As filed with the Securities and Exchange Commission on May 11, 2001
Registration No. 333-58964/811-8358
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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:
1211 Avenue of the Americas, 41st Floor
New York, New York 10036
Name and Address of Agent for Service:
Lisa Hurley
c/o BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, Ohio 43219
Copies to:
JOSEPH J. BERTINI, ESQ. SARAH E. COGAN, ESQ. JOHN E. BAUMGARDNER,
PETER B. ELDRIDGE, ESQ. Simpson Thacher & Bartlett JR., ESQ.
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 INSTITUTIONAL TREASURY MONEY MARKET FUND
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
522 FIFTH AVENUE
NEW YORK, NY 10036
1-800-766-7722
May 13, 2001
Dear Shareholder:
A special meeting of the shareholders of J.P. Morgan Institutional Treasury
Money Market Fund (the "Merging Fund"), a series of J.P. Morgan Institutional
Funds ("JPMIF"), will be held on July 3, 2001 at 9:00 a.m., Eastern time. Formal
notice of the meeting appears after this letter, followed by materials regarding
the meeting.
As you may be aware, J.P. Morgan & Co. Incorporated, the former corporate
parent of the investment adviser of the Merging Fund's assets, recently
completed a merger with The Chase Manhattan Corporation to form J.P. Morgan
Chase & Co. ("JPMC"). As a result of this merger, JPMC is seeking to reorganize
parts of its investment management business 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 Treasury Plus Money Market Fund (formerly, Chase Vista Treasury Plus
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.
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 JPMIF.
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 JPMIF to the Surviving Fund and MFT.
The cost and expenses associated with the Reorganization, including costs of
soliciting proxies, will be borne by JPMC and not by the Merging Fund, JPMIF,
the Surviving Fund, MFT or their shareholders.
If approval of the Reorganization is obtained, you will automatically
receive shares in the Surviving Fund.
The Proposals have been carefully reviewed by the Board of Trustees of
JPMIF, which has approved the Proposals.
THE BOARD OF TRUSTEES OF JPMIF UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
EACH OF THE PROPOSALS.
Following this letter is a list of commonly asked questions. If you have any
additional questions on voting of proxies and/or the meeting agenda, please call
us at 1-800-766-7722.
A proxy card is enclosed for your use in the shareholder meeting. This card
represents shares you held as of the record date, April 6, 2001. IT IS IMPORTANT
THAT YOU COMPLETE, SIGN, AND RETURN YOUR PROXY CARD IN THE ENVELOPE PROVIDED OR
CALL 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 they may
have or to provide assistance in voting. Remember, your vote is important!
Please sign, date and promptly mail your proxy card(s) in the return envelope
provided or call the number provided on the proxy card in order to vote.
WHY IS THE REORGANIZATION BEING PROPOSED?
The Reorganization is being proposed because each Fund's board believes it
is in the best interests of its shareholders.
IF THE REORGANIZATION IS APPROVED, WHAT WILL HAPPEN?
In connection with the Reorganization, the Merging Fund will cease investing
in The Treasury 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 pro rata to shareholders. After the Reorganization, you will own
shares of 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 the highest possible level of current income high current income consistent with the preservation of
while still maintaining liquidity and preserving capital. capital and same-day liquidity.
- - Invests at least 65% of its assets in direct debt - Invests primarily in U.S. Treasury obligations and
securities of the U.S. Treasury, including Treasury repurchase agreements collateralized by these
bills, bonds and notes, and repurchase agreements obligations.
collateralized by these investments.
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) and
actual (or post-waiver) total expense ratios are expected to be the same or less
for your shares in the Surviving Fund than they are for your shares in the
Merging Fund. If an increase does occur, The Chase Manhattan Bank, the Surviving
Fund's administrator, has contractually agreed to waive fees payable to it and
reimburse expenses so that the actual total operating expenses will remain the
same for 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 JPMIF IF AFTER THE
REORGANIZATION I WILL OWN SHARES IN THE SURVIVING FUND, A SERIES OF MFT?
Even if the Reorganization is approved, other mutual funds that are series
of JPMIF will continue to exist and operate. All shareholders of any series of
JPMIF as of the record date (April 6, 2001) are required to be given a vote on
the proposal regarding Trustees. Because as of the record date you were still a
shareholder in JPMIF, you are entitled to vote on this proposal. Shareholders of
MFT are being asked to approve the same Trustees that are proposed for JPMIF.
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 INSTITUTIONAL TREASURY MONEY MARKET FUND,
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
522 FIFTH AVENUE
NEW YORK, NY 10036
1-800-766-7722
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 3, 2001
To the Shareholders of J.P. Morgan Institutional Treasury Money Market Fund:
NOTICE IS HEREBY GIVEN THAT a Special Meeting (the "Meeting") of the
shareholders ("Shareholders") of J.P. Morgan Institutional Treasury Money Market
Fund (the "Merging Fund"), a series of J.P. Morgan Institutional Funds
("JPMIF"), will be held at the offices of J.P. Morgan Chase & Co., 1211 Avenue
of the Americas, 41st Floor, New York, 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 JPMIF, on
behalf of the Merging Fund, Mutual Fund Trust ("MFT"), on behalf of
JPMorgan Treasury Plus Money Market Fund (formerly, Chase Vista
Treasury Plus 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 Institutional 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 JPMIF.
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. The Meeting will be a joint meeting with the
meetings of shareholders of all series of JPMIF, which meetings are being called
for purposes of considering proposals 1 and 2 above and certain other proposals
not applicable to you.
Shareholders of record as of the close of business on April 6, 2001 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment(s)
thereof.
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY THE BOARD OF
TRUSTEES OF JPMIF. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE SPECIAL MEETING.
PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO
THE MERGING FUND A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY
OR BY ATTENDING THE SPECIAL MEETING AND VOTING IN PERSON.
/s/ Sharon Weinberg
SHARON WEINBERG
SECRETARY
May 13, 2001
COMBINED PROSPECTUS/PROXY STATEMENT
DATED MAY 13, 2001
ACQUISITION OF THE ASSETS AND LIABILITIES OF
J.P. MORGAN INSTITUTIONAL TREASURY MONEY MARKET FUND,
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
522 FIFTH AVENUE
NEW YORK, NY 10036
1-800-766-7722
BY AND IN EXCHANGE FOR INSTITUTIONAL CLASS SHARES OF
JPMORGAN TREASURY PLUS MONEY MARKET FUND
(FORMERLY, CHASE VISTA TREASURY PLUS 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 Institutional Treasury Money Market Fund (the
"Merging Fund"), a series of J.P. Morgan Institutional Funds ("JPMIF"), into
JPMorgan Treasury Plus Money Market Fund (formerly, Chase Vista Treasury Plus
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"). JPMIF and MFT are both open-end management
investment companies offering shares in several portfolios.
Under the proposed Reorganization, each Merging Fund Shareholder will
receive Institutional Class shares (the "Surviving Fund Shares") of the
Surviving Fund with a value equal to such Merging Fund Shareholder's holdings in
the Merging Fund. The Surviving Fund currently has a multi-class structure under
which it offers three classes of shares: the 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"
and will introduce a new "Institutional Class" and "Reserves Class" of shares.
At the Meeting, you also will be asked to consider and vote upon the
election of Trustees of JPMIF.
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 JPMIF, 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 JPMIF is soliciting proxies in connection with a
Special Meeting (the "Meeting") of Shareholders to be held on July 3, 2001 at
9:00 a.m., Eastern time, at the offices of J.P. Morgan Chase & Co., 1211 Avenue
of the Americas, 41st Floor, New York, 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 JPMIF 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 Treasury Money Market Portfolio) and the
preliminary Prospectus and Statement of Additional Information and the current
Annual Report and the Semi-Annual
Report of the Surviving Fund are incorporated herein by reference, and the
preliminary Prospectus and current Annual Report and Semi-Annual Report for the
Surviving Fund are enclosed with this Combined Prospectus/Proxy Statement. A
Statement of Additional Information relating to this Combined Prospectus/ Proxy
Statement dated May 13, 2001 containing additional information about MFT and
JPMIF has been filed with the Commission and is incorporated by reference into
this Combined Prospectus/Proxy Statement. A copy of the Statement of Additional
Information, as well as the Prospectus, Statement of Additional Information and
Annual Report of the Merging Fund (including the Annual Report of the Treasury
Money Market Portfolio), may be obtained without charge by writing to JPMIF at
its address noted above or by calling 1-800-766-7722.
This Combined Prospectus/Proxy Statement is expected to first be sent to
shareholders on or about May 13, 2001.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS COMBINED PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROSPECTUS/PROXY
STATEMENT AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND,
IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY MFT OR JPMIF.
INVESTMENTS IN THE SURVIVING FUND ARE SUBJECT TO RISK--INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL. NO SHARES IN THE SURVIVING FUND ARE BANK DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK AND ARE NOT FEDERALLY
INSURED BY, OBLIGATIONS OF, OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY.
TABLE OF CONTENTS
Page
-----
INTRODUCTION...................................... 1
PROPOSAL 1: REORGANIZATION PLAN................... 1
SUMMARY........................................... 1
COMPARATIVE FEE AND EXPENSE TABLES................ 3
RISK FACTORS...................................... 5
INFORMATION RELATING TO THE PROPOSED
REORGANIZATION................................... 5
INVESTMENT POLICIES............................... 8
PURCHASES, REDEMPTIONS AND EXCHANGES.............. 13
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.................. 25
ADDITIONAL INFORMATION ABOUT JPMIF................ 25
FINANCIAL STATEMENTS AND EXPERTS.................. 25
OTHER BUSINESS.................................... 26
LITIGATION........................................ 26
SHAREHOLDER INQUIRIES............................. 26
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 JPMIF of proxies to
be used at a Special Meeting of Shareholders of the Merging Fund to be held on
July 3, 2001 at 9:00 a.m., Eastern time, at the offices of J.P. Morgan Chase &
Co., 1211 Avenue of the Americas, 41st Floor, New York, 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 JPMIF, which meetings are
being called for purposes of considering proposals 1 and 2 above and certain
other proposals not applicable to you. It is expected that the mailing of this
Combined Prospectus/Proxy Statement will be made on or about May 13, 2001.
PROPOSAL 1:
REORGANIZATION PLAN
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 Meeting, Merging Fund Shareholders will consider and vote
upon the Agreement and Plan of Reorganization (the "Reorganization Plan") dated
May 11, 2001 among JPMIF, on behalf of the Merging Fund, MFT, on behalf of the
Surviving Fund (the Merging Fund and the Surviving Fund are collectively defined
as the "Funds"), and JPMC pursuant to which all of the assets and liabilities of
the Merging Fund will be transferred to the Surviving Fund in exchange for
Surviving Fund Shares. As a result of the Reorganization, Merging Fund
Shareholders will become shareholders of the Surviving Fund and will receive
Surviving Fund Shares equal in value to their holdings in the Merging Fund on
the date of the Reorganization. Further information relating to the Surviving
Fund is set forth herein, and the Surviving Fund's preliminary Prospectus, and
current Annual Report and Semi-Annual Report are enclosed with this Combined
Prospectus/Proxy Statement.
THE JPMIF 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 JPMIF Board will consider other appropriate courses of action.
SUMMARY
The following is a summary of certain information relating to the proposed
Reorganization, the parties thereto and the transactions contemplated thereby,
and is qualified by reference to the more complete information contained
elsewhere in this Combined Prospectus/Proxy Statement, the Prospectus, Statement
of Additional Information, and Annual Report of the Merging Fund (including the
Annual Report of The Treasury Money Market Portfolio) the preliminary Prospectus
and Statement of Additional Information and the current Annual and 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 Institutional 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 objectives and policies, and the
fact that the Reorganization will be tax-free, and in light of their fiduciary
duties under federal and state law, the MFT Board and the JPMIF Board, including
a majority of each Board's members who are not "interested persons" within the
meaning of the Investment Company Act of 1940, as amended (the "1940 Act"), have
each determined that the proposed Reorganization is in the best interests of its
respective Fund and its respective shareholders and that the interests of such
shareholders will not be diluted as a result of such Reorganization.
REASONS FOR THE REORGANIZATION
The Reorganization is being proposed because each Fund's board believes it
is in the best interests of its shareholders.
CONCURRENT REORGANIZATION
The Merging Fund currently invests all of its investable assets in The
Treasury 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 Treasury Money Market Fund and J.P. Morgan Treasury Money Market
Reserves Fund, each a series of JPMIF with identical investment objectives and
policies as the Merging Fund (the "Feeder Portfolios") also currently invest all
of their assets in the Master Portfolio. The Surviving Fund has entered into
substantially similar agreements and plans of reorganization with each Feeder
Portfolio (collectively, the "Concurrent Reorganization"). If each of the
Reorganization and the Concurrent Reorganization is approved by the shareholders
of the Merging Fund, and each Feeder Portfolio, respectively, and certain other
conditions are met, the Merging Fund and the Feeder Portfolios will be
reorganized into the Surviving Fund and the Merging Fund and the Feeder
Portfolios will no longer invest their assets in the Master Portfolio. The
consummation of the Reorganization is contingent upon the simultaneous
consummation of the Concurrent Reorganization.
FEDERAL INCOME TAX CONSEQUENCES
Simpson Thacher & Bartlett will issue an opinion (based on certain
assumptions) as of the effective time of the Reorganization to the effect that
the transaction will not give rise to the recognition of income, gain or loss
for federal income tax purposes to the Merging Fund, the Surviving Fund or the
shareholders of the Merging Fund. A shareholder's holding period and tax basis
of Surviving Fund Shares received by a shareholder of the Merging Fund will be
the same as the holding period and tax basis of 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 the highest
possible level of current income while still maintaining liquidity and
preserving capital. 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 at least 65% of its assets in direct debt securities of the U.S.
Treasury, including Treasury bills, bonds and notes, and repurchase agreements
collateralized by these investments. The Surviving Fund also seeks to enhance
its performance by investing in repurchase agreements, using debt securities
guaranteed by the U.S. Treasury as collateral. As a AAA- rated funds the dollar
weighted average maturity each of the Surviving Fund and
2
Merging Fund will be 60 days or less and the funds will buy only those
instruments which have remaining maturities of 397 days or less. There can be no
assurance that the Fund will continue to be rated by Standard & Poor's Ratings
Service and/or Moody's Investors Service or that these agencies will not
downgrade their current ratings. The Surviving Fund invests only in securities
issued and payable in U.S. dollars. THE MERGING FUND INVESTS PRIMARILY IN U.S.
TREASURY OBLIGATIONS AND REPURCHASE AGREEMENTS COLLATERALIZED BY THESE
OBLIGATIONS. 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 assets. The Merging Fund currently pays a management fee at an
annual rate of 0.20% of the first $1 billion of average daily net assets and
0.10% of average daily net assets for assets over $1 billion. Following the
Reorganization, JPMFAM will continue to manage the Surviving Fund's assets and
will receive a fee at an annual rate of 0.10% of average daily net assets.
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, the Distributor
serves as sub-administrator and DST Systems, Inc. ("DST") serves as transfer
agent and dividend disbursing agent for the Surviving Fund. It is anticipated
that prior to the consummation of the Reorganization, The Bank of New York
("BONY") will become the Surviving Fund's fund accountant and custodian.
PricewaterhouseCoopers LLP serves as the Surviving Fund's independent
accountants.
ADMINISTRATOR
As of 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 JPMIF is organized as a Massachusetts business trust. The
Merging Fund is organized as a series of JPMIF, and the Surviving Fund is
organized as a series of MFT.
PURCHASES, REDEMPTIONS AND EXCHANGES
After the Reorganization, the procedures for making purchases, redemptions
and exchanges of shares of the Surviving Fund will be as described in this
Combined Prospectus/Proxy Statement and in the Surviving Fund's preliminary
Prospectus and Statement of Additional Information.
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 Reorganization and the
Concurrent Reorganization. Under the Reorganization, holders of shares in the
Merging Fund will receive Institutional Class shares in the Surviving Fund. The
Surviving Fund currently has three 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 in the table below): Vista
Class, Premier Class and Institutional Class. In connection with the
Reorganization and Concurrent Reorganization, the Surviving Fund will
3
rename the Vista Class "Morgan Class", will rename the Institutional Class
"Agency Class" and will introduce a new "Institutional Class" and "Reserves
Class".
The table indicates that both the contractual (pre-waiver) and actual
(post-waiver) total expense ratio for current shareholders of the Merging Fund
will be less or stay the same for at least 3 years following the Reorganization.
In addition, 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 0.19%
Distribution (12b-1) Fees None
Other Expenses 0.20%
----
Total Annual Fund Operating Expenses 0.39%
====
Fee Waiver and Expense Reimbursement(a) 0.19%
----
Net Expenses 0.20%
====
- ---------------------
(a) Reflects an agreement by Morgan dated 3/01/01, an affiliate of JPMC, to
reimburse the Merging Fund to the extent total operating expenses
(excluding interest, taxes, extraordinary expenses and expenses related to
the deferred compensation plan) exceed 0.20% of average daily net assets of
the Merging Fund through 2/28/02.
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
----------------------------------------
INSTITUTIONAL CLASS SHARES
----------------------------------------
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (Load)
When You Buy Shares, Shown As %
Of The Offering Price None
Maximum Deferred Sales Charge (Load)
Shown As Lower Of Original Purchase Price Or
Redemption Proceeds None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees 0.10%
Distribution (12b-1) Fees None
Other Expenses 0.24%
----
Total Annual Fund Operating Expenses 0.34%
====
Fee Waivers and Expense Reimbursements(c) 0.14%
----
Net Expenses 0.20%
====
- ---------------------
(c) 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 0.20% of average daily net assets with respect to
Institutional Class 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 $20 $106 $200 $474
PRO FORMA THE SURVIVING FUND
WITH CONCURRENT
REORGANIZATION
Institutional Class $20 $ 64 $146 $387
RISK FACTORS
The following discussion highlights the principal risk factors associated
with an investment in the Surviving Fund. The Surviving Fund has investment
policies and investment restrictions generally similar to those of the Merging
Fund. Therefore, there should be similarities between the risk factors
associated with the Surviving Fund and the Merging Fund. This discussion is
qualified in its entirety by the more extensive discussion of risk factors set
forth in the Prospectus and Statement of Additional Information of the Surviving
Fund, which are incorporated herein by reference.
The Surviving Fund attempts to keep its net asset value constant, but there
is no guarantee it will be able to do so. Investments in the Surviving Fund are
not bank deposits or obligations of, or guaranteed or endorsed by, Chase or any
of its affiliates and are not insured by the FDIC, the Federal Reserve Board or
any other government agency. Although the Surviving Fund seeks to preserve the
value of your investment at $1.00 per share, it is possible to lose money by
investing in the Surviving Fund.
The value of a money market investment tends to fall when prevailing
interest rates rise, although it tends to be generally less sensitive to
interest rate changes than the value of longer-term securities. Although the
Surviving Fund seeks to be fully invested, it may at times hold some of its
assets in cash, which could hurt the Fund's performance. Securities in the
Fund's portfolio may not earn as high a current income as longer term or
lower-quality securities.
Repurchase agreements involve some risk of loss to the Surviving Fund if the
other party does not live up to its obligations under the agreement.
INFORMATION RELATING TO THE PROPOSED REORGANIZATION
GENERAL
The terms and conditions under which the Reorganization may be consummated
are set forth in the Reorganization Plan. Significant provisions of the
Reorganization Plan are summarized below; however, this summary is qualified in
its entirety by reference to the Reorganization Plan, a copy of which is
attached as Appendix A to this Combined Prospectus/Proxy Statement and which is
incorporated herein by reference.
DESCRIPTION OF THE REORGANIZATION PLAN
In connection with the Reorganization, the Merging Fund and the Feeder
Portfolios will cease investing in the Master Portfolio. The Reorganization Plan
provides that at the Effective Time (as defined in the Reorganization Plan) of
the Reorganization, the assets and liabilities of the Merging Fund will be
transferred to and assumed by the Surviving Fund. In exchange for the transfer
of the assets and the assumption of the liabilities of the Merging Fund, MFT
will issue at the Effective Time of the Reorganization full and fractional
Institutional 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
5
time specified in the Reorganization Plan. The Reorganization Plan provides that
the Merging Fund will declare a dividend or dividends prior to the Effective
Time of the Reorganization which, together with all previous dividends, will
have the effect of distributing to Merging Fund Shareholders all undistributed
net investment income earned and net capital gain realized up to and including
the Effective Time of the Reorganization.
Following the transfer of assets to, and the assumption of the liabilities
of the Merging Fund by, the Surviving Fund, the Merging Fund will distribute
Surviving Fund Shares received by it to the Merging Fund Shareholders in
liquidation of the Merging Fund. Each Merging Fund Shareholder at the Effective
Time of the Reorganization will receive an amount of Institutional 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 or one of its affiliates.
The Reorganization Plan and the Reorganization described herein may be
abandoned at any time prior to the Effective Time of the Reorganization by
either party if a material condition to the performance of such party under the
Reorganization Plan or a material covenant of the other party is not fulfilled
by the date specified in the Reorganization Plan or if there is a material
default or material breach of the Reorganization Plan by the other party. In
addition, either party may terminate the Reorganization Plan if its trustees
determine that proceeding with the Reorganization Plan is not in the best
interests of their Fund's shareholders.
BOARD CONSIDERATIONS
The JPMIF Board met on January 23 and 24 and on March 26 and 27, 2001 and
the MFT Board met on February 22 and April 3, 2001, and each considered and
discussed the proposed Reorganization. The Trustees of each Board discussed the
advantages of reorganizing the Merging Fund into the Surviving Fund.
The Board of each trust has determined that it is in the 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
6
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.
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 JPMIF BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
PROPOSAL.
The JPMIF Board has not determined what action the Merging Fund will take in
the event Shareholders do not approve the Reorganization Plan or for any reason
the Reorganization is not consummated. In either such event, the Board will
consider other appropriate courses of action.
INFORMATION RELATING TO CONCURRENT REORGANIZATION
The terms and conditions under which the Concurrent Reorganization may be
consummated are set forth in reorganization plans which are substantially
similar to the Reorganization Plan you are considering. As a result of the
Reorganization and the Concurrent Reorganization, the Merging Fund and the
Feeder Portfolios will no longer invest their assets in the Master Portfolio.
The consummation of the Reorganization is contingent upon the simultaneous
consummation of the Concurrent Reorganization.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the Reorganization is subject to the condition that JPMIF
receive an opinion from Simpson Thacher & Bartlett to the effect that for
federal income tax purposes: (i) the transfer of all of the assets and
liabilities of the Merging Fund to the Surviving Fund in exchange for the
Surviving Fund Shares and the liquidating distributions to shareholders of the
Surviving Fund Shares so received, as described in the Reorganization Plan, will
constitute a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and with respect to the
Reorganization, the Merging Fund and the Surviving Fund will each be considered
"a party to a reorganization" within the meaning of Section 368(b) of the Code;
(ii) no gain or loss will be recognized by the Merging Fund as a result of such
transaction; (iii) no gain or loss will be recognized by the Surviving Fund as a
result of such transaction; (iv) no gain or loss will be recognized by the
Merging Fund Shareholders on the distribution to the Merging Fund Shareholders
of the Surviving Fund Shares solely in exchange for their Merging Fund Shares;
(v) the aggregate basis of shares of the Surviving Fund received by a
shareholder of the Merging Fund will be the same as the aggregate basis of such
Merging Fund Shareholder's Merging Fund Shares immediately prior to the
Reorganization; (vi) the basis of the Surviving Fund in the assets of the
Merging Fund received pursuant to such transaction will be the same as the basis
of such assets in the hands of the Merging Fund immediately before such
transaction; (vii) a Merging Fund Shareholder's holding period for the Surviving
Fund Shares will be determined by including the period for which such Merging
Fund Shareholder held the Merging Fund Shares exchanged therefor, provided that
the Merging Fund Shareholder held such Merging Fund Shares as a capital asset;
and (viii) the Surviving Fund's holding period with respect to the assets
received in the Reorganization will include the period for which such assets
were held by the Merging Fund.
JPMIF has not sought a tax ruling from the Internal Revenue Service (the
"IRS"), but is acting in reliance upon the opinion of counsel discussed in the
previous paragraph. That opinion is not binding on the IRS and does not preclude
the IRS from adopting a contrary position. Shareholders should consult their own
advisers concerning the potential tax consequences to them, including state and
local income taxes.
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 three classes of shares: Vista Class, Premier Class and
Institutional Class. In connection with the Reorganization, the Surviving Fund
will rename the Vista Class "Morgan Class", rename the Institutional Class
"Agency Class" and introduce a new "Institutional Class" and "Reserve Class."
CAPITALIZATION
PRO FORMA WITH CONCURRENT REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
BENEFICIAL
INTEREST SHARES NET ASSET
OUTSTANDING OUTSTANDING NET ASSETS VALUE PER SHARE
----------- ----------- ---------- ---------------
J.P. MORGAN FUNDS
Treasury Money Market
Reserves Fund 524,371 -- 524,328 $1.00
Institutional Service
Treasury Money Market Fund 473,243 -- 473,086 $1.00
Institutional Treasury Money
Market Fund (Merging Fund) 537,242 -- 537,150 $1.00
THE SURVIVING FUND
Vista (Renamed Morgan) 1,391,162 1,390,971 $1.00
Premier 347,882 347,866 $1.00
Institutional (Renamed
Agency) 1,074,655 1,074,678 $1.00
PRO FORMA THE SURVIVING FUND
WITH CONCURRENT
REORGANIZATION
Reserve 524,371 524,328 $1.00
Morgan 1,391,162 1,390,971 $1.00
Premier 821,125 820,952 $1.00
Agency 1,074,655 1,074,678 $1.00
Institutional 537,242 537,150 $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 Preliminary Prospectus and Statement of
Additional Information of the Surviving Fund, which are incorporated herein by
reference.
OBJECTIVE
The Surviving Fund's investment objective is to aim to provide the highest
possible level of current income while still maintaining liquidity and
preserving capital. THE MERGING FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE HIGH
CURRENT INCOME CONSISTENT WITH THE PRESERVATION OF CAPITAL AND SAME-DAY
LIQUIDITY. Neither Fund can change its objective without shareholder approval.
SHAREHOLDERS OF THE SURVIVING FUND CURRENTLY ARE CONSIDERING A PROPOSAL THAT, IF
PASSED AT A SHAREHOLDER MEETING TO BE HELD THE SAME DAY AS THE MEETING OF THE
MERGING FUND, WOULD ALLOW THE SURVIVING FUND TO CHANGE ITS OBJECTIVE WITHOUT
SHAREHOLDER APPROVAL.
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 at least 65% of its assets in direct debt
securities of the U.S. Treasury, including Treasury bills, bonds and notes, and
repurchase agreements collateralized by these investments. These debt securities
carry different interest rates, maturities and issue dates. The Surviving Fund
also seeks to enhance its performance by investing in repurchase agreements,
using debt securities guaranteed by the U.S. Treasury as collateral. THE MERGING
FUND INVESTS PRIMARILY IN U.S. TREASURY OBLIGATIONS AND REPURCHASE AGREEMENTS
COLLATERALIZED BY THESE OBLIGATIONS.
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 60 days
or less and the Fund will buy only those instruments which have remaining
maturities of 397 days or less. THE MERGING FUND MAY MAINTAIN A DOLLAR-WEIGHTED
AVERAGE MATURITY OF NO MORE THAN 90 DAYS.
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 may not purchase the The Merging Fund may not purchase the
securities of any issuer (other than securities or other obligations of issuers
securities issued or guaranteed by the U.S. conducting their principal business activity
government or any of its agencies or in the same industry if, immediately after
instrumentalities, or repurchase agreements such purchase, the value of its investment in
secured thereby) if, as a result, more than such industry would exceed 25% of the the
25% of the Surviving Fund's total assets value of the Fund's total assets; provided,
would be invested in securities of companies however, that the Fund may invest all or part
whose principal business activities are in of its assets in an open-end management
the same industry. Notwithstanding the investment company with the same investment
foregoing, (i) with respect to the Surviving objective and restrictions as the Fund. For
Fund's permissible futures and options purposes of industry concentration, there is
transactions in U.S. Government securities, no percentage limitation with respect to
positions in such options and futures shall investments in U.S. Government securities and
not be subject to this restriction; and (ii) repurchase agreements related thereto.
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, The Merging Fund may not borrow money, except
except for temporary or emergency purposes, in amounts not to exceed one third of the
or by engaging in reverse repurchase Fund's total assets (including the amount
transactions, in an amount not exceeding 33% borrowed) less liabilities (other than
of the value of its total assets at the time borrowings) (i) from banks for temporary or
when the loan is made and may pledge, short-term purposes or for the clearance of
mortgage or hypothecate no more than 1/3 of transactions, (ii) in connection with the
its net assets to secure such borrowings. Any redemption of Fund shares or to finance
borrowings representing more than 5% of the failed settlements of portfolio trades
Surviving Fund's total assets must be repaid without immediately liquidating portfolio
before the Surviving Fund may make additional securities or other assets, (iii) in order to
investments. fulfill commitments or plans to purchase
additional securities pending the anticipated
sale of other portfolio securities or assets
and (iv) pursuant to reverse repurchase
agreements entered into by the Fund.
The Merging Fund may not enter into reverse
repurchase agreements which together with any
other borrowing exceed in the aggregate
one-third of the market value of the Fund's
total assets, less liabilities other than the
obligations created by reverse repurchase
agreements.
The Surviving Fund may not purchase or sell The Merging Fund may not purchase or sell
real estate unless acquired as a result of puts, calls, straddles, spreads, or any
ownership of securities or other instruments combination thereof, real estate,
(but this shall not prevent the Fund from commodities, or commodity contracts or
investing in securities or other instruments interests in oil, gas, or mineral exploration
backed by real estate or securities of or development programs.
companies engaged in the real estate
business). Investments by the Fund in
securities backed by mortgages on real estate
or in marketable securities of companies
engaged in such activities are not hereby
precluded.
The Surviving Fund may not purchase or sell
physical commodities unless acquired as a
result of ownership of securities or other
instruments but this shall not prevent the
Fund from (i) purchasing or selling options
and futures contracts or from investing in
securities or other instruments backed by
physical commodities or (ii) engaging in
forward purchases or sales of foreign
currencies or securities.
10
SURVIVING FUND MERGING FUND
- --------------------------------------------- ---------------------------------------------
The Surviving Fund may not make loans, except The Merging Fund may not make loans, except
that the Surviving Fund may: (i) purchase and through purchasing or holding debt
hold debt instruments (including without obligations, repurchase agreements, or loans
limitation, bonds, notes, debentures or other of portfolio securities in accordance with
obligations and certificates of deposit, the Fund's investment objective and policies.
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.
The Surviving Fund is not subject to a The Merging Fund may not purchase securities
similar fundamental restriction, although it on margin, make short sales of securities, or
is subject to a similar non-fundamental maintain a short position, provided that this
restriction (see below). restriction shall not be deemed to be
applicable to the purchase or sale of
when-issued securities or of securities for
delivery at a future date.
Notwithstanding any other investment policy The Merging Fund may not purchase the
or restriction, the Surviving Fund may seek securities or other obligations of any one
to achieve its investment objective by issuer if, immediately after such purchase,
investing all of its investable assets in more than 5% of the value of the Fund's total
another investment company having assets would be invested in securities or
substantially the same investment objective other obligations of any one such issuer;
and policies as the Surviving Fund. provided, however, that the Fund may invest
all or part of its investable assets in an
open-end management investment company with
the same investment objective and
restrictions as the Fund. This limitation
also shall not apply to issues of the U.S.
Government and repurchase agreements related
thereto.
The Merging Fund may not acquire securities
companies, except as permitted by the 1940
Act or in connection with a merger,
consolidation, reorganization, acquisition of
assets or an offer of exchange; provided,
however, that nothing in this investment
restriction shall prevent the Fund from
investing all or part of its assets in an
open-end management investment company with
the same investment objective and
restrictions as the Fund.
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.
11
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 The Merging Fund may not acquire any illiquid
10% of its net assets in illiquid securities. securities, such as repurchase agreements
For purposes of this non-fundamental with more than seven days to maturity or
restriction, "illiquid securities" include fixed time deposits with a duration of over
securities restricted as to resale unless seven calendar days, if as a result thereof,
they are determined to be readily marketable more than 10% of the Fund's net assets would
in accordance with the procedures established be in investments which are illiquid.
by the Board of Trustees.
The Surviving Fund may not make short sales The Merging Fund is not subject to a similar
of securities, other than short sales non- fundamental restriction. However, it is
"against the box," or purchase securities on subject to a fundamental restriction
margin except for short-term credits regarding investing more than 5% of its
necessary for clearance of portfolio assets in securities of one issuer (see
transactions, provided that this restriction above).
will not be applied to limit the use of
options, futures contracts and related
options, in the manner otherwise permitted by
the investment restrictions, policies and
investment program of the Fund. The Surviving
Fund has no current intention of making short
sales against the box.
The Surviving Fund may not, with respect to The Merging Fund is not subject to a similar
75% of its assets, hold more than 10% of the non- fundamental restriction. However, it is
outstanding voting securities of any issuer subject to a fundamental restriction
or invest more than 5% of its assets in the regarding investing more than 5% of its
securities of any one issuer (other than assets in securities of one issuer (see
obligations of the U.S. Government, its above).
agencies and instrumentalities).
The Surviving Fund may invest up to 5% of its The Merging Fund is not subject to a similar
total assets in the securities of any one non- fundamental restriction, although it is
investment company, but may not own more than subject to a similar restriction under the
3% of the securities of any one investment terms of the 1940 Act.
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
interests in oil, gas or mineral leases. non- fundamental restriction. However, it is
subject to a similar fundamental restriction
(see above).
The Surviving Fund may not write, purchase or The Merging Fund is not subject to a similar
sell any put or call option or any non- fundamental restriction. However, it is
combination thereof, provided that this shall subject to a similar fundamental restriction
not prevent (i) the writing, purchasing or (see above).
selling of puts, calls or combinations
thereof with respect to portfolio securities
or (ii) with respect to the Surviving Fund's
permissible futures and options transactions,
the writing, purchasing, ownership, holding
or selling of futures and options positions
or of puts, calls or combinations thereof
with respect to futures.
The Surviving Fund will not invest more than The Merging Fund is not subject to a similar
25% of its total assets in obligations issued non- fundamental restriction.
by foreign banks (other than foreign branches
of U.S. banks).
12
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
Institutional 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 Institutional Class Shares.
12B-1 FEES
There is no Rule 12b-1 distribution plan for Institutional Class Shares of
the Surviving Fund.
BUYING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF INSTITUTIONAL 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.
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 4:30 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 Surviving
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 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.
Institutional 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 Institutional Class shares in the Reorganization will be
permitted to purchase additional Institutional shares in the future.
The investment minimum for Institutional Class Shares is 10,000,000. Orders
by wire will be canceled if the Center does not receive payment by 4:30 p.m.,
Eastern time, on the day the shareholder buys.
Shareholders seeking to buy Institutional 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,
13
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 INSTITUTIONAL 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 Fund may stop accepting orders to sell and may
postpone payments for more than seven days, only when permitted by federal
securities laws.
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 1-800-766-7722 or contact your financial intermediary.
EXCHANGING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF INSTITUTIONAL CLASS SHARES
THAT YOU MIGHT MAKE AFTER THE REORGANIZATION.
Institutional 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 Institutional 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
14
annual fee of up to 0.10% of the average daily net assets of the Institutional
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.
If you don't notify us otherwise, we'll reinvest all distributions. If your
distributions are reinvested, they will be in the form of shares of the same
class. The taxation of dividends won't be affected by the form in which you
receive them.
Dividends of net investment income are usually taxable as ordinary income at
the federal, state and local levels.
If you receive distributions of net capital gain, the tax rate will be based
on how long the Surviving Fund held a particular asset, not on how long you have
owned your shares. If you buy shares just before a distribution, you will pay
tax on the entire amount of the taxable distribution you receive, even though
the NAV will be higher on that date because it includes the distribution amount.
Early in each calendar year, the Surviving Fund will send its shareholders a
notice showing the amount of distributions received in the preceding year and
the tax status of those distributions.
The above is only a general summary of tax implications of investing in the
Surviving Fund. Shareholders should consult their tax advisors to see how
investing in the Surviving Fund will affect their own tax situation.
COMPARISON OF THE MERGING FUND'S
AND THE SURVIVING FUND'S ORGANIZATION STRUCTURE
There are no material differences in the organizational structure of the
Merging Fund and the Surviving Fund. Set forth below are descriptions of the
structure, voting rights, shareholder liability and the liability of Trustees.
STRUCTURE OF THE MERGING FUND
The Merging Fund is organized as a series of JPMIF, which is organized under
the law of the Commonwealth of Massachusetts. As a Massachusetts business trust,
JPMIF's operations are governed by JPMIF's Declaration of Trust and By-Laws and
applicable Massachusetts law. The operations of the Merging Fund are also
subject to the provisions of the 1940 Act and the rules and regulations
thereunder.
STRUCTURE OF THE SURVIVING FUND
The Surviving Fund is organized as a series of MFT, which is organized under
the law of the Commonwealth of Massachusetts. As a Massachusetts business trust,
MFT's operations are governed by MFT's Declaration of Trust and By-Laws and
applicable Massachusetts law. The operations of the Surviving Fund are also
subject to the provisions of the 1940 Act and the rules and regulations
thereunder.
15
TRUSTEES AND OFFICERS
Subject to the provisions of its trust documents, the business of the
Merging Fund is managed by JPMIF's Trustees and the business of the Surviving
Fund is managed by MFT's Trustees, who serve indefinite terms and have all
powers necessary or convenient to carry out their responsibilities.
Information concerning the current Trustees and officers of MFT and JPMIF is
set forth in the Funds' respective Statements of Additional Information, which
are incorporated herein by reference.
SHARES OF FUNDS
Each of MFT and JPMIF is a trust with an unlimited number of authorized
shares of beneficial interest which may be divided into of classes thereof. Each
Fund is one series of a trust and may issue multiple classes of shares. Each
share of a series or class of a trust represents an equal proportionate interest
in that series or class with each other share of that series or class. The
shares of each series or class of either MFT or JPMIF participate equally in the
earnings, dividends and assets of the particular series or class. Fractional
shares have proportionate rights to full shares. Expenses of MFT or JPMIF that
are not attributable to a specific series or class will be allocated to all the
series of that trust in a manner believed by its board to be fair and equitable.
Generally, shares of each series will be voted separately, for example, to
approve an investment advisory agreement. Likewise, shares of each class of each
series will be voted separately, for example, to approve a distribution plan,
but shares of all series and classes vote together, to the extent required by
the 1940 Act, including for the election of Trustees. Neither MFT nor JPMIF is
required to hold regular annual meetings of shareholders, but may hold special
meetings from time to time. There are no conversion or preemptive rights in
connection with shares of either MFT or JPMIF.
SHAREHOLDER VOTING RIGHTS
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
JPMIF are entitled to the number of votes (or "voting shares") equal to the
product of the number of shares owned multiplied by the net asset value per
share on the record date.
A vacancy in the Board of either MFT or JPMIF resulting from the resignation
of a Trustee or otherwise may be filled similarly by a vote of a majority of the
remaining Trustees then in office, subject to the 1940 Act. In addition,
Trustees may be removed from office by a vote of two-thirds of the outstanding
shares (in the case of MFT) or voting shares (in the case of JPMIF) 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 JPMIF) entitled to vote on the matters
specified in the written request. Except as set forth above, the Trustees may
continue to hold office and may appoint successor Trustees.
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders of either MFT or JPMIF could, under
certain circumstances, be held personally liable as partners for the obligations
of that trust. However, the Declaration of Trust of each of MFT and JPMIF
disclaims shareholder liability for acts or obligations of that trust and
provides for indemnification and reimbursement of expenses out of trust property
for any shareholder held personally liable for the obligations of that trust.
Each of MFT and JPMIF may maintain appropriate insurance (for example, fidelity
bonding and errors and omissions insurance) for the protection of that trust,
its shareholders, Trustees, officers, employees and agents covering possible
tort and other liabilities. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability generally is limited to circumstances
in which both inadequate insurance existed and the trust itself was unable to
meet its obligations.
LIABILITY OF DIRECTORS AND TRUSTEES
Under the Declaration of Trust of each of MFT and JPMIF, the Trustees of
that trust are personally liable only for bad faith, willful misfeasance, gross
negligence or reckless disregard of their duties as Trustees. Under the
Declaration of Trust of each of MFT and JPMIF, a Trustee or officer will
generally be indemnified against all liability and against all expenses
reasonably incurred or paid by such person in connection with any claim, action,
suit or proceeding in which such person becomes involved as a party or otherwise
by virtue of such person being or having been a Trustee or officer and against
amounts paid or incurred by such person in the settlement thereof.
The foregoing is only a summary of certain organizational and governing
documents and Massachusetts business trust law. It is not a complete
description. Shareholders should refer to the provisions of these
16
documents and state law directly for a more thorough comparison. Copies of the
Declaration of Trust and By-Laws of each of MFT and JPMIF are available without
charge upon written request to that trust.
INFORMATION RELATING TO THE ADVISORY CONTRACTS AND OTHER SERVICES
GENERAL INFORMATION
As noted above, the investment adviser of the Master Portfolio (and
therefore the Merging Fund's assets) is JPMIM. Pursuant to an Advisory
Agreement, the investment adviser of the Surviving Fund is JPMFAM.
DESCRIPTION OF JPMFAM
JPMFAM, a registered investment adviser, is an indirect wholly-owned
subsidiary of JPMC, incorporated under the laws of Delaware. JPMFAM's principal
executive offices are located at 522 Fifth Avenue, New York, New York 10036. As
of March 31, 2001, JPMFAM and certain of its affiliates (including JPMIM)
provided investment management services with respect to assets of approximately
$607.7 billion.
Under the Advisory Agreement, JPMFAM is responsible for making decisions
with respect to, and placing orders for, all purchases and sales of the
portfolio securities of the Surviving Fund. JPMFAM's responsibilities under the
Advisory Agreement include supervising the Surviving Fund's investments and
maintaining a continuous investment program, placing purchase and sale orders
and paying costs of certain clerical and administrative services involved in
managing and servicing the Surviving Fund's investments and complying with
regulatory reporting requirements. Under the Advisory Agreement, JPMFAM is
obligated to furnish employees, office space and facilities required for the
operation of the Surviving Fund. The services provided to the Surviving Fund by
JPMFAM are substantially similar to the services currently provided to the
Master Portfolio 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 continues 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
17
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.
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
18
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.
As of 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.
PROPOSAL 2:
ELECTION OF TRUSTEES
It is proposed that shareholders of the Merging Fund consider the election
of the individuals listed below (the "Nominees") to the Board of Trustees of
JPMIF, which is currently organized as a Massachusetts business trust. Even if
the Reorganization described in Proposal 1 is approved, other mutual funds that
are series of JPMIF will continue to exist and operate. All shareholders of any
series of JPMIF as of the record date (April 6, 2001) are required to be given a
vote on the proposal regarding Trustees. Because as of the record date you were
still a shareholder in JPMIF, you are entitled to vote on this proposal.
Shareholders of MFT are being asked to approve the same Trustees as are being
proposed for JPMIF.
In connection with the 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 Nominees include certain current Trustees of MFT, certain
current Trustees of JPMIF (including certain members of JPMIF'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 JPMIF is contained in the Funds'
Statements of Additional Information, which are incorporated herein by
reference.
The persons named in the accompanying form of proxy intend to vote each such
proxy "FOR" the election of the Nominees, unless shareholders specifically
indicate on their proxies the desire to withhold authority to vote for elections
to office. It is not contemplated that any Nominee will be unable to serve as a
Board member for any reason, but if that should occur prior to the Meeting, the
proxy holders reserve the right to substitute another person or persons of their
choice as nominee or nominees.
(1)Each Nominee is grandfathered with respect to the mandatory retirement age
for three years from the date of election.
THE JPMIF 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
JPMIF present, in person or by proxy, at the joint meeting is required to elect
a Trustee of JPMIF, provided that at least one-third of the outstanding shares
of JPMIF 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 JPMIF.
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.
19
NAME OF NOMINEE AND CURRENT TRUSTEE BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATIONS
POSITION WITH FUND COMPLEX SINCE AGE DURING THE PAST FIVE YEARS
- ----------------------------------- ------- --- ---------------------------------------------
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,
Chairman of certain other trusts Lumelite Corporation, since September 1985;
in the Fund Complex Trustee, Morgan Stanley Funds. Address: 202
June Road, Stamford, CT 06903.
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 JPMIF 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 JPMIF presently has an Audit Committee. The members
of the Audit Committee are Messrs. Addy (Chairman), Eschenlauer, Burns, Mallardi
and Healey. The function of the Audit Committee is to recommend independent
auditors and monitor accounting and financial matters. The Audit Committee met
four times during the 2000 calendar year.
The Board of Trustees of JPMIF 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 JPMIF, 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 generally means registered investment companies
advised by JPMIM.
2 A Fund Complex means two or more investment companies that hold themselves
out to investors as related companies for purposes of investment and
investment services, or have a common investment adviser or have an
investment adviser that is an affiliated person of the investment adviser
of any of the other investment companies. The Fund Complex for which the
nominees will serve includes 14 investment companies (as used herein,
registered investment companies advised by JMPIM and JPFAM).
3 Total number of investment company boards with respect to Trustees, or
Advisory Boards with respect to Advisory Board members, served on within
the Fund Complex.
4 Pierpont Group, Inc. paid Mr. Healey, in his role as Chairman of Pierpont
Group, Inc., compensation in the amount of $200,000, contributed $25,500 to
a defined contribution plan on his behalf and paid $18,400 in insurance
premiums for his benefit.
Inasmuch as the Morgan Fund Complex does not have any retirement plan for
its Trustees and JPMC will also benefit from the administrative efficiencies of
a consolidated board, JPMC has agreed to pay a one-time retirement package to
the Trustees of the Morgan Fund Complex and the Advisory Board members who have
volunteered to leave the Board of Trustees or Advisory Board of the Morgan Fund
Complex prior to their normal retirement date. For each retiring Trustee, the
retirement package is equal to three times the annual fee (which may increase)
for the new Combined Board per Trustee; for each retiring Advisory Board member,
the retirement package is one and a half times the annual fee (which may
increase) for the new Combined Board per Trustee.
SURVIVING FUND'S RETIREMENT PLAN AND DEFERRED COMPENSATION PLAN FOR ELIGIBLE
TRUSTEES
Effective August 21, 1995, the Trustees of the former Chase Vista Funds also
instituted a Retirement Plan for Eligible Trustees (the "Plan") pursuant to
which each Trustee (who is not an employee of any of the former Chase Vista
Funds' adviser, administrator or distributor or any of their affiliates) may be
entitled to certain benefits upon retirement from the Board of Trustees.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible Trustee has attained age 65 and has completed at least five years of
continuous service with one or more of the investment companies advised by the
adviser of certain former Chase Vista Funds and its affiliates (collectively,
the "Covered Funds"). Each Eligible Trustee is entitled to receive from the
Covered Funds an annual benefit commencing on the first day of the calendar
quarter coincident with or following his date of retirement equal to the sum of
(1) 8% of the highest annual compensation received from the Covered Funds
multiplied by the number of such Trustee's years of service (not in excess of 10
years) completed with respect to any Covered Funds and (2) 4% of the highest
annual compensation received from the Covered Funds for each year of service in
excess of 10 years, provided that no Trustee's annual benefit will exceed the
highest annual compensation received by that Trustee from the Covered Funds.
Such benefit is payable to each eligible Trustee in monthly installments for the
life of the Trustee. On February 22, 2001, the Board of Trustees voted to
terminate the Plan and in furtherance of this determination agreed to pay
Trustees an amount equal, in the aggregate, to $10.95 million, of which $5.3
million had been previously accrued by the Covered Funds. The remaining $5.65
million was paid by Chase. Mssrs. Armstrong, Eppley, Reid, Spalding and
Vartabedian, who are Nominees, received $1,027,673, $800,600, $2,249,437,
$463,798 and $1,076,927, respectively, in connection with the termination. Each
nominee has elected to defer receipt of such amount pursuant to the Deferred
Compensation Plan for Eligible Trustees.
Effective August 21, 1995, the Trustees instituted a Deferred Compensation
Plan for Eligible Trustees (the "Deferred Compensation Plan") pursuant to which
each Trustee (who is not an employee of the former
21
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 dated elected by the Trustee (or
the Trustee's termination of service). The deferred amounts are deemed invested
in shares of funds as elected by the Trustee at the time of deferral. If a
deferring Trustee dies prior to the distribution of amounts held in the deferral
account, the balance of the deferral account will be distributed to the
Trustee's designated beneficiary in a single lump sum payment as soon as
practicable after such deferring Trustee's death. Messrs. Armstrong, Eppley,
Reid, Spalding and Vartabedian are the only Nominees who have elected to defer
compensation under such plan.
The Trustees decide upon general policies and are responsible for overseeing
JPMIF's business affairs. To assist the Trustees in exercising their overall
supervisory responsibilities, each of JPMIF and the Master Portfolio has entered
into a Fund Services Agreement with Pierpont Group, Inc. to assist the Trustees
in exercising their overall supervisory responsibilities. Pierpont Group, Inc.
was organized in July 1989 to provide services for the J.P. Morgan Family of
Funds (formerly "The Pierpont Family of Funds"), and the Trustees are the equal
and sole shareholders of Pierpont Group, Inc. JPMIF 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:
$5,064, $5,894 and $4,579.
MASTER PORTFOLIO--For the fiscal years ended October 31, 1998, 1999 and
2000: $15,548, $17,351 and $16,550.
PRINCIPAL EXECUTIVE OFFICERS:
JPMIF's principal executive officers are listed below. The officers conduct
and supervise the business operations of JPMIF. 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 JPMIF are as follows:
NAME AND POSITION AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ----------------- ---- ------------------------------------------
David Wezdenko, 37 Vice President, J.P. Morgan Investment
President and Management Inc. Mr. Wezdenko is the Chief
Treasurer Operating Officer for the U.S. Mutual
Funds and Financial Intermediaries
Business. Since joining J.P. Morgan in
1996, he has held numerous financial and
operations related positions supporting
the J.P. Morgan pooled funds business.
Sharon Weinberg, 41 Vice President, J.P. Morgan Investment
Vice-President Management Inc. Ms. Weinberg is head of
and Secretary Business and Product Strategy for the U.S.
Mutual Funds and Financial Intermediaries
business. Since joining J.P. Morgan in
1996 in New York, she has held numerous
positions throughout the asset management
business in mutual funds marketing, legal
and product development.
ACCOUNTANTS
PricewaterhouseCoopers LLP serves as the Merging Fund's, the Master
Portfolio's and the Surviving Fund's independent accountants, auditing and
reporting on the annual financial statements and reviewing certain regulatory
reports and federal income tax returns. PricewaterhouseCoopers LLP also performs
other professional accounting, auditing, tax and advisory services when MFT or
JPMIF engages it to do so.
AUDIT FEES. The aggregate fees paid to PricewaterhouseCoopers LLP in
connection with the annual audit of the Merging Fund and the Master Portfolio
for the last fiscal year ended October 31, 2000 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 JPMIF Board for use at the Meeting. It
is expected that the solicitation of proxies will be primarily by mail. JPMIF's
officers and service providers may also solicit proxies by telephone, facsimile
machine, telegraph, the Internet or personal interview. In addition JPMIF may
retain the services of professional solicitors to aid in the solicitation of
proxies for a fee. It is anticipated that banks, brokerage houses and other
custodians will be requested on behalf of JPMIF to forward solicitation
materials to their principals to obtain authorizations for the execution of
proxies. Any Merging Fund Shareholder giving a proxy may revoke it at any time
before it is exercised by submitting to JPMIF a written notice of revocation or
a subsequently executed proxy or by attending the Meeting and electing to vote
in person.
Only the Merging Fund Shareholders of record at the close of business on
April 6, 2001 will be entitled to vote at the Meeting. On that date, there were
outstanding and entitled to be voted 25,615,451.181 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
JPMIF, by submission of a later dated Proxy or by voting in person at the
Meeting. If any other matters come before the Meeting, proxies will be voted by
the persons named as proxies in accordance with their best judgment.
23
EXPENSES OF PROXY SOLICITATION
JPMC, and not the Merging Fund or the Surviving Fund (or shareholders of
either Fund) will pay the cost of the preparation, printing and mailing to its
shareholders of the Combined Prospectus/Proxy Statement, accompanying Notice of
Meeting, form of proxy and any supplementary solicitation of its shareholders.
It is expected that the cost of retaining D. F. King & Co., Inc., to assist
in the proxy solicitation process for the fund complex will not exceed $200,000,
which cost will be borne by JPMC.
INTERESTED PARTIES
On the record date, the Trustees and officers of JPMIF as a group owned less
than 1% of the outstanding shares of the Merging Fund. On the record date, the
name, address and percentage ownership of the persons who owned beneficially
more than 5% of the shares of the Merging Fund and the percentage of shares of
the Surviving Fund that would be owned by such persons upon consummation of the
Reorganization and the Concurrent Reorganization based upon their holdings at
April 6, 2001 are as follows:
PERCENTAGE OF
AMOUNT PERCENTAGE OF SURVIVING FUND
OF SHARES MERGING FUND OWNED UPON
NAME AND ADDRESS OWNED OWNED ON CONSUMMATION
- ----------------------------------- ---------------- ------------- --------------
MGT of New York as agent
for Julian Robertson
Attn: Special Products 2/OPS3
500 Stanton Christiana Road
Newark DE 19713-2107 225,697,867.0900 44.06% 5.46%
Monroe & Co. FBO
Worldport/Denver
Series 2000A Construction
Fund
A/C 1000018603
P.O. Box 160
Westerville OH 43086-0160 46,208,728.7500 9.02% 1.12%
FX Alliance LLC
Attn Karen Kelly
900 Third Ave 3rd Fl.
New York NY 10022-4728 17,351,152.1600 7.29% 0.09%
Ellen Haebler Skove
48 Card Sound Rd
Key Largo FL 33037-3770 30,296,871.6100 5.91% 0.07%
The Robertson Foundation
c/o Tiger Mgmt. co.
Attn Julie Depperschmidt
101 Park Ave. Fl 48
New York NY 10178-4799 34,048,773.4000 6.65% 0.08%
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 shares of the Surviving Fund and the percentage of shares
24
of the Surviving Fund that would be owned by such persons upon consummation of
the Reorganization and the Concurrent Reorganization based upon their holdings
at April 6, 2001 are as follows:
PERCENTAGE OF PERCENTAGE OF
AMOUNT SURVIVING FUND SURVIVING FUND
OF SHARES OWNED ON OWNED UPON
NAME AND ADDRESS OWNED RECORD DATE CONSUMMATION
- ----------------------------------- ---------------- -------------- --------------
OBIE & CO
Chase Bank of Texas
Attn: STIF Unit 18 HCB 340
PO Box 2558
Houston, TX 77252-2558 189,493,561,4000 7.16% 4.59%
Chase Manhattan Bank N/A
Global Investor Services
Omnibus, AC
Attn Barrington A Miller
3 Chase Metro Tech Center
7th Flr
Brooklyn, NY 11245 448,159,856,8300 16.93% 10.85%
ADDITIONAL INFORMATION ABOUT MFT
Information about the Surviving Fund is included in its Prospectus, which is
incorporated by reference and enclosed herein. Additional information about the
Surviving Fund is also included in MFT's Statement of Additional Information,
which has been filed with the Commission and which is incorporated herein by
reference. Copies of the Statement of Additional information may be obtained
without charge by calling 1-800-348-4782. MFT is subject to the requirements of
the 1940 Act and, in accordance with such requirements, files reports and other
information with the Commission. These materials can be inspected and copied at
the Public Reference Facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
at 7 World Trade Center, Suite 1300, New York, NY 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can also be
obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, D.C.
20549, at prescribed rates, and are also available on the Commission's web site
at http://www.sec.gov.
ADDITIONAL INFORMATION ABOUT JPMIF
Information about the Merging Fund is included in its Prospectus, which is
incorporated by reference herein. Additional information about the Merging Fund
is also included in JPMIF's Statement of Additional Information which has been
filed with the Commission and which is incorporated herein by reference. Copies
of the Statement of Additional information may be obtained without charge by
calling 1-800-766-7722. JPMIF is subject to the requirements of the 1940 Act
and, in accordance with such requirements, files reports and other information
with the Commission. These materials can be inspected and copied at the Public
Reference Facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World
Trade Center, Suite 1300, New York, NY 10048 and 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can also be obtained from
the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, Washington, D.C. 20549, at
prescribed rates, and are also available on the Commission's web site at
http://www.sec.gov.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial highlights, financial statements and notes thereto of
the Merging Fund for the fiscal year ended 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.
25
OTHER BUSINESS
The JPMIF Board knows of no other business to be brought before the Meeting.
However, if any other matters come before the Meeting, it is the intention of
the JPMIF Board that proxies that do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of proxy.
LITIGATION
Neither MFT nor JPMIF is involved in any litigation that would have any
material adverse effect upon either the Merging Fund or the Surviving Fund.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to JPMIF in writing at the address on
the cover page of this Combined Prospectus/Proxy Statement or by telephoning
1-800-766-7722.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE REQUESTED
TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
26
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 Institutional Funds (the "Transferor Trust"),
a Massachusetts business trust, on behalf of the J.P. Morgan Institutional
Treasury Money Market Fund (the "Transferor Portfolio"), Mutual Fund Trust (the
"Acquiring Trust"), a Massachusetts business trust, on behalf of JPMorgan
Treasury Plus Money Market Fund (formerly, Chase Vista Treasury Plus 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 AMD 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 Agency 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 Institutional 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 Institutional Class shares of the Acquiring
Portfolio, both as determined in accordance with Section 1(c)(i).
(iii) All computations of value shall be made by the Custodian in
accordance with its regular practice as pricing agent for the Acquiring
Portfolio and the Transferor Portfolio.
2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING TRUST
The Acquiring Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Acquiring Trust is a business trust
that is duly organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts and has the power to carry on its business as
it is now being conducted. The Acquiring Portfolio is a validly existing series
of shares of such business trust representing interests therein under the laws
of Massachusetts. Each of the Acquiring Portfolio and the Acquiring Trust have
all necessary federal, state and local authorization to own all of its
properties and assets and to carry on its business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Acquiring Trust is registered
under the Investment Company Act of 1940, as amended (the "Act") as an open-end
investment company of the management type; such registration has not been
revoked or rescinded and is in full force and effect.
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(c) CURRENT OFFERING DOCUMENTS. The current prospectuses and statements of
additional information of the Acquiring Trust, as amended, included in the
Acquiring Trust's registration statement on Form N-1A filed with the Securities
and Exchange Commission, comply in all material respects with the requirements
of the Securities Act of 1933, as amended (the "Securities Act") and the Act and
do not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) CAPITALIZATION. The Acquiring Trust has an unlimited number of
authorized shares of beneficial interest of which as of February 28, 2001 there
were 1,074,655,000 outstanding shares of the Acquiring Portfolio, and no shares
of such Portfolio were held in the treasury of the Acquiring Trust. All of the
outstanding shares of the Acquiring Trust have been duly authorized and are
validly issued, fully paid and nonassessable (except as disclosed in the
Acquiring Trust's prospectus and recognizing that under Massachusetts law,
shareholders of an Acquiring Trust portfolio could, under certain circumstances,
be held personally liable for the obligations of such Acquiring Trust
portfolio). Because the Acquiring Trust is an open-end investment company
engaged in the continuous offering and redemption of its shares, the number of
outstanding shares may change prior to the Effective Time of the Reorganization.
All of the issued and outstanding shares of the Acquiring Portfolio have been
offered and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable state securities
laws.
(e) FINANCIAL STATEMENTS. The financial statements of the Acquiring Trust
with respect to the Acquiring Portfolio for the fiscal year ended August 31,
2000, which have been audited by PricewaterhouseCoopers LLP, fairly present the
financial position of the Acquiring Portfolio as of the dates thereof and the
respective results of operations and changes in net assets for each of the
periods indicated in accordance with generally accepted accounting principles
("GAAP"). The financial statements of the Acquiring Trust with respect to the
Acquiring Portfolio for the fiscal period ended February 28, 2001 fairly present
the financial position of the Acquiring Portfolio as of the dates thereof and
the respective results of operations and changes in net assets for each of the
periods indicated in accordance with GAAP.
(f) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring Portfolio Shares
to be issued in connection with the Reorganization will be duly authorized and
upon consummation of the Reorganization will be validly issued, fully paid and
nonassessable (except as disclosed in the Trust's prospectus and recognizing
that under Massachusetts law, shareholders of an Acquiring Trust portfolio
could, under certain circumstances, be held personally liable for the
obligations of such portfolio).
(g) AUTHORITY RELATIVE TO THIS PLAN. The Acquiring Trust, on behalf of the
Acquiring Portfolio, has the power to enter into this Plan and to carry out its
obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Acquiring Trust's Board of Trustees and no other proceedings by the
Acquiring Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Acquiring Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or 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 537,242,000 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 Treasury 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 Treasury 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, 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 Treasury Money Market Fund and J.P. Morgan Treasury Money
Market Reserves Fund, each a series of the Transferor Trust, 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 Treasury Money Market Fund and J.P. Morgan Treasury Money
Market Reserves Fund, each a series of the Transferor Trust, 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 Reserve Class Shares, Institutional Class Shares, and
Premier 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 Morgan Class Shares and Agency 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 INSTITUTIONAL FUNDS
on behalf of J.P. Morgan Institutional Treasury
Money Market Fund
By: /s/ Sharon Weinberg
--------------------------------------------
Name: Sharon Weinberg
Title: Vice President and Secretary
MUTUAL FUND TRUST
on behalf of JPMorgan Treasury Plus Money Market
Fund
By: /s/ Fergus Reid, III
--------------------------------------------
Name: Fergus Reid, III
Title: Chairman
Agreed and acknowledged with respect to
Section 9:
J.P. MORGAN CHASE & CO.
By: /s/ George Gatch
--------------------------------------------
Name: George Gatch
Title: Managing Director
A-11
STATEMENT OF ADDITIONAL INFORMATION
(SPECIAL MEETING OF SHAREHOLDERS OF
J.P. MORGAN INSTITUTIONAL TREASURY MONEY MARKET FUND,
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS)
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Combined Prospectus/Proxy Statement dated May
12, 2001 for the Special Meeting of Shareholders of J.P. Morgan Institutional
Treasury Money Market Fund (the "Merging Fund"), a series of J.P. Morgan
Institutional 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 three 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, 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 Agency 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-
THE TREASURY MONEY MARKET PORTFOLIO/JPMORGAN TREASURY PLUS MONEY MARKET FUND
PROFORMA COMBINED PORTFOLIO OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001
(AMOUNTS IN THOUSANDS)
Principal Amount Market Value
- -------------------------------------------------- -------------------------------------------
PRO FORMA
JPMORGAN THE JPMORGAN THE COMBINED
TREASURY TREASURY TREASURY TREASURY JPMORGAN
MONEY MONEY MONEY MONEY TREASURY
MARKET MARKET PRO FORMA PRO FORMA MARKET MARKET PRO FORMA PLUS MONEY
FUND PORTFOLIO ADJUSTMENT COMBINED FUND PORTFOLIO ADJUSTMENT MARKET FUND
- -------------------------------------------------- ------------------------ -------------------------------------------
MONEY MARKET INSTRUMENTS 100.35%
------------------------
U.S. TREASURY SECURITIES 33.13%
U.S Treasury Bills,
- 100,000 - 100,000 4.83%, 04/26/01 $ - $ 99,224 $ 99,224
200,000 200,000 4.94%, 03/29/01 199,236 199,236
100,000 100,000 4.95%, 04/05/01 99,522 99,522
100,000 100,000 4.95%, 04/19/01 99,327 99,327
100,000 100,000 4.97%, 05/03/01 99,138 99,138
200,000 200,000 4.98%, 05/17/01 197,895 197,895
100,000 100,000 4.99%, 04/19/01 99,328 99,328
100,000 100,000 4.99%, 05/10/01 99,041 99,041
100,000 100,000 5.08%, 04/12/01 99,413 99,413
250,000 250,000 5.11%, 04/12/01 248,532 248,532
U.S. Treasury Notes, -
25,000 25,000 4.88%, 3/31/01 24,965 24,965
40,000 40,000 5.63%, 5/15/01 39,934 39,934
35,000 35,000 6.63%, 7/31/01 35,143 35,143
------------------------------------------
1,250,000 200,000 1,450,000 TOTAL U.S. TREASURY SECURITIES 1,241,432 199,266 1,440,698
REPURCHASE AGREEMENTS 67.22%
Bear Stearns, 5.38%, due
3/01/01 (Dated 02/28/01,
Proceeds $250,037,
Secured by USTR,
$208,360, various rates,
due 08/15/02 through
02/15/25, Market Value
250,000 250,000 $255,859) Credit Suisse 250,000 250,000
First Boston, Tri Party,
5.38%, due 03/01/01 (Dated
2/28/01, Proceeds $215,032,
Secured by USTR, $218,063,
various rates, due 04/30/01
through 05/15/08;
215,000 215,000 Market Value $219,513) 215,000 215,000
Deutsche Morgan Grenfel, Tri
Party, 5.34%, due 03/01/01,
(Dated 2/28/01, Proceeds
$144,907, Secured by USTR,
$205,950, various rates, due
06/30/01 through 08/15/25;
144,886 144,886 Market Value $146,930) 144,886 144,886
Goldman Sachs & Co., Tri
Party, 5.35%, due 03/01/01
(Dated 2/28/01, Proceeds
$240,036, Secured by USTR,
$213,091, various rates, due
11/15/07 through 05/15/20;
240,000 240,000 Market Value $241,153) 240,000 240,000
Goldman Sachs & Co., 5.10%,
due 03/01/01 Dated 02/28/01,
Proceeds $57,842, Secured by
USTR, $50,311, various
rates,due 05/15/06 through
02/15/29,
57,834 57,834 Market Value $58,991) 57,834 57,834
Goldman Sachs & Co., 5.20%,
due 03/01/01 (Dated
02/28/01,
Proceeds $175,025, Secured
by USTR, $152,235, various
rates, due 05/15/06 through
02/15/29,
175,000 175,000 Market Value $178,500) 175,000 175,000
See Notes to Pro Forma Financial Statements
4
Goldman Sachs & Co., 5.35%,
due 03/01/01 (Dated
02/28/01,
Proceeds $200,030, Secured
by USTR, $173,983, various
rates, due 05/15/06 through
02/15/29,
200,000 200,000 Market Value $204,000) 200,000 200,000
Greenwich Capital Markets,
Inc., Tri Party, 5.37%, due
03/01/01 (Dated 2/28/01,
Proceeds $240,036, Secured
by USTR, $231,671, various
rates, due 06/30/01 through
07/15/02;
240,000 240,000 Market Value $243,095) 240,000 240,000
Greenwich Capital Markets,
Inc., 5.37%, due 03/01/01
(Dated 02/28/01, Proceeds
$250,037, Secured by
USTR, $211,607, various
rates, due 11/15/01 through
08/15/29,
250,000 250,000 Market Value $254,660) 250,000 250,000
Greenwich Capital Markets,
Inc., 5.45%, due 03/06/01
(Dated 02/28/01, Proceeds
$250,227, Secured by U.S.
Government Agency
Obligations, $316,639,
various
rates, due 02/15/07 through
02/15/31,
250,000 250,000 Market Value $255,003) 250,000 250,000
Merrill Lynch & Co., Inc.,
Tri Party, 5.37%, due 03/01/01,
(Dated 2/28/01, Proceeds
$255,038, Secured by USTR,
$268,503, various rates, due
5/15/01 through 11/15/20;
255,000 255,000 Market Value $259,517) 255,000 255,000
Merrill Lynch & Co., Inc.,
5.37%, due 03/01/01 (Dated
02/28/01, Proceeds $400,060,
Secured by USTR, $339,469,
various rates, due 06/30/01
through 05/15/30,
400,000 400,000 Market Value $406,655) 400,000 400,000
Westdeutsche Landesbank, Tri
Party, 5.38%, due 03/01/01,
(Dated 2/28/01, Proceeds
$245,037, Secured by
USTR, $215,680, various
rates, due 08/15/03
through 08/15/29;
245,000 245,000 Market Value $247,765) 245,000 245,000
1,582,834 1,339,886 2,922,720 TOTAL REPURCHASE AGREEMENTS 1,582,834 1,339,886 2,922,720
- ------------------------------------------------------------------------------------------------------------------------------------
2,832,834 1,539,886 - 4,372,720 TOTAL INVESTMENTS 100.35% $ 2,824,266 $ 1,539,152 $ - $ 4,363,418
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL COST $ 2,824,266 $ 1,539,152 $ - $ 4,363,418
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 2,813,515 $ 1,540,440 $ - $ 4,348,079
- ------------------------------------------------------------------------------------------------------------------------------------
USTR - United States Treasury Notes, Bonds and Bills
See Notes to Pro Forma Financial Statements
5
J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY MARKET FUND /
J.P. MORGAN INSTITUTIONAL TREASURY MONEY MARKET FUND /
J.P. MORGAN TREASURY MONEY MARKET RESERVES FUND /
THE TREASURY MONEY MARKET PORTFOLIO /
JPMORGAN TREASURY PLUS MONEY MARKET FUND
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 THE TREASURY
INSTITUTIONAL INSTITUTIONAL TREASURY MONEY MARKET
TREASURY SERVICE MONEY MARKET PORTFOLIO
MONEY MARKET TREASURY RESERVES FUND
FUND MONEY MARKET
FUND
ASSETS:
Investment securities, at Value $ 538,786 $ 474,954 $ 526,700 $ 1,539,152
Deferred organization expenses 3 3 - -
Other assets - 1 1 31
Receivables:
Interest - - - 1,553
Expense reimbursement 86 71 90 -
------------ --------------- ---------------- ----------------
Total Assets 538,875 $ 475,029 526,791 1,540,736
------------ --------------- ---------------- ----------------
LIABILITIES:
Payables:
Dividends 1,659 1,785 2,109 -
Custodian - - - 35
Accrued liabilities:
Investment advisory fees - - - 188
Administration fees 7 7 11 26
Shareholder servicing fees 31 18 22 -
Distribution fees - - - -
Custody fees - - - 14
Service organization fees - 88 109 -
Other 28 45 212 33
------------ --------------- ---------------- ----------------
Total Liabilities 1,725 1,943 2,463 296
------------ --------------- ---------------- ----------------
NET ASSETS:
Paid in capital 537,241 473,244 524,371
Distributions in excess of net investment income (1) (2) (3)
Accumulated net realized loss on investment transactions (90) (156) (40)
------------ --------------- ---------------- ----------------
Net Assets $ 537,150 $ 473,086 $ 524,328 $ 1,540,440
============ =============== ================ ================
Shares of beneficial interest outstanding 537,242 473,243 524,371
Shares outstanding
Vista (Renamed Morgan)
Premier
Institutional (Renamed Agency)
Net Assets Value Per Share $ 1.00 $ 1.00 $ 1.00
Pro Forma with Concurrent Reorganization
JPMorgan Treasury Plus Money Market Fund
Shares Outstanding
Morgan
Premier
Agency
Reserves
Institutional
Net Asset Value Per Share
Morgan
Premier
Agency
Reserves
Institutional
------------ --------------- ---------------- ----------------
Cost of investments $ - $ - $ - $ 1,539,152
============ =============== ================ ================
PRO FORMA
COMBINED
JPMORGAN PRO FORMA JPMORGAN
TREASURY PLUS ADJUSTMENTS TREASURY
MONEY MARKET PLUS MONEY
FUND MARKET FUND
ASSETS:
Investment securities, at Value $ 2,824,266 $ (1,540,440) (a) $ 4,363,418
Deferred organization expenses - (6) (d) -
Other assets 17 - 50
Receivables: -
Interest 273 - 1,826
Expense reimbursement - 6 253
--------------- --------------- -------------
Total Assets 2,824,556 (1,540,440) 4,365,547
--------------- --------------- -------------
LIABILITIES:
Payables:
Dividends 9,671 - 15,224
Custodian - - 35
Accrued liabilities:
Investment advisory fees 198 - 386
Administration fees 119 - 170
Shareholder servicing fees 379 - 450
Distribution fees 105 - 105
Custody fees 27 - 41
Service organization fees - - 197
Other 542 - 860
---------------------------------- -------------
Total Liabilities 11,041 - 17,468
---------------------------------- -------------
NET ASSETS:
Paid in capital 2,813,618 4,348,474
Distributions in excess of net investment income (59) (65)
Accumulated net realized loss on investment transactions (44) (330)
---------------------------------- -------------
Net Assets $ 2,813,515 $ (1,540,440) 4,348,079
================================== =============
Shares of beneficial interest outstanding (1,534,856) (b) -
Shares outstanding
Vista (Renamed Morgan) 1,391,162 (1,391,162) (c) -
Premier 347,882 (347,882) (c) -
Institutional (Renamed Agency) 1,074,655 (1,074,655) (c) -
Net Assets Value Per Share $ 1.00 *
Pro Forma with Concurrent Reorganization
JPMorgan Treasury Plus Money Market Fund
Shares Outstanding
Morgan 1,391,162 (e) 1,391,162
Premier 821,125 (e) 821,125
Agency 1,074,655 (e) 1,074,655
Reserves 524,371 (e) 524,371
See Notes to Pro Forma Financial Statements.
6
Institutional 537,242 (e) 537,242
Net Asset Value Per Share
Morgan $ 1.00
Premier $ 1.00
Agency $ 1.00
Reserves $ 1.00
Institutional $ 1.00
---------------------------------- -------------
Cost of investments $ 2,824,266 $ - $ 4,363,418
================================== =============
(a) Reallocation of investments from the feeder funds to the master portfolio.
(b) Reallocation of the feeder fund's beneficial interest to Morgan, Premier,
Institutional, Reserves and Agency Shares due to the Concurrent
Reorganization.
(c) Reallocation of shares outstanding to Reserves, Morgan, Premier,
Institutional, and Agency Share due to the Concurrent Reorganization.
(d) Write-off of deferred organization expenses of the portfolio.
(e) Reflects the additional number of shares outstanding due to the Concurrent
Reorganization.
* All classes
7
J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY MARKET FUND /
J.P. MORGAN INSTITUTIONAL TREASURY MONEY MARKET FUND /
J.P. MORGAN TREASURY MONEY MARKET RESERVES FUND /
THE TREASURY MONEY MARKET PORTFOLIO /
JPMORGAN TREASURY PLUS MONEY MARKET FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED FEBRUARY 28, 2001 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN THE TREASURY
INSTITUTIONAL INSTITUTIONAL TREASURY MONEY MARKET
TREASURY SERVICE MONEY MARKET PORTFOLIO
MONEY MARKET TREASURY RESERVES FUND
FUND MONEY MARKET
FUND
INCOME:
Interest Income $ 18,826 $ 27,475 $ 23,109 $ 69,410
Allocated Portfolio Expenses (606) (888) (737) -
-----------------------------------------------------------------------
Investment Income 18,220 26,587 22,372 69,410
-----------------------------------------------------------------------
EXPENSES:
Shareholder Servicing Fees 303 222 764 -
Investment Advisory Fees - - - 2,099
Administration Service Fees 72 107 87 266
Distribution Fees/Service Organization Fees - 1,108 1,257 -
Registration Expenses 10 78 168 -
Custodian Fees - - - 106
Transfer Agent Fees 17 17 21 -
Professional Fees 12 13 11 41
Trustees' Fees and Expenses 4 6 1 13
Financial and Fund Accounting Services Fees 20 20 20 -
Printing and Postage 6 4 10 -
Fund Services Fees 4 7 5 16
Administration Fees 3 5 5 7
Amortization of organizational expenses 2 2 - -
Other 12 18 11 13
- - - -
-----------------------------------------------------------------------
Total Expenses 465 1,607 2,360 2,561
-----------------------------------------------------------------------
Less amounts waived - - - -
Less earnings credits - - - -
Less Reimbursement of Expenses 464 501 522 330
-----------------------------------------------------------------------
Net Expenses 1 1,106 1,838 2,231
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Net Investment Income 18,219 25,481 20,534 67,179
-----------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments (49) (74) (26) (149)
Net change in net unrealized appreciation
(depreciation) on investments -- -- -- --
-----------------------------------------------------------------------
Net (decrease) increase in net assets from operations $ 18,170 $ 25,407 $ 20,508 $ 67,030
=======================================================================
JPMORGAN PRO FORMA PRO FORMA
TREASURY PLUS ADJUSTMENTS COMBINED
MONEY MARKET JPMORGAN
FUND TREASURY
PLUS MONEY
MARKET FUND
INCOME:
Interest Income $ 159,318 $ (69,411)(c) $ 228,727
Allocated Portfolio Expenses - 2,231 (b) -
-------------------------------- -----------------
Investment Income 159,318 (67,180) 228,727
-------------------------------- -----------------
EXPENSES:
Shareholder Servicing Fees 6,362 1,609 (a) 9,260
Investment Advisory Fees 2,547 (978) (a) 3,668
Administration Service Fees 2,547 590 (a) 3,669
Distribution Fees/Service Organization Fees 1,364 (1,444) (a) 2,285
Registration Expenses 647 903
Custodian Fees 249 188 (f) 543
Transfer Agent Fees 197 252
Professional Fees 82 (34) (g) 125
Trustees' Fees and Expenses 126 150
Financial and Fund Accounting Services Fees - (57) (f) 3
Printing and Postage 27 (10) (g) 37
Fund Services Fees - 32
Administration Fees - 20
Amortization of Organizational Expenses - (4) (e) -
Other 190 244
-
-------------------------------- -----------------
Total Expenses 14,338 (140) 21,191
-------------------------------- -----------------
Less amounts waived 2,672 (140) (a) 2,532
Less earnings credits 119 - 119
Less Reimbursement of Expenses - - 1,817
-------------------------------- -----------------
Net Expenses 11,547 - 16,723
-------------------------------- -----------------
-------------------------------- -----------------
Net Investment Income 147,771 (67,180) 212,004
-------------------------------- -----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net Realized Gain (Loss) on Investments (97) 149 (d) (246)
Net Change in Net Unrealized Appreciation
(Depreciation) on Investments -- -- --
-------------------------------- -----------------
Net (Decrease) Increase in Net Assets from Operations $ 147,674 $ (67,031) $ 211,758
================================ =================
(a) Reflects adjustments to investment advisory fee, administrative fees and
shareholder servicing fees and/or related waivers based on the surviving
Fund's revised fee schedule.
(b) Reflects the elimination of master portfolio expenses which have been
disclosed under feeder expenses.
(c) Reallocation of investments income to feeder funds.
(d) Reallocation of realized and unrealized loss to feeder funds.
(e) Reflect write off of deferred organization expense.
(f) Reclassification of fund accounting fees into the new combined custody fees.
(g) Reduction reflects expected benefits from combined operations.
8
PRO FORMA FINANCIAL STATEMENTS
J.P. MORGAN INSTITUTIONAL TREASURY MONEY MARKET FUND /
JPMORGAN TREASURY PLUS MONEY MARKET FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF COMBINATION:
The Pro Forma Combining Statement of Assets and Liabilities, Statement of
Operations and Schedule of Investments ("Pro Forma Statements") reflect the
accounts of The Treasury Money Market Portfolio ("Master Portfolio"), J.P.
Morgan Institutional Service Treasury Money Market Fund ("Institutional
Service Fund"), J.P. Morgan Institutional Treasury Money Market Fund
("Institutional Fund") and J.P. Morgan Treasury Money Market Reserves Fund
("Treasury Money Market Reserves Fund"), (collectively the "feeder funds" of
the Master Portfolio) and JPMorgan Treasury Plus Money Market Fund
("JPMTMMF") 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 JPMTPMMF. 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, JPMTPMMF would commence
offering Reserve Class Shares and Institutional Class Shares. The net asset
value per share for the Reserve 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 Concurrent
Reorganization.
Under the Concurrent Reorganization, the existing shares of the Treasury
Money Market Reserves Fund would be renamed Reserves Class Shares, the
Institutional Fund would be renamed Institutional Class Shares and the
Institutional Service Fund would be renamed Premier Class Shares. The net asset
values per share for the Reserves, Agency and Premier Class Shares at the
commencement of offering would be identical to the closing net asset value
per share for the Premier Class Shares immediately prior to the organization.
In addition, the Chase Vista Class shares would be renamed the Investor Class
Shares and the Chase Institutional Class Shares would be renamed Agency Class
Shares.
Under the proposed Concurrent Reorganization, each shareholder of Treasury
Money Market Reserves Fund, Institutional Service Fund and the Institutional
Fund would receive shares of JPMTPMMF with a value equal to their holdings in
their respective funds. Holders of the Treasury Money Market Reserves Fund
will receive Reserves Class Shares in JPMTPMMF, holders of the Institutional
Service Fund will receive Premier Class Shares and holders of Institutional
Fund will receive Institutional Class Shares. Therefore, as a result of the
proposed Concurrent Reorganization,
9
current shareholders of Treasury Money Market Reserves, Institutional Service
Fund and Institutional Fund will become shareholders of JPMTPMMF.
The Pro Forma net asset value per share assumes the issuance of additional
shares of JPMTPMMF which would have been issued on February 28, 2001 in
connection with the proposed reorganization. The amount of additional shares
assumed to be issued was calculated based on the February 28, 2001 net assets
of Treasury Money Market Reserves Fund, Institutional Service Fund and
Institutional Fund and the net asset value per share of JPMTPMMF - Premier
Class.
JPMORGAN TREASURY PLUS MONEY MARKET FUND WITH CONCURRENT REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Institutional
Increase in Shares Issued 537,242
Net Assets 2/28/01 537,150
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. (12)
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 filed
herewith.
- ----------
Part C-3
(1) Filed as an Exhibit to the Registration Statement on Form N-1A of the
Registrant (File No. 33-75250) as filed with the Securities and
Exchange Commission on February 14, 1994.
(2) Filed as an Exhibit to Post-Effective Amendment No. 1 to the
Registration Statement on Form N-1A of the Registrant (File No.
33-75250) as filed with the Securities and Exchange Commission on
August 29, 1994.
(3) Filed as an Exhibit to Post-Effective Amendment No. 2 to the
Registration Statement on Form N-1A of the Registrant (File No.
33-75250) as filed with the Securities and Exchange Commission on
October 28, 1994.
(4) Filed as an Exhibit to Post-Effective Amendment No. 3 to the
Registration Statement on Form N-1A of the Registrant (File No. 33-
75250) as filed with the Securities and Exchange Commission on October
31, 1995.
(5) Filed as an Exhibit to Post-Effective Amendment No. 4 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on December 28, 1995.
(6) Filed as an Exhibit to Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on March 7, 1996.
(7) Filed as an Exhibit to Post-Effective Amendment No. 6 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on April 22, 1996.
(8) Filed as an exhibit to Post-Effective Amendment No. 7 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on September 6, 1996.
(9) Filed as an exhibit to Post-Effective Amendment No. 8 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on December 27, 1996.
(10) Filed herewith.
(11) Filed as an exhibit to Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on October 27, 1997.
(12) Filed as an Exhibit to the Registration Statement on Form N-14 of
the Registrant (File No. 333-58964) 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
Part C-4
the Securities Act of 1933, as amended (the "1933 Act"), the reoffering
prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other items of the
applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
Part C-5
SIGNATURES
----------
As required by the Securities Act of 1933, this registration statement
has been signed on behalf of the registrant, in the City of New York and the
State of New York, on the 11th day of May, 2001.
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
/s/ * 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) Preliminary Statement of Additional Information for the Surviving Fund.
(g) Semi-Annual Report of the Surviving Fund, dated February 28, 2001.
(h) Annual Report of the Merging Fund, dated October 31, 2000.