial Sloan Kettering Cancer
1,000 1,000 Center, Ser. C, Rev., 5.50%, 7/1/2009 1,081 1,081
New York State, Dorm Authority,
Memorial Sloan Kettering Cancer
1,000 1,000 Center, Ser. C, Rev., 5.50%, 7/1/2023 1,063 1,063
New York State, Dorm Authority,
Mental Health Services, Facilities
Improvement, Ser. B, Rev., 5.50%,
1,215 1,215 2/15/2012 1,300 1,300
New York State, Dorm Authority,
Mental Health Services, Facilities
Improvement, Ser. B, Rev., 5.60%,
1,665 1,665 8/15/2013 1,787 1,787
New York State, Dorm Authority, New
York University, Rev., ^, 6.38%,
170 170 7/1/2001 175 175
New York State, Dorm Authority, New
York University, Rev., ^, 6.38%,
2,580 2,580 7/1/2007 2,651 2,651
New York State, Dorm Authority, New
York University, Ser. A, Rev., 5.75%,
2,000 2,000 7/1/2009 2,212 2,212
New York State, Dorm Authority, New
York University, Ser. A, Rev., 5.75%,
1,000 1,000 7/1/2015 1,112 1,112
New York State, Dorm Authority, New
York University, Ser. A, Rev., 5.75%,
3,500 3,500 7/1/2016 3,878 3,878
New York State, Dorm Authority,
Nursing Home, Ser. A, Rev., 5.50%,
500 500 8/1/2020 513 513
New York State, Dorm Authority,
Rockefeller University, Rev., 5.00%,
2,015 2,015 7/1/2012 2,101 2,101
New York State, Dorm Authority,
Rockefeller University, Rev., 5.00%,
1,400 1,400 7/1/2028 1,366 1,366
New York State, Dorm Authority,
Special Act, School Districts
1,305 1,305 Program, Rev., 5.30%, 7/1/2011 1,394 1,394
New York State, Dorm Authority, State
Service Contract, Albany County,
2,065 2,065 Rev., 5.25%, 4/1/2012 2,153 2,153
New York State, Dorm Authority, State
Service Contract, Albany County,
340 340 Rev., 5.50%, 4/1/2008 366 366
New York State, Dorm Authority, State
University Educational Facilities,
1,000 1,000 Ser. A, Rev., 5.25%, 5/15/2011 1,059 1,059
New York State, Dorm Authority, State
University Educational Facilities,
1,380 1,380 Ser. A, Rev., 5.50%, 5/15/2006 1,480 1,480
New York State, Dorm Authority, State
University Educational Facilities,
6,500 6,500 Ser. A, Rev., 5.50%, 5/15/2013 7,112 7,112
New York State, Dorm Authority, State
University Educational Facilities,
2,000 2,000 Ser. C, Rev., ^, 7.38%, 5/15/2010 2,353 2,353
New York State, Energy Research &
Development Authority, Electric
Facilities, Lilco Project, Ser. B,
2,500 2,500 Rev., FRDO, 5.30%, 11/1/2023 2,429 2,429
New York State, Energy Research &
Development Authority, PCR, New York
State Electric and Gas Corp., Ser. E,
5,000 5,000 Rev., 5.90%, 12/1/2006 5,494 5,494
New York State, Environmental
Facilities Corp., PCR, State Water
Revolving Fund, New York City
Municipal Water, Rev., 5.75%,
7,200 7,200 6/15/2012 8,051 8,051
New York State, Environmental
Facilities Corp., PCR, State Water
Revolving Fund, Ser. A, Rev., 7.25%,
1,425 1,425 6/15/2010 1,469 1,469
New York State, Environmental
Facilities Corp., PCR, State Water
Revolving Fund, Ser. E, Rev., 6.00%,
5,415 5,415 6/15/2012 6,185 6,185
1,000 1,000 New York State, GO, 2.75%, 7/1/2004 972 972
345 345 New York State, GO, 5.25%, 3/1/2009 366 366
New York State, Housing Finance
Agency, Health Facilities, Monroe
1,280 1,280 County, Ser. A, Rev., 7.63%, 5/1/2005 1,314 1,314
New York State, Housing Finance
Agency, Multi-Family Housing, Ser. A,
300 300 Rev., 6.95%, 8/15/2012 314 314
New York State, Housing Finance
530 530 Agency, Rev., 8.00%, 11/1/2008 540 540
New York State, Housing Finance
Agency, Service Contract Obligation,
650 650 Ser. A, Rev., ^, 7.38%, 3/15/2002 689 689
New York State, Housing Finance
Agency, State University
Construction, Ser. A, Rev., ^, 8.00%,
1,550 1,550 5/1/2011 1,949 1,949
New York State, Medical Care
Facilities Finance Agency, Mortgage
Project, Ser. A, Rev., 5.40%,
205 205 8/15/2004 216 216
New York State, Medical Care
Facilities Finance Agency, Rev. ^,
70 70 7.70%, 8/15/2003 72 72
New York State, Mortgage Agency, Ser.
3,365 3,365 19, Rev., ^, 4.45%, 10/1/2015 3,366 3,366
See Notes to Pro Forma Financial Statements
9
New York State, Municipal Bond Bank
Agency, Special Program, Buffalo,
1,000 1,000 Ser. A, Rev., 6.88%, 3/15/2006 1,035 1,035
New York State, Thruway Authority,
Highway & Bridge Trust Fund, Ser. B,
120 120 Rev., 5.00%, 4/1/2008 126 126
New York State, Thruway Authority,
3,000 3,000 Ser. D, Rev., 5.25%, 1/1/2021 3,015 3,015
New York State, Thruway Authority,
Service Contract, Local Highway &
Bridge, Ser. A-2, Rev., 5.38%,
5,930 5,930 4/1/2010 6,345 6,345
New York State, Thruway Authority,
Service Contract, Local Highway &
Bridge, Ser. A-2, Rev., 5.00%,
5,000 5,000 4/1/2018 4,960 4,960
New York State, Thruway Authority,
Service Contract, Local Highway &
3,315 3,315 Bridge, 6.00%, 4/1/2011 3,622 3,622
New York State, Urban Development
Corp., Community Enhancement
Facilities, Ser. A, Rev., 5.00%,
1,490 1,490 4/1/2003 1,529 1,529
New York State, Urban Development
Corp., Correctional Facilities
Service Contract, Ser. D, Rev.,
100 100 5.00%, 1/1/2014 102 102
New York State, Urban Development
Corp., Youth Facilities Services
Contract, Ser. B, Rev., 5.60%,
250 250 4/1/2011 271 271
New York State, Urban Development
Corp., Youth Facilities Services
Contract, Ser. B, Rev., 5.88%,
95 95 4/1/2014 103 103
Niagara, New York, Frontier
Transportation Authority, Greater
Buffalo International Airport, Ser.
1,035 1,035 B, Rev., 5.75%, 4/1/2004 1,090 1,090
Oneida County, New York, GO, 5.5%,
1,045 1,045 3/15/2011 1,146 1,146
Oneida-Herkimer, New York, Solid
Waste Management Authority, Solid
1,000 1,000 Waste Systems, Rev., 5.50%, 4/1/2011 1,085 1,085
Port Authority of New York & New
Jersey, Special Obligation, 3rd
Installment, Special Project, Ser. 4,
3,000 3,000 Rev., 7.00%, 10/1/2007 3,149 3,149
Randolph, New York, Central School
275 275 District, GO, 5.00%, 6/15/2006 289 289
Rochester, New York, Ser. A, GO,
2,180 2,180 5.70%, 8/15/2004 2,332 2,332
Rome, New York, City School District,
1,905 1,905 GO, 5.50%, 6/15/2013 2,036 2,036
Scotia Glenville, New York, Central
1,050 1,050 School District, GO, 5.40%, 6/15/2012 1,124 1,124
Scotia Glenville, New York, Central
1,050 1,050 School District, GO, 5.50%, 6/15/2013 1,125 1,125
Scotia Glenville, New York, Central
1,025 1,025 School District, GO, 5.50%, 6/15/2014 1,092 1,092
Shenendehowa, New York, Central
School District, Clifton Park, GO,
275 275 5.50%, 7/15/2011 302 302
Stillwater, New York, Central School
500 500 District, GO, 5.20%, 6/15/2011 531 531
Suffolk County, New York, IDA, IDR,
Nissequogue Cogen Partners Facility,
1,000 1,000 Rev., 5.30%, 1/1/2013 914 914
Suffolk County, New York, Public
Improvement, Ser. C, GO, 5.10%,
1,780 1,780 11/1/2002 1,830 1,830
Suffolk County, New York, Southwest
5,000 5,000 Sewer District, GO, 6.00%, 2/1/2005 5,396 5,396
Sullivan County, New York, Public
1,065 1,065 Improvement, GO, 5.00%, 3/15/2008 1,100 1,100
Triborough Bridge & Tunnel Authority,
New York, General Purpose, Ser. Y,
7,125 7,125 Rev., 6.00%, 1/1/2012 8,073 8,073
Utica, New York, IDA, Civic Facility,
Munson William Porter Institute,
1,000 1,000 Rev., 5.40%, 7/15/2030 1,007 1,007
Utica, New York, Public Improvement,
295 295 GO, 6.10%, 1/15/2013 314 314
Utica, New York, Public Improvement,
295 295 GO, 6.20%, 1/15/2014 314 314
Utica, New York, Public Improvement,
320 320 GO, 6.25%, 1/15/2015 339 339
Utica, New York, Public Improvement,
440 440 GO, 6.00%, 1/15/2003 454 454
Utica, New York, Public Improvement,
465 465 GO, 6.00%, 1/15/2004 486 486
Utica, New York, Public Improvement,
700 700 GO, 6.00%, 1/15/2011 750 750
Utica, New York, Public Improvement,
675 675 GO, 6.00%, 1/15/2012 718 718
Warwick Valley, Central School
District, New York, GO, 5.50%,
565 565 1/15/2014 602 602
Watertown, New York, City School
600 600 District, GO, 5.63%, 6/15/2016 637 637
Watertown, New York, City School
1,365 1,365 District, GO, 5.63%, 6/15/2017 1,443 1,443
Watertown, New York, City School
1,245 1,245 District, GO, 5.63%, 6/15/2018 1,311 1,311
Westchester County, New York, GO, ^,
1,150 1,150 6.70%, 11/1/2006 1,317 1,317
Westchester County, New York, IDA,
AGR Realty Co. Project, Rev., ^,
480 480 5.75%, 1/1/2002 487 487
Westchester County, New York, IDA,
Civic Facility, Children's Village
Project, Ser. A, Rev., 5.30%,
2,000 2,000 3/15/2014 2,036 2,036
See Notes to Pro Forma Financial Statements
10
Westchester County, New York, IDA,
Civic Facility, Rippowam-Cisqua
1,000 1,000 School Project, Rev., 5.75%, 6/1/2029 1,001 1,001
Westchester County, New York, IDA,
Resource Recovery, Resco Co. Project,
2,000 2,000 Ser. A, Rev., 5.70%, 7/1/2008 2,110 2,110
Windsor, New York, Central School
1,000 1,000 District, GO, 5.50%, 6/15/2013 1,075 1,075
Windsor, New York, Central School
1,170 1,170 District, GO, 5.50%, 6/15/2014 1,251 1,251
Windsor, New York, Central School
650 650 District, GO, 5.50%, 6/15/2015 691 691
--------------------------------------------
TOTAL NEW YORK 297,830 49,122 346,952
NORTHER MARIANA ISLANDS 0.07%
Northern Mariana Islands, Public
School System Project, Ser. A, GO,
500 500 3.70%, 10/1/2003 503 503
PUERTO RICO 2.20%
Puerto Rico Commonwealth,
Infrastructure Financing Authority,
Special Obligation, Ser. A, ^, 4.75%,
160 160 10/1/2012 166 166
Puerto Rico Commonwealth, Public
3,500 3,500 Improvement, GO, 6.00%, 7/1/2029 3,674 3,674
Puerto Rico Electric Power Authority,
4,390 4,390 Ser. AA, Rev., 5.40%, 7/1/2013 4,688 4,688
Puerto Rico Electric Power Authority,
1,250 1,250 Ser. AA, Rev., 6.25%, 7/1/2010 1,455 1,455
Puerto Rico Electric Power Authority,
1,300 1,300 Ser. HH, Rev., 5.50%, 7/1/2010 1,439 1,439
Puerto Rico Electric Power Authority,
1,800 1,800 Ser. X, Rev., 6.00%, 7/1/2011 1,951 1,951
Puerto Rico Municipal Finance Agency,
1,000 1,000 Ser. A, GO, 5.00%, 8/1/2002 1,023 1,023
Puerto Rico Municipal Finance Agency,
1,500 1,500 Ser. A, GO, 6.00%, 8/1/2015 1,679 1,679
--------------------------------------------
TOTAL PUERTO RICO 16,075 - 16,075
SOUTH CAROLINA 1.80%
South Carolina, Series 2001 A, (State
15,000 15,000 School Facilities), 3.50%, 1/1/14 - 13,143 13,143
--------------------------------------------
VIRGIN ISLANDS 2.61%
Virgin Islands Public Finance
Authority, Gross Receipts, Taxes Lien
1,090 1,090 Notes, Ser. A, Rev., 5.25%, 10/1/2001 1,096 1,096
Virgin Islands Public Finance
Authority, Gross Receipts, Taxes Lien
1,000 1,000 Notes, Ser. A, Rev., 5.50%, 10/1/2002 1,017 1,017
Virgin Islands Public Finance
Authority, Gross Receipts, Taxes Lien
1,390 1,390 Notes, Ser. A, Rev., 5.00%, 10/1/2003 1,406 1,406
Virgin Islands Public Finance
Authority, Gross Receipts, Taxes Lien
4,000 4,000 Notes, Ser. A, Rev., 6.38%, 10/1/2019 4,275 4,275
Virgin Islands Public Finance
Authority, Matching Fund Lien Notes,
1,150 1,150 Ser. A, Rev., ^, 7.25%, 10/1/2002 1,241 1,241
Virgin Islands Public Finance
Authority, Senior Lien, Fund Lien
2,000 2,000 Notes, Ser. C, Rev., 5.00%, 10/1/2001 2,007 2,007
Virgin Islands Public Finance
Authority, Senior Lien, Fund Lien
3,075 3,075 Notes, Ser. C, Rev., 5.00%, 10/1/2002 3,096 3,096
Virgin Islands Public Finance
Authority, Senior Lien, Ser. A, Rev.,
5,000 5,000 5.50%, 10/1/2022 4,858 4,858
--------------------------------------------
TOTAL VIRGIN ISLANDS 18,996 - 18,996
TOTAL GENERAL OBLIGATIONS &
HOUSE AUTHORITY 333,404 67,386 400,790
INSURED 5.84%
NEW YORK 5.84%
Babylon Industrial Development
Agency, Series 2000 A, (Civic
Facilities Rev.), 6.63%, 8/1/19
6,895 6,895 (AMBAC) 7,840 7,840
City University of New York, (John
Jay College), 5.75%, 8/15/05 (MBIA
4,200 4,200 IBC) 4,527 4,527
Metropolitan Transportation Auth.
Rev., Series 1996 A, 6.25%, 4/1/11
5,500 5,500 (MBIA) 6,294 6,294
1,065 1,065 Monroe County, 5.88%, 6/1/08 (AMBAC) 1,192 1,192
65 65 Monroe County, 5.88%, 6/1/08 (AMBAC) 73 73
New York City, Series 1991 A, 3.00%,
5,000 5,000 8/15/02 (MBIA IBC) 4,969 4,969
New York City, Series 1996 G, 5.75%,
750 750 2/1/06 (AMBAC) 808 808
New York City, Series 1997 I, 6.25%,
4,000 4,000 4/15/07 (MBIA) 4,462 4,462
New York State Dormitory Auth. Rev.,
2,280 2,280 (Columbia University), 5.25%, 7/1/07 2,437 2,437
New York State Dormitory Auth. Rev.,
(North Shore University Hospital),
2,530 2,530 5.50%, 11/1/10 (MBIA) 2,733 2,733
New York State Medical Care
Facilities Finance Agency, Series
1994 A, (N.Y. Hospital Federal
Housing Authority Insured Mortgage),
2,100 2,100 6.80%, 8/15/24 (AMBAC) 2,378 2,378
Suffolk County, (Southwest Sewer
4,365 4,365 District), 6.00%, 2/1/08 (MBIA) 4,840 4,840
--------------------------------------------
TOTAL INSURED - 42,553 42,553
PRE-REFUNDED 3.41%
NEW YORK 3.41%
New York City Municipal Water
Finance Auth. Rev., Series 1996 B,
5,500 5,500 6.25%,6/15/20 6,198 6,198
See Notes to Pro Forma Financial Statements
11
New York Power Auth. Rev., Series
6,000 6,000 1992 AA, 6.25%, 1/1/23 6,264 6,264
New York State Medical Care
Facilities Finance Agency, Series
1992 A, (Methodist Nursing Federal
4,425 4,425 Housing Authority), 6.70%, 8/15/23 4,720 4,720
New York State Medical Care
Facilities Finance Agency, Series
1995 F, (Federal Housing Authority
Insured Mortgage Project), 6.20%,
470 470 8/15/15 509 509
New York State Thruway Auth. Rev.,
(Local Highway & Bridge), 6.45%,
4,950 4,950 4/1/15 5,557 5,557
Triborough Bridge & Tunnel Auth.
Rev., Series 1992 Y, 5.90%, 1/1/07
1,500 1,500 (GO ofAuth.) 1,641 1,641
--------------------------------------------
TOTAL PRE-REFUNDED - 24,889 24,889
PRIVATE PLACEMENT 3.67%
ILLINOIS 0.41%
Illinois Development Finance Auth.
3,000 3,000 Rev., 4.65%, 8/1/2028 - 3,009 3,009
--------------------------------------------
MICHIGAN 0.17%
1,198 1,198 City of Detroit, 5.49%, 10/15/01 - 1,207 1,207
--------------------------------------------
NEW JERSEY 0.28%
2,000 2,000 Trust Cultural, 4.60%, 1/1/08 - 2,027 2,027
--------------------------------------------
NEW YORK 2.61%
New York Convention Center Operating
Corp. Certificates of Partnership,
(Yale Building Acquisition), 6.50%,
1,000 10,000 11,000 12/1/04 1,018 10,189 11,207
New York Office of Temporary &
5,967 5,967 Disability Assistance, 5.21%, 7/1/04 6,110 6,110
1,706 1,706 New York State Office, 4.48%, 3/31/05 1,707 1,707
--------------------------------------------
1,018 18,006 19,024
PUERTO RICO 0.21%
Puerto Rico Commonwealth, 7.47%,
1,428 1,428 12/4/03 1,506 1,506
TOTAL PRIVATE PLACEMENT 1,018 25,755 26,773
REVENUE BONDS 23.71%
ARIZONA 0.82%
Arizona Health Facilities Auth. Rev.,
Series 1999 A, (Catholic Healthcare
6,000 6,000 West), 6.13%, 7/1/09 - 5,975 5,975
--------------------------------------------
MICHIGAN 0.70%
Michigan State Hospital Finance Auth.
Rev., Series 1999 B, (Ascension
5,000 5,000 Health Credit), 5.30%, 11/15/33 - 5,118 5,118
--------------------------------------------
NEW YORK 19.19%
Islip Community Development Agency,
(NY Institute of Technology), 7.50%,
2,000 2,000 3/1/26 2,362 2,362
Long Island Power Auth. Rev., 5.00%,
10,000 10,000 4/1/04 (MBIA) 10,368 10,368
Municipal Assistance Corp. for the
City of New York, Series1997 H,
5,000 5,000 6.00%, 7/1/05 5,428 5,428
New York City Transitional Finance
4,000 4,000 Auth. Rev., Series B, 6.13%, 11/15/14 4,481 4,481
New York City Transitional Finance
6,000 6,000 Auth., Series 2001 B, 5.50%, 2/1/13 6,435 6,435
New York Local Government Assistance
9,000 9,000 Corp., Series 1995 A, 5.90%, 4/1/11 9,919 9,919
New York Mortgage Agency Rev., Series
2000-94, (Homeowner Mortgage), 5.35%,
2,885 2,885 4/1/23 2,954 2,954
New York Power Auth. Rev., Series
2,000 2,000 1990 W, 6.63%, 1/1/03 2,111 2,111
New York State Dormitory Auth. Rev.,
(Concord Nursing Home Inc.), 6.25%,
3,745 3,745 7/1/16 (LOC: Fleet Bank N.A.) 4,003 4,003
New York State Dormitory Auth. Rev.,
(Manhattan College), 5.50%, 7/1/09
2,055 2,055 (Asset Guaranty GO of University) 2,172 2,172
New York State Dormitory Auth. Rev.,
(Manhattan College), 5.50%, 7/1/10
1,770 1,770 (Asset Guaranty GO of University) 1,867 1,867
New York State Dormitory Auth. Rev.,
3,450 3,450 (Pratt Institute), 6.25%, 7/1/14 3,827 3,827
New York State Dormitory Auth. Rev.,
Series 1993 A, (State University
Educational Facilities), 5.25%,
5/15/15 (MBIA-IBC) (Asset Guaranty GO
5,000 5,000 of University) 5,303 5,303
New York State Dormitory Auth. Rev.,
Series 1994 A, (University of
Rochester), 6.50%, 7/1/06 (Asset
1,210 1,210 Guaranty GO of University) 1,352 1,352
New York State Dormitory Auth. Rev.,
Series 2001 A, (New York University),
8,360 8,360 5.75%, 7/1/13 (AMBAC) 9,296 9,296
New York State Dormitory Auth.,
Series 2001 A, (Columbia University),
2,000 2,000 5.25%, 7/1/12 2,133 2,133
New York State Dormitory Auth.,
Series 2001 A, (Columbia University),
1,545 1,545 5.25%, 7/1/13 1,635 1,635
New York State Dormitory Auth.,
Series 2001 A, (Columbia University),
2,880 2,880 5.25%, 7/1/14 3,024 3,024
New York State Dormitory Auth.,
Series 2001 A, (Columbia University),
1,145 1,145 5.25%, 7/1/16 1,180 1,180
See Notes to Pro Forma Financial Statements
12
New York State Environmental
Facilities Corp., (NYC Municipal
5,000 5,000 Water), 5.75%, 6/15/11 5,534 5,534
New York State Environmental
Facilities Corp., (Pooled Loan
Program), Series 2000 B, 5.70%,
5,110 5,110 7/15/14 5,554 5,554
New York State Thruway Auth., Series
4,000 4,000 2000 B-1, 5.50%, 4/1/08 (FGIC) 4,323 4,323
New York State Urban Development
2,635 2,635 Corp., 6.00%, 1/1/06 2,858 2,858
Port Authority of New York & New
3,600 3,600 Jersey, 6.95%, 6/1/08 3,746 3,746
Port Authority of New York & New
Jersey, 120th Series, 5.75%, 10/15/07
9,425 9,425 (MBIA) 10,248 10,248
Triborough Bridge & Tunnel Auth.
8,000 8,000 Rev., Series 1992 Y, 5.50%, 1/1/17 8,568 8,568
Tsasc Inc., Series 1999-1, 4.80%,
3,690 3,690 7/15/06 3,751 3,751
Tsasc Inc., Series 1999-1, 4.88%,
4,175 4,175 7/15/07 4,195 4,195
Tsasc Inc., Series 1999-1, 5.00%,
2,690 2,690 7/15/08 2,715 2,715
Westchester County Healthcare Corp.
Rev., Series 2000 B, (County
8,140 8,140 Guaranteed), 5.25%, 11/1/12 8,577 8,577
--------------------------------------------
TOTAL NEW YORK - 139,919 139,919
PENNSYLVANIA 0.55%
Clinton County Industrial Development
Auth. Rev., Series 1992
A,(International Paper Co.), 4.73%,
4,000 4,000 1/15/02 (v) 4,000 4,000
--------------------------------------------
TEXAS 2.45%
Dallas-Fort Worth International
Airport Facility Improvement Corp.
Rev., Series 2000 B, (American
5,000 5,000 Airlines), 6.05%, 5/1/29 5,123 5,123
Lubbock Health Facilities Development
Corp., (St. Joseph Health Systems),
5,000 5,000 5.25%, 7/1/14 5,005 5,005
Texas Municipal Power Agency Rev.,
(Capital Appreciation), 0.00%,
12,000 12,000 9/1/10 (AMBAC) (y) 7,744 7,744
--------------------------------------------
TOTAL TEXAS - 17,872 17,872
TOTAL REVENUE BONDS - 172,884 172,884
TAX ANTICIPATION NOTES 0.42%
CALIFORNIA 0.42%
Tustin Unified School District Rev.,
(Community Facilities 97-1), 6.10%,
3,000 3,000 9/1/02 - 3,045 3,045
--------------------------------------------
TOTAL TAX ANTICIPATION NOTES - 3,045 3,045
SHORT-TERM MUNICIPAL SECURITIES 6.96%
NEW YORK 6.96%
Long Island Power Authority, New
York, Electric Systems, Sub. Ser. 2,
4,000 4,000 Rev., FRDO, 2.95%, 3/1/2001 4,000 4,000
New York City, New York, Housing
Development Corp., Multi-Family
Rental Housing, Carnegie Park, Ser.
4,000 4,000 A, Rev., FRDO, 2.95%, 3/2/2001 4,000 4,000
New York City, New York, Municipal
Water Finance Authority, Water &
Sewer Systems, Ser. C, Rev., FRDO,
6,900 6,900 2.95%, 3/1/2001 6,900 6,900
New York City, New York, Municipal
Water Finance Authority, Water &
Sewer Systems, Ser. C, Rev., FRDO,
1,050 1,050 2.95%, 3/1/2001 1,050 1,050
New York City, New York, Ser. B, Sub.
2,700 2,700 Ser. B-3, GO, FRDO, 2.95%, 3/1/2001 2,700 2,700
New York City, New York, Ser. B, Sub.
300 300 Ser. B-4, GO, FRDO, 2.95%, 3/1/2001 300 300
New York City, New York, Sub. Ser.
800 800 A-5, GO, FRDO, 2.95%, 3/1/2001 800 800
New York City, New York, Transitional
Finance Authority, Floating Rate
Trusts Receipts, Ser. L-3, Regulation
14,000 14,000 D, Rev., FRDO, 3.30%, 3/6/2001 14,000 14,000
New York State, Energy Research &
Development Authority, PCR, Rochester
Gas & Electric Corp., Ser. C, Rev.,
1,000 1,000 FRDO, 2.80%, 3/6/2001 1,000 1,000
New York State, Housing Finance
Agency, Worth Street Housing, Ser. A,
5,000 5,000 Rev., FRDO, 3.20%, 3/7/2001 5,000 5,000
Port Authority of New York & New
Jersey, Special Obligation, Versatile
Structure Obligation, Ser. 6, Rev.,
1,750 1,750 FRDO, 3.00%, 3/1/2001 1,750 1,750
Provident New York Money Market Fund,
9,271 9,271 3.35%, 12/31/2049 9,271 9,271
--------------------------------------------
TOTAL SHORT-TERM MUNICIPAL SECURITIES 50,771 - 50,771
TOTAL MUNICIPALS $385,194 $336,511 $721,705
SHORT-TERM INVESTMENTS 3.76%
INVESTMENT COMPANIES 3.76%
J.P. Morgan Institutional Tax Exempt
27,383 27,383 Money Market Fund (a) 27,383 27,383
--------------------------------------------
TOTAL SHORT-TERM INVESTMENTS - $27,383 $27,383
See Notes to Pro Forma Financial Statements
13
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS 102.74% $385,194 $363,894 $749,088
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL COST $369,764 $355,450 $725,214
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $385,590 $344,731 $729,128
- -----------------------------------------------------------------------------------------------------------------------------------
AMBAC - AMBAC Assurance Corporation
COP - Certificate of Participation
GO - General Obligation
FGIC - Financial Guarantee Insurance Company
IBC - IBC Financial Data, Inc.
IDA - Industrial Development Authority
IDR - Industrial Development Revenue
LOC - Letter of Credit
MBIA - MBIA Insurance Corp.
PCR - Pollution Control Revenue
(a) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and advised by J.P. Morgan Investment Management, Inc.
(y) Yield to maturity call.
The Accompanying Notes are an Integral Part of the Financial Statements.
See Notes to Pro Forma Financial Statements
14
J.P. MORGAN NEW YORK TAX EXEMPT BOND / J.P. MORGAN INSTITUTIONAL NEW YORK TAX
EXEMPT BOND / THE NEW YORK TAX EXEMPT BOND PORTFOLIO / JPMORGAN NEW YORK
INTERMEDIATE TAX FREE INCOME 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 New York Tax Exempt Portfolio ("Master Portfolio"), J.P. Morgan
New York Tax Exempt Bond Fund ("Tax Exempt Bond Fund"), J.P. Morgan
Institutional New York Tax Exempt Bond Fund ("Institutional Fund")
(collectively the "feeder funds" of the Master Portfolio) and JPMorgan New
York Intermediate Tax Free Income Fund. Income Fund ("CVTEBF") as if the
proposed Concurrent Reorganization occurred as of and for the twelve months
ended February 28, 2001.
Under the Concurrent Reorganization, the Pro Forma Statements give effect to the
proposed transfer of all assets and liabilities of the Master Portfolio and the
feeder funds in exchange for shares in CVTEBF. The Pro Forma Statements should
be read in conjunction with the historical financial statements of each Fund,
which have been incorporated by reference in their respective Statements of
Additional Information.
2. SHARES OF BENEFICIAL INTEREST:
Immediately prior to the Concurrent Reorganization, CVTEBF would commence
offering Select Shares and Institutional Shares. The net asset value per share
for Select and Institutional Shares at the commencement of offering would be
identical to the closing net asset value per share for Class A Shares
immediately prior to Concurrent Reorganization.
Under the Concurrent Reorganization, the existing shares of Institutional Fund,
Tax Exempt Bond Fund, Chase Class A and Chase Class B would be renamed
Institutional, Select, Class A and Class B, respectively. The net asset values
per share for Institutional Shares and Select Shares at the commencement of
offering would be identical to the closing net asset value per share for the
Class A Shares immediately prior to the organization In addition, the net asset
value per share for Class A and Class B at the commencement of offering would be
identical to the closing net asset value per share for Chase Class A and Chase
Class B respectively.
Under the proposed Concurrent Reorganization, each shareholder of Institutional
Fund and Tax Exempt Bond Fund would receive shares of CVTEBF with a value
equal to their holding in their respective funds. Holders of the
Institutional Fund will receive Institutional Shares in CVTEBF and holders of
the Tax Exempt Bond Fund will receive Select Shares in CVTEBF. Therefore, as a
result of the proposed Concurrent Reorganization, current shareholders of
Tax Exempt Bond Fund and Institutional Fund will become shareholders of CVTEBF.
The Pro Forma net asset value per share assumes the issuance of additional
shares of CVTEBF which would have been issued on February 28, 2001 in connection
with the proposed reorganization. The amount of additional shares assumed to be
issued was calculated based on
- 15 -
the February 28, 2001 net assets of Institutional Fund and Tax Exempt Bond
Fund and the net asset value per share of CVTEBF - Class A.
JPMORGAN NEW YORK INTERMEDIATE TAX FREE INCOME FUND
(amounts in thousands except for per share data)
SELECT
Increase in Shares Issued 18,429
Net Assets 2/28/01 $132,943
Pro Forma Net Asset Value 2/28/01 $7.21
3. PRO FORMA OPERATIONS:
The Pro Forma Statement of Operations assumes similar rates of gross investment
income for the investments of each Fund. Accordingly, the combined gross
investment income is equal to the sum of each Fund's gross investment income.
Certain expenses have been adjusted to reflect the expected expenses of the
combined entity. The pro forma investment advisory, administration, shareholder
servicing and distribution fees of the combined Fund and/or the related waivers
are based on the fee schedule in effect for the Surviving Fund Fund at the
combined level of average net assets for the twelve months ended February 28,
2001.
- 16 -
FORM N-14
PART C - OTHER INFORMATION
Item 15. Indemnification.
------------
Reference is hereby made to Article V of the Registrant's Declaration of
Trust.
The Trustees and officers of the Registrant and the personnel of the
Registrant's investment adviser, administrator and distributor are insured under
an errors and omissions liability insurance policy. The Registrant and its
officers are also insured under the fidelity bond required by Rule 17g-1 under
the Investment Company Act of 1940.
Under the terms of the Registrant's Declaration of Trust, the Registrant
may indemnify any person who was or is a Trustee, officer or employee of the
Registrant to the maximum extent permitted by law; provided, however, that any
such indemnification (unless ordered by a court) shall be made by the Registrant
only as authorized in the specific case upon a determination that
indemnification of such persons is proper in the circumstances. Such
determination shall be made (i) by the Trustees, by a majority vote of a quorum
which consists of Trustees who are neither described in Section 2(a)(19) of the
Investment Company Act of 1940 nor parties to the proceeding, or (ii) if the
required quorum is not obtainable or, if a quorum of such Trustees so directs,
by independent legal counsel in a written opinion. No indemnification will be
provided by the Registrant to any Trustee or officer of the Registrant for any
liability to the Registrant or shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of duty.
Insofar as the conditional advancing of indemnification monies for actions
based upon the Investment Company Act of 1940 may be concerned, such payments
will be made only on the following conditions: (i) the advances must be limited
to amounts used, or to be used, for the preparation or presentation of a defense
to the action, including costs connected with the preparation of a settlement;
(ii) advances may be made only upon receipt of a written promise by, or on
behalf of, the recipient to repay that amount of the advance which exceeds that
amount to which it is ultimately determined that he is entitled to receive from
the Registrant by reason of indemnification; and (iii) (a) such promise must be
secured by a surety bond, other suitable insurance or an equivalent form of
security which assures that any repayments may be obtained by the Registrant
without delay or litigation, which bond, insurance or other form of security
must be provided by the recipient of the advance, or (b) a majority of a quorum
of the Registrant's disinterested, non-party Trustees, or an independent legal
counsel in a written opinion, shall determine, based upon a review of readily
available facts, that the recipient of the advance ultimately will be found
entitled to indemnification.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and
Part C-1
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 16. Exhibits.
-----------
Declaration of Trust.
1 Declaration of Trust (1)
2 By-laws (1)
3 None.
4 Agreement and Plan of Reorganization filed herewith as Appendix A to
the Combined Prospectus/Proxy Statement.
5 None.
6 Form of Investment Advisory Agreement.(1)
7 Form of Distribution and Sub-Administration Agreement (1)
8(a) Form of Retirement Plan for Eligible Trustees.(2)
8(b) Form of Deferred Compensation Plan for Eligible Trustees.(2)
9 Form of Custodian Agreement. (1)
10(a) Rule 12b-1 Distribution Plan of Mutual Funds including Selected
Dealer Agreement and Shareholder Service Agreement. (2)
10(b) Rule 12b-1 Distribution Plan - Class B Shares (including forms of
Selected Dealer Agreement and Shareholder Servicing Agreement).(4)
10(c) Form of Rule 12b-1 Distribution Plan - Class C Shares (including
forms of Shareholder Servicing Agreements).(5)
10(d) Form of Rule 18f-3 Multi-Class Plan.(4)
Part C-2
11 None.
12 Opinion and Consent of Simpson Thacher & Bartlett as to Tax
Consequences to be filed by Amendment.
13(a) Form of Transfer Agency Agreement. (1)
13(b) Form of Shareholder Servicing Agreement. (4)
13(c) Form of Administration Agreement.(1)
14 None.
15 None.
16 Powers of Attorney. (6)
17(a) Form of Proxy Card.
17(b) Preliminary Prospectus for the Surviving Fund filed herewith.
17(c) Prospectus for the Merging Fund. (6)
17(d) Preliminary Statement of Additional Information for the Surviving
Fund filed herewith.
17(e) Statement of Additional Information for the Merging Fund. (6)
17(f) Annual Report of the Surviving Fund dated August 31, 2000. (6)
17(g) Annual Report of the Merging Fund (including the Annual Report
of the Master Portfolio) dated July 31, 2000. (6)
17(h) Semi-Annual Report of the Merging Fund (including the
Semi-Annual Report of the Master Portfolio) dated
January 31, 2001. (6)
17(i) Semi-Annual Report of the Surviving Fund dated February 28, 2001.
- --------------------
(1) Filed as an exhibit to the Registration Statement on Form N-1A of the
Registrant (File No. 333-13319) as filed with the Securities and Exchange
Commission on October 2, 1996.
(2) Incorporated by reference to Amendment No. 6 to the Registration Statement
on Form N-1A of Mutual Fund Group (File No. 33-14196) as filed with the
Securities and Exchange Commission on March 23, 1990.
Part C-3
(3) Filed as an exhibit to Pre-Effective Amendment No. 2 as filed with the
Securities and Exchange Commission on December 19, 1996.
(4) Filed as an Exhibit to Amendment No. 32 to the Registration Statement on
Form N-1A of Mutual Fund Group (File No. 33-14196) on December 28, 1995.
(5) Filed as an Exhibit to Amendment No. 45 to the Registration Statement on
Form N-1A of Mutual Fund Group (File No. 33-14196) filed on October 28, 1997.
(6) Filed as an Exhibit to the Registration Statement on Form N-14 of the
Registrant (File No. 333-58920) as filed with the Securities and Exchange
Commission on April 13, 2001.
Part C-4
- ----------------
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-1
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.
MUTUAL FUND SELECT TRUST
Registrant
By: /s/ FERGUS REID, III
------------------------------------
Fergus Reid, III
Chairman
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.
* Chairman and Trustee
- ------------------------------------
Fergus Reid, III
/s/ * President
- ------------------------------------
H. Richard Vartabedian and Trustee
* Trustee
- ------------------------------------
William J. Armstrong
* Trustee
- ------------------------------------
John R.H. Blum
* Trustee
- ------------------------------------
Stuart W. Cragin, Jr.
* Trustee
- ------------------------------------
Roland R. Eppley, Jr.
* Trustee
- ------------------------------------
Joseph J. Harkins
* Trustee
- ------------------------------------
Sarah E. Jones
* Trustee
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W.D. MacCallan
* Trustee
- ------------------------------------
W. Perry Neff
* Trustee
- ------------------------------------
Leonard M. Spalding, Jr.
* Trustee
- ------------------------------------
Irv Thode
* Trustee
- ------------------------------------
Richard E. Ten Haken
/s/ MARTIN R. DEAN Treasurer and
- ------------------------------------
Martin R. Dean Principal Financial
Officer
/s/ PETER B. ELDRIDGE Attorney in Fact
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Peter B. Eldridge
EXHIBITS
ITEM DESCRIPTION
(17)(a) Form of Proxy Card.
(b) Preliminary Prospectus for the Surviving Fund.
(d) Statement of Additional Information of the Surviving Fund.
(i) Semi-Annual Report of the Surviving Fund.