As filed with the Securities and Exchange Commission on May 11, 2001
Registration No. 333-58868/811-8358
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U.S. Securities and Exchange Commission
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 1 Post-Effective Amendment No.___
(Check appropriate box or boxes)
Exact Name of Registrant as Specified in Charter:
MUTUAL FUND TRUST
Area Code and Telephone Number:
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.
PETER B. ELDRIDGE, ESQ. Simpson Thacher & Bartlett BAUMGARDNER, JR., ESQ.
c/o J.P. Morgan Fleming Asset 425 Lexington Avenue Sullivan & Cromwell
Management (USA) Inc. New York, NY 10017-3954 125 Broad Street
522 Fifth Avenue New York, NY 10004
New York, NY 10036
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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. 033-75250/811-8358) pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Registrant's
Form 24f-2 for the fiscal year ended August 31, 2000 was filed on November 27,
2000. Pursuant to Rule 429, this Registration Statement relates to the aforesaid
Registration Statement on Form N-1A.
J.P. MORGAN FEDERAL MONEY MARKET FUND
A SERIES OF J.P. MORGAN FUNDS
522 FIFTH AVENUE
NEW YORK, NY 10036
1-800-521-5411
May 12, 2001
Dear Shareholder:
A special meeting of the shareholders of J.P. Morgan Federal Money Market
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 Federal Money Market Fund II (formerly, Chase Vista Federal Money
Market Fund) (the "Surviving Fund"), a series of Mutual Fund Trust ("MFT") (the
"Reorganization"). After the Reorganization, shareholders will hold an interest
in the Surviving Fund. The investment objective and policies of the Merging Fund
generally are similar to those of the Surviving Fund. In connection with the
Reorganization, the Surviving Fund will be renamed "JPMorgan Federal Money
Market Fund."
After the proposed Reorganization, your investment will be in a larger
combined fund with similar investment policies.
The Surviving Fund has also entered into agreements and plans of
reorganization with other money market funds whose assets are managed by J.P.
Morgan Investment Management Inc. ("JPMIM") and which have identical investment
objectives and policies to the Merging Fund (collectively, the "Concurrent
Reorganization"). If the Concurrent Reorganization is approved by the
shareholders of these other funds and certain other conditions are met, these
funds will be reorganized into the Surviving Fund. The consummation of the
Reorganization is contingent upon the 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 MFT. The
cost and expenses associated with the Reorganization, including costs of
soliciting proxies, will be borne by JPMC and not by the Merging Fund, JPMF, the
Surviving Fund, MFT or their shareholders.
If approval of the Reorganization is obtained, you will automatically
receive shares in the Surviving Fund.
The Proposals have been carefully reviewed by the Board of Trustees of 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., Inc., or us to answer any questions you may
have or to provide assistance in voting. Remember, your vote is important!
Please sign, date and promptly mail your proxy card(s) in the return envelope
provided or call 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?
Under the Reorganization, the Merging Fund will cease investing in The
Federal Money Market Portfolio (the "Master Portfolio" in which it currently
invests), will transfer all of its assets and liabilities to the Surviving Fund
and will receive, in exchange, shares of the Surviving Fund. The Merging Fund
will then be liquidated and those shares of the Surviving Fund will be
distributed to shareholders. After the Reorganization, you will own shares in
the Surviving Fund rather than the Merging Fund. The Surviving Fund invests
directly in portfolio securities rather than in a master portfolio.
WHAT WILL BE THE EFFECT ON THE INVESTMENT STRATEGIES ASSOCIATED WITH MY
INVESTMENT IF THE PROPOSED CHANGES ARE APPROVED?
The Surviving Fund generally has similar investment objectives and policies
to those of the Merging Fund. The principal differences are as follows:
SURVIVING FUND MERGING FUND
- ------------------------------------------------------------ ------------------------------------------------------------
- - The Surviving Fund's investment objective is to aim to - The Merging Fund's investment objective is to provide
provide current income while still preserving capital and high current income consistent with the preservation of
maintaining liquidity. capital and same-day liquidity.
- - Invests primarily in direct debt securities of the U.S. - Invests exclusively in U.S. Treasury Securities and in
Treasury, including Treasury bills, bonds and notes, and U.S. government agency obligations, the income from which
debt securities that certain U.S. government agencies or is generally free from state and local income taxes.
authorities have either issued or guaranteed as to
principal and interest.
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 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 in the Surviving Fund.
HOW WILL THE PROPOSED CONCURRENT REORGANIZATION AFFECT MY INVESTMENT IF IT IS
APPROVED BY THE SHAREHOLDERS OF THE OTHER FUNDS?
If the Concurrent Reorganization is approved and certain other conditions
are met, the assets and liabilities of the other merging funds will become the
assets and liabilities of the Surviving Fund. The
consummation of the Reorganization is contingent upon the 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 MFT?
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
the proposal regarding Trustees. Because as of the record date you were still a
shareholder in JPMF, you are entitled to vote on the proposal. Shareholders of
MFT 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 FEDERAL MONEY MARKET 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 Federal Money Market Fund:
NOTICE IS HEREBY GIVEN THAT a Special Meeting (the "Meeting") of the
shareholders ("Shareholders") of J.P. Morgan Federal Money Market Fund (the
"Merging Fund"), a series of J.P. Morgan Funds ("JPMF"), will be held at the
offices of J.P. Morgan Chase & Co., 1211 Avenue of the Americas, 41st Floor, New
York, New York, on July 3, 2001 at 9:00 a.m. (Eastern time), for the following
purposes:
ITEM 1. To consider and act upon a proposal to approve an Agreement and Plan
of Reorganization (the "Reorganization Plan") by and among JPMF, on
behalf of the Merging Fund, Mutual Fund Trust ("MFT"), on behalf of
JPMorgan Federal Money Market Fund II (formerly, Chase Vista Federal
Money Market Fund) (the "Surviving Fund"), and J.P. Morgan Chase &
Co., and the transactions contemplated thereby, including (a) the
transfer of all of the assets and liabilities of the Merging Fund to
the Surviving Fund in exchange for Premier/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 attached Combined Prospectus/Proxy
Statement. Attached as Appendix A to the Combined Prospectus/Proxy Statement is
a copy of the Reorganization Plan.
Shareholders of record as of the close of business on April 6, 2001 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment(s)
thereof. 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 12, 2001
COMBINED PROSPECTUS/PROXY STATEMENT
DATED MAY 12, 2001
ACQUISITION OF THE ASSETS AND LIABILITIES OF
J.P. MORGAN FEDERAL MONEY MARKET FUND,
A SERIES OF J.P. MORGAN FUNDS
522 FIFTH AVENUE
NEW YORK, NY 10036
1-800-521-5411
BY AND IN EXCHANGE FOR PREMIER/SELECT SHARES OF
JPMORGAN FEDERAL MONEY MARKET FUND II
(FORMERLY, CHASE VISTA FEDERAL MONEY MARKET FUND),
A SERIES OF MUTUAL FUND 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 Federal Money Market Fund (the "Merging Fund"), a
series of J.P. Morgan Funds ("JPMF"), into JPMorgan Federal Money Market Fund II
(formerly, Chase Vista Federal Money Market Fund) (the "Surviving Fund"), a
series of Mutual Fund Trust ("MFT"). 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 MFT are both
open-end management investment companies offering shares in several portfolios.
In connection with the Reorganization, the Surviving Fund will be renamed
"JPMorgan Federal Money Market Fund."
Under the proposed Reorganization, each Merging Fund Shareholder will
receive Premier/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 four classes of shares: the Reserves Class, Vista Class, Premier
Class and Institutional Class shares. In connection with the Reorganization and
the Concurrent Reorganization (defined below), the Surviving Fund will rename
the Vista Class "Morgan Class," will rename the Institutional Class "Agency
Class" will rename Premier Class "Premier/Select Class" and will introduce a new
"Institutional Class" of shares.
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, MFT, 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, New York, at which meeting shareholders
in the Merging Fund will be asked to consider and approve the proposed
Reorganization Plan, certain transactions contemplated by the Reorganization
Plan and certain other proposals. This Combined Prospectus/Proxy Statement
constitutes the proxy statement of the Merging Fund for the meeting of its
Shareholders and also constitutes MFT's prospectus for Surviving Fund Shares
that have been registered with the Securities and Exchange Commission (the
"Commission") and are to be issued in connection with the Reorganization.
This Combined Prospectus/Proxy Statement, which should be retained for
future reference, sets forth concisely the information about MFT and JPMF that
an investor should know before voting on the proposals. The current Prospectus,
Statement of Additional Information and Annual Report for the Merging Fund
(including the Annual Report of The Federal Money Market Portfolio) and the
preliminary Prospectus,
Statement of Additional Information and the current Annual Report and
Semi-Annual Report of the Surviving Fund are incorporated herein by reference,
and the preliminary Prospectus and current Annual Report and the Semi-Annual
Report of the Surviving Fund are enclosed with this Combined Prospectus/ Proxy
Statement. A Statement of Additional Information relating to this Combined
Prospectus/Proxy Statement dated May 12, 2001 containing additional information
about MFT and JPMF has been filed with the Commission and is incorporated by
reference into this Combined Prospectus/Proxy Statement. A copy of the Statement
of Additional Information, as well as the Prospectus, Statement of Additional
Information and Annual Report of the Merging Fund (including the Annual Report
for The Federal Money Market Portfolio), may be obtained without charge by
writing to JPMF at its address noted above or by calling 1-800-521-5411.
This Combined Prospectus/Proxy Statement is expected to first be sent to
shareholders on or about May 12, 2001.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS COMBINED PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROSPECTUS/PROXY
STATEMENT AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND,
IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY MFT OR 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
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INTRODUCTION...................................... 1
PROPOSAL 1: REORGANIZATION PLAN................... 1
SUMMARY........................................... 1
COMPARATIVE FEE AND EXPENSE TABLES................ 4
RISK FACTORS...................................... 5
INFORMATION RELATING TO THE PROPOSED
REORGANIZATION................................... 5
INVESTMENT POLICIES............................... 8
PURCHASES, REDEMPTIONS AND EXCHANGES.............. 12
DISTRIBUTIONS AND TAXES........................... 15
COMPARISON OF THE MERGING FUND'S AND THE SURVIVING
FUND'S ORGANIZATION STRUCTURE.................... 15
INFORMATION RELATING TO THE ADVISORY CONTRACTS AND
OTHER SERVICES................................... 17
PROPOSAL 2: ELECTION OF TRUSTEES.................. 19
INFORMATION RELATING TO VOTING MATTERS............ 23
ADDITIONAL INFORMATION ABOUT MFT.................. 24
ADDITIONAL INFORMATION ABOUT JPMF................. 25
FINANCIAL STATEMENTS AND EXPERTS.................. 25
OTHER BUSINESS.................................... 25
LITIGATION........................................ 25
SHAREHOLDER INQUIRIES............................. 25
APPENDIX A--AGREEMENT AND PLAN OF
REORGANIZATION.................................. A-1
INTRODUCTION
GENERAL
This Combined Prospectus/Proxy Statement is being furnished to the
shareholders of the Merging Fund, an open-end management investment company, in
connection with the solicitation by the Board of Trustees of JPMF of proxies to
be used at a Special Meeting of Shareholders of the Merging Fund to be held on
July 3, 2001 at 9:00 a.m., Eastern time, at the offices of J.P. Morgan Chase &
Co., 1211 Avenue of the Americas, 41st Floor, New York, New York (together with
any adjournments thereof, the "Meeting"). The Meeting will be a joint meeting
with the meetings of shareholders of all series of JPMF, which meetings are
being called for purposes of considering proposals 1 and 2 above and certain
other proposals not applicable to you. It is expected that the mailing of this
Combined Prospectus/Proxy Statement will be made on or about May 12, 2001.
PROPOSAL 1:
REORGANIZATION PLAN
As you may be aware, J.P. Morgan & Co. Incorporated, the former corporate
parent of the investment adviser of the Merging Fund's assets, recently
completed a merger with The Chase Manhattan Corporation to form J.P. Morgan
Chase & Co. ("JPMC"). As a result of this merger, JPMC is seeking to reorganize
parts of its investment management business and of funds advised by its
subsidiaries. At the Meeting, Merging Fund Shareholders will consider and vote
upon the Agreement and Plan of Reorganization (the "Reorganization Plan") dated
May 11, 2001 among JPMF, on behalf of the Merging Fund, MFT, on behalf of the
Surviving Fund (the Merging Fund and the Surviving Fund are collectively defined
as the "Funds"), and JPMC pursuant to which all of the assets and liabilities of
the Merging Fund will be transferred to the Surviving Fund in exchange for
Surviving Fund Shares. As a result of the Reorganization, Merging Fund
Shareholders will become shareholders of the Surviving Fund and will receive
Surviving Fund Shares equal in value to their holdings in the Merging Fund on
the date of the Reorganization. In connection with the Reorganization, the
Surviving Fund will be renamed "JPMorgan Federal Money Market Fund." Further
information relating to the Surviving Fund is set forth herein, and the
Surviving Fund's preliminary Prospectus, and current Annual Report and
Semi-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 Report of the Merging Fund (including the
Annual Report of The Federal Money Market Portfolio), the preliminary Prospectus
and Statement of Additional Information and the current Annual and the
Semi-Annual Reports of the Surviving Fund, and the Reorganization Plan attached
to this Combined Prospectus/Proxy Statement as Appendix A.
PROPOSED REORGANIZATION
Pursuant to the proposed Reorganization Plan, the Merging Fund will transfer
all of its assets and liabilities to the Surviving Fund in exchange for shares
of the Surviving Fund.
Under the proposed Reorganization, each Merging Fund Shareholder will
receive a number of Premier 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."
1
The Surviving Fund has investment objectives, policies and restrictions
generally similar to the Merging Fund.
Based upon their evaluation of the relevant information presented to them,
including an analysis of the operation of the Surviving Fund both before and
after the Reorganization, the terms of the Reorganization Plan, the opportunity
to combine the two Funds with generally similar investment objectives and
policies, and the fact that the Reorganization will be tax-free, and in light of
their fiduciary duties under federal and state law, the MFT Board and the 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
Federal Money Market 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
Service Federal Money Market Fund, and J.P. Morgan Institutional Federal Money
Market Fund, each a series of J.P. Morgan Institutional Funds, each have
identical investment objectives and policies as the Merging Fund (the "Feeder
Portfolios") and also currently invest all of their assets in the Master
Portfolio. The Surviving Fund has entered into substantially similar agreements
and plans of reorganization with each Feeder Portfolio (collectively, the
"Concurrent Reorganization"). If each of the Reorganization and the Concurrent
Reorganization is approved by the shareholders of the Merging Fund, and each
Feeder Portfolio, respectively, and certain other conditions are met, the
Merging Fund and the Feeder Portfolios will be reorganized into the Surviving
Fund and the Merging Fund and the Feeder Portfolios will no longer invest their
assets in the Master Portfolio. The consummation of the Reorganization is
contingent upon the 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. The holding period and tax basis of Surviving
Fund Shares received by a shareholder of the Merging Fund will be the same as
the holding period and tax basis of such shareholder's shares of the Merging
Fund. In addition, the holding period and tax basis of those assets owned by the
Merging Fund and transferred to the Surviving Fund will be identical for the
Surviving Fund. See "Information Relating to the Proposed
Reorganization--Federal Income Tax Consequences."
INVESTMENT ADVISERS
The investment adviser for the Master Portfolio (and therefore the assets of
the Merging Fund and the Feeder Portfolios) is JPMIM. The investment adviser for
the Surviving Fund is J.P. Morgan Fleming Asset Management (USA) Inc.
("JPMFAM"). JPMFAM and JPMIM are each wholly-owned subsidiaries of JPMC. JPMFAM
will continue to serve as investment adviser following the Reorganization.
INVESTMENT OBJECTIVES AND POLICIES
The Surviving Fund's investment objective is to aim to provide current
income while still preserving capital and maintaining liquidity. THE MERGING
FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE HIGH CURRENT INCOME CONSISTENT WITH
THE PRESERVATION OF CAPITAL AND SAME-DAY LIQUIDITY. See "Risk Factors" and
"Investment Restrictions."
The investment policies of the Surviving Fund are generally similar to those
of the Merging Fund, although the Surviving Fund invests its assets directly in
portfolio securities, while the Merging Fund invests its assets in the Master
Portfolio, which in turn invests in portfolio securities. The Surviving Fund
invests primarily in direct debt securities of the U.S. Treasury, including
Treasury bills, bonds and notes, and debt securities that certain U.S.
government agencies or authorities have either issued or guaranteed as to
principal and interest. The dollar weighted average maturity of the Surviving
Fund will be 90 days or less and the Fund will buy only those instruments which
have remaining maturities of 397 days or less. The Surviving
2
Fund invests only in securities issued and payable in U.S. dollars. THE MERGING
FUND INVESTS EXCLUSIVELY IN U.S. TREASURY SECURITIES AND IN U.S. GOVERNMENT
AGENCY OBLIGATIONS THE INCOME FROM WHICH IS GENERALLY FREE FROM STATE AND LOCAL
INCOME TAXES. Each Fund seeks to maintain a net asset value of $1.00 per share.
PRINCIPAL RISKS OF INVESTING IN THE SURVIVING FUND
The principal risk factors associated with an investment in the Surviving
Fund are those typically associated with investing in a managed portfolio of
money market securities. The Surviving Fund attempts to keep its net asset value
at $1.00, although there is no guarantee it will be able to do so. In general,
the value of a money market investment tends to fall when prevailing interest
rates rise, although it tends to be less sensitive to interest rate changes than
the value of longer-term securities. Additionally, investments in the Surviving
Fund may not earn as high a current income as longer-term or lower-quality
securities. See "Risk Factors."
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS
ADVISORY SERVICES
The investment adviser for the Surviving Fund is JPMFAM. JPMFAM oversees the
asset management of the Surviving Fund. As compensation for its services, JPMFAM
receives a management fee from the Surviving Fund at an annual rate of 0.10% of
average daily net asset. The Merging Fund currently pays a management fee at an
annual rate of 0.20% of the first $1 billion of average daily net assets and
0.10% of average daily net assets for assets over $1 billion. Following the
Reorganization, JPMIM will manage the Surviving Fund's assets and will receive a
fee at an annual rate of 0.10% 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. It is
anticipated that subsequent to the consummation of the Reorganization, The Bank
of New York ("BONY") will become the Surviving Fund's fund accountant and
custodian. PricewaterhouseCoopers LLP serves as the Surviving Fund's independent
accountants.
ADMINISTRATOR
On August 11, 2001, Chase will receive an administration fee from the
Surviving Fund of 0.10% of average daily net assets for complex wide money
market fund assets up to $100 billion and 0.05% on assets in excess of $100
billion (currently such assets are less than $100 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 MFT 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 MFT.
PURCHASES, REDEMPTIONS AND EXCHANGES
After the Reorganization, the procedures for making purchases, redemptions
and exchanges of shares of the Surviving Fund will be as described in this
Combined Prospectus/Proxy Statement and in the Surviving Fund's Prospectus and
Statement of Additional Information.
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 in the Merging Fund will receive Premier/Select Class shares in the
Surviving Fund. The Surviving Fund currently has four classes of 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 below):
Reserves Class, Vista Class, Premier Class and Institutional Class. In
connection with the Reorganization and Concurrent Reorganization, the Surviving
Fund will rename the Vista Class "Morgan Class," will rename the Institutional
Class "Agency Class" will rename the Premier Class "Premier/Select Class" and
will introduce a new "Institutional Class" of shares.
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 three years after the Reorganization.
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 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 0.13%
Distribution (12b-1) Fees None
Other Expenses 0.34%
----
Total Annual Fund Operating Expenses 0.47%
====
The table does not reflect charges or credits which you might incur if you
invest through a financial institution.
THE SURVIVING FUND
---------------------------
PRO FORMA WITH
CONCURRENT
REORGANIZATION
---------------------------
PREMIER/SELECT CLASS SHARES
---------------------------
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOU INVESTMENT)
Maximum Sales Charge (Load) when you buy shares,
shown as % of the offering price None
Maximum Deferred Sales Charge (Load) shown as
lower of original purchase price or redemption
proceeds None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees 0.10%
Distribution (12b-1) Fees None
Other Expense 0.38%
----
Total Annual Fund Operating Expense 0.48%
====
Fee Waivers and Expense Reimbursements(A) 0.03%
----
Net Expenses 0.45%
====
- ---------------------
(A) Reflects an agreement by Chase, an affiliate of JPMC, to reimburse the
Surviving Fund to the extent operating expenses (excluding interest, taxes,
extraordinary expenses and expenses related to the deferred compensation
plan) exceed 0.45% of average daily net assets with respect to Premier
Shares for three years after the Reorganization.
4
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 $ 48 $151 $263 $ 591
PRO FORMA THE SURVIVING FUND
WITH CONCURRENT
REORGANIZATION
Premier/Select Shares $ 46 $144 $259 $ 595
RISK FACTORS
The following discussion highlights the principal risk factors associated
with an investment in the Surviving Fund. The Surviving Fund generally has
investment policies and investment restrictions similar to those of the Merging
Fund. Therefore, there should be similarities between the risk factors
associated with the Surviving Fund and the Merging Fund. This discussion is
qualified in its entirety by the more extensive discussion of risk factors set
forth in the Prospectus and Statement of Additional Information of the Surviving
Fund, which are incorporated herein by reference.
The Surviving Fund attempts to keep its net asset value constant, but there
is no guarantee it will be able to do so. Investments in the Surviving Fund are
not bank deposits or obligations of, or guaranteed or endorsed by, Chase or any
of its affiliates and are not insured by the FDIC, the Federal Reserve Board or
any other government agency. Although the Surviving Fund seeks to preserve the
value of your investment at $1.00 per share, it is possible to lose money by
investing in the Surviving Fund.
The value of a money market investment tends to fall when prevailing
interest rates rise, although it tends to be generally less sensitive to
interest rate changes than the value of longer-term securities. Although the
Surviving Fund seeks to be fully invested, it may at times hold some of its
assets in cash, which could hurt the Fund's performance. Securities in the
Fund's portfolio may not earn as high a current income as longer term or
lower-quality securities.
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 and the Feeder Portfolios will cease investing in the Master
Portfolio. The Reorganization Plan provides that at the Effective Time (as
defined in the Reorganization Plan) of the Reorganization, the assets and
liabilities of the Merging Fund will be transferred to and assumed by the
Surviving Fund. In exchange for the transfer of the assets and the assumption of
the liabilities of the Merging Fund, MFT will issue at the Effective Time of the
Reorganization full and fractional Agency 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
5
undistributed net investment income earned and net capital gain realized up to
and including the Effective Time of the Reorganization.
Following the transfer of assets to, and the assumption of the liabilities
of the Merging Fund by, the Surviving Fund, the Merging Fund will distribute
Surviving Fund Shares received by it to the Merging Fund Shareholders in
liquidation of the Merging Fund. Each Merging Fund Shareholder at the Effective
Time of the Reorganization will receive an amount of Premier 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 January 23 and 24 and on March 26 and 27, 2001 and the
MFT Board met on February 22 and April 12, 2001, and each considered and
discussed the proposed Reorganization. The Trustees of each Board discussed the
advantages of reorganizing the Merging Fund into the Surviving Fund.
The Board of each trust has determined that it is in the best interests of
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 best 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; the investment advisory services
supplied by the Surviving Fund's investment adviser; the management and other
fees payable by the Surviving Fund; the similarities and differences in the
investment objectives and policies of the Merging Fund and the Surviving Fund;
and the recommendations of the relevant Fund's current investment adviser with
respect to the proposed Reorganization. In addition, the Merging Fund's Board
took into account that, notwithstanding the fact that the Surviving Fund pays a
higher administration fee than the Merging Fund, Morgan agreed to cap the total
expenses as set forth in the expense table above and to institute a breakpoint
in the administration fee from 0.10% of average daily net assets for complex
wide money market fund assets up to $100 billion to 0.05% on assets in excess of
$100 billion (currently such assets are less than $100 billion). The Merging
Fund pays its administrator, Morgan, a fee at an effective rate of 0.048% of its
average daily net assets.
6
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 reorganization plans which are substantially
similar to the Reorganization Plan you are considering. As a result of the
Reorganization and the Concurrent Reorganization, the Merging Fund and the
Feeder Portfolios will no longer invest their assets in the Master Portfolio.
The consummation of the Reorganization is contingent upon the 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 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.
7
CAPITALIZATION
Because the Merging Fund will be combined with the Surviving Fund in the
Reorganization as well as other funds as a result of the Concurrent
Reorganization, the total capitalization of the Surviving Fund after the
Reorganization and the Concurrent Reorganization is expected to be greater than
the current capitalization of the Merging Fund. The following table sets forth
as of February 28, 2001: (i) the capitalization of the Merging Fund; (ii) the
capitalization of the Surviving Fund; and (iii) the pro forma capitalization of
the Surviving Fund as adjusted to give effect to the Reorganization and the
Concurrent Reorganization. There is, of course, no assurance that the
Reorganization and the Concurrent Reorganization will be consummated. Moreover,
if consummated, the capitalizations of the Surviving Fund and the Merging Fund
are likely to be different at the Effective Time of the Reorganization as a
result of fluctuations in the value of portfolio securities of each Fund and
daily share purchase and redemption activity in each Fund. The Surviving Fund
currently has four classes of shares: Reserves Class, Vista Class, Premier Class
and Institutional Class. In connection with the Reorganization, the Surviving
Fund will rename the Vista Class the "Morgan Class," will rename the
Institutional Class "Agency Class" will rename the Premier Class "Premier/Select
Class" and will introduce a new "Institutional Class" of shares.
CAPITALIZATION
PRO FORMA WITH CONCURRENT REORGANIZATION
(AMOUNTS IN THOUSANDS EXCEPT NAV PER SHARE AMOUNTS)
BENEFICIAL NET ASSET
INTEREST SHARES VALUE PER
OUTSTANDING OUTSTANDING NET ASSETS SHARE
----------- ----------- ----------- ---------
J.P. MORGAN FUNDS
J.P. Morgan Federal Money
Market Fund (Merging Fund) 1,920,547 -- 1,920,590 $1.00
J.P. Morgan Institutional
Federal Money Market Fund 2,197,615 -- 2,197,648 $1.00
J.P. Morgan Institutional
Service Federal Money Market
Fund 17,167 -- 17,172 $1.00
JPMORGAN FEDERAL MONEY MARKET
FUND II
Vista (Renamed Morgan) 673,027 673,013 $1.00
Premier (Renamed
Premier/Select) 312,286 312,277
Institutional (Renamed Agency) 906,471 906,486
Reserve 1 1
PRO FORMA THE SURVIVING FUND
COMBINED WITH
CONCURRENT REORGANIZATION
Agency 906,471 906,486 $1.00
Morgan 673,028 673,014 $1.00
Premier/Select 2,250,000 2,250,039 $1.00
Institutional 2,197,615 2,197,648 $1.00
INVESTMENT POLICIES
The following discussion summarizes some of the investment policies of the
Surviving Fund. Except as noted below, the Merging Fund generally has similar
investment policies to those of the Surviving Fund. This section is qualified in
its entirety by the discussion in the Prospectus and Statement of Additional
Information of the Surviving Fund, which are incorporated herein by reference.
OBJECTIVE
The Surviving Fund's investment objective is to aim to provide current
income while still preserving capital and maintaining liquidity. THE MERGING
FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE HIGH CURRENT INCOME CONSISTENT WITH
THE PRESERVATION OF CAPITAL AND SAME-DAY LIQUIDITY. The Surviving Fund cannot
change its objective without shareholder approval. THE MERGING FUND MAY CHANGE
ITS OBJECTIVE WITHOUT SUCH APPROVAL. SHAREHOLDERS OF THE SURVIVING FUND
CURRENTLY ARE CONSIDERING A PROPOSAL THAT, IF PASSED AT A SHAREHOLDER MEETING TO
BE HELD THE SAME DAY AS THE MEETING OF THE MERGING FUND, WOULD ALLOW THE
SURVIVING FUND TO CHANGE ITS OBJECTIVE WITHOUT SHAREHOLDER APPROVAL.
8
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.
The Surviving Fund invests primarily in direct debt securities of the U.S.
Treasury, including Treasury bills, bonds and notes, and debt securities that
certain U.S. government agencies or authorities have either issued or guaranteed
as to principal and interest. The Surviving Fund does not enter into repurchase
agreements. THE MERGING FUND INVESTS EXCLUSIVELY IN U.S. TREASURY SECURITIES AND
IN U.S. GOVERNMENT AGENCY OBLIGATIONS THE INCOME FROM WHICH IS GENERALLY FREE
FROM STATE AND LOCAL INCOME TAXES.
The Surviving Fund seeks to maintain a net asset value of $1.00 per share.
The dollar weighted average maturity of the Surviving Fund will be 90 days
or less and the Fund will buy only those instruments which have remaining
maturities of 397 days or less.
The Surviving Fund may invest significantly in securities with floating or
variable rates of interest. Their yields will vary as interest rates change.
The Surviving Fund invests only in securities issued and payable in U.S.
dollars. Each investment must have the highest possible short-term rating from
at least two national rating organizations, or one such rating if only one
organization rates that security. Alternatively, some securities may have
additional third party guarantees in order to meet the rating requirements
mentioned above. If the security is not rated, it must be considered of
comparable quality by JPMFAM. The Surviving Fund seeks to develop an appropriate
portfolio by considering the differences in yields among securities of different
maturities, market sectors and issuers.
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 is subject to a similar non- The Merging Fund may not make any investment
fundamental restriction. inconsistent with its classification as a
diversified investment company under the 1940 Act.
The Surviving Fund may not purchase the securities The Merging Fund may not purchase any security
of any issuer (other than securities issued or that would cause it to concentrate its investments
guaranteed by the U.S. government or any of its in the securities of issuers primarily engaged in
agencies or instrumentalities, or repurchase any particular industry except as permitted by the
agreements secured thereby) if, as a result, more 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, (i)
with respect to the Surviving Fund's permissible
futures and options transactions in U.S.
Government securities, positions in such options
and futures shall not be subject to this
restriction; and (ii) the Surviving Fund may
invest more than 25% of its total assets in
obligations issued by banks, including U.S. banks.
9
SURVIVING FUND MERGING FUND
- -------------------------------------------------- --------------------------------------------------
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% 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.
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 and (b) invest in securities or
other instruments issued by issuers that invest in real estate.
Notwithstanding any other investment policy or restriction, the Surviving
Fund may seek to achieve its investment objective by investing all of its
investable assets in another investment company having substantially the same
investment objective and policies as the Surviving Fund. Although the Merging
Fund
10
currently invests all of its investable assets in the Master Portfolio,
following the Reorganization, the Merging Fund will invest directly in portfolio
securities.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The investment restrictions
described below are not fundamental policies of the Surviving Fund and/or the
Merging Fund and may be changed by their respective Trustees.
SURVIVING FUND MERGING FUND
- -------------------------------------------------- --------------------------------------------------
The Surviving Fund may not invest more than 10% of The Merging Fund may not acquire any illiquid
its net assets in illiquid securities. For securities, such as repurchase agreements with
purposes of this non-fundamental restriction, more than seven days to maturity or fixed time
"illiquid securities" include securities deposits with a duration of over seven calendar
restricted as to resale unless they are determined days, if as a result thereof, more than 10% of the
to be readily marketable in accordance with the market value of the Merging Fund's total assets
procedures established by the Board of Trustees. 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.
of options, futures contracts and related options,
in the manner otherwise permitted by the
investment restrictions, policies and investment
program of the Fund. The Surviving Fund has no
current intention of making short sales against
the box.
The Surviving Fund may not, with respect to 75% of The Merging Fund is not subject to a similar non-
its assets, hold more than 10% of the outstanding fundamental restriction, although as a matter of
voting securities of any issuer or invest more fundamental policy the Merging Fund may not make
than 5% of its assets in the securities of any one any investment inconsistent with its
issuer (other than obligations of the U.S. classification as a diversified investment company
Government, its agencies and instrumentalities). under the 1940 Act.
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
trans-actions, the writing, purchasing, ownership,
holding or selling of futures and options
positions or of puts, calls or combinations
thereof with respect to futures.
The Surviving Fund will not invest more than 25% The Merging Fund is not subject to a similar non-
of its total assets in obligations issued by fundamental restriction.
foreign banks (other than foreign branches of U.S.
banks).
11
SURVIVING FUND MERGING FUND
- -------------------------------------------------- --------------------------------------------------
The Surviving Fund is not subject to a similar The Merging Fund may not borrow money (not
non-fundamental restriction, although it is including reverse repurchase agreements), except
subject to the fundamental restriction regarding from banks for temporary or extraordinary or
borrowing described above. emergency purposes and then only in amounts up to
10% of the value of the Fund's total assets, taken
at cost at the time of such borrowing (and
provided that such borrowings and reverse
repurchase agreements do not exceed in the
aggregate one-third of the market value of the
Fund's total assets less liabilities other than
the obligations represented by the bank borrowings
and reverse repurchase agreements). The Merging
Fund may not mortgage, pledge, or hypothecate any
assets except in connection with any such
borrowing and in amounts up to 10% of the value of
the Fund's net assets at the time of such
borrowing. The Fund will not purchase securities
while borrowings exceed 5% of the Fund's total
assets; provided, however, that the Fund may
increase its interest in an open-end management
investment company with the same investment
objective and restrictions as the Fund while such
borrowings are outstanding. This borrowing
provision is included to facilitate the orderly
sale of portfolio securities, for example, in the
event of abnormally heavy redemption requests, and
is not for investment purposes.
There will be no violation of any investment restriction if that restriction
is complied with at the time the relevant action is taken notwithstanding a
later change in market value of an investment, in net or total assets, in the
securities rating of the investment, or any other later change.
PURCHASES, REDEMPTIONS AND EXCHANGES
Following the Reorganization, the procedures for purchases, redemptions and
exchanges of shares will be those of the Surviving Fund, which are generally
similar to those of the Merging Fund. The following discussion applies to
Premier/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 Premier/Select Class Shares.
12B-1 FEES
There is no Rule 12b-1 distribution plan for Premier/Select Class Shares of
the Surviving Fund.
BUYING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF PREMIER/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
seeks to maintain a stable NAV of $1.00. The Surviving Fund uses the amortized
cost method to value its portfolio of securities. This method provides more
stability in valuations. However, it may also result in periods during which the
stated value of a security is different from the price the Surviving Fund would
receive if it sold the investment.
The NAV of each class of shares is generally calculated as of 2:00 p.m.
Eastern time each day the Surviving Fund is accepting purchase orders.
12
A shareholder will pay the next NAV calculated after the JPMorgan Funds
Service Center (the "Center") receives that shareholder's order in proper form.
An order is in proper form only after payment is converted into federal funds.
The Center accepts purchase orders on any business day that the Federal
Reserve Bank of New York and the New York Stock Exchange are open. If an order
is sent in proper form by the Surviving Fund's cut-off time (or such other time
as determined by your financial intermediary), it will be processed at that
day's price and you will be entitled to all dividends declared on that day. If
your order is received after the cut-off time, it generally will be processed at
the next day's price. If you pay by check before the cut-off time, your order
generally will be processed the next day the Surviving Fund is open for
business. Normally, the cut-off (in Eastern time) is 2:00 p.m. A later cut-off
time may be permitted for investors buying their shares through Chase or a bank
affiliate of Chase so long as such later cut-off time is before the Fund's NAV
is calculated. If you buy through an agent and not directly from the Center, the
agent could set earlier cut-off times. The Surviving Fund can set an earlier
cut-off time if the Public Securities Association recommends that the U.S.
Government securities market close trading early. You must provide a Taxpayer
Identification Number when you open an account.
The Surviving Fund has the right to reject any purchase order for any
reason.
Premier/Select Class Shares are available only to qualified investors. These
are defined as institutions, trusts, partnerships, corporations, certain
retirement plans and fiduciary accounts opened by a bank, trust company or
thrift institution which has investment authority over such accounts, as well as
individuals who meet the Surviving Fund's minimum investment requirements.
Shareholders receiving Premier/Select Class shares in the Reorganization will be
permitted to purchase additional Premier/Select Class Shares in the future.
The investment minimum for Premier/Select Class Shares is $100,000. However,
shareholders who receive Premier/Select Class Shares as a result of the
Reorganization may purchase new Premier/Select Class Shares in the Surviving
Fund and may purchase Premier/Select Class Shares in other JPMorgan Funds with
an investment minimum of $2,500. 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 Premier/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 PREMIER/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.
Under normal circumstances, if a request is received before the cut-off
time, the Surviving Fund will send the proceeds the same business day. An order
to sell shares will not be accepted if the Surviving Fund has not collected
payment for the shares. The Surviving Fund may stop accepting orders to sell and
may postpone payments for more than seven days, only when permitted by federal
securities laws.
For Premier/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.
13
EXCHANGING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF PREMIER/SELECT CLASS SHARES
THAT YOU MIGHT MAKE AFTER THE REORGANIZATION.
Premier/Select Class Shares of the Surviving Fund may be exchanged for
shares of the same class in certain other JPMorgan Funds.
For tax purposes, an exchange is treated as a sale of those shares.
Shareholders should carefully read the prospectus of the fund into which they
want to exchange.
The exchange privilege is not a means of short-term trading as this could
increase management cost and affect all shareholders of the Surviving Fund. The
Surviving Fund reserves the right to limit the number of exchanges or refuse an
exchange. Each exchange privilege may also be terminated. The Surviving Fund
charges an administration fee of $5 for each exchange if an investor makes more
than 10 exchanges in a year or three in a quarter.
OTHER INFORMATION CONCERNING THE SURVIVING FUND
For Premier/Select Class Shares, if the balance falls below the applicable
investment minimum for 30 days as a result of selling shares (and not because of
performance), then the Surviving Fund reserves the right to request that you buy
more shares or close your account. At least 60 days' notice will be given before
closing the account.
Unless a shareholder indicates otherwise on his or her account application,
the Surviving Fund is authorized to act on redemption and transfer instructions
received by phone. If someone trades on an account by phone, the Surviving Fund
will ask that person to confirm the account registration and address to make
sure they match those in the Fund records. If they do correspond, the Surviving
Fund is generally authorized to follow that person's instructions. The Surviving
Fund will take all reasonable precautions to confirm that the instructions are
genuine. Investors agree that they will not hold the Surviving Fund liable for
any loss or expenses from any sales request, if the Fund takes reasonable
precautions. The Surviving Fund will be liable for any losses to a shareholder
from an unauthorized sale or fraud against such shareholder if the 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.
MFT, on behalf of the Surviving Fund, has entered into agreements with
certain shareholder servicing agents (including Chase) under which the
shareholder servicing agents agree to provide certain support services to their
customers. For performing these services, each shareholder servicing agent will
receive an annual fee of up to 0.25% of the average daily net assets of the
Premier/Select Class Shares held by investors serviced by the shareholder
servicing agent.
JPMFAM and/or the Distributor may, at their own expense, make additional
payments to certain selected dealers or other shareholder servicing agents for
performing administrative services for their customers.
The Surviving Fund issues multiple classes of shares. Each class may have
different requirements for who may invest, and may have different sales charges
and expense levels. A person who gets compensated for selling Surviving Fund
shares may receive a different amount for each class.
DISTRIBUTIONS AND TAXES
The Surviving Fund can earn income and realize capital gain. The Surviving
Fund will deduct from these earnings any expenses and then pay to shareholders
the distributions.
The Surviving Fund declares dividends daily and distributes any net
investment income at least monthly. Net capital gain is distributed annually.
You have two options for your Surviving Fund distributions. You may:
- reinvest all of them in additional Fund shares; or
- take all distributions in cash or as a deposit in a pre-assigned bank
account.
14
If you don't notify us otherwise, we'll reinvest all distributions. If your
distributions are reinvested, they will be in the form of shares of the same
class. The taxation of dividends won't be affected by the form in which you
receive them.
Dividends of net investment income are usually taxable as ordinary income at
the federal, state and local levels. The state or municipality where you live
may not charge you state and local taxes on tax-exempt interest earned on
certain bonds. Dividends earned on bonds issued by the U.S. government and its
agencies may also be exempt from some types of state and local taxes.
If you receive distributions of net capital gain, the tax rate will be based
on how long the Surviving Fund held a particular asset, not on how long you have
owned your shares. If you buy shares just before a distribution, you will pay
tax on the entire amount of the taxable distribution you receive, even though
the NAV will be higher on that date because it includes the distribution amount.
Early in each calendar year, the Surviving Fund will send its shareholders a
notice showing the amount of distributions received in the preceding year and
the tax status of those distributions.
The above is only a general summary of tax implications of investing in the
Surviving Fund. Shareholders should consult their tax advisors to see how
investing in the Funds 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 MFT, which is organized under
the law of the Commonwealth of Massachusetts. As a Massachusetts business trust,
MFT's operations are governed by MFT's Declaration of Trust and By-Laws and
applicable Massachusetts law. The operations of the Surviving Fund are also
subject to the provisions of the 1940 Act and the rules and regulations
thereunder.
TRUSTEES AND OFFICERS
Subject to the provisions of its trust documents, the business of the
Merging Fund is managed by JPMF's Trustees and the business of the Surviving
Fund is managed by MFT's Trustees, who serve indefinite terms and have all
powers necessary or convenient to carry out their responsibilities.
Information concerning the current Trustees and officers of MFT and JPMF is
set forth in the Funds' respective Statements of Additional Information, which
are incorporated herein by reference.
SHARES OF FUNDS
Each of MFT 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 MFT 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 MFT 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 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 MFT 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 MFT or JPMF.
15
SHAREHOLDER VOTING RIGHTS
With respect to all matters submitted to a vote of shareholders,
shareholders of MFT 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.
A vacancy in the Board of either MFT 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 MFT), 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
MFT), 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 MFT 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 MFT 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 MFT 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 MFT 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 MFT 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 MFT 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.
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
16
provided to the Surviving Fund by JPMFAM are substantially similar to the
services currently provided to the Master Portfolio by JPMIM.
EXPENSES AND MANAGEMENT FEES. The Advisory Agreement provides that the
Surviving Fund will pay JPMFAM a monthly management fee based upon the net
assets of the Surviving Fund. The annual rate of this management fee is 0.10%.
The Merging Fund currently pays JPMIM 0.20% of the first $1 billion of average
daily net assets and 0.10% of average daily net assets in excess of $1 billion
with respect to its assets in the Master Portfolio. JPMFAM may waive fees from
time to time.
Under the Advisory Agreement, except as indicated above, the Surviving Fund
is responsible for its operating expenses including, but not limited to, taxes;
interest; fees (including fees paid to its Trustees who are not affiliated with
JPMFAM or any of its affiliates); fees payable to the Commission; state
securities qualification fees; association membership dues; costs of preparing
and printing prospectuses for regulatory purposes and for distribution to
existing shareholders; advisory and administrative fees; charges of the
custodian and transfer agent; insurance premiums; auditing and legal expenses;
costs of shareholders' reports and shareholder meetings; any extraordinary
expenses; and brokerage fees and commissions, if any, in connection with the
purchase or sale of portfolio securities.
SUBCONTRACTING. JPMFAM is authorized by the Advisory Agreement to employ or
associate with such other persons or entities as it believes to be appropriate
to assist it in the performance of its duties. Any such person is required to be
compensated by JPMFAM, not by the Surviving Fund, and to be approved by the
shareholders of that Fund as required by the 1940 Act.
LIMITATION ON LIABILITY. The Advisory Agreement provides that JPMFAM will not
be liable for any error of judgment or mistake of law or for any act or omission
or loss suffered by MFT or the Surviving Fund in connection with the performance
of the Advisory Agreement except a loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services or from willful
misfeasance, bad faith, or gross negligence in the performance of its duties or
reckless disregard of its obligations and duties under the Advisory Agreement.
DURATION AND TERMINATION. The Advisory Agreement will continue in effect from
year to year with respect to the Surviving Fund, only so long as such
continuation is approved at least annually by (i) the Board of Trustees of MFT
or the majority vote of the outstanding voting securities of the Surviving Fund,
and (ii) a majority of those Trustees who are neither parties to the Advisory
Agreement nor "interested persons," as defined in the 1940 Act, of any such
party, acting in person at a meeting called for the purpose of voting on such
approval. The Advisory Agreement will terminate automatically in the event of
its "assignment," as defined in the 1940 Act. In addition, the Advisory
Agreement is terminable at any time as to the Surviving Fund without penalty by
the MFT Board or by vote of the majority of the Surviving Fund's outstanding
voting securities upon 60 days' written notice to JPMFAM, and by JPMFAM on 60
days' written notice to MFT.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
JPMFAM, as the investment adviser to the Surviving Fund, has
responsibilities with respect to the Fund's portfolio transactions and brokerage
arrangements pursuant to the Fund's policies, subject to the overall authority
of the MFT Board.
Under the Advisory Agreement, JPMFAM, subject to the general supervision of
the Board, is responsible for the placement of orders for the purchase and sale
of portfolio securities for the Surviving Fund with brokers and dealers selected
by JPMFAM. These brokers and dealers may include brokers or dealers affiliated
with JPMFAM to the extent permitted by the 1940 Act and MFT's policies and
procedures applicable to the Fund. JPMFAM shall use its best efforts to seek to
execute portfolio transactions at prices which, under the circumstances, result
in total costs or proceeds being the most favorable to such Fund. In assessing
the best overall terms available for any transaction, JPMFAM shall consider all
factors it deems relevant, including the breadth of the market in the security,
the price of the security, the financial condition and execution capability of
the broker or dealer, research services provided to JPMFAM, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. In no event shall JPMFAM be under any duty to obtain the
lowest commission or the best net price for the Fund on any particular
transaction, nor shall JPMFAM be under any duty to execute any order in a
fashion either preferential to such Fund relative to other accounts managed by
JPMFAM or otherwise materially adverse to such other accounts.
17
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to JPMFAM, the Fund and/or the other accounts over which
JPMFAM exercises investment discretion. JPMFAM is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Fund which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if JPMFAM determines in good faith that the total commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or the overall responsibilities of JPMFAM with respect to accounts
over which it exercises investment discretion. JPMFAM shall report to the Board
regarding overall commissions paid by the Fund and their reasonableness in
relation to the benefits to such Fund.
In executing portfolio transactions for the Fund, JPMFAM may, to the extent
permitted by applicable laws and regulations, but shall not be obligated to,
aggregate the securities to be sold or purchased with those of other funds or
its other clients if, in JPMFAM's reasonable judgment, such aggregation (i) will
result in an overall economic benefit to such fund, taking into consideration
the advantageous selling or purchase price, brokerage commission and other
expenses, and trading requirements, and (ii) is not inconsistent with the
policies set forth in MFT's registration statement, as the case may be, and the
Fund's Prospectus and Statement of Additional Information. In such event, JPMFAM
will allocate the securities so purchased or sold, and the expenses incurred in
the transaction, in an equitable manner, consistent with its fiduciary
obligations to such Fund and such other clients.
It is possible that certain of the brokerage and research services received
will primarily benefit one or more other investment companies or other accounts
for which JPMFAM exercises investment discretion. Conversely, MFT or any of its
portfolios may be the primary beneficiary of the brokerage or research services
received as a result of portfolio transactions effected for such other accounts
or investment companies.
OTHER SERVICES
The Distributor is a wholly owned, indirect subsidiary of BISYS Fund
Services, Inc., which currently serves as the distributor for both the Surviving
Fund and the Merging Fund and as sub-administrator for the Surviving 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. It is anticipated that subsequent to the consummation of the
Reorganization, BONY will become the Surviving Fund's fund accountant and
custodian.
On August 11, 2001, Chase will receive an administration fee from the
Survivng Fund of 0.10% of average daily nets assets for complex wide money
market fund assets up to $100 billion and 0.05% on assets in excess of
$100 billion (currently such assets are less than $100 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 MFT are being asked to approve the same Trustees as are being
proposed for JPMF.
In connection with the recent merger of J.P. Morgan & Co. Incorporated and
The Chase Manhattan Corporation, it has been proposed, subject to shareholder
approval, that the Boards of Trustees of the investment companies managed by
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
18
Nominees include certain JPMF's current Trustees of MFT, certain current
Trustees of JPMF (including certain members of JMPF'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 retirement age of 70.(1) The Trustees have no
reason to believe that any Nominee will be unavailable for election.
Shareholders of MFT are concurrently considering the election of the same
individuals to the Board of Trustees of MFT. Biographical information about the
Nominees and other relevant information is set forth below. More information
regarding the current Trustees of MFT and 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 CURRENT TRUSTEE BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATIONS
POSITION WITH FUND COMPLEX SINCE AGE DURING THE PAST FIVE YEARS
- ----------------------------------- ------- --- ---------------------------------------------
William J. Armstrong-- Nominee 59 Retired; formerly Vice President and
Trustee of certain other trusts Treasurer, Ingersoll- Rand Company. Address:
in the Fund Complex 287 Hampshire Ridge, Park Ridge, NJ 07656.
Roland R. Eppley, Jr.-- Nominee 68 Retired; formerly President and Chief
Trustee of certain other trusts Executive Officer, Eastern States Bankcard
in the Fund Complex 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-- Nominee 55 Former President, Diversified Publishing
Member of Advisory Board of the Group and Vice President, Capital
Trust and certain other trusts in Cities/ABC, Inc. Address: 1262, Rockrimmon
the Fund Complex Road, Stamford, CT 06903.
Matthew Healey-- 1982 63 Former Chief Executive Officer of the Trust
Chairman of the Trust and certain through April 2001; Chairman, Pierpont Group,
other trusts in the Fund Complex since prior to 1993. Address: Pine Tree
Country Club Estates, 10286 Saint Andrews
Road, Boynton Beach, Florida 33436.
Fergus Reid, III*-- Nominee 68 Chairman and Chief Executive Officer,
Trustee of certain other trusts Lumelite Corporation, since September 1985;
in the Fund Complex Trustee, Morgan Stanley Funds. Address: 202
June Road, Stamford, CT 06903.
19
James J. Schonbachler-- Nominee 58 Retired; Prior to September, 1998, Managing
Member of Advisory Board of the Director, Bankers Trust Company and Group
Trust and certain other trusts in Head and Director, Bankers Trust A.G., Zurich
the Fund Complex and BT Brokerage Corp. Address: 3711
Northwind Court, Jupiter, FL 33477
Leonard M. Spalding, Jr.*-- Nominee 65 Retired; formerly Chief Executive Officer of
Trustee of certain other trusts Chase Mutual Funds Corp.; formerly President
in the Fund Complex 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-- Nominee 65 Former President of certain other trusts in
Trustee of certain other trusts the Fund Complex through April 2001;
in the Fund Complex 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 2000
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 and is reimbursed for
expenses incurred in connection with service as a Trustee. The Trustees may hold
various other directorships unrelated to these funds.
20
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)
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. The Fund Complex for which the
nominees will serve includes 14 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 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. Messrs. 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.
21
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' adviser,
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 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 years ended October 31, 1998, 1999 and 2000:
$10,963, $14,921 and $19,457.
MASTER PORTFOLIO--For the fiscal years ended October 31, 1998, 1999 and 2000:
$25,893, $36,961 and $46,373.
JPMF's principal executive officers are listed below. The officers conduct
and supervise the business operations of JPMF. The business address of each of
the officers, unless otherwise noted, is J.P. Morgan Fund Distributors, Inc.,
1211 Avenue of Americas, New York, New York, 10036.
The principal executive officers of JPMF are as follows:
NAME AND POSITION AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ----------------- --- ------------------------------------------
David Wezdenko, 37 Vice President, J.P. Morgan Investment
President and Management Inc. Mr. Wezdenko is the Chief
Treasurer Operating Officer for the U.S. Mutual
Funds and Financial Intermediaries
Business. Since joining J.P. Morgan in
1996, he has held numerous financial and
operations related positions supporting
the J.P. Morgan pooled funds business.
Sharon Weinberg, 41 Vice President, J.P. Morgan Investment
Vice-President and Management Inc. Ms. Weinberg is head of
Secretary Business and Product Strategy for the U.S.
Mutual Funds and Financial Intermediaries
business. Since joining J.P. Morgan in
1996 in New York, she has held numerous
positions throughout the asset management
business in mutual funds marketing, legal
and product development.
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 MFT 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
and for the last fiscal year was $32,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. There were no
financial information systems and design implementation services rendered by
PricewaterhouseCoopers LLP to the Merging Fund, JPMIM and JPMIM's affiliates
that provide services to the Fund for the calendar year ended December 31, 2000.
22
ALL OTHER FEES. The aggregate fees billed for all other non-audit services,
including fees for tax-related services, rendered by PricewaterhouseCoopers LLP
to the Merging Fund, JPMIM and JPMIM's affiliates that provide services to the
Fund for the calendar year ended December 31, 2000 was $11,029,150.
The Audit Committee has considered whether the provision of non-audit
services is compatible with maintaining the independence of
PricewaterhouseCoopers LLP.
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION
This Combined Prospectus/Proxy Statement is being furnished in connection
with the solicitation of proxies by the JPMF Board for use at the Meeting. It is
expected that the solicitation of proxies will be primarily by mail. JPMF's
officers and service providers may also solicit proxies by telephone, facsimile
machine, telegraph, the Internet or personal interview. In addition JPMF may
retain the services of professional solicitors to aid in the solicitation of
proxies for a fee. It is anticipated that banks, brokerage houses and other
custodians will be requested on behalf of JPMF to forward solicitation materials
to their principals to obtain authorizations for the execution of proxies. Any
Merging Fund Shareholder giving a proxy may revoke it at any time before it is
exercised by submitting to JPMF a written notice of revocation or a subsequently
executed proxy or by attending the Meeting and electing to vote in person.
Only the Merging Fund Shareholders of record at the close of business on
April 6, 2001 will be entitled to vote at the Meeting. On that date, there were
outstanding and entitled to be voted 2,670,902.412 Merging Fund voting shares.
Each shareholder of the Merging Fund is entitled to the number of votes equal to
the product of the number of shares owned multiplied by the net asset value per
share on the record date.
The presence in person or by proxy of shareholders that own one-third of the
outstanding Merging Fund shares will constitute a quorum for purposes of
transacting all business at the Meeting. If a quorum is not present at the
Meeting, sufficient votes in favor of the proposals are not received by the time
scheduled for the Meeting, or the Merging Fund Shareholders determine to adjourn
the Meeting for any other reason, the Merging Fund Shareholders present (in
person or proxy) may adjourn the Meeting from time to time, without notice other
than announcement at the Meeting. Any such adjournment will require the
affirmative vote of the Merging Fund Shareholders holding a majority of the
Merging Fund voting shares present, in person or by proxy, at the Meeting. The
persons named in the Proxy will vote in favor of such adjournment those Merging
Fund voting shares that they are entitled to vote if such adjournment is
necessary to obtain a quorum or if they determine such an adjournment is
desirable for any other reason. Business may be conducted once a quorum is
present and may continue until adjournment of the Meeting notwithstanding the
withdrawal or temporary absence of sufficient Merging Fund voting shares to
reduce the number present to less than a quorum. If the accompanying proxy is
executed and returned in time for the Meeting, the 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.
EXPENSES OF PROXY SOLICITATION
JPMC, and not the Merging Fund or the Surviving Fund (or shareholders of
either Fund) will pay the cost of the preparation, printing and mailing to its
shareholders of the Combined Prospectus/Proxy
23
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 any class
or series 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:
AMOUNT PERCENTAGE OF PERCENTAGE OF
OF SHARES SURVIVING FUND SURVIVING FUND OWNED
NAME AND ADDRESS OWNED OWNED ON RECORD DATE UPON CONSUMMATION
- ----------------------------------- ------------------ -------------------- --------------------
Kingsley & Co/JPM Asset Sweep 1,704,807,450.3000 36.69% 25.27%
Fund Omnibus Accountr
Attn: Special Products 2/OPS3
500 Stanton Christiana Road
Newark, DE 19713-2107
On the record date, the Trustees and officers of MFT as a group owned less
than 1% of the outstanding shares of the Surviving Fund. On the record date, the
name, address and percentage ownership of the persons who owned beneficially
more than 5% of the shares of the Surviving Fund 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:
AMOUNT PERCENTAGE OF PERCENTAGE OF
OF SHARES MERGING FUND OWNED SURVIVING FUND OWNED
NAME AND ADDRESS OWNED ON RECORD DATE UPON CONSUMMATION
- ----------------------------------- ---------------- ------------------ --------------------
Chase Manhattan Bank 116,040,685.6200 5.53% 1.72%
FBO IMA Customers
Attn Barbara Licata
1985 Marcus Ave Fl 2
New Hyde Park NY 11042-1053
National Financial Serv 105,457,565.3600 5.02% 1.56%
Corp for the Excl Ben of Our Cust
Church Street Station
PO Box 3752
New York, NY 10008-3752
Chase Manhattan Bank 739,406,441.8800 35.22% 10.96%
Client Services Department
Attn Cecilia Joseph
1 Chase Manhattan Plz Fl 16
New York NY 10005-1401
Star Publishing Company 153,690,731.8600 7.32% 2.27%
Attn James M Vogelpohl
63146 E Mountain Wood Dr
Tucson AZ 85739-1738
ADDITIONAL INFORMATION ABOUT MFT
Information about the Surviving Fund is included in its Prospectus, which is
incorporated by reference and enclosed herein. Additional information about the
Surviving Fund is also included in MFT's Statement of Additional Information,
which has been filed with the Commission and which is incorporated herein by
reference. Copies of the Statement of Additional information may be obtained
without charge by calling 1-800-348-4782. MFT is subject to the requirements of
the 1940 Act and, in accordance with such requirements, files reports and other
information with the Commission. These materials can be inspected
24
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 October 31, 2000, the audited
financial statements, notes thereto and supplementary data of the Master
Portfolio for the fiscal year ended October 31, 2000 and the audited financial
highlights, financial statements and notes thereto of the Surviving Fund for the
fiscal year ended August 31, 2000 are incorporated by reference herein and into
the Statement of Additional Information related to this Combined
Prospectus/Proxy Statement. The audited financial highlights, financial
statements, notes thereto and supplementary data, as applicable, for the Merging
Fund, the Master Portfolio and the Surviving Fund have been incorporated herein
by reference in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on their authority as experts in auditing and
accounting.
The unaudited financial highlights, financial statements and notes thereto
of the Surviving Fund for the fiscal period ended February 28, 2001, are
incorporated by reference herein and into the Statement of Additional
Information related to this Combined Prospectus/Proxy Statement.
OTHER BUSINESS
The 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 MFT nor JPMF is involved in any litigation that would have any
material adverse effect upon either the Merging Fund or the Surviving Fund.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to 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.
25
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 Federal Money Market
Fund (the "Transferor Portfolio"), Mutual Fund Trust (the "Acquiring Trust"), a
Massachusetts business trust, on behalf of JPMorgan Federal Money Market Fund II
(formerly, Chase Vista Federal Money Market 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 Premier/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 Premier/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 Premier/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 which as of February 28, 2001 there were outstanding
312,286,000 shares of the Premier Class 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"). The financial statements of the Acquiring Trust with respect to the
Acquiring Portfolio fairly present the financial position of the Acquiring
Portfolio as of the dates thereof and the respective results of operations and
changes in net assets for each of the periods indicated in accordance with GAAP.
(f) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring Portfolio Shares
to be issued in connection with the Reorganization will be duly authorized and
upon consummation of the Reorganization will be validly issued, fully paid and
nonassessable (except as disclosed in the Trust's prospectus and recognizing
that under Massachusetts law, shareholders of an Acquiring Trust portfolio
could, under certain circumstances, be held personally liable for the
obligations of such portfolio).
(g) AUTHORITY RELATIVE TO THIS PLAN. The Acquiring Trust, on behalf of the
Acquiring Portfolio, has the power to enter into this Plan and to carry out its
obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Acquiring Trust's Board of Trustees and no other proceedings by the
Acquiring Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Acquiring Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
(h) LIABILITIES. There are no liabilities of the Acquiring Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Acquiring Trust's
financial statements with respect to the Acquiring Portfolio and liabilities
incurred in the ordinary course of business subsequent to February 28, 2001 or
otherwise previously disclosed to the Acquiring Trust with respect to the
Acquiring Portfolio, none of which has been materially adverse to the business,
assets or results of operations of the Acquiring Portfolio.
(i) NO MATERIAL ADVERSE CHANGE. Since February 28, 2001, there has been no
material adverse change in the financial condition, results of operations,
business, properties or assets of the Acquiring Portfolio, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
(j) LITIGATION. There are no claims, actions, suits or proceedings pending
or, to the knowledge of the Acquiring Trust, threatened which would adversely
affect the Acquiring Trust or the Acquiring Portfolio's assets or business or
which would prevent or hinder consummation of the transactions contemplated
hereby, there are no facts which would form the basis for the institution of
administrative proceedings against the Acquiring Trust or the Acquiring
Portfolio and, to the knowledge of the Acquiring Trust, there are no
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regulatory investigations of the Acquiring Trust or the Acquiring Portfolio,
pending or threatened, other than routine inspections and audits.
(k) CONTRACTS. No default exists under any material contract or other
commitment to which the Acquiring Trust, on behalf of the Acquiring Portfolio,
is subject.
(l) TAXES. The federal income tax returns of the Acquiring Trust with
respect to the Acquiring Portfolio, and all other income tax returns required to
be filed by the Acquiring Trust with respect to the Acquiring Portfolio, have
been filed, and all taxes payable pursuant to such returns have been paid. To
the knowledge of the Acquiring Trust, no such return is under audit and no
assessment has been asserted in respect of any such return. All federal and
other taxes owed by the Acquiring Trust with respect to the Acquiring Portfolio
have been paid so far as due. The Acquiring Portfolio has elected to qualify and
has qualified as a "regulated investment company" under Subchapter M of the Code
as of and since its first taxable year and intends to continue to so qualify.
(m) NO APPROVALS REQUIRED. Except for the Registration Statement (as defined
in Section 4(a) hereof) and the approval of the Transferor Portfolio's
shareholders (referred to in Section 6(a) hereof), no consents, approvals,
authorizations, registrations or exemptions under federal or state laws are
necessary for the consummation by the Acquiring Trust of the Reorganization,
except such as have been obtained as of the date hereof.
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 1,920,547,000 shares of the Transferor Portfolio, and no shares
of such Portfolio were held in the treasury of the Transferor Trust. All of the
outstanding shares of the Transferor Trust have been duly authorized and are
validly issued, fully paid and nonassessable (except as disclosed in the
Transferor Trust's prospectus and recognizing that under Massachusetts law,
shareholders of a Trust portfolio could, under certain circumstances, be held
personally liable for the obligations of such Trust portfolio). Because the
Transferor Trust is an open-end investment company engaged in the continuous
offering and redemption of its shares, the number of outstanding shares may
change prior to the Effective Time of the Reorganization. All such shares will,
at the Exchange Date, be held by the shareholders of record of the Transferor
Portfolio as set forth on the books and records of the Transferor Trust in the
amounts set forth therein, and as set forth in any list of shareholders of
record provided to the Acquiring Portfolio for purposes of the Reorganization,
and no such shareholders of record will have any preemptive rights to purchase
any Transferor Portfolio shares, and the Transferor Portfolio does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any Transferor Portfolio shares (other than any existing dividend reinvestment
plans of the Transferor Portfolio or as set forth in this Plan), nor are there
outstanding any securities convertible into any shares of the Transferor
Portfolio (except pursuant to any existing exchange privileges described in the
current prospectus and statement of additional information of the Transferor
Trust). All of the Transferor Portfolio's issued and outstanding shares have
been offered and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable state securities
laws.
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(e) FINANCIAL STATEMENTS. The financial statements for the Transferor Trust
with respect to the Transferor Portfolio and for The Federal Money Market
Portfolio for the fiscal year ended October 31, 2000 which have been audited by
PricewaterhouseCoopers LLP fairly present the financial position of the
Transferor Portfolio and The Federal Money Market Portfolio as of the dates
thereof and the respective results of operations and changes in net assets for
each of the periods indicated in accordance with GAAP.
(f) AUTHORITY RELATIVE TO THIS PLAN. The Transferor Trust, on behalf of the
Transferor Portfolio, has the power to enter into this Plan and to carry out its
obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Transferor Trust's Board of Trustees and no other proceedings by the
Transferor Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Transferor Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
(g) LIABILITIES. There are no liabilities of the Transferor Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Transferor Trust's
Financial Statements with respect to the Transferor Portfolio and liabilities
incurred in the ordinary course of business subsequent to October 31, 2000 or
otherwise previously disclosed to the Transferor Trust with respect to the
Transferor Portfolio, none of which has been materially adverse to the business,
assets or results of operations of the Transferor Portfolio.
(h) NO MATERIAL ADVERSE CHANGE. Since October 31, 2000, there has been no
material adverse change in the financial condition, results of operations,
business, properties or assets of the Transferor Portfolio, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
(i) LITIGATION. There are no claims, actions, suits or proceedings pending
or, to the knowledge of the Transferor Trust, threatened which would adversely
affect the Transferor Trust or the Transferor Portfolio's assets or business or
which would prevent or hinder consummation of the transactions contemplated
hereby, there are no facts which would form the basis for the institution of
administrative proceedings against the Transferor Trust or the Transferor
Portfolio and, to the knowledge of the Transferor Trust, there are no regulatory
investigations of the Transferor Trust or the Transferor Portfolio, pending or
threatened, other than routine inspections and audits.
(j) CONTRACTS. The Transferor Trust, on behalf of the Transferor Portfolio,
is not subject to any contracts or other commitments (other than this Plan)
which will not be terminated with respect to the Transferor Portfolio without
liability to the Transferor Trust or the Transferor Portfolio as of or prior to
the Effective Time of the Reorganization.
(k) TAXES. The federal income tax returns of the Transferor Trust with
respect to the Transferor Portfolio, and all other income tax returns required
to be filed by the Transferor Trust with respect to the Transferor Portfolio,
have been filed, and all taxes payable pursuant to such returns have been paid.
To the knowledge of the Transferor Trust, no such return is under audit and no
assessment has been asserted in respect of any such return. All federal and
other taxes owed by the Transferor Trust with respect to the Transferor
Portfolio have been paid so far as due. The Transferor Portfolio has elected to
qualify as a "regulated investment company" under Subchapter M of the Code, as
of and since its first taxable year, and shall continue to so qualify until the
Effective Time of the Reorganization.
(l) NO APPROVALS REQUIRED. Except for the Registration Statement (as
defined in Section 4(a) hereof) and the approval of the Transferor Portfolio's
shareholders referred to in Section 6(a) hereof, no consents, approvals,
authorizations, registrations or exemptions under federal or state laws are
necessary for the consummation by the Transferor Trust of the Reorganization,
except such as have been obtained as of the date hereof.
4. COVENANTS OF THE ACQUIRING TRUST
The Acquiring Trust covenants to the following:
(a) REGISTRATION STATEMENT. On behalf of the Acquiring Portfolio, the
Acquiring Trust shall file with the Commission a Registration Statement on Form
N-14 (the "Registration Statement") under the Securities Act relating to the
Acquiring Portfolio Shares issuable hereunder and the proxy statement of the
Transferor
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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 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
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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 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
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solely in exchange for shares of the Acquiring Portfolio or upon the
distribution of the shares of the Acquiring Portfolio to the holders of the
shares of the Transferor Portfolio solely in exchange for all of the shares of
the Transferor Portfolio; (iii) no gain or loss will be recognized by
shareholders of the Transferor Portfolio upon the exchange of shares of such
Transferor Portfolio solely for shares of the Acquiring Portfolio; (iv) the
holding period and tax basis of the shares of the Acquiring Portfolio received
by each holder of shares of the Transferor Portfolio pursuant to the
Reorganization will be the same as the holding period and tax basis of shares of
the Transferor Portfolio held by such holder immediately prior to the
Reorganization (provided the shares of the Transferor Portfolio were held as a
capital asset on the date of the Reorganization); and (v) the holding period and
tax basis of the assets of the Transferor Portfolio acquired by the Acquiring
Portfolio will be the same as the holding period and tax basis of those assets
to the Transferor Portfolio immediately prior to the Reorganization.
(e) CONCURRENT REORGANIZATION. The reorganization of each of J.P. Morgan
Institutional Service Federal Money Market Fund and J.P. Morgan Institutional
Federal Money Market Fund, each 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 October 31,
2000.
(c) PORTFOLIO SECURITIES. All securities to be acquired by the Acquiring
Portfolio in the Reorganization shall have been approved for acquisition by J.P.
Morgan Fleming Asset Management (USA) Inc. ("JPMFAM"), in its capacity as
investment adviser to the Acquiring Portfolio, as consistent with the investment
policies of the Acquiring Portfolio.
(d) REGULATORY APPROVAL. The Regulatory Approvals shall have been obtained.
(e) DISTRIBUTION OF INCOME AND GAINS. The Transferor Trust on behalf of the
Transferor Portfolio shall have distributed to the shareholders of the
Transferor Portfolio all of the Transferor Portfolio's investment company
taxable income (determined without regard to the deduction for dividends paid)
as defined in Section 852(b)(2) of the Code for its taxable year ending on the
Exchange Date and all of its net capital gain as such term is used in
Section 852(b)(3) of the Code, after reduction by any capital loss carry
forward, for its taxable year ending on the Exchange Date.
(f) TAX OPINION. The Acquiring Trust shall have received the Tax Opinion.
(g) CONCURRENT REORGANIZATION. The reorganization of each of J.P. Morgan
Institutional Service Federal Money Market Fund and J.P. Morgan Institutional
Federal Money Market 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 respective Boards of Trustees amend this Plan at any time before or
after approval hereof by the shareholders of the Transferor Portfolio, but after
such approval, no amendment shall be made which substantially changes the terms
hereof.
(b) WAIVERS. At any time prior to the Effective Time of the Reorganization,
either the Transferor Trust or the Acquiring Trust may by written instrument
signed by it (i) waive any inaccuracies in the representations and warranties
made to it contained herein and (ii) waive compliance with any of the covenants
or conditions made for its benefit contained herein, except that conditions set
forth in Sections 6(c) and 7(d) may not be waived.
A-8
(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 Premier/Select Class and 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 Agency
Class and Morgan Class Shares, after the Exchange Date.
10. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Plan shall be in writing and shall be given by hand, certified
mail or by facsimile transmission, shall be deemed given when received and shall
be addressed to the parties hereto at their respective addresses listed below or
to such other persons or addresses as the relevant party shall designate as to
itself from time to time in writing delivered in like manner:
if to the 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.
A-9
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 Institutional Funds" is the designation of its
Trustees under a Declaration of Trust dated November 4, 1992, as amended, and
all persons dealing with the Transferor Trust must look solely to the Transferor
Trust's property for the enforcement of any claims against the Transferor Trust,
as none of the Transferor Trustees, officers, agents or shareholders assumes any
personal liability for obligations entered into on behalf of the Transferor
Trust. No series of the Transferor Trust shall be liable for claims against any
other series of the Transferor Trust.
(f) The name "Mutual Fund Trust" is the designation of its Trustees under a
Declaration of Trust dated February 1, 1994, as amended, and all persons dealing
with the Acquiring Trust must look solely to the Acquiring Trust's property for
the enforcement of any claims against the Acquiring Trust, as none of the
Acquiring Trustees, officers, agents or shareholders assumes any personal
liability for obligations entered into on behalf of the Acquiring Trust. No
series of the Acquiring Trust shall be liable for claims against any other
series of the Acquiring Trust.
A-10
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 Federal Money Market Fund
By: /s/ Sharon Weinberg
----------------------------------------------
Name: Sharon Weinberg
Title: Vice President and Secretary
MUTUAL FUND TRUST
on behalf of JPMorgan Federal Money Market Fund II
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
J.P. MORGAN FEDERAL MONEY MARKET FUND,
A SERIES OF J.P. MORGAN FUNDS)
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Combined Prospectus/Proxy Statement dated May
12, 2001 for the Special Meeting of Shareholders of J.P. Morgan Federal Money
Market 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 MFT'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, and MFT, on behalf of the Surviving Fund, and JPMC, and the
transactions contemplated thereby, the Reorganization Plan contemplates the
transfer of all of the assets and liabilities of the Merging Fund to the
Surviving Fund in exchange for shares issued by MFT in the Surviving Fund that
will have an aggregate net asset value equal to the aggregate net asset value of
the shares of the Merging Fund that are outstanding immediately before the
Effective Time of the Reorganization.
Following the exchange, the Merging Fund will make a liquidating
distribution of the Surviving Fund shares to its Shareholders, so that a holder
of shares in the Merging Fund will receive Premier Class shares of the Surviving
of equal value, plus the right to receive any unpaid dividends and distributions
that were declared before the Effective Time of the Reorganization.
At the Meeting, shareholders will also be asked to consider and vote
upon the election of Trustees of 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, New York, 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 Surviving Fund contained in their Annual
Reports dated October 31, 2000 and August 31, 2000, respectively, are
incorporated by reference into this Statement of Additional Information related
to this Combined Prospectus/Proxy Statement. The audited financial statements,
notes thereto and supplementary data of the Master Portfolio contained in its
Annual Report dated October 31, 2000 are incorporated by reference into this
Statement of Additional Information related to this Combined Prospectus/Proxy
Statement. The 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 October 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.
The unaudited financial highlights, financial statements and notes
thereto of the Surviving Fund for the fiscal period ended February 28, 2001, are
incorporated by reference herein and into the Statement of Additional
Information related to this Combined Prospectus/Proxy Statement.
-3-
PRO FORMA FINANCIAL STATEMENTS
The Federal Money Market Portfolio / JPMorgan Federal Money Market Fund II
Proforma Combining Schedule of Portfolio Investments
February 28, 2001 (unaudited)
(Amounts in Thousands)
PRINCIPAL AMOUNT
---------------------------------------------------------
PRO FORMA
COMBINED
THE JPMORGAN
JPMORGAN FEDERAL MONEY FEDERAL
FEDERAL MONEY MARKET PRO FORMA MONEY MARKET
MARKET FUND II PORTFOLIO ADJUSTMENTS FUND
-------------- --------- ----------- ------------
MONEY MARKET INSTRUMENTS 101.77%
U.S. GOVERNMENT AGENCY SECURITIES 94.7%
FEDERAL FARM CREDIT BANK - 15.67%
Federal Farm Credit Bank,
5.13%, 04/02/01 $ 2,075 $ 2,075
5.32%, 03/01/01 250,000 250,000
5.35%, 03/25/01 100,000 100,000
5.38%, 03/11/01 100,000 100,000
5.40%, 03/10/01 25,000 25,000
5.88%, 07/02/01 50,000 50,000
6.60%, 03/01/01 88,300 88,300
DN, 4.26%, 03/05/01 1,375 1,375
DN, 4.82%, 08/27/01 15,000 15,000
DN, 5.04%, 04/06/01 38,925 38,925
DN, 5.07%, 01/09/02 50,000 50,000
DN, 5.09%, 03/29/01 14,000 14,000
DN, 5.13%, 03/26/01 20,195 20,195
DN, 5.21%, 03/09/01 72,580 72,580
DN, 5.39%, 03/05/01 20,000 20,000
FRN, 6.45%, 05/01/01 100,000 100,000
FEDERAL HOME LOAN BANK - 78.21%
Federal Home Loan Bank,
5.12%, 01/16/02 20,000 20,000
5.31%, 05/01/01 100,000 100,000
5.34%, 03/26/01 100,000 100,000
5.37%, 03/15/01 100,000 100,000
5.39%, 03/17/01 50,000 50,000
5.47%, 03/01/01 130,000 130,000
5.50%, 03/01/01 100,000 100,000
5.89%, 07/19/01 28,500 28,500
6.38%, 12/20/01 50,000 50,000
6.50%, 04/26/01 50,000 50,000
6.67%, 04/06/01 40,000 40,000
6.75%, 03/01/01 25,000 25,000
7.13%, 11/15/01 50,000 50,000
DN, 4.75%, 03/01/01 9,005 4,032 13,037
DN, 4.76%, 03/09/01 100,000 100,000
DN, 4.83%, 08/22/01 15,000 15,000
DN, 4.86%, 08/10/01 35,000 35,000
VALUE
-------------------------------------------------------------
PRO FORMA
COMBINED
JPMORGAN
JPMORGAN THE FEDERAL
FEDERAL MONEY FEDERAL MONEY PRO FORMA MONEY MARKET
MARKET FUND II MARKET PORTFOLIO ADJUSTMENTS FUND
-------------- ---------------- ----------- -------------
MONEY MARKET INSTRUMENTS 101.77%
U.S. GOVERNMENT AGENCY SECURITIES 94.7%
FEDERAL FARM CREDIT BANK - 15.67%
Federal Farm Credit Bank,
5.13%, 04/02/01 $ 2,072 $ 2,072
5.32%, 03/01/01 250,000 250,000
5.35%, 03/25/01 100,000 100,000
5.38%, 03/11/01 99,993 99,993
5.40%, 03/10/01 25,000 25,000
5.88%, 07/02/01 49,875 49,875
6.60%, 03/01/01 88,300 88,300
DN, 4.26%, 03/05/01 1,374 1,374
DN, 4.82%, 08/27/01 14,647 14,647
DN, 5.04%, 04/06/01 38,703 38,703
DN, 5.07%, 01/09/02 47,898 47,898
DN, 5.09%, 03/29/01 13,943 13,943
DN, 5.13%, 03/26/01 20,120 20,120
DN, 5.21%, 03/09/01 72,484 72,484
DN, 5.39%, 03/05/01 19,988 19,988
FRN, 6.45%, 05/01/01 99,992 99,992
-----------
944,389
FEDERAL HOME LOAN BANK - 78.21%
Federal Home Loan Bank,
5.12%, 01/16/02 19,986 19,986
5.31%, 05/01/01 99,975 99,975
5.34%, 03/26/01 99,966 99,966
5.37%, 03/15/01 99,968 99,968
5.39%, 03/17/01 49,989 49,989
5.47%, 03/01/01 129,965 129,965
5.50%, 03/01/01 99,999 99,999
5.89%, 07/19/01 28,477 28,477
6.38%, 12/20/01 50,000 50,000
6.50%, 04/26/01 49,992 49,992
6.67%, 04/06/01 40,000 40,000
6.75%, 03/01/01 25,000 25,000
7.13%, 11/15/01 50,325 50,325
DN, 4.75%, 03/01/01 9,005 4,032 13,037
DN, 4.76%, 03/09/01 99,881 99,881
DN, 4.83%, 08/22/01 14,656 14,656
DN, 4.86%, 08/22/01 34,252 34,252
See Notes to Pro Forma Financial Statements.
-4-
PRO FINANCIAL STATEMENTS
The Federal Money Market Portfolio / JPMorgan Federal Money Market Fund II
Proforma Combining Schedule of Portfolio Investments
February 28, 2001 (unaudited)
(Amounts in Thousands)
PRINCIPAL AMOUNT
---------------------------------------------------------
PRO FORMA
COMBINED
THE JPMORGAN
JPMORGAN FEDERAL MONEY FEDERAL
FEDERAL MONEY MARKET PRO FORMA MONEY MARKET
MARKET FUND II PORTFOLIO ADJUSTMENTS FUND
-------------- --------- ----------- ------------
DN, 4.86%, 08/10/01 35,000 35,000
DN, 4.89%, 08/15/01 101,345 101,345
DN, 4.90%, 08/24/01 62,762 62,762
DN, 4.92%, 08/01/01 33,895 33,895
DN, 4.95%, 08/03/01 40,000 40,000
DN, 5.03%, 03/16/01 86,350 86,350
DN, 5.03%, 04/04/01 148,312 148,312
DN, 5.07%, 05/02/01 70,439 70,439
DN, 5.09%, 04/06/01 11,480 11,480
DN, 5.11%, 04/25/01 74,798 74,798
DN, 5.13%, 03/21/01 213,513 213,513
DN, 5.16%, 04/11/01 25,000 25,000
DN, 5.18%, 04/17/01 96,199 96,199
DN, 5.18%, 07/06/01 90,000 90,000
DN, 5.19%, 04/27/01 23,216 23,216
DN, 5.21%, 03/07/01 150,000 150,000
DN, 5.22%, 04/27/01 60,000 60,000
DN, 5.23%, 03/01/01 300,000 300,000
DN, 5.25%, 03/28/01 50,000 50,000
DN, 5.26%, 04/20/01 149,056 149,056
DN, 5.29%, 04/18/01 97,656 97,656
DN, 5.36%, 03/02/01 50,000 50,000
DN, 5.38%, 03/02/01 100,000 100,000
DN, 5.46%, 03/22/01 50,000 50,000
DN, 5.77%, 06/01/01 7,313 7,313
DN, 5.84%, 05/11/01 24,345 24,345
DN, 5.85%, 04/09/01 121,000 121,000
DN, 5.88%, 06/27/01 150,000 150,000
DN, 5.95%, 05/11/01 75,000 75,000
DN, 6.03%, 05/01/01 75,000 75,000
DN, 6.23%, 04/16/01 51,564 51,564
DN, 6.37%, 05/04/01 50,000 50,000
DN, 6.51%, 03/15/01 25,000 25,000
DN, 6.55%, 04/09/01 25,000 25,000
DN, 6.55%, 09/13/01 25,000 25,000
DN, 6.57%, 04/20/01 25,000 25,000
DN, 6.63%, 08/31/01 25,000 25,000
FRN, 5.14%, 03/05/01 98,000 98,000
FRN, 5.24%, 05/10/01 50,000 50,000
FRN, 5.39%, 03/20/01 100,000 100,000
FRN, 5.40%, 03/15/01 160,000 160,000
FRN, 5.45%, 02/21/02 100,000 100,000
FRN, 5.45%, 03/01/01 160,000 160,000
FRN, 5.48%, 7/18/01 50,000 50,000
VALUE
-------------------------------------------------------------
PRO FORMA
COMBINED
JPMORGAN
JPMORGAN THE FEDERAL
FEDERAL MONEY FEDERAL MONEY PRO FORMA MONEY MARKET
MARKET FUND II MARKET PORTFOLIO ADJUSTMENTS FUND
-------------- ---------------- ----------- ---------
DN, 4.86%, 08/10/01 34,252 34,252
DN, 4.89%, 08/15/01 99,074 99,074
DN, 4.90%, 08/24/01 61,288 61,288
DN, 4.92%, 08/01/01 33,196 33,196
DN, 4.95%, 08/03/01 39,166 39,166
DN, 5.03%, 03/16/01 86,153 86,153
DN, 5.03%, 04/04/01 147,453 147,453
DN, 5.07%, 05/02/01 69,821 69,821
DN, 5.09%, 04/06/01 11,420 11,420
DN, 5.11%, 04/25/01 74,208 74,208
DN, 5.13%, 03/21/01 212,796 212,796
DN, 5.16%, 04/11/01 24,851 24,851
DN, 5.18%, 04/17/01 95,540 95,540
DN, 5.18%, 07/06/01 88,397 88,397
DN, 5.19%, 04/27/01 23,027 23,027
DN, 5.21%, 03/07/01 149,858 149,858
DN, 5.22%, 04/27/01 59,499 59,499
DN, 5.23%, 03/01/01 300,000 300,000
DN, 5.25%, 03/28/01 49,797 49,797
DN, 5.26%, 04/20/01 147,955 147,955
DN, 5.29%, 04/18/01 96,960 96,960
DN, 5.36%, 03/02/01 49,993 49,993
DN, 5.38%, 03/02/01 99,985 99,985
DN, 5.46%, 03/22/01 49,842 49,842
DN, 5.77%, 06/01/01 7,206 7,206
DN, 5.84%, 05/11/01 24,064 24,064
DN, 5.85%, 04/09/01 120,219 120,219
DN, 5.88%, 06/27/01 147,139 147,139
DN, 5.95%, 05/11/01 74,139 74,139
DN, 6.03%, 05/01/01 74,250 74,250
DN, 6.23%, 04/16/01 51,148 51,148
DN, 6.37%, 05/04/01 49,449 49,449
DN, 6.51%, 03/15/01 24,941 24,941
DN, 6.55%, 04/09/01 24,833 24,833
DN, 6.55%, 09/13/01 24,163 24,163
DN, 6.57%, 04/20/01 24,786 24,786
DN, 6.63%, 08/31/01 24,210 24,210
FRN, 5.14%, 03/05/01 98,000 98,000
FRN, 5.24%, 05/10/01 49,995 49,995
FRN, 5.39%, 03/20/01 99,977 99,977
FRN, 5.40%, 03/15/01 159,955 159,955
FRN, 5.45%, 02/21/02 99,981 99,981
FRN, 5.45%, 03/01/01 159,970 159,970
FRN, 5.48%, 7/18/01 49,987 49,987
See Notes to Pro Forma Financial Statements.
-5-
PRO FORMA FINANCIAL STATEMENTS
The Federal Money Market Portfolio / JPMorgan Federal Money Market Fund II
Pro forma Combining Schedule of Portfolio Investments
February 28, 2001 (unaudited)
(Amounts in Thousands)
PRINCIPAL AMOUNT
---------------------------------------------------------
PRO FORMA
COMBINED
THE JPMORGAN
JPMORGAN FEDERAL MONEY FEDERAL
FEDERAL MONEY MARKET PRO FORMA MONEY MARKET
MARKET FUND II PORTFOLIO ADJUSTMENTS FUND
-------------- --------- ----------- --------
FRN, 5.52%, 04/19/01 125,000 125,000
FRN, 5.52%, 10/19/01 50,000 50,000
MTN, FRN, 5.47%, 03/20/01 75,000 75,000
FEDERAL HOME LOAN MORTGAGE COMPANY - 0.82%
Federal Home Loan Mortgage Company,
DN, 5.13%, 03/19/01 25,000 25,000
DN, 5.57%, 03/08/01 24,790 24,790
STUDENT LOAN MARKETING ASSOCIATION - 6.15%
Student Loan Marketing Association,
DN, 5.00%, 03/01/01 6,175 6,175
DN, 5.05%, 03/30/01 30,000 30,000
DN, 6.02%, 04/02/01 93,750 93,750
FRN, 5.25%, 11/15/01 50,000 50,000
FRN, 5.28%, 07/19/01 28,200 28,200
FRN, 5.35%, 08/23/01 113,000 113,000
MTN, FRN, 5.25%, 09/13/01 50,000 50,000
STATE AND MUNICIPAL OBLIGATIONS - 0.91%
Tennessee Valley Authority,
DN, 4.28%, 03/05/01 55,000 55,000
TOTAL INVESTMENTS - 101.77% $1,903,421 $4,257,724 $ 6,161,145
VALUE
-------------------------------------------------------------
PRO FORMA
COMBINED
JPMORGAN
JPMORGAN THE FEDERAL
FEDERAL MONEY FEDERAL MONEY PRO FORMA MONEY MARKET
MARKET FUND II MARKET PORTFOLIO ADJUSTMENTS FUND
-------------- ---------------- ----------- ---------
FRN, 5.52%, 04/19/01 124,946 124,946
FRN, 5.52%, 10/19/01 49,978 49,978
MTN, FRN, 5.47%, 03/20/01 74,998 74,998
-----------
4,714,076
FEDERAL HOME LOAN MORTGAGE COMPANY - 0.82%
Federal Home Loan Mortgage Company,
DN, 5.13%, 03/19/01 24,933 24,933
DN, 5.57%, 03/08/01 24,759 24,759
-----------
49,692
STUDENT LOAN MARKETING ASSOCIATION - 6.15%
Student Loan Marketing Association,
DN, 5.00%, 03/01/01 6,175 6,175
DN, 5.05%, 03/30/01 29,874 29,874
DN, 6.02%, 04/02/01 93,236 93,236
FRN, 5.25%, 11/15/01 50,000 50,000
FRN, 5.28%, 07/19/01 28,198 28,198
FRN, 5.35%, 08/23/01 113,011 113,011
MTN, FRN, 5.25%, 09/13/01 49,984 49,984
-----------
370,478
STATE AND MUNICIPAL OBLIGATIONS - 0.91%
Tennessee Valley Authority,
DN, 4.28%, 03/05/01 54,967 54,967
TOTAL INVESTMENTS - 101.77% $ 1,893,759 $ 4,239,843 $ 6,133,602
(COST $1,893,759) (COST $4,239,843)
DN - Discount Notes: The rate shown is the effective yield at the date of
purchase.
FRN - Floating Rate Note: The maturity date is the actual maturity date; the
rate shown is the rate in effect at February 28, 2001.
MTN - Medium Term Notes
See Notes to Pro Forma Financial Statements.
-6-
THE FEDERAL MONEY MARKET PORTFOLIO /
JPMORGAN FEDERAL MONEY MARKET FUND II
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AS OF FEBRUARY 28, 2001 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN
FEDERAL MONEY INSTITUTIONAL INSTITUTIONAL
MARKET FUND FEDERAL MONEY SERVICE FEDERAL
MARKET FUND MONEY MARKET
FUND
ASSETS:
Investment securities, at value $ - $ - $ -
Investment in The Federal Money Market Portfolio ("Portfolio"), at value 1,929,099 2,206,876 17,331
Cash - - -
Deferred organization cost - - 4
Other assets 1 331 37
Receivables:
Interest - - -
Expenses reimbursement from distributor - - -
---------------------------------------
Total Assets 1,929,100 2,207,207 17,372
---------------------------------------
LIABILITIES:
Payables:
Investment securities purchased - - -
Dividends 8,054 9,268 116
Other 5 (0) -
Accrued liabilities:
Investment advisory fees - -
Administrative service fees 374 168 9
Administration fees 37 41 5
Shareholder servicing fees - - -
Custodian fees - - -
Distribution fees - - -
Other 40 82 70
---------------------------------------
Total Liabilities 8,510 9,559 200
---------------------------------------
NET ASSETS:
Paid-in capital 1,920,549 2,197,614 17,167
Accumulated undistributed (distributions in excess of ) net
investment income 18 22 5
Accumulated net realized gain on investment transactions 23 12 -
---------------------------------------
Net Assets $ 1,920,590 $ 2,197,648 $ 17,172
---------------------------------------
Shares of beneficial interest outstanding 1,920,547 2,197,615 17,167
Shares outstanding
Agency
Morgan
Premier
Institutional
Net Asset Value Per Share $ 1.00 $ 1.00 $ 1.00
PRO FORMA WITH CONCURRENT REORGANIZATION
JPMORGAN FEDERAL MONEY MARKET FUND
Shares outstanding
Agency
Morgan
Premier
Institutional
Net Asset Value:
Agency
Investor
Premier
Institutional
---------------------------------------
Cost of investments - - -
=======================================
THE JPMORGAN
FEDERAL MONEY FEDERAL MONEY
MARKET PORTFOLIO MARKET FUND II
ASSETS:
Investment securities, at value $ 4,239,843 $ 1,893,759
Investment in The Federal Money Market Portfolio ("Portfolio"), at value - -
Cash 32 1
Deferred organization cost - -
Other assets 4 7
Receivables:
Interest 11,986 6,762
Expenses reimbursement from distributor - 7
----------------- --------------
Total Assets 4,251,865 1,900,536
----------------- --------------
LIABILITIES:
Payables:
Investment securities purchased 98,000 -
Dividends - 7,618
Other - -
Accrued liabilities:
Investment advisory fees 412 143
Administrative service fees 1 -
Administration fees 81 143
Shareholder servicing fees - 246
Custodian fees 25 38
Distribution fees - 52
Other 40 519
----------------- --------------
Total Liabilities 98,559 8,759
----------------- --------------
NET ASSETS:
Paid-in capital - 1,891,793
Accumulated undistributed (distributions in excess of ) net
investment income - (35)
Accumulated net realized gain on investment transactions - 19
----------------- --------------
Net Assets $ 4,153,306 $ 1,891,777
----------------- --------------
Shares of beneficial interest outstanding
Shares outstanding
Agency 673,027
Investor 312,286
Premier 906,471
Institutional 1
Net Asset Value Per Share $ 1.00
PRO FORMA WITH CONCURRENT REORGANIZATION
JPMORGAN FEDERAL MONEY MARKET FUND
Shares outstanding
Agency
Investor
Premier
Institutional
Net Asset Value:
Agency
Investor
Premier
Institutional
----------------- --------------
Cost of investments 4,239,843 $ 1,893,759
================= ==============
PRO FORMA PRO FORMA
ADJUSTMENTS COMBINED
JPMORGAN
FEDERAL MONEY
MARKET FUND
------------------ --------------
ASSETS:
Investment securities, at value $ - $ 6,133,602
Investment in The Federal Money Market Portfolio ("Portfolio"), at value (4,153,306) (a) -
Cash - 33
Deferred organization cost (4) (b) -
Other assets 380
Receivables: -
Interest - 18,748
Expenses reimbursement from distributor 4 (b) 11
------------------- -------------
Total Assets (4,153,306) 6,152,774
------------------- -------------
LIABILITIES:
Payables:
Investment securities purchased - 98,000
Dividends - 25,056
Other - 5
Accrued liabilities:
Investment advisory fees - 555
Administrative service fees - 552
Administration fees - 307
Shareholder servicing fees - 246
Custodian fees - 63
Distribution fees - 52
Other - 751
------------------- -------------
Total Liabilities - 125,587
------------------- -------------
NET ASSETS:
Paid-in capital - 6,027,123
Accumulated undistributed (distributions in excess of ) net
investment income 10
Accumulated net realized gain on investment transactions - 54
------------------- -------------
Net Assets $ (4,153,306) $ 6,027,187
------------------- -------------
Shares of beneficial interest outstanding (4,135,329) (d) -
Shares outstanding
Agency (673,027) (e) -
Morgan (312,286) (e) -
Premier (906,471) (e) -
Institutional (1) (e) -
Net Asset Value Per Share
PRO FORMA WITH CONCURRENT REORGANIZATION
JPMORGAN FEDERAL MONEY MARKET FUND
Shares outstanding
Agency 906,471 (c) 906,471
Morgan 673,028 (c) 673,028
Premier 2,250,000 (c) 2,250,000
Institutional 2,197,615 (c) 2,197,615
Net Asset Value:
Agency $ 1.00
Morgan $ 1.00
Premier $ 1.00
Institutional $ 1.00
------------------- -------------
Cost of investments - 6,133,602
=================== =============
(a) Reallocation of investment from the feeder funds to the master portfolio.
(b) Write-off of deferred organization expenses of the portfolio.
(c) Reflects the additional number of shares outstanding due to the Concurrent
Reorganization.
(d) Reallocation of feeder fund's beneficial interest to Agency, Investor,
Premier, Institutional and Reserves Shares due to the Concurrent
Reorganization.
(e) Reallocation of Chase Vista Federal Money Market Fund II shares outstanding
to Agency, Investor, Premier, Institutional and Reserves Shares due to the
Concurrent Reorganization.
See Notes to Pro Forma Financial Statements.
-7-
THE FEDERAL MONEY MARKET PORTFOLIO / JPMORGAN
FEDERAL MONEY MARKET FUND II
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED FEBRUARY 28, 2001 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN THE
FEDERAL MONEY INSTITUTIONAL INSTITUTIONAL FEDERAL MONEY
MARKET FUND FEDERAL MONEY SERVICE FEDERAL MARKET PORTFOLIO
MARKET FUND MONEY MARKET
FUND
INCOME:
Allocated investment income from portfolio $ 90,903 $ 117,347 $ 10,568 $ -
Interest income 224,708
------------------------------------------------------------------
Investment income 90,903 117,347 10,568 224,708
------------------------------------------------------------------
EXPENSES:
Investment advisory fees - - - 4,538
Administration fees 368 472 42 867
Shareholder servicing fees 3,679 1,895 74 -
Financial and fund accounting services 20 20 20 -
Distribution fees - - - -
Custodian fees - - - 329
Registration costs 171 223 43 -
Transfer agent fees 32 24 12 -
Professional fees 18 20 11 54
Printing and postage 10 8 10 10
Trustees' fees 17 19 1 37
Fund service fees - 26 1 33
Service organization fees - - 432 -
Amortization of organizational expenses - - 1 -
Other 28 14 5 22
------------------------------------------------------------------
Total expenses 4,343 2,721 652 5,890
------------------------------------------------------------------
Less amounts waived
Less earnings credit
Less expense reimbursements - 2,091 169 -
------------------------------------------------------------------
Net expenses 4,343 630 483 5,890
------------------------------------------------------------------
------------------------------------------------------------------
Net investment income 86,560 116,717 10,085 218,818
------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions 62 67 5 134
Net unrealized gain (loss) on investment transactions - - - -
------------------------------------------------------------------
Net increase in net assets from operations 86,622 116,784 10,090 218,952
==================================================================
JPMORGAN PRO FORMA PRO FORMA
FEDERAL MONEY ADJUSTMENTS COMBINED
MARKET FUND II JPMORGAN
FEDERAL MONEY
MARKET FUND
-------------- --------------
INCOME:
Allocated investment income from portfolio $ - $ (218,818)(c) $ -
Interest income 86,715 311,423
----------------------------------------------------------
Investment income 86,715 (218,818) 311,423
----------------------------------------------------------
EXPENSES:
Investment advisory fees 1,380 (176) (a) 5,742
Administration fees 1,380 890 (a) 4,019
Shareholder servicing fees 3,304 168 (a) 9,120
Financial and fund accounting services - (60) (e) -
Distribution fees 599 - 599
Custodian fees 131 296 (e) 756
Registration costs 53 - 490
Transfer agent fees 458 - 526
Professional fees 49 (24) (f) 128
Printing and postage 14 (10) (f) 42
Trustees' fees 68 - 142
Fund service fees - - 60
Service organization fees - - 432
Amortization of organizational expenses - 4 (d) 5
Other 5 - 74
---------------------- --------------- -------------
Total expenses 7,441 1,088 22,135
---------------------- --------------- -------------
Less amounts waived 546 1,088 (a) 1,634
Less earnings credit 11 11
Less expense reimbursements 11 114 (a) 2,385
---------------------- --------------- -------------
Net expenses 6,873 (114) 18,105
---------------------- --------------- -------------
---------------------- --------------- -------------
Net investment income 79,842 (218,704) 293,318
---------------------- --------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions 73 (134)(b) 207
Net unrealized gain (loss) on investment transactions - -
---------------------- --------------- -------------
Net increase in net assets from operations 79,915 (218,838) 293,525
====================== =============== =============
(a) Reflects adjustments to administrative fees and/or related waivers based
on the surviving Fund's revised fee schedule.
(b) Reflects the elimination of realized gain of the feeder funds.
(c) Reallocation of investment income to feeder funds.
(d) Reflects write-off of deferred organization expenses of the portfolio.
(e) Reclassification of fund accounting into new combined custody fees.
(f) Reduction reflects expected benefits of combined operations.
See Notes to Pro Forma Financial Statements.
-8-
J.P. MORGAN FEDERAL MONEY MARKET FUND /J.P. MORGAN INSTITUTIONAL FEDERAL MONEY
MARKET FUND/ J.P. MORGAN INSTITUTIONAL SERVICE FEDERAL MONEY MARKET FUND / THE
FEDERAL MONEY MARKET PORTFOLIO / JPMORGAN FEDERAL MONEY MARKET FUND II
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF COMBINATION:
The Pro Forma Combining Statement of Assets and Liabilities, Statement of
Operations and Schedule of Investments ("Pro Forma Statements") reflect the
accounts of The Federal Money Market Portfolio ("Master Portfolio"), J.P.
Morgan Federal Money Market Fund ("Federal Money Market Fund"), J.P. Morgan
Institutional Service Federal Money Market Fund ("Institutional Service") and
J.P. Morgan Institutional Money Market Fund ("Institutional"), (collectively
the "feeder funds" of the Master Portfolio) and JPMorgan Federal Money Market
Fund II ("JPMFMF") 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 JPMFMF. 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, JPMFMF would commence
offering Institutional Shares. The net asset value per share for the
Institutional Shares at the commencement of offering would be identical to the
closing net asset value per share for the Premier Shares immediately prior to
Concurrent Reorganization.
Under the Concurrent Reorganization, the existing shares of the Federal Money
Market Fund and Institutional Service Fund would be renamed Premier Class
Shares and the Institutional Fund would be renamed Institutional Class
Shares. The net asset values per share for the Premier and Institutional
Class Shares at the commencement of offering would be identical to the
closing net asset value per share for the Premier Shares immediately prior to
the Reorganization. In addition, the Chase Vista and Reserve Class shares
will combine and be renamed the Morgan Class and the Chase Institutional
Class shares will be renamed Agency Class Shares.
Under the proposed Concurrent Reorganization, each shareholder of the Federal
Money Market Fund, Institutional Class Service Fund and the Institutional
Class Fund would receive shares of JPMFMF with a value equal to their
holdings in their respective funds. Holders of the Federal Money Market Fund
and Institutional Service will receive Premier Class Shares in JPMFMF and
holders of the Institutional Fund will receive Institutional Class Shares.
Therefore, as a result of the proposed Concurrent Reorganization, current
shareholders of Federal Money Market Fund, Institutional Service Fund and
Institutional Fund will become shareholders of JPMFMF.
-9-
The Pro Forma net asset value per share assumes the issuance of additional
shares of JPMFMF, which would have been issued on February 28, 2001 in
connection with the proposed Concurrent Reorganization. The amount of
additional shares assumed to be issued was calculated based on the February
28, 2001 net assets of Federal Money Market Fund, Institutional Service and
Institutional Class and the net asset value per share of JPMFMF- Premier
Class.
JPMORGAN FEDERAL MONEY MARKET FUND II WITH CONCURRENT REORGANIZATION --
(Amounts in Thousands Except Per Share Amounts)
Premier
Class Shares
Increase in Shares Issued 1,937,714
Net Assets 2/28/01 $1,920,590
Pro Forma Net Asset Value 2/28/01 $1.00
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 at the combined level of average net assets for the twelve months ended
February 28, 2001.
-10-
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, as amended. (1)
2 By-laws. (1)
3 None.
4 Agreement and Plan of Reorganization filed herewith as Appendix A to the Combined
Prospectus/Proxy Statement.
5 None.
6 Form of Investment Advisory Agreement.(6)
7 Distribution and Sub-Administration Agreement dated August 21, 1995.(6)
8(a) Retirement Plan for Eligible Trustees.(6)
8(b) Deferred Compensation Plan for Eligible Trustees.(6)
9 Custodian Agreement. (1)
10(a) Rule 12b-1 Distribution Plan of Mutual Funds including Selected Dealer Agreement and
Shareholder Service Agreement. (1) and (3)
10(b) Rule 12b-1 Distribution Plan - Class B Shares (including forms of Selected Dealer
Agreement and Shareholder Servicing Agreement).(6)
10(c) Form of Rule 12b-1 Distribution Plan - Class C Shares (including forms of Shareholder
Servicing Agreements).(12)
10(d) Form of Rule 18f-3 Multi-Class Plan.(12)
Part C-2
11 None.
12 Opinion and Consent of Simpson Thacher & Bartlett as to Tax Consequences to be filed
by Amendment.
13(a) Transfer Agency Agreement. (1)
13(b) Form of Shareholder Servicing Agreement. (6)
13(c) Form of Administration Agreement.(6)
14 None.
15 None.
16 Powers of Attorney for: Fergus Reid, III, H. Richard Vartabedian, William J.
Armstrong, John R.H. Blum, Stuart W. Cragin, Jr., Roland R. Eppley, Jr., Joseph J.
Harkins, W.D. MacCallan, W. Perry Neff, Richard E. Ten Haken, Irving L. Thode. (12)
16(b) Powers of Attorney for: Sarah E. Jones and Leonard M. Spalding, Jr.
17(a) Form of Proxy Card.
17(b) Preliminary Prospectus for the Surviving Fund filed herewith.
17(c) Prospectus for the Merging Fund. (12)
17(d) Preliminary Statement of Additional Information for the Surviving Fund filed herewith.
17(e) Statement of Additional Information for the Merging Fund. (12)
17(f) Annual Report of the Surviving Fund dated August 31, 2000. (12)
17(g) Semi-Annual Report of the Surviving Fund dated February 28, 2001 filed herewith.
17(h) Annual Report of the Merging Fund (including the Annual Report
of the Master Portfolio) dated October 31, 2000. (12)
- ----------
(1) Filed as an Exhibit to the Registration Statement on Form N-1A of the
Registrant (File No. 33-75250) as filed with the Securities and
Exchange Commission on February 14,
Part C-3
1994.
(2) Filed as an Exhibit to Post-Effective Amendment No. 1 to the
Registration Statement on Form N-1A of the Registrant (File No.
33-75250) as filed with the Securities and Exchange Commission on
August 29, 1994.
(3) Filed as an Exhibit to Post-Effective Amendment No. 2 to the
Registration Statement on Form N-1A of the Registrant (File No.
33-75250) as filed with the Securities and Exchange Commission on
October 28, 1994.
(4) Filed as an Exhibit to Post-Effective Amendment No. 3 to the
Registration Statement on Form N-1A of the Registrant (File No. 33-
75250) as filed with the Securities and Exchange Commission on October
31, 1995.
(5) Filed as an Exhibit to Post-Effective Amendment No. 4 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on December 28, 1995.
(6) Filed as an Exhibit to Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on March 7, 1996.
(7) Filed as an Exhibit to Post-Effective Amendment No. 6 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on April 22, 1996.
(8) Filed as an exhibit to Post-Effective Amendment No. 7 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on September 6, 1996.
(9) Filed as an exhibit to Post-Effective Amendment No. 8 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on December 27, 1996.
(10) Filed herewith.
(11) Filed as an exhibit to Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on October 27, 1997.
(12) Filed as an Exhibit to the Registration Statement on Form N-14 of the
Registrant (File No. 333-58868) as filed with the Securities and
Exchange Commission on April 13, 2001.
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
Part C-4
the information called for by the applicable registration form for reofferings
by persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that
is filed under paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
Part C-5
SIGNATURES
As required by the Securities Act of 1933, this registration statement
has been signed on behalf of the registrant, in the City of New York and the
State of New York, on the 11th day of May, 2001.
MUTUAL FUND 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
* President
- ------------------------------------ and Trustee
H. Richard Vartabedian
* Trustee
- ------------------------------------
William J. Armstrong
* Trustee
- ------------------------------------
John R.H. Blum
* Trustee
- ------------------------------------
Stuart W. Cragin, Jr.
* Trustee
- ------------------------------------
Roland R. Eppley, Jr.
* Trustee
- ------------------------------------
Joseph J. Harkins
* Trustee
- ------------------------------------
Sarah E. Jones
* Trustee
- ------------------------------------
W.D. MacCallan
* Trustee
- ------------------------------------
W. Perry Neff
* Trustee
- ------------------------------------
Leonard M. Spalding, Jr.
* Trustee
- ------------------------------------
Irv Thode
* Trustee
- ------------------------------------
Richard E. Ten Haken
/s/ Martin R. Dean Treasurer and
- ------------------------------------ Principal Financial
Martin R. Dean Officer
/s/ Peter B. Eldridge Attorney in Fact
- ---------------------------
Peter B. Eldridge
EXHIBITS
ITEM DESCRIPTION
(17) (a) Form of Proxy Card.
(b) Preliminary Prospectus for the Surviving Fund.
(d) Statement of Additional Information for the Surviving Fund.
(g) Semi-Annual Report for the Surviving Fund.