As filed with the Securities and Exchange Commission on May 15, 2001
Registration No. 333-59046/811-07342
===============================================================================
U.S. Securities and Exchange Commission
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 1 Post-Effective Amendment No.___
(Check appropriate box or boxes)
Exact Name of Registrant as Specified in Charter:
J.P. MORGAN INSTITUTIONAL FUNDS
Area Code and Telephone Number:
1-800-766-7722
Address of Principal Executive Offices:
522 Fifth Avenue
New York, NY 10036
Name and Address of Agent for Service:
Sharon Weinberg
522 Fifth Avenue
New York, NY 10036
Copies to:
JOSEPH J. BERTINI, ESQ. SARAH E. COGAN, ESQ. JOHN E. BAUMGARDNER,
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
===============================================================================
Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective under the Securities Act of 1933.
It is proposed that this filing will become effective on May 16, 2001 pursuant
to Rule 488 under the Securities Act of 1933.
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is required because an indefinite number of shares have previously been
registered on Form N-1A (Registration No. 033-54642/811-07342) pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Registrant's
Form 24f-2 for the fiscal year ended October 31, 2000 was filed on February 22,
2001. Pursuant to Rule 429, this Registration Statement relates to the aforesaid
Registration Statement on Form N-1A.
J.P. MORGAN INSTITUTIONAL BOND FUND - ULTRA
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
522 FIFTH AVENUE
NEW YORK, NY 10036
1-800-766-7722
May 16, 2001
Dear Shareholder:
A special meeting of the shareholders of J.P. Morgan Institutional Bond
Fund--Ultra (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, The Chase Manhattan Corporation recently completed a
merger with J.P. Morgan & Co. Incorporated, the corporate parent of the
investment adviser of the Merging Fund's assets, to form J.P. Morgan Chase & Co.
("JPMC"). As a result of this merger, JPMC is seeking to reorganize parts of its
investment management business and funds advised by its subsidiaries. At the
special meeting (the "Meeting"), shareholders will be asked to consider and vote
upon the proposed reorganization of the Merging Fund into J.P. Morgan
Institutional Bond Fund (the "Surviving Fund"), another series of JPMIF (the
"Reorganization"). After the Reorganization, shareholders of the Merging Fund
will hold Ultra Class Shares of the Surviving Fund. The investment objective and
policies of the Surviving Fund are identical to those of the Merging Fund. Both
the Merging Fund and the Surviving Fund currently invest all of their investable
assets in The U.S. Fixed Income Portfolio (the "Master Portfolio"). Concurrent
with the Reorganization, the Surviving Fund will cease to operate under a
"master/feeder" structure and will instead invest directly in portfolio
securities. In connection with the Reorganization, the Surviving Fund will be
renamed "JPMorgan Bond Fund."
After the proposed Reorganization, your investment will be in a larger
combined fund with identical investment policies.
The Surviving Fund has also entered into agreements and plans of
reorganization with (i) JPMorgan Bond Fund II (formerly, Chase Vista Bond Fund),
a series of Mutual Fund Select Group ("MFSG") with similar investment objectives
and policies to the Merging Fund (the "Chase Fund Reorganization I"),
(ii) JPMorgan Intermediate Bond Fund (formerly, Chase Vista Intermediate Bond
Fund), a series of MFSG with similar investment objectives and policies to the
Merging Fund (the "Chase Fund Reorganization II" and, collectively, with the
Chase Fund Reorganization I, the "Chase Fund Reorganizations"), and (iii) one
other mutual fund whose assets are managed by J.P. Morgan Investment Management
Inc. ("JPMIM") with identical investment objectives and policies to the
Surviving Fund (collectively the "Feeder Reorganization" and, together with the
Chase Fund Reorganizations, the "Concurrent Reorganizations"). If the Concurrent
Reorganizations are approved by the shareholders of these other funds and
certain other conditions are met, these other funds will be reorganized into the
Surviving Fund. The consummation of the Reorganization is contingent upon the
consummation of the Feeder 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 both the Merging Fund and the
Surviving Fund is JPMIM.
Please see the enclosed Combined Prospectus/Proxy Statement for detailed
information regarding the proposed Reorganization, the Concurrent
Reorganizations and a comparison of the Merging Fund to the Surviving Fund. The
cost and expenses associated with the Reorganization, including costs of
soliciting proxies, will be borne by JPMC and not by the Merging Fund, the
Surviving Fund, JPMIF or their shareholders.
If approval of the Reorganization is obtained, you will automatically
receive Ultra Class shares of 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 that
it is in the best interests of its shareholders.
IF THE REORGANIZATION IS APPROVED, WHAT WILL HAPPEN?
In connection with the Reorganization, the Merging Fund will transfer all of
its assets and liabilities to the Surviving Fund and will receive, in exchange,
Ultra Class shares of the Surviving Fund. The Merging Fund will then be
liquidated and the Ultra Class shares of the Surviving Fund will be distributed
pro rata to shareholders. After the Reorganization, you will own Ultra Class
shares of the Surviving Fund rather than shares of the Merging Fund.
WHAT WILL BE THE EFFECT ON THE INVESTMENT STRATEGIES ASSOCIATED WITH MY
INVESTMENT IF THE PROPOSED CHANGES ARE APPROVED?
The Surviving Fund has identical investment objectives and policies to those
of the Merging Fund. Both the Merging Fund and the Surviving Fund currently
invest all of their investable assets in the Master Portfolio. Concurrent with
the Reorganization, the Surviving Fund will cease to operate under a "master/
feeder" structure and will instead invest its assets directly in portfolio
securities.
HOW WILL THE FEES AND EXPENSES ASSOCIATED WITH MY INVESTMENT BE AFFECTED?
As a result of the Reorganization, the contractual (or pre-waiver) total
expense ratios will be higher for your shares in the Surviving Fund than they
are for your shares in the Merging Fund. However, the actual (or post-waiver)
total expense ratios are expected to be the same or less for your shares in the
Surviving Fund than they are for your shares in the Merging Fund. This is
because Morgan Guaranty Trust Company of New York, the Surviving Fund's
administrator, has contractually agreed to waive fees payable to it and
reimburse expenses so that actual total operating expenses will remain the same
for THREE YEARS after the Reorganization.
WILL THERE BE ANY CHANGE IN WHO MANAGES MY INVESTMENT?
No. JPMIM will continue to manage the assets of the Surviving Fund after the
Reorganization.
WHO WILL PAY FOR THE REORGANIZATION?
The cost and expenses associated with the Reorganization, including costs of
soliciting proxies, will be borne by JPMC and not by either the Merging Fund or
the Surviving Fund (or shareholders of either fund).
WHAT IF I DO NOT VOTE OR VOTE AGAINST THE REORGANIZATION, YET APPROVAL OF THE
REORGANIZATION IS OBTAINED?
You will automatically receive Ultra Class shares of the Surviving Fund.
HOW WILL THE PROPOSED CONCURRENT REORGANIZATIONS AFFECT MY INVESTMENT IF THEY
ARE 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 these other merging funds will become
assets and liabilities of the Surviving Fund. The consummation of the
Reorganization is contingent upon the consummation of the Feeder Reorganization,
but not on the consummation of the Chase Fund Reorganizations.
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 BOND FUND-ULTRA
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 Bond Fund-Ultra:
NOTICE IS HEREBY GIVEN THAT a Special Meeting (the "Meeting") of the
shareholders ("Shareholders") of J.P. Morgan Institutional Bond Fund-Ultra (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, JPMIF, on behalf of J.P. Morgan
Institutional Bond 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 Ultra Class shares of the
Surviving Fund (the "Ultra Class Shares"), and (b) the distribution of
such Ultra Class Shares to the Shareholders of the Merging Fund in
connection with the liquidation of the Merging Fund.
ITEM 2. To elect eight Trustees to serve as members of the Board of Trustees
of 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 accompanying Combined Prospectus/Proxy
Statement. Attached as Appendix A to the Combined Prospectus/Proxy Statement is
a copy of the Reorganization Plan.
Shareholders of record as of the close of business on April 6, 2001 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment(s)
thereof. The Meeting will be a joint meeting with the meetings of shareholders
of all series of JPMIF, which meetings are being called for purposes of
considering proposals 1 and 2 above and certain other proposals not applicable
to you.
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY THE BOARD OF
TRUSTEES OF 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 16, 2001
COMBINED PROSPECTUS/PROXY STATEMENT
DATED MAY 16, 2001
ACQUISITION OF THE ASSETS AND LIABILITIES OF
J.P. MORGAN INSTITUTIONAL BOND FUND-ULTRA
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
522 FIFTH AVENUE
NEW YORK, NY 10036
1-800-766-7722
BY AND IN EXCHANGE FOR ULTRA CLASS SHARES OF
JPMORGAN INSTITUTIONAL BOND FUND
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
522 FIFTH AVENUE
NEW YORK, NY 10036
1-800-766-7722
This Combined Prospectus/Proxy Statement relates to the proposed
reorganization of J.P. Morgan Institutional Bond Fund-Ultra (the "Merging
Fund"), a series of J.P. Morgan Institutional Funds ("JPMIF"), into J.P. Morgan
Institutional Bond Fund (the "Surviving Fund"), another series of JPMIF. If
approved by shareholders of the Merging Fund, the proposed reorganization will
be effected by transferring all of the assets and liabilities of the Merging
Fund to the Surviving Fund, which has identical investment objectives and
policies to those of the Merging Fund, in exchange for Ultra Class shares of the
Surviving Fund (the "Reorganization"). Therefore, as a result of the proposed
Reorganization, current shareholders of the Merging Fund (the "Merging Fund
Shareholders") will become shareholders of the Surviving Fund ("Surviving Fund
Shareholders"). JPMIF is an open-end management investment company offering
shares in several portfolios. In connection with the Reorganization, the
J.P. Morgan Institutional Bond Fund will be renamed "JPMorgan Bond Fund."
In connection with the proposed Reorganization, the Surviving Fund will
implement a new multi-class structure under which it will offer Class A, Class
B, Select Class, Institutional Class and Ultra Class shares. If the proposed
Reorganization is approved by Merging Fund Shareholders, each Merging Fund
Shareholder will receive Ultra Class shares (the "Ultra Class Shares") of the
Surviving Fund with a value equal to such Merging Fund Shareholder's holdings in
the Merging Fund. Merging Fund Shareholders will not pay a sales charge on Ultra
Class Shares received in the Reorganization.
At the Meeting, you will also 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, JPMIF, on behalf of the Surviving Fund and J.P. Morgan Chase & Co.
("JPMC"), 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, NY, at which meeting shareholders in the
Merging Fund will be asked to consider and approve the proposed Reorganization
Plan, certain transactions contemplated by the Reorganization Plan and certain
other proposals. This Combined Prospectus/Proxy Statement constitutes the proxy
statement of the Merging Fund for the meeting of its Shareholders and also
constitutes JPMIF's prospectus for Ultra Class Shares that have been registered
with the Securities and Exchange Commission (the "Commission") and are to be
issued in connection with the Reorganization.
This Combined Prospectus/Proxy Statement, which should be retained for
future reference, sets forth concisely the information about JPMIF that an
investor should know before voting on the proposals. The current Prospectus,
Statement of Additional Information and Annual Report (including the Annual
Report of The U.S. Fixed Income Portfolio) of the Merging Fund and the
preliminary Prospectus, Statement of Additional Information and the current
Annual Report (including the current Annual Report of the U.S. Fixed Income
Portfolio) of the Surviving Fund are incorporated herein by reference, and the
preliminary Prospectus and Annual Report (including the Annual Report of The
U.S. Fixed Income Portfolio) for the Surviving Fund are enclosed with this
Combined Prospectus/Proxy Statement. A Statement of Additional
Information relating to this Combined Prospectus/Proxy Statement dated May 16,
2001 containing additional information about JPMIF has been filed with the
Commission and is incorporated by reference into this Combined Prospectus/Proxy
Statement. A copy of the Statement of Additional Information, as well as the
Prospectus, Statement of Additional Information and Annual Report of the Merging
Fund may be obtained without charge by writing to 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 16, 2001.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS COMBINED PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROSPECTUS/PROXY
STATEMENT AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND,
IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY 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................ 4
RISK FACTORS...................................... 7
INFORMATION RELATING TO THE PROPOSED
REORGANIZATION................................... 8
PURCHASES, REDEMPTIONS AND EXCHANGES.............. 12
DISTRIBUTIONS AND TAXES........................... 14
COMPARISON OF THE MERGING FUND'S AND THE SURVIVING
FUND'S ORGANIZATION STRUCTURE.................... 15
INFORMATION RELATING TO THE ADVISORY CONTRACTS AND
OTHER SERVICES................................... 16
PROPOSAL 2: ELECTION OF TRUSTEES.................. 18
INFORMATION RELATING TO VOTING MATTERS............ 23
ADDITIONAL INFORMATION ABOUT JPMIF................ 25
FINANCIAL STATEMENTS AND EXPERTS.................. 26
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, NY (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 16, 2001.
PROPOSAL 1: REORGANIZATION PLAN
At the Meeting, Merging Fund Shareholders will consider and vote upon the
Agreement and Plan of Reorganization (the "Reorganization Plan") dated May 11,
2001 among JPMIF, on behalf of the Merging Fund, JPMF, on behalf of the
Surviving Fund (the Merging Fund and the Surviving Fund are collectively defined
as the "Funds"), and J.P. Morgan Chase & Co. ("JPMC") pursuant to which all of
the assets and liabilities of the Merging Fund will be transferred to the
Surviving Fund in exchange for Ultra Class Shares of the Surviving Fund. As a
result of the Reorganization, Merging Fund Shareholders will become shareholders
of the Surviving Fund and will receive Ultra Class Shares equal in value to
their holdings in the Merging Fund on the date of the Reorganization. In
connection with the Reorganization, the Surviving Fund will be renamed "JPMorgan
Bond Fund." Further information relating to the Surviving Fund is set forth
herein, and the Surviving Fund's preliminary Prospectus and current Annual
Report (including the Annual Report of The U.S. Fixed Income Portfolio) is
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 (including the Annual Report of The
U.S. Fixed Income Portfolio) of the Merging Fund, the preliminary Prospectus and
Statement of Additional Information and the current Annual Report (including the
Annual Report of the U.S. Fixed Income Portfolio) of the Surviving Fund, and the
Reorganization Plan attached to this Combined Prospectus/Proxy Statement as
Appendix A.
PROPOSED REORGANIZATION
Each of the Surviving Fund and the Merging Fund currently invests all of its
investable assets in The U.S. Fixed Income Portfolio (the "Master Portfolio"),
which has identical investment objectives and policies as the Surviving Fund and
the Merging Fund and which is advised by J.P. Morgan Investment Management Inc.
("JPMIM"). The Surviving Fund has also entered into plans of reorganization with
(i) JPMorgan Bond Fund II (formerly, Chase Vista Bond Fund), a series of Mutual
Fund Select Group ("MFSG") with similar investment objectives and policies to
the Merging Fund (the "Chase Fund Reorganization I") (ii), JPMorgan Intermediate
Bond Fund (formerly, Chase Vista Intermediate Bond Fund), a series of MFSG with
similar investment objectives and policies to the Merging Fund (the "Chase Fund
Reorganization II" and, collectively with the Chase Fund Reorganization I, the
"Chase Fund Reorganizations"), and (iii) JPMorgan Bond Fund, a series of J.P.
Morgan Funds with identical investment objectives and policies to the Surviving
Fund whose assets are managed by JPMIM (collectively the "Feeder Reorganization"
and, together with the Chase Fund Reorganizations, the "Concurrent
Reorganizations").
1
If each of the Reorganization and the Concurrent Reorganization is approved
by the shareholders of the respective funds and certain other conditions are
met, the Merging Fund and these other funds will be reorganized into the
Surviving Fund. Concurrent with the Feeder Reorganization, the Surviving Fund
will cease to operate under a "master/feeder" structure and will instead invest
directly in portfolio securities rather than in the Master Portfolio. The
consummation of the Reorganization and the Chase Fund Reorganizations are
contingent upon the consummation of the Feeder Reorganization. The consummation
of the Reorganization is not contingent upon the consummation of either Chase
Fund Reorganization.
In connection with the proposed Reorganization, the Surviving Fund will
implement a new multi-class structure under which it will offer Class A, Class
B, Select Class Shares, Institutional Class Shares and Ultra Class Shares.
Pursuant to the proposed Reorganization, the Merging Fund will transfer all of
its assets and liabilities to the Surviving Fund in exchange for Ultra Class
Shares.
Under the proposed Reorganization, each Merging Fund Shareholder will
receive a number of Ultra Class Shares of the Surviving Fund with an aggregate
net asset value equal on the date of the exchange to the aggregate net asset
value of such shareholder's Merging Fund Shares on such date. Therefore,
following the proposed Reorganization, Merging Fund Shareholders will be
Surviving Fund Shareholders. Merging Fund Shareholders will not pay a sales load
in connection with the Reorganization. See "Information Relating to the Proposed
Reorganization."
The Surviving Fund has investment objectives, policies and restrictions
identical to those of the Merging Fund. However, while the Merging Fund and the
Surviving Fund currently invest all of their assets in the Master Portfolio
(which in turn invests in portfolio securities), after the Reorganization the
Surviving Fund will invest directly in portfolio securities. Following the
Reorganization the Surviving Fund will have substantially similar purchase,
redemption and dividend policies as the Merging Fund.
Based upon their evaluation of the relevant information presented to them,
including an analysis of the operation of the Surviving Fund both before and
after the Reorganization, the terms of the Reorganization Plan, the opportunity
to combine the two Funds with identical investment objectives and policies, and
the fact that the Reorganization will be tax-free, and in light of their
fiduciary duties under federal and state law, the JPMIF Board, including a
majority of the Board's members who are not "interested persons" within the
meaning of the Investment Company Act of 1940, as amended (the "1940 Act"), have
each determined that the proposed Reorganization is in the best interests of its
Fund and 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 that
it is in the best interest of its shareholders.
FEDERAL INCOME TAX CONSEQUENCES
Simpson Thacher & Bartlett will issue an opinion (based on certain
assumptions) as of the effective time of the Reorganization to the effect that
the transaction will not give rise to the recognition of income, gain or loss
for federal income tax purposes to the Merging Fund, the Surviving Fund or the
shareholders of the Merging Fund. A shareholder's holding period and tax basis
of Ultra Class Shares received by a Shareholder of the Merging Fund will be the
same as the holding period and tax basis of the shareholder's shares of the
Merging Fund. In addition, the holding period and tax basis of those assets
owned by the Merging Fund and transferred to the Surviving Fund will be
identical for the Surviving Fund. See "Information Relating to the Proposed
Reorganization--Federal Income Tax Consequences."
INVESTMENT ADVISER
The investment adviser for the Master Portfolio (and therefore the assets of
the Merging Fund and the Surviving Fund) is JPMIM. Following the Reorganization,
JPMIM will serve as the Surviving Fund's investment adviser. JPMIM is a
wholly-owned subsidiary of J.P. Morgan Chase & Co. ("JPMC").
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Surviving Fund and the Merging Fund is to
provide high total return consistent with moderate risk of capital and
maintenance of liquidity. See "Risk Factors." Both Funds have identical
investment policies, and the Surviving Fund's investment policies will not
change as a result of the Reorganization, although, as mentioned above, the
Surviving Fund will invest directly in portfolio securities rather than the
Master Portfolio. For more information regarding the Surviving Fund's investment
policies, see the Surviving Fund's Prospectus enclosed with this Combined
Prospectus/Proxy Statement.
2
Under normal market conditions, the Surviving Fund invests primarily in
investment grade debt securities, at least 65% of which must be rated A or
better. However, it may invest up to 25% of its total assets in debt securities
rated B or BB, which are below investment grade and are sometimes referred to as
"junk bonds." The Surviving Fund invests mainly in investment grade corporate
bonds as well as other debt securities. Under normal market conditions, the
Surviving Fund will invest at least 65% of its total assets in debt securities
with at least an A rating or the equivalent from Moody's Investors Service,
Inc., Standard & Poor's Corporation or Fitch Investor's Service Inc., and will
not invest in securities rated below Baa or BBB. These include unrated
securities of comparable quality.
The Surviving Fund may invest up to 25% of its total assets in foreign
securities, including 20% in debt securities denominated in foreign currencies
of developed countries.
There is no restriction on the maturity of either of the Surviving Fund's or
the Merging Fund's portfolios or on any individual security in the portfolios.
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
debt securities. In particular, the value of shares of the Surviving Fund will
be influenced by the performance of the securities selected for its portfolio.
The value of fixed-income securities tends to fall when prevailing interest
rates rise. This drop in value could be worse if a fund is investing in debt
securities with longer maturities. Investments in mortgage-related securities
could lead the value of a fund to change more often and to a greater degree than
if the fund did not buy mortgage-related securities. In addition, the Surviving
Fund may invest up to 25% of its total assets in foreign investments and up to
25% of its total assets in securities rated below investment grade, both of
which are subject to certain special risks. See "Risk Factors."
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS
ADVISORY SERVICES
The investment adviser for the Surviving Fund's and the Merging Fund's
assets is JPMIM. JPMIM oversees the asset management of both funds. As
compensation for its services, JPMIM receives a management fee indirectly from
both funds at an annual rate of 0.30% of average daily net assets. Following the
Reorganization, JPMIM will manage the Surviving Fund's assets directly and will
receive a fee at an annual rate of 0.30% of average daily net assets.
OTHER SERVICES
J.P. Morgan Fund Distributors, Inc. (the "Distributor") is the distributor
for the Surviving Fund. Morgan Guaranty Trust Company of New York ("Morgan")
currently serves as administrator and shareholder servicing agent and an
affiliate of the Distributor currently serves as sub-administrator. The Bank of
New York ("BONY") currently serves as fund accountant and custodian, and DST
Systems, Inc. ("DST") currently serves as transfer agent and dividend disbursing
agent for the Surviving Fund. It is anticipated that subsequent to the
consummation of the Reorganization, The Chase Manhattan Bank ("Chase") will
become the Surviving Fund's fund accountant and custodian.
PricewaterhouseCoopers LLP serves as the Surviving Fund's independent
accountants.
ADMINISTRATOR
In connection with the Reorganization, the administration fee paid to Morgan
will be increased on August 11, 2001 to 0.15% of average daily net assets for
complex wide non-money market fund assets up to $25 billion and 0.075% on assets
in excess of $25 billion (currently such assets are less than $25 billion). The
Merging Fund currently pays Morgan, its administrator, an administration fee at
an effective rate of 0.048% of its average daily net assets.
ORGANIZATION
JPMIF is organized as a Massachusetts business trust. The Merging Fund and
the Surviving Fund are organized as a series of JPMIF.
PURCHASES, REDEMPTIONS AND EXCHANGES
After the Reorganization, the procedures for making purchases, redemptions
and exchanges of Ultra Class Shares of the Surviving Fund will be similar to
those with respect to shares of the Merging Fund, as described in this Combined
Prospectus/Proxy Statement and the Surviving Fund's Prospectus and Statement of
Additional Information.
3
COMPARATIVE FEE AND EXPENSE TABLES
The table below shows (i) information regarding the fees and expenses paid
by the Merging Fund for the most recent fiscal year that reflect current expense
reimbursement arrangements, (ii) estimated fees and expenses on a pro forma
basis after giving effect to the Reorganization and the Feeder Reorganization
but not either Chase Fund Reorganization, (iii) estimated fees and expenses on a
pro forma basis after giving effect to the Reorganization, the Feeder
Reorganization and the Chase Fund Reorganization I, (iv) estimated fees and
expenses on a pro forma basis after giving effect to the Reorganization, the
Feeder Reorganization and the Chase Fund Reorganization II and (v) estimated
fees and expenses on a pro forma basis for the Surviving Fund after giving
effect to the Concurrent Reorganizations. Under the proposed Reorganization,
holders of Shares in the Merging Fund will receive Ultra Class Shares in the
Surviving Fund. Please note that the Surviving Fund currently has one class of
shares (which will not be distributed to Merging Fund shareholders as a result
of the Reorganization and, therefore, no information on this class is shown in
the table below). In connection with the Reorganization, this class will be
re-named "Institutional Class" and the Class A share class, the Class B share
class, the Select Class share class and the Ultra Class share class will be
introduced.
The table indicates that while contractual (pre-waiver) total expense ratios
for current shareholders of the Merging Fund are anticipated to be higher
following the Reorganization, actual (post-waiver) total expense ratio for
current shareholders of the Merging Fund will be less or stay the same for at
least three years following the Reorganization. This is because Morgan, the
Surviving Fund's Administrator, has contractually agreed to waive certain fees
and/or reimburse certain expenses to ensure that actual total operating expenses
do not increase for three years after the Reorganization.
THE MERGING FUND
----------------
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 0.30%
Distribution (12b-1) Fees None
Other Expenses 0.12%
----
Total Annual Fund Operating Expenses 0.42%
====
Fee Waiver and Expense Reimbursement(1) 0.02%
----
Net Expenses 0.40%
====
- ---------------------
(1) Reflects an agreement dated 3/01/01 by Morgan, an affiliate of JPMC, and
some of the other service providers have agreed to reimburse the Fund to
the extent total operating expenses (excluding interest, taxes and
extraordinary expenses) exceed 0.40% of the Fund's average daily net assets
through 2/28/02.
THE SURVIVING FUND
---------------------
PRO FORMA WITH FEEDER
REORGANIZATION
---------------------
ULTRA CLASS SHARES
---------------------
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees 0.30%
Distribution (12b-1) Fees None
Other Expenses 0.23%
-----
Total Annual Fund Operating Expenses 0.53%
=====
Fee Waivers and Expense Reimbursements(1) 0.13%
-----
Net Expenses 0.40%
=====
- ---------------------
(1) Reflects an agreement by Morgan, an affiliate of JPMC, to reimburse the
Surviving Fund to the extent that operating expenses (which exclude
interest, taxes, extraordinary expenses and expenses related to the
deferred compensation plan) exceed 0.40% of average daily net assets with
respect to Ultra Class Shares for three years after the Reorganization.
4
THE SURVIVING FUND
---------------------
PRO FORMA WITH FEEDER
REORGANIZATION AND
CHASE FUND
REORGANIZATION II
---------------------
ULTRA 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 0.30%
Distribution (12b-1) Fees None
Other Expenses 0.23%
----
Total Annual Fund Operating
Expenses 0.53%
Fee Waivers and Expense
Reimbursements(1) 0.13%
----
Net Expenses 0.40%
====
- ---------------------
(1) Reflects an agreement by Morgan, an affiliate of JPMC, to reimburse the
Fund to the extent that operating expenses (which exclude interest, taxes,
extraordinary expenses and expenses related to the deferred compensation
plan) exceed 0.40% of average daily net assets with respect to Ultra Class
Shares for three years after the Reorganization.
THE SURVIVING FUND
------------------------------------
PRO FORMA WITH FEEDER REORGANIZATION
AND CHASE FUND REORGANIZATION II
------------------------------------
ULTRA 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 0.30%
Distribution (12b-1) Fees None
Other Expenses 0.23%
----
Total Annual Fund Operating
Expenses 0.53%
Fee Waivers and Expense
Reimbursements(1) 0.13%
----
Net Expenses 0.40%
====
- ---------------------
(1) Reflects an agreement by Morgan, an affiliate of JPMC, to reimburse the
Fund to the extent that operating expenses (which exclude interest, taxes,
extraordinary expenses and expenses related to the deferred compensation
plan) exceed 0.40% of average daily net assets with respect to Ultra Class
Shares for three years after the Reorganization.
5
PRO FORMA
--------------------------
THE SURVIVING FUND WITH
CONCURRENT REORGANIZATIONS
--------------------------
ULTRA 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 0.30%
Distribution (12b-1) Fees None
Other Expenses 0.23%
----
Total Annual Fund Operating
Expenses 0.53%
Fee Waivers and Expense
Reimbursements(1) 0.13%
----
Net Expenses 0.40%
====
- ---------------------
(1) Reflects an agreement by Morgan, an affiliate of JPMC, to reimburse the
Fund to the extent that operating expenses (which exclude interest, taxes,
extraordinary expenses and expenses related to the deferred compensation
plan) exceed 0.40% of average daily net assets with respect to Ultra Class
Shares for three years after the Reorganization.
The table does not reflect charges or credits which investors might incur if
they invest through a financial institution.
Example: This example helps investors compare the cost of investing in the
Fund 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 expenses subject to the fee waivers and expense reimbursements as
indicated in the tables 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 $41 $133 $233 $528
PRO FORMA J.P. MORGAN
INSTITUTIONAL BOND FUND
WITH FEEDER REORGANIZATION
Ultra Class Shares $41 $128 $225 $625
PRO FORMA J.P. MORGAN
INSTITUTIONAL BOND FUND
ULTRA CLASS SHARES WITH
FEEDER REORGANIZATION AND
CHASE REORGANIZATION I
Ultra Class Shares $41 $128 $225 $625
PRO FORMA J.P. MORGAN
INSTITUTIONAL BOND FUND
WITH FEEDER REORGANIZATION
AND CHASE REORGANIZATION
II
Ultra Class Shares $41 $128 $225 $625
PRO FORMA J.P. MORGAN
INSTITUTIONAL BOND FUND
WITH CONCURRENT
REORGANIZATIONS
Ultra Class Shares $41 $128 $225 $625
6
RISK FACTORS
The following discussion highlights the principal risk factors associated
with an investment in the Surviving Fund. The Surviving Fund has investment
policies and investment restrictions, and therefore risks, identical to those of
the Merging Fund. This discussion is qualified in its entirety by the more
extensive discussion of risk factors set forth in the Prospectus and Statement
of Additional Information of the Surviving Fund, which are incorporated herein
by reference.
All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Surviving Fund. The Surviving Fund may not achieve its
objective if JPMIM's expectations regarding particular securities or markets are
not met. In addition, the Surviving Fund's share price, yield and total return
will vary in response to changes in interest rates and bond market movements.
The value of most bonds will fall when interest rates rise, and the longer a
bond's maturity and the lower its credit quality, the more its value typically
falls. How well the Fund's performance compares to that of similar fixed income
funds will depend on the success of the investment process.
To the extent that the Surviving Fund seeks higher returns by investing in
non-investment-grade bonds (those rated BB/Ba or lower and often called "junk
bonds"), it takes on additional risks. The Surviving Fund may invest up to 25%
of its assets in securities rated B or BB/Ba. These bonds are more sensitive to
economic news, their issuers have a less secure financial position and they have
a higher risk of default, tend to be less liquid, and may be more difficult to
value.
The Surviving Fund may invest up to 25% of its assets in foreign securities,
including 20% in debt securities denominated in foreign currencies of developed
countries. If the Surviving Fund invests in foreign securities, it could lose
money because of foreign government actions, political instability, currency
fluctuation or lack of adequate and accurate information. Currency and
investment risks tend to be higher in emerging markets.
The Surviving Fund's mortgage-backed investments involve risk of losses due
to default or prepayments that occur earlier or later than expected. The
Surviving Fund may engage in active and frequent trading, leading to increased
portfolio turnover and the possibility of increased capital gains.
The Surviving Fund may invest in asset-backed securities (securities
representing an interest in, or secured by, a pool of mortgages or other assets
such as receivables) and direct mortgages which could generate capital losses or
periods of low yields if they are paid off substantially earlier or later than
expected.
Adverse market conditions may from time to time cause the Surviving Fund to
take temporary defensive positions that are inconsistent with its principal
investment strategies and may hinder the Surviving Fund from achieving its
investment objective.
The Surviving Fund may use derivatives to help manage duration, yield curve
exposure, and credit and spread volatility. Derivatives such as futures,
options, swaps and forward foreign currency contracts that are used for hedging
the portfolio or specific securities may not fully offset the underlying
positions and this could result in losses to the Fund that would not have
otherwise occurred. Derivatives used for risk management may not have the
intended effects and may result in losses or missed opportunities. The
counterparty to a derivatives contract could default. Certain types of
derivatives involve costs to the Fund which can reduce returns. Derivatives that
involve leverage could magnify losses.
The Surviving Fund may invest in illiquid securities. The Surviving Fund
could have difficulty valuing these holdings precisely. The Surviving Fund could
be unable to sell these securities at the time or price desired.
The Surviving Fund may buy when-issued and delayed delivery securities.
The Surviving Fund may use short-term trading to take advantage of
attractive or unexpected opportunities or to meet demands generated by
shareholder activity. Increased trading would raise the Surviving Fund's
transaction costs. Increased short-term capital gains distributions would raise
shareholders' income tax liability.
The Surviving Fund may lend some of its portfolio securities in order to
earn income. When the Surviving Fund lends a security, there is a risk that the
loaned securities may not be returned if the borrower defaults. The collateral
the Surviving Fund receives from the borrower will be subject to the risks of
the securities in which it is invested.
7
An investment in the Surviving Fund is not a deposit of any bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. You could lose money if you sell when the Surviving Fund's
share price is lower than when you invested.
INFORMATION RELATING TO THE PROPOSED REORGANIZATION
GENERAL
The terms and conditions under which the Reorganization may be consummated
are set forth in the Reorganization Plan. Significant provisions of the
Reorganization Plan are summarized below; however, this summary is qualified in
its entirety by reference to the Reorganization Plan, a copy of which is
attached as Appendix A to this Combined Prospectus/Proxy Statement and which is
incorporated herein by reference.
DESCRIPTION OF THE REORGANIZATION PLAN
In connection with the Reorganization and the Concurrent Reorganization, the
Merging Fund will cease investing in the Merging Portfolio. The Reorganization
Plan provides that at the Effective Time (as defined in the Reorganization Plan)
of the Reorganization, the assets and liabilities of the Merging Fund will be
transferred to and assumed by the Surviving Fund. In exchange for the transfer
of the assets and the assumption of the liabilities of the Merging Fund, JPMIF
will issue at the Effective Time of the Reorganization full and fractional Ultra
Class Shares of the Surviving Fund equal in aggregate dollar value to the
aggregate net asset value of full and fractional outstanding shares of the
Merging Fund as determined at the valuation time specified in the Reorganization
Plan. The Reorganization Plan provides that the Merging Fund will declare a
dividend or dividends prior to the Effective Time of the Reorganization which,
together with all previous dividends, will have the effect of distributing to
Merging Fund Shareholders all undistributed net investment income earned and net
capital gain realized up to and including the Effective Time of the
Reorganization.
Following the transfer of assets to, and the assumption of the liabilities
of the Merging Fund by, the Surviving Fund, the Merging Fund will distribute
Ultra Class Shares received by it to the Merging Fund Shareholders in
liquidation of the Merging Fund. Each Merging Fund Shareholder at the Effective
Time of the Reorganization will receive an amount of Ultra Class Shares with a
total net asset value equal to the net asset value of their Merging Fund Shares
plus the right to receive any dividends or distributions which were declared
before the Effective Time of the Reorganization but that remained unpaid at that
time with respect to the shares of the Merging Fund.
The Surviving Fund expects to maintain most of the portfolio investments of
the Merging Fund in light of the identical investment policies of the Merging
Fund and the Surviving Fund. Concurrently with the Reorganization, the Surviving
Fund will cease to operate under a "master/feeder" structure and will instead
invest directly in portfolio securities rather than in the Master Portfolio.
After the Reorganization, all of the issued and outstanding shares of the
Merging Fund shall be canceled on the books of the Merging Fund and the stock
transfer books of the Merging Fund will be permanently closed.
The Reorganization is subject to a number of conditions, including without
limitation: approval of the Reorganization Plan and the transactions
contemplated thereby described in this Combined Prospectus/Proxy Statement by
the Merging Fund Shareholders; the receipt of a legal opinion from Simpson
Thacher & Bartlett with respect to certain tax issues, as more fully described
in "Federal Income Tax Consequences" below; and the parties' performance in all
material respects of their respective agreements and undertakings in the
Reorganization Plan. Assuming satisfaction of the conditions in the
Reorganization Plan, the Effective Time of the Reorganization will be on
September 1, 2001 or such other date as is agreed to by the parties.
In addition, the consummation of the Reorganization is contingent upon the
consummation of the Feeder 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
8
trustees determine that proceeding with the Reorganization Plan is not in the
best interests of their Fund's shareholders.
BOARD CONSIDERATIONS
The Merging Fund and the Surviving Fund currently exist in a "master/feeder"
format, pursuant to which each fund (the feeders) invests its assets in a common
portfolio--the "master"--and shares of each fund are sold to different
categories of investors with different distribution and shareholder services and
fees. Among other reasons for the creation of this structure was the opportunity
to obtain the economies of scale from an investment and expense perspective that
might come from the investment and administration of a larger pool of assets
than any one fund could expect to have on its own. An important factor in the
decision to structure the funds in this way was that non-U.S. investors' assets
would be invested alongside those of U.S. investors within the master portfolio
on a basis that was not disadvantageous to the non-U.S. investors from a U.S.
tax perspective. For various reasons, non-U.S. feeders in the fund complex
withdrew their assets from the masters commencing in 1997, thereby eliminating
one of the principal reasons for the master/feeder format. Nevertheless, the
funds continued in that format and, the JPMIF Board believes, conducted their
operations on a basis at least as favorable to the funds as would have obtained
if the format had been abandoned, as is now proposed.
Following the announcement of the merger of The Chase Manhattan Corporation
and J.P. Morgan & Co., JPMIM and Morgan and their counterparts within the Chase
organization reviewed the compatibilities of their various mutual fund groups,
including their respective organizational structures, service providers,
distribution arrangements and methodologies, and fees and expenses. The proposed
Reorganization of the Merging Fund into the Surviving Fund is a part of the more
general integration of the J.P. Morgan funds complex with the Chase Vista funds
complex to create a single mutual fund complex with substantially similar
arrangements for the provision of advisory, administration, distribution,
custody and fund accounting and transfer agency services.
The JPMIF Board believes that the conversion by way of the proposed
Reorganization of the current master-feeder format into the multi-class format
discussed in this Combined Prospectus/Proxy Statement and the adoption of the
service arrangements by the Surviving Fund described herein (the "Service
Arrangements") are in the best interests of the Merging Fund and its
shareholders and that the interests of shareholders will not be diluted as a
result of the Reorganization.
In considering the proposed Reorganization and Service Arrangements on
January 23 and 24 and on March 26 and 27, 2001, the JPMIF Board also noted that
there were important benefits expected to arise out of the integration of the
J.P. Morgan and Chase Vista mutual funds complexes. Among these benefits, the
Board considered (1) investor and shareholder confusion should be mitigated if
not eliminated by the adoption by both the J.P. Morgan and the Chase Vista
mutual funds of common organizational structures and common service providers;
(2) Surviving Fund shareholders would be able to exchange into a larger number
and greater variety of funds without paying sales charges, (3) to the extent
that additional share classes are subsequently offered by the Surviving Fund it
should have a positive effect on asset growth, which in turn over time could
result in a lower total expense ratio as economies of scale were realized;
(4) JPMIM advised the Board that it believes that the outsourcing of many
functions to the sub-administrator will (a) upgrade the quality of services
currently being provided to the Funds, and (b) enhance Morgan's ability
effectively to monitor and oversee the quality of all Fund service providers,
including the investment adviser, distributor, custodian and transfer agent; (5)
Morgan's undertaking for three years to waive fees or reimburse the Surviving
Fund's expenses in order that the total expense ratios of the Select and
Institutional Classes do not exceed those of the Merging Fund and the Surviving
Fund, respectively; (6) the fact that all costs and expenses of the
Reorganization and implementation of the Service Arrangements would be borne by
JPMC and (7) the fact that the Reorganization would constitute a tax-free
reorganization.
In addition, each Board took into account that, notwithstanding the increase
in the administration fee paid to Morgan, Morgan agreed to cap the total
expenses as set forth in the expense table above and to institute a breakpoint
in the administration fee from 0.15% of average daily net assets for complex
wide non-money market fund assets up to $25 billion to 0.075% on assets in
excess of $25 billion (currently such assets are less than $25 billion). The
Merging Fund currently pays its administrator, Morgan, an administration fee at
an effective rate of 0.048% of its average daily net assets. Moreover, JPMIM
agreed that, notwithstanding its proposed increase to $1 million of the minimum
investment in the Select Class, all current shareholders of the Merging Fund
(for which the current minimum is $2,500) will be entitled to make additional
investments in the Select Class of the Surviving Fund or of any other fund in
the integrated fund complex or
9
to exchange shares of the Select Class of the Surviving Fund for Select Shares
of any other such fund. The Board also noted that Morgan did not propose, and
advised that it does not expect to propose, the imposition of any distribution
(12b-1) fees or shareholder servicing fees on the Select or Institutional Class
that are not already in place. Finally the Board was advised that the custody
and fund accounting fees to be charged by Chase will be lower than those
currently charged by The Bank of New York. It should be recognized that, at
current asset levels and in consequence of the expense cap, the lower custody
and fund accounting fees will not have an immediate effect on the Surviving
Fund's total expense ratio but should have some positive effect in the future.
Based upon their evaluation of the relevant information provided to them,
the changes effected in the Service Arrangements in the negotiations between the
Trustees and Morgan, and in light of their fiduciary duties under federal and
state law, the Trustees, including a majority who are not interested persons of
the Funds or JPMC as defined in the 1940 Act, determined that the proposed
Reorganization is in the best interests of the Merging and Surviving Fund, as
applicable, that the interests of their respective shareholders would not be
diluted as a result of the Reorganization, and that the Service Arrangements are
in the best interests of the Surviving Fund.
THE 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 THE CONCURRENT REORGANIZATIONS
The terms and conditions under which the Concurrent Reorganizations may be
consummated are set forth in reorganization plans which are substantially
similar to the Reorganization Plan you are in considering. Concurrently with the
Reorganization and Feeder Reorganization, the Surviving Fund will cease to
operate under a "master/feeder" structure and will instead invest directly in
portfolio securities rather than in the Master Portfolio. The consummation of
the Chase Fund Reorganizations is contingent upon the consummation of the Feeder
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 Ultra
Class Shares and the liquidating distributions to shareholders of the Ultra
Class Shares so received, as described in the Reorganization Plan, will
constitute a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and with respect to the
Reorganization, the Merging Fund and the Surviving Fund will each be considered
"a party to a reorganization" within the meaning of Section 368(b) of the Code;
(ii) no gain or loss will be recognized by the Merging Fund as a result of such
transaction; (iii) no gain or loss will be recognized by the Surviving Fund as a
result of such transaction; (iv) no gain or loss will be recognized by the
Merging Fund Shareholders on the distribution to the Merging Fund Shareholders
of the Ultra Class Shares solely in exchange for their Merging Fund Shares;
(v) the aggregate basis of shares of the Surviving Fund received by a
shareholder of the Merging Fund will be the same as the aggregate basis of such
Merging Fund Shareholder's Merging Fund Shares immediately prior to the
Reorganization; (vi) the basis of the Surviving Fund in the assets of the
Merging Fund received pursuant to such transaction will be the same as the basis
of such assets in the hands of the Merging Fund immediately before such
transaction; (vii) a Merging Fund Shareholder's holding period for the Ultra
Class Shares will be determined by including the period for which such Merging
Fund Shareholder held the Merging Fund Shares exchanged therefor, provided that
the Merging Fund Shareholder held such Merging Fund Shares as a capital asset;
and (viii) the Surviving Fund's holding period with respect to the assets
received in the Reorganization will include the period for which such assets
were held by the Merging Fund.
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.
10
CAPITALIZATION
Because the Merging Fund will be combined with the Surviving Fund in the
Reorganization as well as the Feeder Advisor Portfolio as a result of the
Concurrent Reorganizations, the total capitalization of the Surviving Fund after
the Reorganization and the Concurrent Reorganizations is expected to be greater
than the current capitalization of the Merging Fund. The following tables set
forth as of October 31, 2000: (i) the capitalization of the Merging Fund; (ii)
the capitalization of the Surviving Fund (iii) the pro forma capitalization of
the Surviving Fund as adjusted to give effect to the Feeder Reorganization and
the Chase Fund Reorganization I, (iv) the pro forma capitalization of the
Surviving Fund as adjusted to give effect to the Feeder Reorganization and the
Chase Fund Reorganization II and (v) the pro forma capitalization of the
Surviving Fund as adjusted to give effect to the Concurrent Reorganizations.
There is, of course, no assurance that the Reorganization and the Concurrent
Reorganizations will be consummated. Moreover, if consummated, the
capitalizations of the Surviving Fund and the Merging Fund are likely to be
different at the Effective Time of the Reorganization as a result of
fluctuations in the value of portfolio securities of each Fund and daily share
purchase and redemption activity in each Fund. The Surviving Fund currently has
one class of shares. In connection with the Reorganization, this class will be
renamed Institutional Class and the Class A share class, Class B share class,
the Select Class share class and the Ultra Class share class will be introduced.
CAPITALIZATION
PRO FORMA WITH FEEDER REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
BENEFICIAL NET ASSET
INTEREST SHARES VALUE PER
OUTSTANDING OUTSTANDING NET ASSETS SHARE
----------- ----------- ---------- ---------
THE U.S. FIXED INCOME
PORTFOLIO
J.P. Morgan Bond Fund 24,290 -- $240,180 9.89
J.P. Morgan Institutional
Bond Fund 96,271 -- 907,411 9.43
J.P. Morgan Institutional
Bond Fund--Ultra (Merging
Fund) 48,475 -- 466,026 9.61
PRO FORMA COMBINED JPMORGAN
BOND FUND
Select -- 25,482 240,180 9.43
Institutional -- 96,271 907,411 9.43
Ultra -- 49,443 466,026 9.43
CAPITALIZATION(3)
PRO FORMA WITH FEEDER REORGANIZATION AND CHASE FUND REORGANIZATION I
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
BENEFICIAL NET ASSET
INTEREST SHARES VALUE PER
OUTSTANDING OUTSTANDING NET ASSETS SHARE
----------- ----------- ---------- ---------
THE U.S. FIXED INCOME
PORTFOLIO
J.P. Morgan Bond Fund 24,290 -- $240,180 9.89
J.P. Morgan Institutional
Bond Fund 96,271 -- 907,411 9.43
J.P. Morgan Institutional
Bond Fund--Ultra (Merging
Fund) 48,475 -- 466,026 9.61
JPMORGAN BOND FUND II(1) 15,449 587,369 38.02
PRO FORMA COMBINED JPMORGAN
BOND FUND
Select -- 87,804 827,549 9.43
Institutional -- 96,271 907,411 9.43
Ultra -- 49,443 466,026 9.43
11
CAPITALIZATION(3)
PRO FORMA WITH REORGANIZATION AND CHASE FUND REORGANIZATION II
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
BENEFICIAL NET ASSET
INTEREST SHARES VALUE PER
OUTSTANDING OUTSTANDING NET ASSETS SHARE
----------- ----------- ---------- ---------
THE U.S. FIXED INCOME
PORTFOLIO
J.P. Morgan Bond Fund 24,290 -- $240,180 9.89
J.P. Morgan Institutional
Bond Fund 96,271 -- 907,411 9.43
J.P. Morgan Institutional
Bond Fund--Ultra (Merging
Fund) 48,475 -- 466,026 9.61
JPMORGAN INTERMEDIATE BOND
FUND(2) 40,050 387,065 9.66
PRO FORMA COMBINED JPMORGAN
BOND FUND
Select -- 66,541 627,245 9.43
Institutional -- 96,271 907,411 9.43
Ultra -- 49,443 466,026 9.43
CAPITALIZATION(3)
PRO FORMA WITH CONCURRENT REORGANIZATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
BENEFICIAL NET ASSET
INTEREST SHARES VALUE PER
OUTSTANDING OUTSTANDING NET ASSETS SHARE
----------- ----------- ---------- ---------
THE U.S. FIXED INCOME
PORTFOLIO
J.P. Morgan Bond Fund 24,290 -- $ 240,180 9.89
J.P. Morgan Institutional
Bond Fund 96,271 -- 907,411 9.43
J.P. Morgan Institutional
Bond Fund--Ultra (Merging
Fund) 48,475 -- 466,026 9.61
JPMORGAN BOND FUND II(1) 15,449 587,369 38.02
JPMORGAN INTERMEDIATE BOND
FUND(2) 40,050 387,065 9.66
PRO FORMA COMBINED J.P. MORGAN
BOND FUND
Select -- 128,863 1,214,614 9.43
Institutional -- 96,271 907,411 9.43
Ultra -- 49,443 466,026 9.43
- ---------------------
(1) Formerly Chase Vista Select Bond Fund
(2) Formerly Chase Vista Select Intermediate Bond Fund
(3) As the Chase Income Fund and the Chase Vista Bond Fund merged into the
JPMorgan Bond Fund II (formerly the Chase Vists Select Bond Fund) and the
Chase Intermediate Term Bond Fund merged into the JPMorgan Intermediate
Bond Fund (formerly the Chase Vista Select Intermediate Bond Fund) on March
2, 2001 and February 16, 2001, respectively, their net assets are not
included in the pro forma net assets as of October 31, 2000. Such net
assets are less than 10% of pro forma combined net assets. The net assets
of Class A and Class B shares of JPMorgan Bond Fund II and JPMorgan
Intermediate Bond Fund will become Class A and Class B shares in the
Surviving Fund, as applicable. The pro forma net asset value per share of
Class A and Class B shares would be $9.43 each, similar to all other
classes, if included.
PURCHASES, REDEMPTIONS AND EXCHANGES
Following the Reorganization, the procedures for purchases, redemptions and
exchanges of shares of the Surviving Fund will be substantially similar to those
of the Merging Fund. The Surviving Fund currently has one class of shares. In
connection with the Reorganization and the Concurrent Reorganization, this class
will be renamed "Institutional Class" and the Class A share class, Class B share
class, Select Class share class and Ultra Class share class will be introduced.
The following discussion reflects the new class structure. This
12
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.
BUYING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF THE ULTRA CLASS SHARES THAT
YOU MIGHT MAKE AFTER THE REORGANIZATION AND REFLECTS THE NEW CLASS STRUCTURE.
The price shareholders pay for their shares is the net asset value per share
(NAV). NAV is the value of everything the Surviving Fund owns, minus everything
it owes, divided by the number of shares held by investors. The Surviving Fund
generally values its assets at fair market values but may use fair value if
market prices are unavailable.
The NAV of each class of the Surviving Fund's shares is generally calculated
once each day as of the close of regular trading on the New York Stock Exchange.
A shareholder will pay the next NAV calculated after the JPMorgan Institutional
Funds Service Center (the "Center") receives that shareholder's order in proper
form. An order is in proper form only after payment is converted into federal
funds.
The Center accepts purchase orders on any business day that the New York
Stock Exchange is open. If an order is received in proper form by the close of
regular trading on the New York Stock Exchange (or such other time as determined
by your financial intermediary), it will be processed at that day's price and
the purchaser will be entitled to all dividends declared on that day. If an
order is received after that time, it will generally be processed at the next
day's price. If a purchaser pays by check for Surviving Fund shares before the
close of regular trading on the New York Stock Exchange, it will generally be
processed the next day the Surviving Fund is open for business.
If a shareholder buys through an agent and not directly from the Center, the
agent could set earlier cut-off times. Each shareholder must provide a Social
Security Number or Taxpayer Identification Number when opening an account.
The Surviving Fund has the right to reject any purchase order for any
reason.
The investment minimum for Ultra Class Shares is $20,000,000. Orders by wire
will be canceled if the Center does not receive payment by 4:00 p.m. on the
settlement date.
Shareholders seeking to buy Ultra Class Shares through an investment
representative should instruct their representative to contact the Surviving
Fund. Such representatives may charge investors a fee and may offer additional
services, such as special purchase and redemption programs, "sweep" programs,
cash advances and redemption checks. Such representative may set different
minimum investments and earlier cut-off times.
SELLING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO SALES OF THE ULTRA CLASS SHARES THAT YOU
MIGHT MAKE AFTER THE REORGANIZATION AND REFLECTS THE NEW CLASS STRUCTURE.
Ultra Class Shares of the Surviving Fund may be sold on any day the Center
is open for trading, either directly to the Fund or through an investment
representative. Shareholders of the Surviving Fund will receive the next NAV
calculated after the Center accepts his or her sale order.
Under normal circumstances, if a request is received before the close of
regular trading on the New York Stock Exchange, the Surviving Fund will send the
proceeds the same business day. An order to sell shares will not be accepted if
the Surviving Fund has not collected payment for the shares. The Surviving Fund
may stop accepting orders to sell and may postpone payments for more than seven
days only when permitted by federal securities laws.
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 or
their financial intermediary. Ultra Class shareholders may call 1-800-766-7722.
EXCHANGING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF THE ULTRA CLASS SHARES THAT
YOU MIGHT MAKE AFTER THE REORGANIZATION.
13
Ultra Class Shares of the Surviving Fund may be exchanged for shares in
certain other JPMorgan Funds.
For tax purposes, an exchange is treated as a sale of those shares.
Shareholders should carefully read the prospectus of the fund into which they
want to exchange. Shareholders who exchange must meet any minimum investment
requirements and may have to pay a sales commission.
The exchange privilege is not a means of short-term trading as this could
increase management cost and affect all shareholders of the Surviving Fund. The
Fund reserves the right to limit the number of exchanges or refuse an exchange.
Each exchange privilege may also be terminated. The Surviving Fund charges an
administration fee of $5 for each exchange if an investor makes more than 10
exchanges in a year or three in a quarter.
OTHER INFORMATION CONCERNING THE SURVIVING FUND
For Ultra Class Shares, if the balance falls below the applicable investment
minimum for 30 days as a result of selling shares (and not because of
performance), then the Surviving Fund reserves the right to request that you buy
more shares or close your account. At least 60 days' notice will be given before
closing the account.
Unless a shareholder indicates otherwise on his or her account application,
the Surviving Fund is authorized to act on redemption and transfer instructions
received by phone. If someone trades on an account by phone, the Surviving Fund
will ask that person to confirm the account registration and address to make
sure they match those in the Surviving Fund records. If they do correspond, the
Surviving Fund is generally authorized to follow that person's instructions. The
Surviving Fund will take all reasonable precautions to confirm that the
instructions are genuine. Investors agree that they will not hold the Surviving
Fund liable for any loss or expenses from any sales request, if the Surviving
Fund takes reasonable precautions. The Surviving Fund will be liable for any
losses to a shareholder from an unauthorized sale or fraud against such
shareholder if the Surviving Fund does not follow reasonable procedures.
It may not always be possible to reach the Center by telephone. This may be
true at times of unusual market changes and shareholder activity. In that event,
shareholders can mail instructions to the Surviving Fund or contact their
investment representative or agent. The Surviving Fund may modify or cancel the
sale of shares by phone without notice.
JPMIF, on behalf of the Surviving Fund, has entered into agreements with
certain shareholder servicing agents (including Morgan) under which the
shareholder servicing agents agree to provide certain support services to their
customers. For performing these services, each shareholder servicing agent will
receive an annual fee of up to 0.05% of the average daily net assets of the
Ultra Class Shares held by investors serviced by the shareholder servicing
agent. The Merging Fund likewise has similar arrangements with respect to its
Shares.
JPMIM and/or the Distributor may, at their own expense, make additional
payments to certain selected dealers or other shareholder servicing agents for
performing administrative services for their customers.
The Surviving Fund will issue 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 Ultra
Class Shares may receive a different amount for each class.
DISTRIBUTIONS AND TAXES
The Surviving Fund can earn income and realize capital gain. The Surviving
Fund will deduct from these earnings any expenses and then pay to shareholders
the distributions.
The Surviving Fund typically distributes any net investment income at least
monthly. Net capital gain, if any, is distributed annually. You have three
options for your Surviving Fund distributions. You may:
- reinvest all of them in additional Surviving Fund shares;
- take distributions of net investment income in cash or as a deposit in a
pre-assigned bank account and reinvest distributions of net capital gain
in additional shares; or
- take all distributions in cash or as a deposit in a pre-assigned bank
account.
14
If you don't notify us otherwise, we'll reinvest all distributions. If your
distributions are reinvested, they will be in the form of shares of the same
class. The taxation of dividends won't be affected by the form in which you
receive them.
Dividends of net investment income are usually taxable as ordinary income at
the federal, state and local levels.
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 AND SURVIVING FUND
Each of the Merging Fund and Surviving Fund is organized as a series of
JPMIF, which is organized under the law of the Commonwealth of Massachusetts. As
a Massachusetts business trust, JPMIF's operations are governed by JPMIF's
Declaration of Trust and By-Laws and applicable Massachusetts law. The
operations of the Surviving Fund are also subject to the provisions of the 1940
Act and the rules and regulations thereunder.
TRUSTEES AND OFFICERS
Subject to the provisions of its trust documents, the business of the
Merging Fund and the Surviving Fund is managed by JPMIF's Trustees, who serve
indefinite terms (subject to mandatory retirement age) and have all powers
necessary or convenient to carry out their responsibilities.
Information concerning the current Trustees and officers of JPMIF is set
forth in the Funds' respective Statements of Additional Information, which are
incorporated herein by reference.
SHARES OF FUNDS
JPMIF is a trust with an unlimited number of authorized shares of beneficial
interest which may be divided into series or classes thereof. Each Fund is one
series of a trust and may issue multiple classes of shares. Each share of a
series or class of a trust represents an equal proportionate interest in that
series or class with each other share of that series or class. The shares of
each series or class of 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 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. JPMIF is not 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
JPMIF.
SHAREHOLDER VOTING RIGHTS
With respect to all matters submitted to a vote of shareholders,
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 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
15
addition, Trustees may be removed from office by a vote of holders of voting
shares representing two-thirds of the outstanding voting shares of each
portfolio of that trust. A meeting of shareholders shall be held upon the
written request of the holders of voting shares representing not less than 10%
of the outstanding voting shares entitled to vote on the matters specified in
the written request. Except as set forth above, the Trustees may continue to
hold office and may appoint successor Trustees.
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders of JPMIF could, under certain
circumstances, be held personally liable as partners for the obligations of that
trust. However, the Declaration of Trust of 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. JPMIF may maintain
appropriate insurance (for example, fidelity bonding and errors and omissions
insurance) for the protection of that trust, its shareholders, Trustees,
officers, employees and agents covering possible tort and other liabilities.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability generally is limited to circumstances in which both
inadequate insurance exists and the trust itself is unable to meet its
obligations.
LIABILITY OF DIRECTORS AND TRUSTEES
Under the Declaration of Trust of 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 JPMIF, a Trustee or officer will generally be indemnified against all
liability and against all expenses reasonably incurred or paid by such person in
connection with any claim, action, suit or proceeding in which such person
becomes involved as a party or otherwise by virtue of such person being or
having been a Trustee or officer and against amounts paid or incurred by such
person in the settlement thereof.
The foregoing is only a summary of certain organizational and governing
documents and Massachusetts business trust law. It is not a complete
description. Shareholders should refer to the provisions of these documents and
state law directly for a more thorough comparison. Copies of the Declaration of
Trust and By-Laws of JPMIF are available without charge upon written request to
that trust.
INFORMATION RELATING TO THE ADVISORY CONTRACTS AND
OTHER SERVICES
GENERAL INFORMATION
As noted above, the assets of the Surviving Fund currently invested in the
Master Portfolio are managed by JPMIM pursuant to an Advisory Agreement between
JPMIM and the Master Portfolio, and JPMIM is responsible for the day-to-day
management of the Surviving Fund's assets. Following the Reorganization and the
Concurrent Reorganizations, the Surviving Fund's assets will be managed directly
by JPMIM pursuant to an Advisory Agreement substantially similar to the
agreement between the Master Portfolio and JPMIM.
DESCRIPTION OF JPMIM
JPMIM is an indirect wholly-owned subsidiary of JPMC incorporated under the
laws of Delaware. JPMIM's principal executive offices are located at 522 Fifth
Avenue, New York, New York 10036. JPMIM, a registered investment adviser,
manages employee benefit funds of corporations, labor unions and state and local
governments and the accounts of other institutional investors, including
investment companies. As of March 31, 2001, JPMIM and certain of its affiliates
provided investment management services with respect to assets of approximately
$607.7 billion.
Under the Advisory Agreement, JPMIM will be responsible for making decisions
with respect to, and placing orders for, all purchases and sales of the
portfolio securities of the Surviving Fund. JPMIM's responsibilities under the
Advisory Agreement will include supervising the Surviving Fund's investments and
maintaining a continuous investment program, placing purchase and sale orders
and paying costs of certain clerical and administrative services involved in
managing and servicing the Surviving Fund's investments and complying with
regulatory reporting requirements. The services to be provided to the Surviving
Fund by JPMIM are substantially similar to the services currently provided to
the Master Portfolio and, therefore, indirectly to the Merging Fund by JPMIM.
EXPENSES AND MANAGEMENT FEES. The Advisory Agreement provides that the
Surviving Fund will pay JPMIM a monthly management fee based upon the net assets
of the Surviving Fund. The annual rate of this management fee is 0.30%. The
Master Portfolio and, therefore, indirectly the Merging Fund also currently
16
pay 0.30% of average net assets to JPMIM for its advisory services. JPMIM may
waive fees from time to time.
Under the Advisory Agreement, except as indicated above, the Surviving Fund
is responsible for its operating expenses including, but not limited to, taxes;
interest; fees (including fees paid to its Trustees who are not affiliated with
JPMIM or any of its affiliates); fees payable to the Commission; state
securities qualification fees; association membership dues; costs of preparing
and printing prospectuses for regulatory purposes and for distribution to
existing shareholders; management and administrative fees; charges of the
custodian and transfer agent; insurance premiums; auditing and legal expenses;
costs of shareholders' reports and shareholder meetings; any extraordinary
expenses; and brokerage fees and commissions, if any, in connection with the
purchase or sale of portfolio securities.
LIMITATION ON LIABILITY. The Advisory Agreement provides that JPMIM will not
be liable for any error of judgment or mistake of law or for any act or omission
or loss suffered by JPMIF or the Surviving Fund in connection with the
performance of the Advisory Agreement except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services or from
willful misfeasance, bad faith, or gross negligence in the performance of its
duties or reckless disregard of its obligations and duties under the Advisory
Agreement.
DURATION AND TERMINATION. The Advisory Agreement will continue in effect from
year to year with respect to the Surviving Fund, only so long as such
continuation is approved at least annually by (i) the Board of Trustees of JPMIF
or the majority vote of the outstanding voting securities of the Surviving Fund,
and (ii) a majority of those Trustees who are neither parties to the Advisory
Agreement nor "interested persons," as defined in the 1940 Act, of any such
party, acting in person at a meeting called for the purpose of voting on such
approval. The Advisory Agreement will terminate automatically in the event of
its "assignment," as defined in the 1940 Act. In addition, the Advisory
Agreement is terminable at any time as to the Surviving Fund without penalty by
the JPMIF Board or by vote of the majority of the Surviving Fund's outstanding
voting securities upon 60 days' written notice to JPMIM, and by JPMIM on 90
days' written notice to JPMIF.
PORTFOLIO MANAGER
The Surviving Fund will be managed by a team of individuals from JPMIM.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
JPMIM places orders for the Surviving Fund for all purchases and sales of
portfolio securities, enters into repurchase agreements, and may enter into
reverse repurchase agreements and execute loans of portfolio securities on
behalf of the Surviving Fund. Fixed income and debt securities and municipal
bonds and notes are generally traded at a net price with dealers acting as
principal for their own accounts without a stated commission. The price of the
security usually includes profit to the dealers. In underwritten offerings,
securities are purchased at a fixed price which includes an amount of
compensation to the underwriter, generally referred to as the underwriter's
concession or discount. On occasion, certain securities may be purchased
directly from an issuer, in which case no commissions or discounts are paid.
Portfolio transactions for the Surviving Fund will be undertaken principally
to accomplish the Surviving Fund's objective in relation to expected movements
in the general level of interest rates. The Surviving Fund may engage in
short-term trading consistent with its objectives.
In connection with portfolio transactions, JPMIM intends to seek best
execution on a competitive basis for both purchases and sales of securities.
Subject to the overriding objective of obtaining the best execution of orders,
JPMIM may allocate a portion of the Surviving Fund's brokerage transactions to
affiliates of JPMIM. Under the 1940 Act, persons affiliated with the Surviving
Fund and persons who are affiliated with such persons are prohibited from
dealing with the fund as principal in the purchase and sale of securities unless
a permissive order allowing such transactions is obtained from the Commission.
However, affiliated persons of the fund may serve as its broker in listed or
over-the-counter transactions conducted on an agency basis provided that, among
other things, the fee or commission received by such affiliated broker is
reasonable and fair compared to the fee or commission received by non-affiliated
brokers in connection with comparable transactions. In addition, the Surviving
Fund may not purchase securities during the existence of any underwriting
syndicate for such securities of which JPMIM or an affiliate is a member or in a
private placement in which JPMIM or an affiliate serves as placement agent
except pursuant to procedures adopted by the Board of Trustees that either
comply with rules adopted by the Commission or with interpretations of the
Commission's staff.
17
Investment decisions made by JPMIM are the product of many factors in
addition to basic suitability for the particular fund or other client in
question. Thus, a particular security may be bought or sold for certain clients
even though it could have been bought or sold for other clients at the same
time. Likewise, a particular security may be bought for one or more clients when
one or more other clients are selling the same security. The Surviving Fund may
only sell a security to other portfolios or accounts managed by JPMIM or its
affiliates in accordance with procedures adopted by the Trustees.
It also sometimes happens that two or more clients simultaneously purchase
or sell the same security. On those occasions when JPMIM deems the purchase or
sale of a security to be in the best interests of the Surviving Fund, as well as
other clients including other funds, JPMIM, to the extent permitted by
applicable laws and regulations, may, but is not obligated to, aggregate the
securities to be sold or purchased for the Surviving Fund with those to be sold
or purchased for other clients in order to obtain best execution, including
lower brokerage commissions if appropriate. In such event, allocation of the
securities so purchased or sold as well as any expenses incurred in the
transaction will be made by JPMIM in the manner it considers to be most
equitable and consistent with JPMIM's fiduciary obligations to the Surviving
Fund. In some instances, this procedure might adversely affect the Surviving
Fund.
OTHER SERVICES
The Distributor is a wholly owned, indirect subsidiary of BISYS Fund
Services, Inc. currently serves as the distributor for both the Surviving Fund
and the Merging Fund. An affiliate of the Distributor serves as the
sub-administrator for the Merging Fund and for the Survivng Fund. The
Distributor is unaffiliated with JPMC or any of its subsidiaries.
Morgan serves as administrator and shareholder servicing agent, BONY serves
as fund accountant and custodian, and State Street serves as transfer agent and
dividend disbursing agent for the Surviving Fund. The principal business address
of Morgan is 60 Wall Street, New York, NY 10005. The services provided by Morgan
and BONY include day-to-day maintenance of certain books and records,
calculation of the offering price of the shares and preparation of reports. In
its role as custodian, BONY will be responsible for the daily safekeeping of
securities and cash held by the Surviving Fund. It is anticipated that
subsequent to the consummation of the Reorganization, Chase will become the
Surviving Fund's administrator, shareholder servicing agent, fund accountant and
custodian, and DST will become the Surviving Fund's transfer agent and dividend
disbursing agent.
In connection with the Reorganization, the administration fee paid to Morgan
will be increased on August 11, 2001 to 0.15% of average daily net assets for
complex wide non-money market fund assets up to $25 billion and 0.075% on assets
in excess of $25 billion (currently such assets are less than $25 billion). The
Merging Fund currently pays Morgan, its administrator, an administration fee at
an effective rate of 0.048% of its average daily net assets.
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. 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 a shareholder in JPMIF, you are entitled to vote on
this proposal.
In connection with the merger of J.P. Morgan & Co. Incorporated and The
Chase Manhattan Corporation, it has been proposed, subject to shareholder
approval, that the Boards of Trustees of the investment companies managed by
JPMIM and its affiliates be reorganized. JPMC and the Boards considered that the
Boards of Trustees for the registered investment companies advised by J.P.
Morgan Investment Management Inc. and the registered investment companies
advised by J.P. Morgan Fleming Asset Management (USA) Inc. also be integrated
and streamlined into a consolidated Board of Trustees to serve all of the funds
in the Fund Complex (as defined below) (the "Consolidated Board"). It is
anticipated that having a Consolidated Board will enhance the governance of the
larger Fund Complex and is consistent with the prior practice of having a single
Board for each predecessor fund complex. JPMC believes, and the respective
Boards similarly concluded, that the Consolidated Board will increase
administrative efficiencies for JPMC and the funds in the Fund Complex and will
benefit shareholders of all such funds. The eight individuals who are being
proposed for election to the Consolidated Board, and hence the Nominees
described in this Proposal, were nominated after a careful and deliberate
selection process by the respective
18
Nominating Committees and Boards of Trustees. This selection process included
the consideration of various factors, such as the desire to balance the
respective expertise of the various candidates and diversity of background, the
historical experience of various Trustees and Advisory Board members of the
predecessor complexes, the size of the Board and related future cost savings,
the practicalities dictated by the age 70 retirement policy of the registered
investment companies advised by J.P. Morgan Investment Management Inc., and
other factors the Boards deemed relevant. Therefore, the Nominees include
certain current Trustees of J.P. Morgan Funds ("JPMF"), certain current Trustees
of JPMIF, certain current members of JPMIF's Advisory Board and certain Trustees
of the former Chase Vista Funds. Each Nominee has consented to being named in
this 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.
Other shareholders of JPMIF are concurrently considering the election of the
same individuals to the Board of Trustees of JPMIF. Biographical information
about the Nominees and other relevant information is set forth below. More
information regarding the current Trustees of JPMIF is contained in either of
the Fund's 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 for 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:
TRUSTEE
NAME OF NOMINEE AND OF JPMIF BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATIONS
CURRENT POSITION WITH FUND COMPLEX SINCE AGE DURING THE PAST FIVE YEARS AND CURRENT DIRECTORSHIPS
- ----------------------------------- -------- --- ------------------------------------------------------
William J. Armstrong-- Nominee 59 Retired; formerly Vice President and Treasurer,
Trustee of certain other trusts Ingersoll-Rand Company (manufacturer of industrial
in the Fund Complex since 1987 supplies). Address: 287 Hampshire Ridge, Park Ridge,
NJ 07656.
Roland R. Eppley, Jr.-- Nominee 68 Retired; formerly President and Chief Executive
Trustee of certain other trusts Officer, Eastern States Bankcard Association Inc.
in the Fund Complex since 1989 (financial services) (1971-1988); Director, Janel
Hydraulics, Inc.; formerly Director of The Hanover
Funds, Inc. (open-end mutual funds) Address: 105
Coventry Place, Palm Beach Gardens, FL 33418.
19
TRUSTEE
NAME OF NOMINEE AND OF JPMIF BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATIONS
CURRENT POSITION WITH FUND COMPLEX SINCE AGE DURING THE PAST FIVE YEARS AND CURRENT DIRECTORSHIPS
- ----------------------------------- -------- --- ------------------------------------------------------
Ann Maynard Gray-- Nominee 55 Former President, Diversified Publishing Group and
Member of Advisory Board of the Vice President, Capital Cities/ABC, Inc. Ms. Gray is
Trust and certain other trusts in also a director of Duke Energy Corporation and Elan
the Fund Complex since 2000 Corporation, plc (pharmaceuticals). Address: 1262
Rockrimmon Road, Stamford, CT 06903.
Matthew Healey-- 1982 63 Former Chief Executive Officer of the Trust through
Chairman of the Trust and certain April 2001; Chairman, Pierpont Group (provides
other trusts in the Fund Complex services to trustees of investment companies), 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, Lumelite
Chairman of certain other trusts Corporation (plastics manufacturing), since September
in the Fund Complex; Trustee of 1985; Trustee, Morgan Stanley Funds. Address:
other trusts in the Fund Complex 202 June Road, Stamford, CT 06903.
since 1984
James J. Schonbachler-- Nominee 58 Retired; prior to September, 1998, Managing Director,
Member of Advisory Board of the Bankers Trust Company and Group Head and Director,
Trust and certain other trusts in Bankers Trust A.G., Zurich and BT Brokerage Corp.
the Fund Complex since 2000 (financial services) Address: 3711 Northwind Court,
Jupiter, FL 33477
Leonard M. Spalding, Jr.*-- Nominee 65 Retired; formerly Chief Executive Officer of Chase
Trustee of certain other trusts Mutual Funds Corp.; formerly President and Chief
in the Fund Complex since 1998 Executive Officer of Vista Capital Management
(investment management); and formerly Chief Investment
Executive of The Chase Manhattan Private Bank
(investment management). Address: 2025 Lincoln Park
Road, Springfield, KY 40069.
H. Richard Vartabedian-- Nominee 65 Former President of certain other trusts in the Fund
Trustee of certain other trusts Complex through April 2001; Investment Management
in the Fund Complex since 1992 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.
If elected, each Nominee would oversee 91 separate portfolios.
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.
20
REMUNERATION OF TRUSTEES AND CERTAIN EXECUTIVE OFFICERS
Each current Trustee is reimbursed for expenses incurred in attending each
meeting of the Board of Trustees or any committee thereof. Each Trustee who is
not an affiliate of JPMIM is compensated for his or her services according to a
fee schedule which recognizes the fact that each Trustee also serves as a
Trustee of other investment companies advised by JPMIM. Each Trustee receives a
fee, allocated among all investment companies for which the Trustee serves.
Set forth below is information regarding compensation paid or accrued during
the calendar year ended December 31, 2000 for each nominee of JPMF:
COMPENSATION FROM PENSION OR RETIREMENT TOTAL COMPENSATION FROM
"MORGAN FUND COMPLEX"(1) BENEFITS ACCRUED "FUND COMPLEX"(2)
-------------------------------- --------------------- -----------------------
William J. Armstrong NA $ 41,781 $ 90,000 (10)(3)
Roland R. Eppley, Jr. NA $ 58,206 $ 91,000 (10)(3)
Ann Maynard Gray $75,000 NA $ 75,000 (17)(3)
Matthew Healey(4) $75,000 NA $ 75,000 (17)(3)
Fergus Reid, III NA $110,091 $202,750 (10)(3)
James J. Schonbachler $75,000 NA $ 75,000 (17)(3)
Leonard M. Spalding, Jr. NA $ 35,335 $ 89,000 (10)(3)
H. Richard Vartabedian NA $ 86,791 $134,350 (10)(3)
- ---------------------
(1) The Morgan Fund Complex means registered investment companies advised by
JPMIM.
(2) A Fund Complex generally means two or more investment companies that hold
themselves out to investors as related companies for purposes of investment
and investment services, or have a common investment adviser or have an
investment adviser that is an affiliated person of the investment adviser
of any of the other investment companies (as used herein, registered
investment companies advised by JPMIM and JPMFAM).
(3) Total number of investment company boards with respect to Trustees, or
Advisory Boards with respect to Advisory Board members, served on within
the Fund Complex.
(4) Pierpont Group, Inc. paid Mr. Healey, in his role as Chairman of Pierpont
Group, Inc., compensation in the amount of $200,000, contributed $25,500 to
a defined contribution plan on his behalf and paid $18,400 in insurance
premiums for his benefit.
Inasmuch as the Morgan Fund Complex does not have any retirement plan for
its Trustees and JPMC will also benefit from the administrative efficiencies of
a consolidated board, JPMC has agreed to pay a one-time retirement package to
the Trustees of the Morgan Fund Complex and the Advisory Board members who have
volunteered to leave the Board of Trustees or Advisory Board of the Morgan Fund
Complex prior to their normal retirement date. For each retiring Trustee, the
retirement package is equal to three times the annual fee (which may increase)
for the new Combined Board per Trustee; for each retiring Advisory Board member,
the retirement package is one and a half times the annual fee (which may
increase) for the new Combined Board per Trustee.
FORMER CHASE VISTA FUNDS' RETIREMENT PLAN AND DEFERRED COMPENSATION PLAN FOR
ELIGIBLE TRUSTEES
Effective August 21, 1995, the Trustees of the former Chase Vista Funds also
instituted a Retirement Plan for Eligible Trustees (the "Plan") pursuant to
which each Trustee (who is not an employee of the former Chase Vista Funds'
adviser, administrator or distributor or any of their affiliates) may be
entitled to certain benefits upon retirement from the Board of Trustees.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible Trustee has attained age 65 and has completed at least five years of
continuous service with one or more of the investment companies advised by the
adviser of certain former Chase Vista Funds and its affiliates (collectively,
the "Covered Funds"). Each Eligible Trustee is entitled to receive from the
Covered Funds an annual benefit commencing on the first day of the calendar
quarter coincident with or following his date of retirement equal to the sum of
(1) 8% of the highest annual compensation received from the Covered Funds
multiplied by the number of such Trustee's years of service (not in excess of 10
years) completed with respect to any Covered Funds and (2) 4% of the highest
annual compensation received from the Covered Funds for each year of service in
excess of 10 years, provided that no Trustee's annual benefit will exceed the
highest annual compensation received by that Trustee from the Covered Funds.
Such benefit is payable to each eligible Trustee in monthly installments for the
life of the Trustee. On February 22, 2001, the board of Trustees voted to
terminate the Plan and in furtherance of this 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.
21
Messrs. Armstrong, Eppley, Reid, Spalding and Vartabedian, who are Nominees,
received $1,027,673, $800,600, $2,249,437, $463,798 and $1,076,927,
respectively, in connection with the termination. Each nominee has elected to
defer receipt of such amount pursuant to the Deferred Compensation Plan for
Eligible Trustees.
Effective August 21, 1995, the Trustees instituted a Deferred Compensation
Plan for Eligible Trustees (the "Deferred Compensation Plan") pursuant to which
each Trustee (who is not an employee of the former Chase Vista Funds' adviser,
administrator or distributor or any of their affiliates) may enter into
agreements with such Funds whereby payment of the Trustees' fees are deferred
until the payment date elected by the Trustee (or the Trustee's termination of
service). The deferred amounts are deemed invested in shares of funds as elected
by the Trustee at the time of deferral. If a deferring Trustee dies prior to the
distribution of amounts held in the deferral account, the balance of the
deferral account will be distributed to the Trustee's designated beneficiary in
a single lump sum payment as soon as practicable after such deferring Trustee's
death. Messrs. Armstrong, Eppley, Reid, Spalding and Vartabedian are the only
Nominees who have elected to defer compensation under such plan.
The Trustees decide upon general policies and are responsible for overseeing
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. Pierpont Group, Inc.
was organized in July 1989 to provide services for the J.P. Morgan Family of
Funds (formerly "The Pierpont Family of Funds"), and the Trustees are the equal
and sole shareholders of Pierpont Group, Inc. JPMIF has 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 and the
Surviving Fund will terminate its agreement with Pierpont Group, Inc. in
connection with the Reorganization. The consolidated Board of Trustees will
instead look to counsel, auditors, Morgan and other service providers, as
necessary.
The aggregate fees paid to Pierpont Group, Inc. by the Merging Fund, the
Surviving Fund and the Master Portfolio during the indicated fiscal periods are
set forth below:
MERGING FUND--For the fiscal years ended October 31, 1999 and 2000: $4,687
and $5,923, respectively.
SURVIVING FUND--For the fiscal years ended October 31, 1998, 1999 and 2000:
$28,012, $21,558 and $14,992, respectively.
MASTER PORTFOLIO--For the fiscal years ended October 31, 1998, 1999 and
2000: $35,661, $30,562 and $24,445, respectively.
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. Each officer will hold
office for an indefinite term, but may be removed by the Board of Trustees at
any time.
The principal executive officers of JPMIF are as follows:
PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS AND OTHER
NAME AND POSITION AGE INFORMATION
- ----------------- --- -----------
David Wezdenko, 37 Vice President, J.P. Morgan Investment Management Inc.
President and Mr. Wezdenko is the Chief Operating Officer for the U.S.
Treasurer Mutual Funds and Financial Intermediaries Business. Since
(April joining J.P. Morgan in 1996, he has held numerous
2001-present) financial and operations related positions supporting the
J.P. Morgan pooled funds business.
Sharon Weinberg, 41 Vice President, J.P. Morgan Investment Management Inc.
Vice-President Ms. Weinberg is head of Business and Product Strategy for
and Secretary the U.S. Mutual Funds and Financial Intermediaries
(April business. Since joining J.P. Morgan in 1996 in New York,
2001-present) she has held numerous positions throughout the asset
management business in mutual funds marketing, legal and
product development.
22
ACCOUNTANTS
PricewaterhouseCoopers LLP serves as the Merging Fund's, the Surviving
Fund's and the Master Portfolio's independent accountants, auditing and
reporting on the annual financial statements and reviewing certain regulatory
reports and federal income tax returns. PricewaterhouseCoopers LLP also performs
other professional accounting, auditing, tax and advisory services when JPMIF
engages it to do so. Representatives of PricewaterhouseCoopers LLP are expected
to be present at the Meeting, and will have an opportunity to make a statement
if they desire. Such representatives are expected to be available to respond to
appropriate questions at the Meeting.
AUDIT FEES. The aggregate fees paid to PricewaterhouseCoopers LLP in
connection with the annual audit of the Merging Fund and the Master Portfolio
for the last fiscal year was $42,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. There were no
financial systems design and implementation services rendered by
PricewaterhouseCoopers LLP to the Merging Fund, JPMIM and JPMIM's affiliates
that provide services to the Fund for the calendar year ended December 31, 2000.
ALL OTHER FEES. The aggregate fees billed for all other non-audit services,
including fees for tax-related services, rendered by PricewaterhouseCoopers LLP
to the Merging Fund, JPMIM and JPMIM's affiliates that provide services to the
Fund for the calendar year ended December 31, 2000 was $11,029,300.
The Audit Committee has considered whether that 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 52,836,987.070 Merging Fund 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
23
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.
EXPENSES OF PROXY SOLICITATION
JPMIC, and not the Merging Fund or the Surviving Fund (or shareholders of
either Fund) will pay the cost of the preparation, printing and mailing to its
shareholders of the Combined Prospectus/Proxy Statement, accompanying Notice of
Meeting, form of proxy and any supplementary solicitation of its shareholders.
It is expected that the cost of retaining D. F. King & Co., Inc., to assist
in the proxy solicitation process for the fund complex will not exceed $200,000,
which cost will be borne by JPMC.
ABSTENTIONS AND BROKER NON-VOTES
In tallying the Merging Fund Shareholder votes, abstentions and broker
non-votes (i.e., proxies sent in by brokers and other nominees that cannot be
voted on a proposal because instructions have not been received from the
beneficial owners) will be counted for purposes of determining whether or not a
quorum is present for purposes of convening the Meeting. Abstentions and broker
non-votes will be considered to be a vote against each proposal.
INTERESTED PARTIES
On the record date, the Trustees and officers of JPMIF as a group owned less
than 1% of the outstanding shares of the Merging Fund. On the record date, the
name, address and percentage ownership of the persons who owned beneficially
more than 5% of the shares of the Merging Fund or any class thereof and the
percentage of shares of the Surviving Fund or any class thereof that would be
owned by such persons upon consummation of the Reorganization based upon their
holdings at April 6, 2001 are as follows:
PERCENTAGE OF PERCENTAGE OF
AMOUNT MERGING FUND SURVIVING FUND
OF SHARES OWNED ON OWNED UPON
NAME AND ADDRESS OWNED RECORD DATE CONSUMMATION
- ----------------------------------- -------------- ------------- --------------
MORGAN GUARANTY TRUST CO 4,183,898.3340 7.92% 1.92%
OF NEW YORK AS AGENT FOR
1984 GEISEL TRUST -- SURVIVOR'S
TR
ATTN: SPECIAL PRODUCTS 2/OPS3
500 STANTON CHRISTIANA ROAD
NEWARK, DE 19713-2107
JPMIM AS AGENT FOR ALBANY 3,628,005.1770 6.87% 1.67%
MEDICAL CENTER INSURANCE
TRUST-FLEET TRUST CO AS
CUSTODIAN
ATTN: FRAN GENTILE
522 FIFTH AVE
NEW YORK, NY 10036-7601
JPMIM AS AGENT FOR THE 2,815,501.6830 5.33% 1.29%
RETIREMENT TRUST FUND FOR ST
JOSEPH'S PROVINCE OF THE
SISTERS OF ST JOSEPH OF PEACE
ATTN: FRAN GENTILE
522 FIFTH AVE
NEW YORK NY 10036-7601
24
JPMIM AS AGENT AND 3,470,183.8560 6.57% 1.60%
INVESTMENT MANAGER FOR THE
UNITED HOSPITAL FUND
ATTN: PAUL BRIGNOLA
522 FIFTH AVE
NEW YORK NY 10036-7601
MICHIGAN CATHOLIC 3,816,847.6190 7.22% 1.75%
CONFERENCE
DIOCESE INVESTMENT
505 N CAPITAL AVE
LANCING MI 48933-1266
THE NEW YORK ACADEMY OF 2,991,918.8760 5.66% 1.38%
MEDICINE
ATTN: PATRICIA J VOLLAND
1216 5TH AVE
NEW YORK, NY 10029-9957
On the record date, the Trustees and officers of JPMF as a group owned less
than 1% of the outstanding shares of the Surviving Fund. On the record date, the
name, address and share ownership of the persons who owned beneficially more
than 5% of the shares of the Surviving Fund or any class thereof and the
percentage of shares of the Surviving Fund or any class thereof that would be
owned by such person upon consummation of the Reorganization based upon their
holdings at April 6, 2001 were as follows:
PERCENTAGE OF
SURVIVING PERCENTAGE OF
AMOUNT FUND SURVIVING FUND
OF SHARES OWNED ON OWNED UPON
NAME AND ADDRESS OWNED RECORD DATE CONSUMMATION
- ----------------------------------- -------------- ------------- --------------
MGT OF NEW YORK DEFERRED 7,409,239.1490 7.89% 3.41%
PROFIT SHARING PLAN OF MGT
OF NEW AND AFFILIATED CO FOR
US EMPLOYEES
AMERICAN CENTURY SERVICES
INC
4500 MAIN ST
ATTN: STEVE LEVITT
KANSAS CITY MO 64111-1816
PROPOSALS TO BE SUBMITTED BY SHAREHOLDERS
The Merging Fund does not generally hold an Annual Meeting of Shareholders.
Shareholders wishing to submit proposals for inclusion in a proxy statement for
a subsequent shareholders' meeting should send their written proposals to the
Secretary of the Merging Fund at the address set forth on the cover of this
Combined Prospectus/Proxy Statement.
ADDITIONAL INFORMATION ABOUT JPMIF
Information about each of the Merging Fund and the Surviving Fund is
included in its Prospectus, which is incorporated by reference. The Surviving
Fund's Prospectus is also enclosed herein. Additional information about each of
the Merging Fund and the Surviving Fund is also included in JPMIF's Statements
of Additional Information with respect to each of them which have been filed
with the Commission and which are incorporated herein by reference. Copies of
the Prospectuses and Statements 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.
25
FINANCIAL STATEMENTS AND EXPERTS
The audited financial highlights, financial statements and notes thereto of
each of the Merging Fund and the Surviving Fund for the fiscal year ended
October 31, 2000, and the audited financial statements, notes thereto and
supplementary data of the Master Portfolio for the fiscal year ended October 31,
2000, are incorporated by reference herein and into the Statement of Additional
Information related to this Combined Prospectus/Proxy Statement. The audited
financial highlights, financial statements, notes thereto and supplementary data
as applicable, of the Merging Fund, the Surviving Fund and the Master Portfolio
have been incorporated herein by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on their authority as
experts in auditing and accounting.
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
JPMF is not 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 JPMorgan Institutional Funds (the "Transferor Trust"), a
Massachusetts business trust, on behalf of J.P. Morgan Bond Fund - Ultra (the
"Transferor Portfolio"), J.P. Morgan Institutional Funds (the "Acquiring
Trust"), a Massachusetts business trust, on behalf of the J.P. Morgan
Institutional Bond Fund (the "Acquiring Portfolio") and J.P. Morgan Chase & Co.
WHEREAS, the Board of Trustees of each of the Transferor Trust and the
Acquiring Trust has determined that the transfer of all of the assets and
liabilities of the Transferor Portfolio to the Acquiring Portfolio is in the
best interests of the Transferor Portfolio and the Acquiring Portfolio, as well
as the best interests of shareholders of the Transferor Portfolio and the
Acquiring Portfolio, and that the interests of existing shareholders would not
be diluted as a result of this transaction;
WHEREAS, each of the Transferor Trust and the Acquiring Trust intends to
provide for the reorganization of the Transferor Portfolio (the
"Reorganization") through the acquisition by the Acquiring Portfolio of all of
the assets, subject to all of the liabilities, of the Transferor Portfolio in
exchange for shares of beneficial interest of the Acquiring Portfolio (the
"Acquiring Portfolio Shares"), the liquidation of the Transferor Portfolio and
the distribution to Transferor Portfolio shareholders of such Acquiring
Portfolio Shares, all pursuant to the provisions of Section 368(a)(1) of the
Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. TRANSFER OF ASSETS OF THE TRANSFEROR PORTFOLIO IN EXCHANGE FOR THE ACQUIRING
PORTFOLIO SHARES AND LIQUIDATION AND TERMINATION OF THE TRANSFEROR PORTFOLIO
(a) PLAN OF REORGANIZATION.
(i) The Transferor Trust on behalf of the Transferor Portfolio listed
above, will convey, transfer and deliver to the Acquiring Portfolio all of the
then existing assets of the Transferor Portfolio (consisting, without
limitation, of portfolio securities and instruments, dividend and interest
receivables, cash and other assets). In consideration thereof, the Acquiring
Trust on behalf of the Acquiring Portfolio will (A) assume and pay, to the
extent that they exist on or after the Effective Time of the Reorganization (as
defined in Section 1(b)(i) hereof), all of the obligations and liabilities of
the Transferor Portfolio and (B) issue and deliver to the Transferor Portfolio
full and fractional shares of beneficial interest of the Acquiring Portfolio,
with respect to the Acquiring Portfolio equal to that number of full and
fractional Acquiring Portfolio Shares as determined in Section 1(c) hereof. The
Acquiring Portfolio Shares issued and delivered to the Transferor Portfolio
shall be of the Ultra Class share class in exchange for Shares of the Transferor
Portfolio, with the amounts of shares to be determined by the parties. Any
shares of beneficial interest (if any) of the Transferor Portfolio ("Transferor
Portfolio Shares") held in the treasury of the Transferor Trust at the Effective
Time of the Reorganization shall thereupon be retired. Such transactions shall
take place on the date provided for in Section 1(b) hereof (the "Exchange
Date"). All computations for the Transferor Portfolio and the Acquiring
Portfolio shall be performed by their respective custodians and J.P. Morgan
Chase & Co. The determination of said parties shall be conclusive and binding on
all parties in interest.
(ii) As of the Effective Time of the Reorganization, the Transferor Trust
will liquidate and distribute pro rata to its shareholders of record
("Transferor Portfolio Shareholders") as of the Effective Time of the
Reorganization the Acquiring Portfolio Shares received by such Transferor
Portfolio pursuant to Section 1(a)(i) in actual or constructive exchange for the
shares of the Transferor Portfolio held by the Transferor Portfolio
shareholders. Such liquidation and distribution will be accomplished by the
transfer of the Acquiring Portfolio Shares then credited to the account of the
Transferor Portfolio on the books of the Acquiring Portfolio, to open accounts
on the share records of the Acquiring Portfolio in the names of the Transferor
Portfolio Shareholders and representing the respective pro rata number of the
Acquiring Portfolio Shares due such shareholders. The Acquiring Portfolio will
not issue certificates representing the Acquiring Portfolio Shares in connection
with such exchange.
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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 Ultra 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 Ultra Class shares of the Acquiring
Portfolio, both as determined in accordance with Section 1(c)(i). All
computations of value shall be made by the Custodian in accordance with its
regular practice as pricing agent for the Acquiring Portfolio and the Transferor
Portfolio.
2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING TRUST
The Acquiring Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Acquiring Trust is a business trust
that is duly organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts and has the power to carry on its business as
it is now being conducted. The Acquiring Portfolio is a validly existing series
of shares of such business trust representing interests therein under the laws
of Massachusetts. Each of the Acquiring Portfolio and the Acquiring Trust have
all necessary federal, state and local authorization to own all of its
properties and assets and to carry on its business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Acquiring Trust is registered
under the Investment Company Act of 1940, as amended (the "Act") as an open-end
investment company of the management type; such registration has not been
revoked or rescinded and is in full force and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectuses and statements of
additional information of the Acquiring Trust, as amended, included in the
Acquiring Trust's registration statement on Form N-1A
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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 October 31, 2000 there
were outstanding 96,271,000 shares of the Acquiring Portfolio, and no shares of
such Portfolio were held in the treasury of the Acquiring Trust. All of the
outstanding shares of the Acquiring Trust have been duly authorized and are
validly issued, fully paid and nonassessable (except as disclosed in the
Acquiring Trust's prospectus and recognizing that under Massachusetts law,
shareholders of an Acquiring Trust portfolio could, under certain circumstances,
be held personally liable for the obligations of such Acquiring Trust
portfolio). Because the Acquiring Trust is an open-end investment company
engaged in the continuous offering and redemption of its shares, the number of
outstanding shares may change prior to the Effective Time of the Reorganization.
All of the issued and outstanding shares of the Acquiring Portfolio have been
offered and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable state securities
laws.
(e) FINANCIAL STATEMENTS. The financial statements of the Acquiring Trust
with respect to the Acquiring Portfolio and The U.S. Fixed Income Portfolio for
the fiscal year ended October 31, 2000, which have been audited by
PricewaterhouseCoopers LLP, fairly present the financial position of the
Acquiring Portfolio and The U.S. Fixed Income Portfolio as of the dates thereof
and the respective results of operations and changes in net assets for each of
the periods indicated in accordance with generally accepted accounting
principles ("GAAP").
(f) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring Portfolio Shares
to be issued in connection with the Reorganization will be duly authorized and
upon consummation of the Reorganization will be validly issued, fully paid and
nonassessable (except as disclosed in the Trust's prospectus and recognizing
that under Massachusetts law, shareholders of an Acquiring Trust portfolio
could, under certain circumstances, be held personally liable for the
obligations of such portfolio).
(g) AUTHORITY RELATIVE TO THIS PLAN. The Acquiring Trust, on behalf of the
Acquiring Portfolio, has the power to enter into this Plan and to carry out its
obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Acquiring Trust's Board of Trustees and no other proceedings by the
Acquiring Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Acquiring Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
(h) LIABILITIES. There are no liabilities of the Acquiring Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Acquiring Trust's
financial statements with respect to the Acquiring Portfolio and liabilities
incurred in the ordinary course of business subsequent to October 31, 2000 or
otherwise previously disclosed to the Acquiring Trust with respect to the
Acquiring Portfolio, none of which has been materially adverse to the business,
assets or results of operations of the Acquiring Portfolio.
(i) NO MATERIAL ADVERSE CHANGE. Since October 31, 2000, there has been no
material adverse change in the financial condition, results of operations,
business, properties or assets of the Acquiring Portfolio, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
(j) LITIGATION. There are no claims, actions, suits or proceedings
pending or, to the knowledge of the Acquiring Trust, threatened which would
adversely affect the Acquiring Trust or the Acquiring Portfolio's assets or
business or which would prevent or hinder consummation of the transactions
contemplated hereby, there are no facts which would form the basis for the
institution of administrative proceedings against the Acquiring Trust or the
Acquiring Portfolio and, to the knowledge of the Acquiring Trust, there are no
regulatory investigations of the Acquiring Trust or the Acquiring Portfolio,
pending or threatened, other than routine inspections and audits.
(k) CONTRACTS. No default exists under any material contract or other
commitment to which the Acquiring Trust, on behalf of the Acquiring Portfolio,
is subject.
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(l) TAXES. The federal income tax returns of the Acquiring Trust with
respect to the Acquiring Portfolio, and all other income tax returns required to
be filed by the Acquiring Trust with respect to the Acquiring Portfolio, have
been filed, and all taxes payable pursuant to such returns have been paid. To
the knowledge of the Acquiring Trust, no such return is under audit and no
assessment has been asserted in respect of any such return. All federal and
other taxes owed by the Acquiring Trust with respect to the Acquiring Portfolio
have been paid so far as due. The Acquiring Portfolio has elected to qualify and
has qualified as a "regulated investment company" under Subchapter M of the Code
as of and since its first taxable year and intends to continue to so qualify.
(m) NO APPROVALS REQUIRED. Except for the Registration Statement (as
defined in Section 4(a) hereof) and the approval of the Transferor Portfolio's
shareholders (referred to in Section 6(a) hereof), no consents, approvals,
authorizations, registrations or exemptions under federal or state laws are
necessary for the consummation by the Acquiring Trust of the Reorganization,
except such as have been obtained as of the date hereof.
3. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR TRUST
The Transferor Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Transferor Trust is a business trust
that is duly organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts and has the power to carry on its business as
it is now being conducted. The Transferor Portfolio is a validly existing series
of shares of such business trust representing interests therein under the laws
of Massachusetts. Each of Transferor Portfolio and the Transferor Trust has all
necessary federal, state and local authorization to own all of its properties
and assets and to carry on its business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Transferor Trust is registered
under the Act as an open-end investment company of the management type; such
registration has not been revoked or rescinded and is in full force and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectuses and statements of
additional information of the Transferor Trust, as amended, included in the
Transferor Trust's registration statement on Form N-1A filed with the
Commission, comply in all material respects with the requirements of the
Securities Act and the Act and do not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(d) CAPITALIZATION. The Transferor Trust has an unlimited number of
authorized shares of beneficial interest, of which as of October 31, 2000 there
were outstanding 48,475,000 shares of the Transferor Portfolio, and no shares of
such Portfolio were held in the treasury of the Transferor Trust. All of the
outstanding shares of the Transferor Trust have been duly authorized and are
validly issued, fully paid and nonassessable (except as disclosed in the
Transferor Trust's prospectus and recognizing that under Massachusetts law,
shareholders of a Trust portfolio could, under certain circumstances, be held
personally liable for the obligations of such Trust portfolio). Because the
Transferor Trust is an open-end investment company engaged in the continuous
offering and redemption of its shares, the number of outstanding shares may
change prior to the Effective Time of the Reorganization. All such shares will,
at the Exchange Date, be held by the shareholders of record of the Transferor
Portfolio as set forth on the books and records of the Transferor Trust in the
amounts set forth therein, and as set forth in any list of shareholders of
record provided to the Acquiring Portfolio for purposes of the Reorganization,
and no such shareholders of record will have any preemptive rights to purchase
any Transferor Portfolio shares, and the Transferor Portfolio does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any Transferor Portfolio shares (other than any existing dividend reinvestment
plans of the Transferor Portfolio or as set forth in this Plan), nor are there
outstanding any securities convertible into any shares of the Transferor
Portfolio (except pursuant to any existing exchange privileges described in the
current prospectus and statement of additional information of the Transferor
Trust). All of the Transferor Portfolio's issued and outstanding shares have
been offered and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable state securities
laws.
(e) FINANCIAL STATEMENTS. The financial statements for the Transferor Trust
with respect to the Transferor Portfolio and The U.S. Fixed Income 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 U.S. Fixed Income Portfolio as of the dates thereof
and the respective results of operations and changes in net assets for each of
the periods indicated in accordance with GAAP.
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(f) AUTHORITY RELATIVE TO THIS PLAN. The Transferor Trust, on behalf of the
Transferor Portfolio, has the power to enter into this Plan and to carry out its
obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Transferor Trust's Board of Trustees and no other proceedings by the
Transferor Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Transferor Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
(g) LIABILITIES. There are no liabilities of the Transferor Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Transferor Trust's
Financial Statements with respect to the Transferor Portfolio and liabilities
incurred in the ordinary course of business subsequent to 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,
and all taxes payable pursuant to such returns have been paid. To the knowledge
of the Transferor Trust, no such return is under audit and no assessment has
been asserted in respect of any such return. All federal and other taxes owed by
the Transferor Trust with respect to the Transferor Portfolio have been paid so
far as due. The Transferor Portfolio has elected to qualify as a "regulated
investment company" under Subchapter M of the Code, as of and since its first
taxable year, and shall continue to so qualify until the Effective Time of the
Reorganization.
(l) NO APPROVALS REQUIRED. Except for the Registration Statement (as
defined in Section 4(a) hereof) and the approval of the Transferor Portfolio's
shareholders referred to in Section 6(a) hereof, no consents, approvals,
authorizations, registrations or exemptions under federal or state laws are
necessary for the consummation by the Transferor Trust of the Reorganization,
except such as have been obtained as of the date hereof.
4. COVENANTS OF THE ACQUIRING TRUST
The Acquiring Trust covenants to the following:
(a) REGISTRATION STATEMENT. On behalf of the Acquiring Portfolio, the
Acquiring Trust shall file with the Commission a Registration Statement on Form
N-14 (the "Registration Statement") under the Securities Act relating to the
Acquiring Portfolio Shares issuable hereunder and the proxy statement of the
Transferor Portfolio relating to the meeting of the Transferor Portfolio's
shareholders referred to in Section 5(a) herein. At the time the Registration
Statement becomes effective, the Registration Statement (i) will comply in all
material respects with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder (the "Regulations") and (ii) will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and at the time the Registration Statement becomes effective, at the
time of the Transferor
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Portfolio shareholders' meeting referred to in Section 5(a) hereof, and at the
Effective Time of the Reorganization, the prospectus/proxy statement (the
"Prospectus") and statement of additional information (the "Statement of
Additional Information") included therein, as amended or supplemented by any
amendments or supplements filed by the Trust, will not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(b) COOPERATION IN EFFECTING REORGANIZATION. The Acquiring Trust agrees to
use all reasonable efforts to effectuate the Reorganization, to continue in
operation thereafter, and to obtain any necessary regulatory approvals for the
Reorganization. The Acquiring Trust shall furnish such data and information
relating to the Acquiring Trust as shall be reasonably requested for inclusion
in the information to be furnished to the Transferor Portfolio shareholders in
connection with the meeting of the Transferor Portfolio's shareholders for the
purpose of acting upon this Plan and the transactions contemplated herein.
(c) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise contemplated by
this Plan, the Acquiring Trust shall conduct the business of the Acquiring
Portfolio in the ordinary course until the consummation of the Reorganization,
it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions.
5. COVENANTS OF THE TRANSFEROR TRUST
The Transferor Trust covenants to the following:
(a) MEETING OF THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor
Trust shall call and hold a meeting of the shareholders of the Transferor
Portfolio for the purpose of acting upon this Plan and the transactions
contemplated herein.
(b) PORTFOLIO SECURITIES. With respect to the assets to be transferred in
accordance with Section 1(a), the Transferor Portfolio's assets shall consist of
all property and assets of any nature whatsoever, including, without limitation,
all cash, cash equivalents, securities, claims and receivables (including
dividend and interest receivables) owned, and any deferred or prepaid expenses
shown as an asset on the Transferor Trust's books maintained on behalf of the
Transferor Portfolio. At least five (5) business days prior to the Exchange
Date, the Transferor Portfolio will provide the Acquiring Trust, for the benefit
of the Acquiring Portfolio, with a list of its assets and a list of its stated
liabilities. The Transferor Portfolio shall have the right to sell any of the
securities or other assets shown on the list of assets prior to the Exchange
Date but will not, without the prior approval of the Acquiring Trust, on behalf
of the Acquiring Portfolio, acquire any additional securities other than
securities which the Acquiring Portfolio is permitted to purchase, pursuant to
its investment objective and policies or otherwise (taking into consideration
its own portfolio composition as of such date). In the event that the Transferor
Portfolio holds any investments that the Acquiring Portfolio would not be
permitted to hold, the Transferor Portfolio will dispose of such securities
prior to the Exchange Date to the extent practicable, to the extent permitted by
its investment objective and policies and to the extent that its shareholders
would not be materially affected in an adverse manner by such a disposition. In
addition, the Transferor Trust will prepare and deliver immediately prior to the
Effective Time of the Reorganization, a Statement of Assets and Liabilities of
the Transferor Portfolio, prepared in accordance with GAAP (each, a "Schedule").
All securities to be listed in the Schedule for the Transferor Portfolio as of
the Effective Time of the Reorganization will be owned by the Transferor
Portfolio free and clear of any liens, claims, charges, options and
encumbrances, except as indicated in such Schedule, and, except as so indicated,
none of such securities is or, after the Reorganization as contemplated hereby,
will be subject to any restrictions, legal or contractual, on the disposition
thereof (including restrictions as to the public offering or sale thereof under
the Securities Act) and, except as so indicated, all such securities are or will
be readily marketable.
(c) REGISTRATION STATEMENT. In connection with the preparation of the
Registration Statement, the Transferor Trust will cooperate with the Acquiring
Trust and will furnish to the Acquiring Trust the information relating to the
Transferor Portfolio required by the Securities Act and the Regulations to be
set forth in the Registration Statement (including the Prospectus and Statement
of Additional Information). At the time the Registration Statement becomes
effective, the Registration Statement, insofar as it relates to the Transferor
Portfolio, (i) will comply in all material respects with the provisions of the
Securities Act and the Regulations and (ii) will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and at the
time the Registration Statement becomes effective, at the time of the Transferor
Portfolio's shareholders' meeting referred to in Section 5(a) and at the
Effective Time of the Reorganization, the Prospectus and Statement of
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Additional Information, as amended or supplemented by any amendments or
supplements filed by the Transferor Trust, insofar as they relate to the
Transferor Portfolio, will not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall apply
only to statements in or omissions from the Registration Statement, Prospectus
or Statement of Additional Information made in reliance upon and in conformity
with information furnished by the Transferor Portfolio for use in the
registration statement, prospectus or statement of additional information as
provided in this Section 5(c).
(d) COOPERATION IN EFFECTING REORGANIZATION. The Transferor Trust agrees to
use all reasonable efforts to effectuate the Reorganization and to obtain any
necessary regulatory approvals for the Reorganization.
(e) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise contemplated by
this Plan, the Transferor Trust shall conduct the business of the Transferor
Portfolio in the ordinary course until the consummation of the Reorganization,
it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions.
(f) Statement of Earnings and Profits. As promptly as practicable, but in
any case within 60 days after the Exchange Date, the Transferor Trust on behalf
of the Transferor Portfolio, shall prepare a statement of the earnings and
profits of the Transferor Portfolio for federal income tax purposes, and of any
capital loss carryovers and other items that the Acquiring Portfolio will
succeed to and take into account as a result of Section 381 of the Code.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRANSFEROR TRUST
The obligations of the Transferor Trust with respect to the consummation of
the Reorganization are subject to the satisfaction of the following conditions:
(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. This Plan and the
transactions contemplated by the Reorganization shall have been approved by the
requisite vote of the shares of the Transferor Portfolio entitled to vote on the
matter ("Transferor Shareholder Approval").
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Acquiring Trust shall
have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all material
respects as of the Effective Time of the Reorganization (except as otherwise
contemplated herein), and there shall have been no material adverse change (as
described in Section 2(i)) in the financial condition, results of operations,
business, properties or assets of the Acquiring Portfolio since October 31,
2000.
(c) REGULATORY APPROVAL. The Registration Statement shall have been
declared effective by the Commission and no stop orders under the Securities Act
pertaining thereto shall have been issued, and all other approvals,
registrations, and exemptions under federal and state laws considered to be
necessary shall have been obtained (collectively, the "Regulatory Approvals").
(d) TAX OPINION. The Transferor Trust shall have received the opinion of
Simpson Thacher & Bartlett, dated on or before the Exchange Date, addressed to
and in form and substance satisfactory to the Transferor Trust, as to certain of
the federal income tax consequences under the Code of the Reorganization,
insofar as it relates to the Transferor Portfolio and the Acquiring Portfolio,
and to shareholders of the Transferor Portfolio (the "Tax Opinion"). For
purposes of rendering the Tax Opinion, Simpson Thacher & Bartlett may rely
exclusively and without independent verification, as to factual matters, upon
the statements made in this Plan, the Prospectus and Statement of Additional
Information, and upon such other written representations as the President or
Treasurer of the Transferor Trust will have verified as of the Effective Time of
the Reorganization. The Tax Opinion will be to the effect that, based on the
facts and assumptions stated therein, for federal income tax purposes: (i) the
Reorganization will constitute a reorganization within the meaning of
section 368(a)(1) of the Code with respect to the Transferor Portfolio and the
Acquiring Portfolio; (ii) no gain or loss will be recognized by any of the
Transferor Portfolio or the Acquiring Portfolio upon the transfer of all the
assets and liabilities, if any, of the Transferor Portfolio to the Acquiring
Portfolio solely in exchange for shares of the Acquiring Portfolio or upon the
distribution of the shares of the Acquiring Portfolio to the holders of the
shares of the Transferor Portfolio solely in exchange for all of the shares of
the Transferor Portfolio; (iii) no gain or loss will be recognized by
shareholders of the Transferor Portfolio upon the exchange of shares of such
Transferor Portfolio solely for shares of the Acquiring Portfolio; (iv) the
holding period and tax basis of the shares of the Acquiring Portfolio received
by each holder of shares of the Transferor Portfolio pursuant to the
Reorganization will be the same as the holding
A-7
period and tax basis of shares of the Transferor Portfolio held by such holder
immediately prior to the Reorganization (provided the shares of the Transferor
Portfolio were held as a capital asset on the date of the Reorganization); and
(v) the holding period and tax basis of the assets of the Transferor Portfolio
acquired by the Acquiring Portfolio will be the same as the holding period and
tax basis of those assets to the Transferor Portfolio immediately prior to the
Reorganization.
(e) CONCURRENT REORGANIZATION. The reorganization of J.P. Morgan Bond Fund,
a series of J.P. Morgan Funds, into the Acquiring Portfolio shall have been
consummated.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING TRUST
The obligations of the Acquiring Trust with respect to the consummation of
the Reorganization are subject to the satisfaction of the following conditions:
(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor
Shareholder Approval shall have been obtained.
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Transferor Trust shall
have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all material
respects as of the Effective Time of the Reorganization (except as otherwise
contemplated herein), and there shall have been no material adverse change (as
described in Section 3(h)) in the financial condition, results of operations,
business, properties or assets of the Transferor Portfolio since October 31,
2000.
(c) PORTFOLIO SECURITIES. All securities to be acquired by the Acquiring
Portfolio in the Reorganization shall have been approved for acquisition by J.P.
Morgan Investment Management Inc. ("JPMIM"), in its capacity as investment
adviser to the Acquiring Portfolio, as consistent with the investment policies
of the Acquiring Portfolio.
(d) REGULATORY APPROVAL. The Regulatory Approvals shall have been obtained.
(e) DISTRIBUTION OF INCOME AND GAINS. The Transferor Trust on behalf of the
Transferor Portfolio shall have distributed to the shareholders of the
Transferor Portfolio all of the Transferor Portfolio's investment company
taxable income (determined without regard to the deduction for dividends paid)
as defined in Section 852(b)(2) of the Code for its taxable year ending on the
Exchange Date and all of its net capital gain as such term is used in
Section 852(b)(3) of the Code, after reduction by any capital loss carry
forward, for its taxable year ending on the Exchange Date.
(f) TAX OPINION. The Acquiring Trust shall have received the Tax Opinion.
(g) CONCURRENT REORGANIZATION. The reorganization of J.P. Morgan
Institutional Bond Fund, a series of J.P. Morgan Funds, into the Acquiring
Portfolio shall have been consummated.
6. 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.
(c) TERMINATION BY THE TRANSFEROR TRUST. The Transferor Trust, on behalf of
the Transferor Portfolio, may terminate this Plan with respect to the Transferor
Portfolio at any time prior to the Effective Time of the Reorganization by
notice to the Acquiring Trust and JPMIM if (i) a material condition to the
performance of the Transferor Trust hereunder or a material covenant of the
Acquiring Trust contained herein shall not be fulfilled on or before the date
specified for the fulfillment thereof or (ii) a material default or material
breach of this Plan shall be made by the Acquiring Trust. In addition, this Plan
may be terminated by the Transferor Trust at any time prior to the Effective
Time of the Reorganization, whether before or after approval of this Plan by the
shareholders of the Transferor Portfolio, without liability on the part of any
A-8
party hereto, its Trustees, officers or shareholders or JPMIM on notice to the
other parties in the event that the Board of Trustees determines that proceeding
with this Plan is not in the best interests of the shareholders of the
Transferor Portfolio.
(d) TERMINATION BY THE ACQUIRING TRUST. The Acquiring Trust, on behalf of
the Acquiring Portfolio, may terminate this Plan with respect to the Acquiring
Portfolio at any time prior to the Effective Time of the Reorganization by
notice to the Transferor Trust and JPMIM if (i) a material condition to the
performance of the Acquiring Trust hereunder or a material covenant of the
Transferor Trust contained herein shall not be fulfilled on or before the date
specified for the fulfillment thereof or (ii) a material default or material
breach of this Plan shall be made by the Transferor Trust. In addition, this
Plan may be terminated by the Acquiring Trust at any time prior to the Effective
Time of the Reorganization, whether before or after approval of this Plan by the
shareholders of the Transferor Portfolio, without liability on the part of any
party hereto, its Trustees, officers or shareholders or JPMIM on notice to the
other parties in the event that the Board of Trustees determines that proceeding
with this Plan is not in the best interests of the shareholders of the Acquiring
Portfolio.
(e) SURVIVAL. No representations, warranties or covenants in or pursuant to
this Plan, except for the provisions of Section 5(f) and Section 9 of this Plan,
shall survive the Reorganization.
9. EXPENSES
The expenses of the Reorganization will be borne by J.P. Morgan Chase & Co.
("JPMC"). Such expenses include, without limitation, (i) expenses incurred in
connection with the entering into and the carrying out of the provisions of this
Plan; (ii) expenses associated with the preparation and filing of the
Registration Statement; (iii) fees and expenses of preparing and filing such
forms as are necessary under any applicable state securities laws in connection
with the Reorganization; (iv) postage; (v) printing; (vi) accounting fees;
(vii) legal fees and (viii) solicitation costs relating to the Reorganization.
In addition, JPMC or an affiliate will waive fees payable to it or reimburse
expenses to the extent necessary such that the actual (post-waiver) total
expense ratios of the Select Class Shares, Institutional Class Shares and Ultra
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 Class A and Class B Shares, after the Exchange Date.
10. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Plan shall be in writing and shall be given by hand, certified
mail or by facsimile transmission, shall be deemed given when received and shall
be addressed to the parties hereto at their respective addresses listed below or
to such other persons or addresses as the relevant party shall designate as to
itself from time to time in writing delivered in like manner:
if to the Transferor Trust (for itself or on behalf of the Transferor
Portfolio):
60 State Street
Suite 1300
Boston, Massachusetts 02109
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: John E. Baumgardner, Jr., Esq.
if to the Acquiring Trust (for itself or on behalf of the Acquiring Portfolio):
60 State Street
Suite 1300
Boston, Massachusetts 02109
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: John E. Baumgardner, Jr., Esq.
A-9
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 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 Bond Fund
By: /s/ Sharon Weinberg
--------------------------------------------
Name: Sharon Weinberg
Title: Vice President and Secretary
J.P. MORGAN INSTITUTIONAL FUNDS
on behalf of J.P. Morgan Institutional Bond Fund-
Ultra
By: /s/ Sharon Weinberg
--------------------------------------------
Name: Sharon Weinberg
Title: Vice President and Secretary
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 BOND FUND-ULTRA
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
Bond Fund-Ultra (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 JPMorgan
Institutional Bond Fund-Ultra at 1-800-521-5411.
Unless otherwise indicated, capitalized terms used herein and not
otherwise defined have the same meanings as are given to them in the Combined
Prospectus/Proxy Statement.
Further information about the Surviving Fund and the Merging Fund is
contained in JPMF's Statements of Additional Information, which are incorporated
herein by reference.
The date of this Statement of Additional Information is May 12, 2001.
1
GENERAL INFORMATION
The Shareholders of the Merging Fund are being asked to consider and
vote on two proposals.
With respect to an Agreement and Plan of Reorganization (the
"Reorganization Plan") dated as of May 11, 2001 by and among JPMF, on behalf
of the Merging Fund, JPMF, on behalf of the Surviving Fund, and JPMC and the
transactions contemplated thereby, the Reorganization Plan contemplates the
transfer of all of the assets and liabilities of the Merging Fund to the
Surviving Fund in exchange for shares issued by JPMF in the Surviving Fund
that will have an aggregate net asset value equal to the aggregate net asset
value of the shares of the Merging Fund that are outstanding immediately
before the Effective Time of the Reorganization.
Following the exchange, the Merging Fund will make a liquidating
distribution of the Surviving Fund shares to its Shareholders, so that a holder
of Shares in the Merging Fund will receive Agency Class Shares of the Surviving
Fund of equal value, plus the right to receive any unpaid dividends and
distributions that were declared before the Effective Time of the
Reorganization.
At the Meeting, shareholders will also be asked to consider and vote
upon the election of Trustees of JPMF.
A Special Meeting of Shareholders of the Merging Fund to consider the
proposals and the related transaction will be held at the offices of J.P. Morgan
Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, NY, on July 3,
2001 at 9:00 a.m., Eastern time. For further information about the transaction,
see the Combined Prospectus/Proxy Statement.
2
FINANCIAL STATEMENTS
The audited financial highlights, financial statements and notes
thereto of each of the Merging Fund and the Surviving Fund contained in their
respective Annual Reports dated October 31, 2000, and 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 audited financial highlights, financial
statements, notes thereto and supplementary data, as applicable, which appear in
each of the Surviving Fund's, the Master Portfolio's and the Merging Fund's
Annual Report have been audited by PricewaterhouseCoopers LLP, whose reports
thereon also appear in such Annual Reports and are also incorporated herein by
reference. The financial highlights, financial statements, notes thereto and
supplementary data, as applicable, for the Merging Fund, the Surviving Fund and
the Master Portfolio for the fiscal year ended October 31, 2000 have been
incorporated herein by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on their authority as
experts in auditing and accounting.
3
PRO FORMA FINANCIAL STATEMENTS
JPMORGAN BOND FUND II(1) / JPMORGAN INTERMEDIATE BOND FUND
(2) / THE U.S. FIXED INCOME PORTFOLIO
OCTOBER 31, 2000
COMBINING PORTFOLIO OF INVESTMENTS
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
SHARES/PRINCIPAL AMOUNT MARKET VALUE
--------------------------------------------------- -------------------------------------------------
JPMORGAN U.S. PRO U.S. PRO
JPMORGAN INTER- FIXED PRO THE U.S. JPMORGAN INTER- FIXED PRO THE U.S.
BOND MEDIATE INCOME FORMA COMBINED BOND MEDIATE INCOME FORMA COMBINED
FUND BOND PORT- ADJUST- JPMORGAN FUND BOND PORT- ADJUST- JPMORGAN
II(1) FUND(2) FOLIO MENTS BOND FUND II(1) FUND(2) FOLIO MENTS BOND FUND
--------- -------- ------ -------- --------- --------- -------- ------ ------- ---------
ASSET-BACKED
SECURITIES - 6.2%
FINANCIAL SERVICES - 6.2%
American Express Credit
Account Master Trust,
Ser. 1997-1, Class A,
6.40%, 4/15/05 - 4,750 - - 4,750 - 4,724 - - 4,724
Citibank Credit Card
Master Trust I,Series
1998-9, Class A, 5.30%,
1/9/06 - - 10,000 - 10,000 - - $9,609 - 9,609
Citibank Credit Card
Master Trust I, Ser.
1997-2, Class A, 6.55%,
2/15/04 - 1,700 - - 1,700 - 1,693 - - 1,693
Conseco Finance
Securitizations Corp.,
Series 2000-5, Class A3
SEQ, 7.21%, 2/1/32 - - 15,000 - 15,000 - - 15,000 - 15,000
Daimler Chrysler Auto
Trust, Series 2000 C,
Class A2 SEQ, 6.81%,
7/6/03 - - 6,600 - 6,600 - - 6,606 - 6,606
Daimler-Benz Vehicle
Trust, Series 1998 A,
Class A4 SEQ, 5.22%,
12/22/03 - - 21,000 - 21,000 - - 20,626 - 20,626
Discover Card Master
Trust I, Series 1998-4,
Class A, 5.75%, 10/16/03 - - 12,000 - 12,000 - - 11,925 - 11,925
First USA Credit Card
Master Trust,
Series1999-1, Class C,
6.42%, 10/19/06 - - 5,000 - 5,000 - - 4,847 - 4,847
Ford Credit Auto Owner
Trust, Series 1998 C,
Class D, 7.70%, 1/15/04 - - 5,000 - 5,000 - - 5,013 - 5,013
Ford Credit Auto Owner
Trust, Series 1999A,
Class D, 8.00%, 6/15/04 - - 5,000 - 5,000 - - 5,036 - 5,036
Ford Credit Auto Owner
Trust, Series 2000 D,
Class A2 SEQ, 7.06%,
4/15/03 - - 11,000 - 11,000 - - 11,014 - 11,014
Green Tree Financial
Corporation, Series
1999-5, Class B1, 9.20%,
4/1/31 - - 10,000 - 10,000 - - 9,438 - 9,438
Green Tree Financial
Corporation,Series
1993-3, Class B, 6.85%,
10/15/18 - - 15,486 - 15,486 - - 13,168 - 13,168
MBNA Master Credit Card
Trust, Ser1999-M, Class
B, 6.80%, 4/16/07 8,300 - - - 8,300 8,270 - - - 8,270
MBNA Master Credit Card
Trust, Ser1999-J, Class
A, 7.00%, 2/15/12 10,345 2,710 - - 13,055 10,390 2,722 - - 13,112
Nomura CBO LTD, Ser.
1997-1, Class A2, FRN,
144A, 6.67%, 5/15/09 6,500 - - 6,500 5,929 - - - 5,929
Nomura CBO LTD, Ser.
1997-1, Class A2, FRN,
144A, SUB, 6.67%, 5/15/09 - 5,000 - - 5,000 - 4,561 - - 4,561
Residential Funding
Mortgage Securities II,
Ser. 2000-HI1, Class
AI4, 7.79%, 1/25/14 7,500 - - - 7,500 7,603 - - - 7,603
Sears Credit Account
Master Trust, Series
1999-2, Class A, 6.35%,
2/16/07 - 19,855 - 19,855 - - 19,712 - 19,712
Standard Credit Card
Trust, Ser. 93, 5.95%,
10/7/04 - 4,000 - - 4,000 - 3,919 - - 3,919
--------------------------------------------------
TOTAL ASSET-BACKED
SECURITIES - 32,192 17,619 131,994 - 181,805
--------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATIONS - 9.6%
FINANCIAL SERVICES - 9.6%
Chase Commercial
Mortgage Securities
Corp., Series 1998-2,
Class A2 SEQ, 6.39%,
11/18/08 - - 26,550 26,550 25,500 25,500
Chase Manhattan
Bank-First Union
National Bank, Series
1999-1, Class A2 SEQ,
7.44%, 7/15/09 - - 20,000 20,000 20,363 20,363
COMM, Series 2000 FL2A,
Class H-NW, Floater,
7.97%, 11/15/00, resets
monthly off the 1-month
LIBOR plus 1.35%
with no caps - - 4,900 4,900 4,900 4,900
Commercial Mortgage
Acceptance Corp., Series
1998-C2, Class D, 6.75%,
11/15/09 - - 10,000 10,000 9,400 9,400
DLJ Commercial Mortgage
Corporation, Series
2000-CF1, Class A1B SEQ,
7.62%, 5/10/10 - - 42,660 42,660 43,673 43,673
FHLMC, Series 1980,
Class C SEQ, 6.85%,
10/15/21 - - 530 530 528 528
FHLMC, Ser. 2155, Class
PC, 6.00%, 11/15/17 - 5,225 5,225 5,120 5,120
FNMA, Ser. 1999-17,
Class PC, 6.00%, 12/25/22 - 4,200 4,200 4,044 4,044
First Nationwide Trust,
Series 1999-4, Class
3PA1 SEQ, 6.50%, 10/19/29 - - 28,873 28,873 27,123 27,123
First Union Commercial
Mortgage Trust, Series
1999-C1, Class A2 SEQ,
6.07%, 10/15/08 - - 20,000 20,000 18,813 18,813
GMAC Commercial Mortgage
Securities Inc., Series
1997-C1, Class A3 SEQ,
6.87%, 8/15/07 - - 8,895 8,895 8,787 8,787
GS Mortgage, Series 2000
F, Floater, 8.37%,
11/15/00 - - 5,000 5,000 5,000 5,000
Heller Financial
Commercial Mortgage
Asset, Series 1999-PH1,
Class A2 SEQ, 6.85%,
5/15/31 - - 6,950 6,950 6,829 6,829
LB-UBS Commerical
Mortgage Trust, Series
2000-C3, Class A2 SEQ,
7.95%, 1/15/10 - - 42,943 42,943 44,594 44,594
Morgan Stanley Capital
I, Series 1998-XL2,
Class A2 SEQ, 6.17%,
10/3/08 - - 7,830 7,830 7,393 7,393
Mortgage Capital
Funding, Inc., Series
1998-MC2, Class A2 SEQ,
6.42%, 5/18/08 - - 30,000 30,000 28,800 28,800
PNC Mortgage Acceptance
Corp., Series 2000-C1,
Class A2 SEQ, 7.61%,
2/15/10 - - 12,500 12,500 12,828 12,828
PNC Mortgage Acceptance
Corp., Series 2000-C2,
Class A2 SEQ, 7.30%,
9/12/10 - - 6,245 6,245 6,269 6,269
SACO I Inc. Series
1997-2, Class 1A5 SEQ,
7.00%, 8/25/36 - - 2,253 2,253 2,084 2,084
Vendee Mortgage Trust,
Series 1997-1, Class 2C
SEQ, 7.50%, 9/15/17 - - 802 802 801 801
--------------------------------------------------
TOTAL COLLATERALIZED
MORTGAGE OBLIGATIONS - 0 9,164 273,684 282,848
--------------------------------------------------
COMMERCIAL MORTGAGE
BACKED SECURITIES - 0.8%
Bear Stearns Commercial
Mortgage Securities,
Ser-2000-WF2, Class A1,
7.11%, 9/15/09 7,900 3,000 10,900 7,937 3,014 10,951
Bear Stearns Commercial
Mortgage Securities,
Ser-2000-WF2, Class A2,
7.32%, 8/15/10 6,300 6,300 6,343 6,343
Credit Suisse First
Boston Mortgage
Securities Corp., Ser.
1997-SPCE, Class A,
144A, 6.65%, 6/20/03 - 536 536 533 533
LB-UBS Commercial
Mortgage Trust, Ser.
2000-C4, Class A1,
7.18%, 9/15/09 3,088 897 3,985 3,098 899 3,997
--------------------------------------------------
TOTAL COMMERCIAL
MORTGAGE BACKED
SECURITIES - 17,378 4,446 0 21,824
--------------------------------------------------
See Notes to Pro Forma Financial Statements
4
U.S. PRO U.S. PRO
JPMORGAN INTER- FIXED PRO THE U.S. JPMORGAN INTER- FIXED PRO THE U.S.
BOND MEDIATE INCOME FORMA COMBINED BOND MEDIATE INCOME FORMA COMBINED
FUND BOND PORT- ADJUST- JPMORGAN FUND BOND PORT- ADJUST- JPMORGAN
II(1) FUND(2) FOLIO MENTS BOND FUND II(1) FUND(2) FOLIO MENTS BOND FUND
--------- -------- ------ -------- --------- --------- -------- ------ ------- ---------
CORPORATE BONDS & NOTES
- - 16.0%
BANKS - 2.8%
Bank of America Corp.,
7.80%, 2/15/10 7,700 7,700 7,820 7,820
Bank One Capital III,
8.75%, 9/1/30 - 2,010 2,010 1,955 1,955
Bank One Corp., 7.88%,
8/1/10 5,800 5,000 10,800 5,824 5,020 10,844
Capital One Bank, 8.25%,
6/15/05 - 8,500 8,500 8,546 8,546
First Union National
Bank, 7.80%, 8/18/10 - 9,975 9,975 9,940 9,940
J.P. Morgan & Co., Inc.,
MTN, 6.00%, 1/15/09 7,900 5,000 12,900 7,229 4,575 11,804
Keystone Financial
Mid-Atlantic Funding
Corp., MTN, 7.30%,
5/15/04 4,850 4,850 4,851 4,851
Manufacturers & Traders
Trust Co., 8.00%, 10/1/10 6,415 4,815 11,230 6,345 4,763 11,108
MBNA America Bank, N.A.,
7.75%, 9/15/05 7,060 4,831 11,891 6,984 4,779 11,763
U.S. Bank, NA, 5.70%,
12/15/08 - 5,575 5,575 4,892 4,892
--------------------------------------------------
39,053 24,029 20,440 0 83,522
--------------------------------------------------
BROADCASTING/CABLE - 0.3%
Jones Intercable, Inc.,
7.63%, 4/15/08 - 5,425 5,425 5,309 5,309
USA Networks, Inc.,
6.75%, 11/15/05 - 4,275 4,275 4,173 4,173
--------------------------------------------------
0 9,482 0 0 9,482
--------------------------------------------------
CHEMICALS - 0.2%
Cytec Industries, Inc.,
6.85%, 5/11/05 - 1,000 1,000 931 931
Rohm & Haas Co., 7.85%,
7/15/29 - 5,110 5,110 4,986 4,986
--------------------------------------------------
0 0 5,917 0 5,917
--------------------------------------------------
COMPUTERS/COMPUTER
HARDWARE - 0.2%
Hewlett-Packard Co.,
7.15%, 6/15/05 - 4,500 4,500 4,549 4,549
--------------------------------------------------
0 4,549 0 0 4,549
--------------------------------------------------
CONSUMER PRODUCTS - 0.2%
Procter & Gamble Co.,
6.60%, 12/15/04 - 5,890 0 0 5,890 0 5,867 0 0 5,867
--------------------------------------------------
0 5,867 0 0 5,867
--------------------------------------------------
DEFENSE/AEROSPACE - 0.7%
Lockheed Martin Corp.,
8.20%, 12/1/09 - 8,530 8,530 8,879 8,879
Raytheon Co., 144A,
7.90%, 3/1/03 6,700 3,270 9,970 6,802 3,320 10,122
--------------------------------------------------
6,802 3,320 8,879 0 19,001
--------------------------------------------------
ELECTRICAL UTILITY /
UTILITIES - 0.6%
Cilcorp Inc., 8.70%,
10/15/09 6,000 6,000 6,185 6,185
Cogentrix Energy Inc.,
8.75%, 10/15/08 - 506 506 507 507
Dominion Resources Inc.,
Series 2010-A, 8.13%,
6/15/10 - 4,025 4,025 4,150 4,150
Dominion Resources
Inc./VA, Series 2000 B,
7.63%, 7/15/05 - 7,940 7,940 8,027 8,027
--------------------------------------------------
6,185 0 12,685 0 18,870
--------------------------------------------------
ENERGY RESERVES &
PRODUCTION - (z)
Lasmo (USA) Inc., 6.75%,
12/15/07 - 500 500 477 477
--------------------------------------------------
0 0 477 0 477
--------------------------------------------------
FINANCIAL SERVICES - 3.5%
500 Grant St.
Association, 144A,
Series 1999 A, 6.46%,
12/1/08 - 5,493 5,493 5,257 5,257
CIT Group, Inc., 7.63%,
8/16/05 9,125 9,125 9,116 9,116
CitiFinancial, 8.70%,
6/15/10 - 3,400 3,400 3,681 3,681
Comdisco Inc., 9.50%,
8/15/03 - 4,205 4,205 3,154 3,154
Comdisco, Inc., 6.38%,
11/30/01 - 3,490 3,490 2,928 2,928
ERAC USA Finance Co.,
144A, 6.38%, 5/15/03 - 5,000 5,000 4,795 4,795
FleetBoston Financial
Corp., 7.25%, 9/15/05 - 4,080 4,080 4,102 4,102
Ford Motor Credit Co.,
7.25%, 1/15/03 - 135 135 135 135
Ford Motor Credit Co.,
7.38%, 10/28/09 - 1,010 1,010 981 981
Heller Financial, Inc.,
8.00%, 6/15/05 7,100 5,000 12,100 7,200 5,071 12,271
Household Finance Corp.,
8.00%, 5/9/05 - 6,500 6,500 6,647 6,647
Keycorp Institutional
Capital, Series 1996 B,
8.25%, 12/15/26 - 2,200 2,200 2,001 2,001
Lehman Brothers
Holdings, Inc., 8.25%,
6/15/07 - 5,000 5,000 5,104 5,104
McKesson Financial of
Canada, 144A, 6.55%,
11/1/02 - 4,475 4,475 4,292 4,292
National Rural Utilities
Cooperative Finance
Corp., 5.5%, 1/15/05 - 5,000 5,000 4,719 4,719
Newcourt Credit Group
Inc., 6.88%, 2/16/05 - 6,000 6,000 5,796 5,796
NGC Corp. Capital Trust,
Series 1997 B, 8.32%,
6/1/27 - 8,835 8,835 7,776 7,776
Oil Purchase Company,
144A, 7.10%, 4/30/02 - 1,835 1,835 1,752 1,752
Provident Financing
Trust I, 7.41%, 3/15/38 - 1,765 1,765 1,304 1,304
Washington Mutual
Financial Corp., 8.25%,
6/15/05 - 17,500 17,500 18,059 18,059
--------------------------------------------------
16,316 18,996 68,557 0 103,869
--------------------------------------------------
FOOD & BEVERAGE - 0.3%
Smithfield Foods Inc.,
7.63%, 2/15/08 - 1,410 1,410 1,280 1,280
Coca-Cola Enterprises,
7.13%, 9/30/09 - 3,975 3,975 3,901 3,901
Conagra Foods, Inc.,
7.88%, 9/15/10 - 4,320 4,320 4,385 4,385
--------------------------------------------------
0 8,286 1,280 0 9,566
--------------------------------------------------
See Notes to Pro Forma Financial Statements
5
U.S. PRO U.S. PRO
JPMORGAN INTER- FIXED PRO THE U.S. JPMORGAN INTER- FIXED PRO THE U.S.
BOND MEDIATE INCOME FORMA COMBINED BOND MEDIATE INCOME FORMA COMBINED
FUND BOND PORT- ADJUST- JPMORGAN FUND BOND PORT- ADJUST- JPMORGAN
II(1) FUND(2) FOLIO MENTS BOND FUND II(1) FUND(2) FOLIO MENTS BOND FUND
--------- -------- ------ -------- --------- --------- -------- ------ ------- ---------
FOREST PRODUCTS & PAPER
- - 0.4%
Champion International
Corp., 7.10%, 9/1/05 - 5,000 5,000 4,899 4,899
International Paper Co.,
144A, 8.13%, 7/8/05 - 5,900 5,900 6,072 6,072
--------------------------------------------------
0 6,072 4,899 0 10,971
--------------------------------------------------
GAS & WATER UTILITIES -
0.2%
United Utilities Plc,
6.88%, 8/15/28 - 6,970 6,970 5,544 5,544
--------------------------------------------------
0 0 5,544 0 5,544
--------------------------------------------------
INSURANCE - 0.8%
Conseco, Inc., 8.50%,
10/15/02 9,270 6,025 15,295 7,230 4,700 11,930
GE Global Insurance
Holding Corp., 7.75%,
6/15/30 5,800 5,000 10,800 5,847 5,040 10,887
--------------------------------------------------
13,077 9,740 0 0 22,817
--------------------------------------------------
MANUFACTURING - 0.3%
Louisiana-Pacific Corp.,
8.88%, 8/15/10 7,900 7,900 7,829 7,829
--------------------------------------------------
7,829 0 0 0 7,829
--------------------------------------------------
MEDIA - 1.1%
Adelphia Communications
Corp., 9.38%, 11/15/09 - 3,125 3,125 2,664 2,664
Clear Channel
Communications, 7.88%,
6/15/05 5,350 5,540 10,890 5,392 5,583 10,975
Fox Sports Networks LLC,
8.88%, 8/15/07 - 2,500 2,500 2,513 2,513
Lamar Media Corp.,
8.63%, 9/15/07 - 1,900 1,900 1,853 1,853
Time Warner
Entertainment Co. LP,
8.38%, 3/15/23 8,705 5,000 13,705 9,125 5,242 14,367
--------------------------------------------------
14,517 5,242 12,612 0 32,371
--------------------------------------------------
MEDICAL PROVIDERS &
SERVICES - (z)
Mariner Post-Acute
Network Inc., Series B,
9.50%, 4/1/06(d)+ - 2,000 2,000 10 10
--------------------------------------------------
0 0 10 0 10
--------------------------------------------------
MOTOR VEHICLES & PARTS /
AUTOMOTIVE - 0.4%
DaimlerChrysler NA
Holding Corp., 6.90%,
9/1/04 - 2,500 2,500 2,467 2,467
GMAC, 7.50%, 7/15/05 5,800 5,800 5,851 5,851
TRW, Inc., 6.45%, 6/15/01 - 3,850 3,850 3,831 3,831
--------------------------------------------------
5,851 3,831 2,467 0 12,149
--------------------------------------------------
MULTI-INDUSTRY - 0.2%
Cendant Corporation,
7.75%, 12/1/03 - 5,000 5,000 4,893 4,893
--------------------------------------------------
0 0 4,893 0 4,893
--------------------------------------------------
OIL SERVICES - 1.5%
Amerada Hess Corp.,
7.38%, 10/1/09 - 6,150 6,150 6,135 6,135
Enron Corp., 144A,
7.11%, 12/12/00, resets
quarterly off the
3-month LIBOR
plus 0.45% with - 15,000 15,000 14,993 14,993
no caps
Enron Corp., 7.88%,
6/15/03 - 4,500 4,500 4,591 4,591
Express Pipeline LP,
144A, Series 1998 B,
7.39%, 12/31/17 - 1,497 1,497 1,278 1,278
Phillips Petroleum Co.,
8.75%, 5/25/10 - 4,000 4,000 4,363 4,363
Valero Energy Corp.,
8.38%, 6/15/05 6,000 6,000 6,221 6,221
Valero Energy Corp.,
8.75%, 6/15/30 5,600 5,600 5,894 5,894
Williams Cos. Inc.,
6.20%, 8/1/02 - 350 350 344 344
--------------------------------------------------
12,115 10,726 20,978 0 43,819
--------------------------------------------------
PACKAGING - 0.1%
Tenneco Packaging, Inc.,
8.00%, 4/15/07 3,775 3,775 3,759 3,759
--------------------------------------------------
3,759 0 0 0 3,759
--------------------------------------------------
PIPELINES - 0.4%
Duke Energy Field
Services LLC, 7.88%,
8/16/10 5,750 5,750 5,860 5,860
El Paso Energy Corp.,
6.75%, 5/15/09 5,170 5,170 4,913 4,913
--------------------------------------------------
10,773 0 0 0 10,773
--------------------------------------------------
RAILROADS - 0.2%
Burlington Northern
Railroad Co., 7.33%,
6/23/10 - 1,601 1,601 1,605 1,605
Canadian National
Railway Co., 7.00%,
3/15/04 - 5,350 5,350 5,287 5,287
--------------------------------------------------
0 0 6,892 0 6,892
--------------------------------------------------
REAL ESTATE INVESTMENT
TRUSTS - (z)
Felcor Lodging LP, 144A,
9.50%, 9/15/08 - 830 830 820 820
--------------------------------------------------
0 0 820 0 820
--------------------------------------------------
RETAILING - 0.2%
Wal-Mart Stores, Inc.,
6.88%, 8/10/09 - 5,175 5,175 5,139 5,139
--------------------------------------------------
0 5,139 0 0 5,139
--------------------------------------------------
See Notes to Pro Forma Financial Statements
6
U.S. PRO U.S. PRO
JPMORGAN INTER- FIXED PRO THE U.S. JPMORGAN INTER- FIXED PRO THE U.S.
BOND MEDIATE INCOME FORMA COMBINED BOND MEDIATE INCOME FORMA COMBINED
FUND BOND PORT- ADJUST- JPMORGAN FUND BOND PORT- ADJUST- JPMORGAN
II(1) FUND(2) FOLIO MENTS BOND FUND II(1) FUND(2) FOLIO MENTS BOND FUND
--------- -------- ------ -------- --------- --------- -------- ------ ------- ---------
SEMICONDUCTOR - 0.1%
Charter Communications
Holdings, LLC/ Charter
Communications Holdings
Capital Corp.,
8.25%, 4/1/07 - 3,125 3,125 2,797 2,797
--------------------------------------------------
0 0 2,797 0 2,797
--------------------------------------------------
TELEPHONE /
TELECOMMUNICATIONS - 1.1%
Global Crossing Holding
Limited, 9.13%,
11/15/06 - 4,125 4,125 3,939 3,939
MCI Worldcom, Inc.,
7.55%, 4/1/04 - 7,000 7,000 7,058 7,058
McLeodUSA Inc., 9.25%,
7/15/07 - 3,000 3,000 2,790 2,790
Qwest Capital Funding
Inc., 6.88%, 7/15/28 - 700 700 615 615
Sprint Capital Corp.,
5.88%, 5/1/04 - 10,000 10,000 9,518 9,518
U.S. West Capital
Funding, Inc., 6.25%,
7/15/05 5,575 5,575 5,328 5,328
Williams Communications
Group, 10.70%, 10/1/07 - 2,000 2,000 1,720 1,720
WorldCom, Inc., 6.40%,
8/15/05 - 500 500 482 482
XO Communications Inc.,
9.63%, 10/1/07 - 1,000 1,000 835 835
--------------------------------------------------
5,328 7,058 19,899 0 32,285
--------------------------------------------------
TRUCKING & SHIPPING &
AIR FREIGHT - 0.2%
Atlantic Express,
10.75%, 2/1/04 - 1,900 1,900 1,634 1,634
FedEx Corp., Series
1999-1, Class C, 8.25%,
1/15/19 - 4,682 4,682 4,729 4,729
-------------------------------------------------
0 0 6,363 0 6,363
--------------------------------------------------
--------------------------------------------------
TOTAL CORPORATE BONDS &
NOTES - 141,605 122,337 206,408 0 470,350
--------------------------------------------------
PREFERRED STOCKS - 0.1%
- -----------------------
ENTERTAINMENT - 0.1%
- --------------------
AT&T Corp., 10.00%,
5/31/45 - 150 150 3,797 3,797
--------------------------------------------------
TOTAL PREFERRED STOCKS - 0 0 3,797 0 3,797
--------------------------------------------------
FOREIGN CORPORATE BONDS
- - 3.9%
BANKS - 0.1%
Barclays Bank Plc, 144A,
8.55%, 9/29/49 - 4,000 4,000 4,027 4,027
--------------------------------------------------
0 0 4,027 0 4,027
--------------------------------------------------
ELECTRICAL EQUIPMENT -
0.1%
Legrand S.A., 8.50%,
2/15/25 - 1,785 1,785 1,864 1,864
--------------------------------------------------
0 0 1,864 0 1,864
--------------------------------------------------
ELECTRICAL UTILITY /
UTILITIES - 0.4%
Israel Electric Corp.,
7.75%, 12/15/27 5,500 5,500 4,676 4,676
Israel Electronic Corp.,
MTN, 144A, 8.25%,
10/15/09 - 6,000 6,000 5,739 5,739
--------------------------------------------------
4,676 5,739 - - 10,415
--------------------------------------------------
FINANCIAL SERVICES - 0.3%
HSBC Capital Funding LP,
144A, 10.18%, 12/29/49,
resets quarterly off the
3-month
LIBOR plus 4.98%
with no caps - 7,220 7,220 7,901 7,901
Montell Finance Co.
B.V., 144A, 8.10%,
3/15/27 - 2,250 2,250 2,023 2,023
--------------------------------------------------
0 0 9,924 0 9,924
--------------------------------------------------
INFORMATION SERVICES -
0.3%
Marconi Corporation Plc,
8.38%, 9/15/30 - 8,760 8,760 8,354 8,354
--------------------------------------------------
0 0 8,354 0 8,354
--------------------------------------------------
TELEPHONE /
TELECOMMUNICATIONS - 1.5%
Deutsche Telekom
International Finance,
8.25%, 6/15/30 - 10,000 10,000 10,205 10,205
Metronet Communications
Corp., 144A, SUB, 0.00%,
6/15/03 - 4,000 4,000 3,201 3,201
Microcell
Telecommunications Inc.,
Series B, 11.99%,
6/1/06(y) - 300 300 288 288
Telefonica Europe B.V.,
8.25%, 9/15/30 - 12,150 12,150 12,441 12,441
Telefonica Europe BV,
7.75%, 9/15/10 - 6,000 6,000 6,024 6,024
Vodafone AirTouch PLC,
144A, 7.63%, 2/15/05 5,800 5,200 11,000 5,884 5,275 11,159
--------------------------------------------------
5,884 14,500 22,935 0 43,319
--------------------------------------------------
MOTOR VEHICLES & PARTS /
AUTOMOTIVE - 0.2%
Daimler Chrysler NA
Holding Corp., 8.00%,
6/15/10 - 5,600 5,600 5,689 5,689
--------------------------------------------------
0 5,689 0 0 5,689
--------------------------------------------------
OIL SERVICES - 1.0%
PEMEX Finance Limited,
9.14%, 8/15/04 7,040 7,040 7,201 7,201
PEMEX Finance LTD, 144A,
9.03%, 2/15/11 - 2,560 2,560 2,678 2,678
Repsol International
Finance BV, 7.45%,
7/15/05 7,900 6,885 14,785 7,940 6,920 14,860
YPF Sociedad Anonima,
7.25%, 3/15/03 6,525 6,525 6,375 6,375
--------------------------------------------------
21,516 9,598 0 0 31,114
--------------------------------------------------
--------------------------------------------------
TOTAL FOREIGN CORPORATE
BONDS - 32,076 35,526 47,104 0 114,706
--------------------------------------------------
See Notes to Pro Forma Financial Statements
7
U.S. PRO U.S. PRO
JPMORGAN INTER- FIXED PRO THE U.S. JPMORGAN INTER- FIXED PRO THE U.S.
BOND MEDIATE INCOME FORMA COMBINED BOND MEDIATE INCOME FORMA COMBINED
FUND BOND PORT- ADJUST- JPMORGAN FUND BOND PORT- ADJUST- JPMORGAN
II(1) FUND(2) FOLIO MENTS BOND FUND II(1) FUND(2) FOLIO MENTS BOND FUND
--------- -------- ------ -------- --------- --------- -------- ------ ------- ---------
MORTGAGE PASS THRU -
25.0%
FHLMC, 12.50%, 8/1/14 - 1 1 1 1
FHLMC, 6.00%, 3/1/11 to
4/1/11 - 1,033 1,033 1,001 1,001
FNMA, 6.00%, 12/1/28 to
2/1/29 - 58,466 58,466 54,836 54,836
FNMA, 6.50%, 1/1/28 to
9/1/29 - 11,407 11,407 10,966 10,966
FNMA, 7.00%, 7/1/28 to
10/1/29 - 3,179 3,179 3,115 3,115
FNMA, 7.50%, 5/1/30 - 167 167 167 167
FNMA, 8.00%, 8/1/22 to
6/1/27 - 1,899 1,899 1,924 1,924
FNMA, 7.00%, 5/1/28 85 85 83 83
FNMA, 6.50%, 11/1/28 12,075 12,075 11,610 11,610
FNMA, 6.00%, 3/1/29 11,027 11,027 10,341 10,341
FNMA, 6.00%, 5/1/14 2,146 2,146 2,066 2,066
FNMA, 6.50%, 9/1/29 3,442 3,442 3,308 3,308
FNMA, 7.00%, 4/1/30 37 37 37 37
FNMA, 7.00%, 3/1/29 23,754 23,754 23,279 23,279
FNMA, 7.50%, 4/1/29 21,319 21,319 21,332 21,332
FNMA, 7.50%, 3/1/29 4,321 4,321 4,324 4,324
FNMA, 6.00%, 1/1/29 3,452 3,452 3,237 3,237
FNMA, 6.50%, 3/1/29 8,855 8,855 8,509 8,509
FNMA, 6.00%, 3/1/29 10,555 10,555 9,899 9,899
FNMA, 6.50%, 4/1/29 11,362 11,362 10,918 10,918
FNMA, 7.00%, 9/1/29 47 47 46 46
FNMA, 7.00%, 2/1/30 1,682 1,682 1,648 1,648
FNMA, 7.00%, 3/1/30 499 499 488 488
FNMA, 8.00%, 3/1/30 8,574 8,574 8,678 8,678
FNMA, 6.00%, 11/1/14 21,666 21,666 20,853 20,853
FNMA, 7.50%, 6/1/15 12,522 12,522 12,608 12,608
FNMA, 7.50%, 7/1/30 5,710 5,710 5,701 5,701
FNMA, 7.00%, 7/1/30 99 99 97 97
FNMA, TBA, 6.50%, 11/1/30 - 8,010 8,010 7,697 7,697
FNMA, TBA, 7.00%, 11/1/15 - 71,310 71,310 70,864 70,864
FNMA, TBA, 7.00%, 9/1/29 - 107,234 107,234 105,056 105,056
FNMA, TBA, 7.50%, 12/1/30 - 157,605 157,605 157,211 157,211
FNMA, 6.50, 6/1/29 - 7,848 7,848 7,541 7,541
FNMA, 6.50, 9/1/14 - 1,981 1,981 1,940 1,940
FNMA, 7.50%, 7/1/30 - 7,430 7,430 7,419 7,419
FNMA, 7.50%, 8/1/15 - 1,968 1,968 1,982 1,982
GNMA, 6.50%, 6/15/28 to
12/15/28 - 51,325 51,325 49,554 49,554
GNMA, 7.00%, 12/15/08 - 194 194 195 195
GNMA, 7.50%, 1/15/27 to
2/15/27 - 8,480 8,480 8,516 8,516
GNMA, 8.50%, 5/15/27 - 218 218 224 224
GNMA, 9.00%, 12/15/19 - 63 63 66 66
GNMA, 6.50%, 5/15/29 14,475 14,475 13,973 13,973
GNMA, 7.00%, 8/15/29 12,250 12,250 12,074 12,074
GNMA, 7.50%, 9/15/29 8,542 8,542 8,571 8,571
GNMA, 8.00%, 3/15/30 9,973 9,973 10,138 10,138
GNMA, 8.00%, 7/15/30 11,530 11,530 11,721 11,721
GNMA, TBA, 7.00%, 11/1/30 - 28,460 28,460 28,051 28,051
--------------------------------------------------
TOTAL MORTGAGE PASS THRU - 215,539 18,882 499,445 0 733,866
--------------------------------------------------
PRIVATE PLACEMENTS - 0.6%
CO-OP APARTMENTS - 0.6%
180 East End Avenue Note,
secured by first mortgage
and agreement on co-op
apartment building
in New York
City,6.88%, 1/1/29(f) - - 4,415 4,415 4,176 4,176
200 East 57th Street,
secured by first
mortgage and agreement
on co-op apartment
building
in New York City,
6.50%, 1/1/14(f) - - 10,900 10,900 10,110 10,110
81 Irving Place Note,
secured by first
mortgage and agreement
on co-op apartment
building
in New York City,
6.95%, 1/1/29(f) - - 3,239 3,239 3,071 3,071
- -
--------------------------------------------------
TOTAL PRIVATE PLACEMENTS 0 0 17,357 0 17,357
--------------------------------------------------
SOVEREIGN GOVERNMENTS &
AGENCIES - 1.0%
Bancomext Trust
Division, 11.25%, 5/30/06 1,800 1,800 1,944 1,944
Korea Development Bank,
6.50%, 11/15/02 6,722 6,722 6,541 6,541
Province of Quebec,
6.50%, 1/17/06 4,700 4,700 4,610 4,610
Quebec Province, 7.50%,
9/15/29 7,900 4,200 12,100 8,011 4,259 12,270
United Mexican States,
9.88%, 2/1/10 4,200 4,200 4,358 4,358
--------------------------------------------------
TOTAL SOVEREIGN
GOVERNMENTS AND AGENCIES
- - 20,854 4,259 4,610 0 29,723
--------------------------------------------------
U.S. GOVERNMENT AGENCY
SECURITIES - 8.3%
FHLB, 7.25%, 5/13/05 15,000 15,000 15,403 15,403
FHLB, 7.63%, 5/15/07 15,000 15,000 15,804 15,804
FHLB, 4.88%, 1/22/02 - 8,000 8,000 7,849 7,849
FHLMC, 6.88%, 9/15/10(s) - 61,175 61,175 61,959 61,959
FHLMC, 5.00%, 1/15/04 - 8,000 8,000 7,654 7,654
See Notes to Pro Forma Financial Statements
8
U.S. PRO U.S. PRO
JPMORGAN INTER- FIXED PRO THE U.S. JPMORGAN INTER- FIXED PRO THE U.S.
BOND MEDIATE INCOME FORMA COMBINED BOND MEDIATE INCOME FORMA COMBINED
FUND BOND PORT- ADJUST- JPMORGAN FUND BOND PORT- ADJUST- JPMORGAN
II(1) FUND(2) FOLIO MENTS BOND FUND II(1) FUND(2) FOLIO MENTS BOND FUND
--------- -------- ------ -------- --------- --------- -------- ------ ------- ---------
FHLMC,5.13%, 10/15/08 - 3,500 3,500 3,165 3,165
FNMA, 7.00%, 7/15/05(s) - 59,297 59,297 60,418 60,418
FNMA, 7.13%, 6/15/10(s) - 29,271 29,271 30,154 30,154
FNMA, 7.25%, 1/15/10 5,000 5,000 5,183 5,183
FNMA, 5.13%, 2/13/04 - 9,800 9,800 9,405 9,405
FNMA,5.75%, 4/15/03 - 7,500 7,500 7,383 7,383
FNMA, 5.88%, 4/23/04 - 3,500 3,500 3,392 3,392
FNMA, 6.00%, 5/15/08 - 7,000 7,000 6,723 6,723
FNMA, 6.63%, 9/15/09 - 10,000 10,000 9,941 9,941
--------------------------------------------------
TOTAL U. S. GOVERNMENT
AGENCY SECURITIES - 36,390 55,512 152,531 0 244,433
--------------------------------------------------
U.S. TREASURY SECURITIES
- - 14.3%
U.S. Treasury Bonds,
5.25%, 2/15/29 - 7,005 7,005 6,376 6,376
U.S. Treasury Bonds,
6.75%, 8/15/26 - 40,743 40,743 44,856 44,856
U.S. Treasury Bonds,
8.00%, 11/15/21 - 4,150 4,150 5,129 5,129
U.S. Treasury Bonds,
8.88%, 2/15/19 - 70,195 70,195 92,252 92,252
U.S. Treasury Notes &
Bonds, 8.13%, 8/15/19 44,000 44,000 54,368 54,368
U.S. Treasury Notes,
5.75%, 8/15/10(s) - 50,965 50,965 50,917 50,917
U.S. Treasury Notes,
6.75%, 5/15/05(s) 24,000 330 24,330 24,881 342 25,223
U.S. Treasury Notes,
6.88%, 5/15/06(s) - 14,950 14,950 15,665 15,665
U.S. Treasury STRIPS,
PO, 6.47%, 11/15/15 - 38,155 38,155 15,604 15,604
U.S. Treasury Notes &
Bonds, 5.25%, 2/15/29 - 1,500 1,500 1,365 1,365
U.S. Treasury Notes &
Bonds, 5.88%, 11/15/05 - 23,000 23,000 23,079 23,079
U.S. Treasury Notes &
Bonds, 6.13%, 8/15/29 - 6,000 6,000 6,214 6,214
U.S. Treasury Notes &
Bonds, 6.25%, 8/31/02 - 9,000 9,000 9,035 9,035
U.S. Treasury Notes &
Bonds, 6.5%, 5/31/02 - 11,000 11,000 11,065 11,065
U.S. Treasury Notes &
Bonds, 6.5%, 8/15/05 - 25,290 25,290 25,990 25,990
U.S. Treasury Notes &
Bonds, 8.13%, 8/15/19 - 26,000 26,000 32,126 32,126
--------------------------------------------------
TOTAL U.S. TREASURY
SECURITIES - 79,249 108,874 231,140 0 419,263
--------------------------------------------------
SHORT-TERM INVESTMENTS -
14.2%
COMMERCIAL PAPER - 2.7%
Morgan Stanley, 6.58%,
11/1/00(s) - 50,000 50,000 49,991 49,991
Salomon Smith Barney
6.60%, 11/1/00(s) - 30,719 30,719 30,713 30,713
--------------------------------------------------
0 0 80,704 80,704
--------------------------------------------------
INVESTMENT COMPANIES -
10.9%
J.P. Morgan
Institutional Prime
Money Market Fund(s)* - 320,834 (499)(a) 320,335 320,834 (499)(a) 320,335
--------------------------------------------------
0 0 320,834 (499) 320,335
--------------------------------------------------
U.S. TREASURY SECURITIES
- - 0.2%
U.S. Treasury Notes,
5.63%, 11/30/00(s) - 2,700 2,700 2,699 2,699
U.S. Treasury Bill,
6.18%, 12/7/00 2,000 2,000 1,988 1,988
--------------------------------------------------
1,988 0 2,699 0 4,687
--------------------------------------------------
REPURCHASE AGREEMENTS -
0.4%
Greenwich Capital
Markets, Inc., 6.55%,
due 11/01/00, (dated
10/31/00, proceeds
$4,731, secured by FNMA,
$4,805, 6.75%, due
6/18/21; value $4,829) 4,730 4,730 4,730 4,730
Greenwich Capital
Markets, Inc., 6.55%,
due 11/01/00, (dated
10/31/00, proceeds
$6,706, secured by FNMA,
$6,805, 6.75%, due
6/18/21; value $6,840) - 6,705 6,705 6,705 6,705
--------------------------------------------------
4,730 6,705 0 11,435
--------------------------------------------------
TOTAL INVESTMENT
SECURITIES - (COST
$2,939,739) 582,001 383,324 1,972,306 (499) 2,937,132
See Notes to Pro Forma Financial Statements
9
FUTURES CONTRACTS
UNDERLYING
FACE
EXPIRATION AMOUNT AT
PURCHASED DATE VALUE NUMBER OF CONTRACTS NET UNREALIZED APPRECIATION (DEPRECIATION)
- --------- ---------- ---------- ------------------- ------------------------------------------
U.S. Two-Year December
Treasury Note 2000 $ 84,052,500 420 420 (160,122) (160,122)
U.S. Five-Year December
Treasury Note 2000 35,613,039 700 353 1,053 130 334,510 334,640
-------------------------------------------------
130 - 174,388 - 174,518
-------------------------------------------------
SOLD
- ----
U.S. Ten-Year December
Treasury Note 2000 112,343,985 600 1,115 1,715 (427) (746,864) (747,291)
U.S. Five-Year December
Treasury Note 2000 13,279,219 133 133 25,956 25,956
-------------------------------------------------
(427) - (720,908) - (721,335)
-------------------------------------------------
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
FRN - Floating Rate Note. The maturity date is the actual maturity date; the
rate shown is the rate in effect at October 31, 2000.
GNMA - Government National Mortgage Association
LIBOR - London Interbank Offered Rate
PO - Principal only
resets - The frequency with which a security's coupon changes, based on
current market conditions or an underlying index.
SEQ - Sequential Payor
STRIPS - Separate Trading of Registered Interest and Principal of Securities.
SUB - Step-up Bond. The maturity date shown is the earlier of the call date of
maturity date; the reate shown is the rate in ecfect at October 31, 2000.
TBA -Securities purchased (sold) on a forward commitment basis with an
approximate principal amount and no definite maturity date. The actual
principal amount and maturity will be determined upon settlement.
144A - Securities restricted for resale to Qualified Institutional Buyers
(a) Reflects the redemption of short-term securities of the J.P. Morgan U.S.
Fixed Income - Advisor Series
(d) Defaulted security
(f) Illiquid and fair valued security. Approximately $17,356,656 or 0.9% of
the market value of the securities have been valued at fair value.
(s) Security is fully or partially segregated with custodian as collateral
for futures or with brokers as initial margin for futures contracts.
(y) Yield to maturity
(z) Category is less than 0.05% of total investment securities.
* Money Market Mutual Fund registered under the Investment Act of 1940, as
amended, and advised by J.P. Morgan Investment Management, Inc.
+ Non-income producing security (1) Subsequently renamed JPMorgan Bond
Fund II
(1) Formerly Chase Vista Select Bond Fund
(2) Formerly Chase Vista Select Intermediate Bond Fund
See Notes to Pro Forma Financial Statements
10
PRO FORMA FINANCIAL STATEMENTS
JPMORGAN BOND FUND II(1) / THE U.S. FIXED INCOME PORTFOLIO
OCTOBER 31, 2000 COMBINING PORTFOLIO OF INVESTMENTS
(UNAUDITED) (AMOUNTS IN THOUSANDS)
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
THE U.S. FORMA THE U.S. FORMA
JPMORGAN FIXED PRO COMBINED JPMORGAN FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND II(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND II(1) PORTFOLIO ADJUSTMENTS BOND FUND
-------------------------------------------------- ------------------------------------------------
ASSET-BACKED SECURITIES - 6.4%
FINANCIAL SERVICES - 6.4%
Citibank Credit Card Master
Trust I,Series 1998-9, Class A,
5.30%, 1/9/06 - 10,000 - 10,000 - 9,609 - 9,609
Conseco Finance Securitizations
Corp., Series 2000-5, Class A3
SEQ, 7.21%, 2/1/32 - 15,000 - 15,000 - 15,000 - 15,000
Daimler Chrysler Auto Trust,
Series 2000 C, Class A2 SEQ,
6.81%, 7/6/03 - 6,600 - 6,600 - 6,606 - 6,606
Daimler-Benz Vehicle Trust,
Series 1998 A, Class A4 SEQ,
5.22%, 12/22/03 - 21,000 - 21,000 - 20,626 - 20,626
Discover Card Master Trust I,
Series 1998-4, Class A, 5.75%,
10/16/03 - 12,000 - 12,000 - 11,925 - 11,925
First USA Credit Card Master
Trust, Series1999-1, Class C,
6.42%, 10/19/06 - 5,000 - 5,000 - 4,847 - 4,847
Ford Credit Auto Owner Trust,
Series 1998 C, Class D, 7.70%,
1/15/04 - 5,000 - 5,000 - 5,013 - 5,013
Ford Credit Auto Owner Trust,
Series 1999A, Class D, 8.00%,
6/15/04 - 5,000 - 5,000 - 5,036 - 5,036
Ford Credit Auto Owner Trust,
Series 2000 D, Class A2 SEQ,
7.06%, 4/15/03 - 11,000 - 11,000 - 11,014 - 11,014
Green Tree Financial
Corporation, Series 1999-5,
Class B1, 9.20%, 4/1/31 - 10,000 - 10,000 - 9,438 - 9,438
Green Tree Financial
Corporation,Series 1993-3,
Class B, 6.85%, 10/15/18 - 15,486 - 15,486 - 13,168 - 13,168
MBNA Master Credit Card Trust,
Ser1999-M, Class B, 6.8%,
4/16/07 8,300 - - 8,300 8,270 - - 8,270
MBNA Master Credit Card Trust,
Ser1999-J, Class A, 7%, 2/15/12 10,345 - - 10,345 10,390 - - 10,390
Nomura CBO LTD, Ser. 1997-1,
Class A2, FRN, 144A, 6.67%,
5/15/09 6,500 - - 6,500 5,929 - - 5,929
Residential Funding Mortgage
Securities II, Ser. 2000-HI1,
Class AI4, 7.79%, 1/25/14 7,500 - - 7,500 7,603 - - 7,603
Sears Credit Account Master
Trust, Series 1999-2, Class A,
6.35%, 2/16/07 - 19,855 - 19,855 - 19,712 - 19,712
-
------------------------------------------------
TOTAL ASSET-BACKED SECURITIES - 32,192 131,994 - 164,186
------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATIONS - 10.7%
FINANCIAL SERVICES - 10.7%
Chase Commercial Mortgage
Securities Corp., Series
1998-2, Class A2 SEQ, 6.39%,
11/18/08 - 26,550 26,550 25,500 25,500
Chase Manhattan Bank-First
Union National Bank, Series
1999-1, Class A2 SEQ, 7.44%,
7/15/09 - 20,000 20,000 20,363 20,363
COMM, Series 2000 FL2A, Class
H-NW, Floater, 7.97%, 11/15/00,
resets monthly off the 1-month - 4,900 4,900 4,900 4,900
LIBOR plus 1.35% with no
caps
Commercial Mortgage Acceptance
Corp., Series 1998-C2, Class D,
6.75%, 11/15/09 - 10,000 10,000 9,400 9,400
DLJ Commercial Mortgage
Corporation, Series 2000-CF1,
Class A1B SEQ, 7.62%, 5/10/10 - 42,660 42,660 43,673 43,673
FHLMC, Series 1980, Class C
SEQ, 6.85%, 10/15/21 - 530 530 528 528
First Nationwide Trust, Series
1999-4, Class 3PA1 SEQ, 6.50%,
10/19/29 - 28,873 28,873 27,123 27,123
First Union Commercial Mortgage
Trust, Series 1999-C1, Class A2
SEQ, 6.07%, 10/15/08 - 20,000 20,000 18,813 18,813
GMAC Commercial Mortgage
Securities Inc., Series
1997-C1, Class A3 SEQ, 6.87%,
8/15/07 - 8,895 8,895 8,787 8,787
GS Mortgage, Series 2000 F,
Floater, 8.37%, 11/15/00 - 5,000 5,000 5,000 5,000
Heller Financial Commercial
Mortgage Asset, Series
1999-PH1, Class A2 SEQ, 6.85%,
5/15/31 - 6,950 6,950 6,829 6,829
LB-UBS Commerical Mortgage
Trust, Series 2000-C3, Class A2
SEQ, 7.95%, 1/15/10 - 42,943 42,943 44,594 44,594
Morgan Stanley Capital I,
Series 1998-XL2, Class A2 SEQ,
6.17%, 10/3/08 - 7,830 7,830 7,393 7,393
Mortgage Capital Funding, Inc.,
Series 1998-MC2, Class A2 SEQ,
6.42%, 5/18/08 - 30,000 30,000 28,800 28,800
PNC Mortgage Acceptance Corp.,
Series 2000-C1, Class A2 SEQ,
7.61%, 2/15/10 - 12,500 12,500 12,828 12,828
PNC Mortgage Acceptance Corp.,
Series 2000-C2, Class A2 SEQ,
7.30%, 9/12/10 - 6,245 6,245 6,269 6,269
SACO I Inc. Series 1997-2,
Class 1A5 SEQ, 7.00%, 8/25/36 - 2,253 2,253 2,084 2,084
Vendee Mortgage Trust, Series
1997-1, Class 2C SEQ, 7.50%,
9/15/17 - 802 802 801 801
See Notes to Pro Forma Financial Statements
11
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
THE U.S. FORMA THE U.S. FORMA
JPMORGAN FIXED PRO COMBINED JPMORGAN FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND II(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND II(1) PORTFOLIO ADJUSTMENTS BOND FUND
-------------------------------------------------- ------------------------------------------------
------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS - - 273,684 - 273,684
------------------------------------------------
COMMERCIAL MORTGAGE BACKED
SECURITIES - 0.7%
Bear Stearns Commercial
Mortgage Securities,
Ser-2000-WF2, Class A1, 7.11%,
9/15/09 7,900 7,900 7,937 7,937
Bear Stearns Commercial
Mortgage Securities,
Ser-2000-WF2, Class A2, 7.32%,
8/15/10 6,300 6,300 6,343 6,343
LB-UBS Commercial Mortgage
Trust, Ser. 2000-C4, Class A1,
7.18%, 9/15/09 3,088 3,088 3,098 3,098
------------------------------------------------
TOTAL COMMERCIAL MORTGAGE
BACKED SECURITIES - 17,378 - - 17,378
------------------------------------------------
CORPORATE BONDS & NOTES - 13.6%
BANKS - 2.4%
Bank of America Corp., 7.80%,
2/15/10 7,700 7,700 7,820 7,820
Bank One Capital III, 8.75%,
9/1/30 - 2,010 2,010 1,955 1,955
Bank One Corp., 7.88%, 8/1/10 5,800 5,800 5,824 5,824
Capital One Bank, 8.25%, 6/15/05 - 8,500 8,500 8,546 8,546
First Union National Bank,
7.80%, 8/18/10 - 9,975 9,975 9,940 9,940
J.P. Morgan & Co., Inc., MTN,
6.00%, 1/15/09 7,900 7,900 7,229 7,229
Keystone Financial Mid-Atlantic
Funding Corp., MTN, 7.30%,
5/15/04 4,850 4,850 4,851 4,851
Manufacturers & Traders Trust
Co., 8.00%, 10/1/10 6,415 6,415 6,345 6,345
MBNA America Bank, N.A., 7.75%,
9/15/05 7,060 7,060 6,984 6,984
------------------------------------------------
39,053 20,440 - 59,493
------------------------------------------------
CHEMICALS - 0.2%
Cytec Industries, Inc., 6.85%,
5/11/05 - 1,000 1,000 931 931
Rohm & Haas Co., 7.85%, 7/15/29 - 5,110 5,110 4,986 4,986
------------------------------------------------
- 5,917 - 5,917
------------------------------------------------
DEFENSE/AEROSPACE - 0.6%
Lockheed Martin Corp., 8.20%,
12/1/09 - 8,530 8,530 8,879 8,879
Raytheon Co., 144A, 7.90%,
3/1/03 6,700 6,700 6,802 6,802
------------------------------------------------
6,802 8,879 - 15,681
------------------------------------------------
ELECTRICAL UTILITY / UTILITIES
- - 0.7%
Cilcorp Inc., 8.70%, 10/15/09 6,000 6,000 6,185 6,185
Cogentrix Energy Inc., 8.75%,
10/15/08 - 506 506 507 507
Dominion Resources Inc., Series
2010-A, 8.13%, 6/15/10 - 4,025 4,025 4,150 4,150
Dominion Resources Inc./VA,
Series 2000 B, 7.63%, 7/15/05 - 7,940 7,940 8,027 8,027
------------------------------------------------
6,185 12,685 - 18,870
------------------------------------------------
ENERGY RESERVES & PRODUCTION -
(Z)
Lasmo (USA) Inc., 6.75%,
12/15/07 - 500 500 477 477
------------------------------------------------
- 477 - 477
------------------------------------------------
FINANCIAL SERVICES - 3.3%
500 Grant St. Association,
144A, Series 1999 A, 6.46%,
12/1/08 - 5,493 5,493 5,257 5,257
CIT Group, Inc., 7.63%, 8/16/05 9,125 9,125 9,116 9,116
CitiFinancial, 8.70%, 6/15/10 - 3,400 3,400 3,681 3,681
Comdisco Inc., 9.50%, 8/15/03 - 4,205 4,205 3,154 3,154
Comdisco, Inc., 6.38%, 11/30/01 - 3,490 3,490 2,928 2,928
ERAC USA Finance Co., 144A,
6.38%, 5/15/03 - 5,000 5,000 4,795 4,795
Ford Motor Credit Co., 7.25%,
1/15/03 - 135 135 135 135
Ford Motor Credit Co., 7.38%,
10/28/09 - 1,010 1,010 981 981
Heller Financial, Inc., 8.00%,
6/15/05 7,100 7,100 7,200 7,200
Household Finance Corp., 8.00%,
5/9/05 - 6,500 6,500 6,647 6,647
Keycorp Institutional Capital,
Series 1996 B, 8.25%, 12/15/26 - 2,200 2,200 2,001 2,001
McKesson Financial of Canada,
144A, 6.55%, 11/1/02 - 4,475 4,475 4,292 4,292
See Notes to Pro Forma Financial Statements
12
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
THE U.S. FORMA THE U.S. FORMA
JPMORGAN FIXED PRO COMBINED JPMORGAN FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND II(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND II(1) PORTFOLIO ADJUSTMENTS BOND FUND
-------------------------------------------------- ------------------------------------------------
Newcourt Credit Group Inc.,
6.88%, 2/16/05 - 6,000 6,000 5,796 5,796
NGC Corp. Capital Trust, Series
1997 B, 8.32%, 6/1/27 - 8,835 8,835 7,776 7,776
Oil Purchase Company, 144A,
7.10%, 4/30/02 - 1,835 1,835 1,752 1,752
Provident Financing Trust I,
7.41%, 3/15/38 - 1,765 1,765 1,304 1,304
Washington Mutual Financial
Corp., 8.25%, 6/15/05 - 17,500 17,500 18,059 18,059
------------------------------------------------
16,316 68,557 - 84,873
------------------------------------------------
FOOD & BEVERAGE - 0.1%
Smithfield Foods Inc., 7.63%,
2/15/08 - 1,410 1,410 1,280 1,280
------------------------------------------------
- 1,280 - 1,280
------------------------------------------------
FOREST PRODUCTS & PAPER - 0.2%
Champion International Corp.,
7.10%, 9/1/05 - 5,000 5,000 4,899 4,899
------------------------------------------------
- 4,899 - 4,899
------------------------------------------------
GAS & WATER UTILITIES - 0.2%
United Utilities Plc, 6.88%,
8/15/28 - 6,970 6,970 5,544 5,544
------------------------------------------------
- 5,544 - 5,544
------------------------------------------------
INSURANCE - 0.5%
Conseco, Inc., 8.50%, 10/15/02 9,270 9,270 7,230 7,230
GE Global Insurance Holding
Corp., 7.75%, 6/15/30 5,800 5,800 5,847 5,847
------------------------------------------------
13,077 - - 13,077
------------------------------------------------
MANUFACTURING - 0.3%
Louisiana-Pacific Corp., 8.88%,
8/15/10 7,900 7,900 7,829 7,829
------------------------------------------------
7,829 - - 7,829
------------------------------------------------
MEDIA - 1.1%
Adelphia Communications Corp.,
9.38%, 11/15/09 - 3,125 3,125 2,664 2,664
Clear Channel Communications,
7.88%, 6/15/05 5,350 5,540 10,890 5,392 5,583 10,975
Fox Sports Networks LLC, 8.88%,
8/15/07 - 2,500 2,500 2,513 2,513
Lamar Media Corp., 8.63%,
9/15/07 - 1,900 1,900 1,853 1,853
Time Warner Entertainment Co.
LP, 8.38%, 3/15/23 8,705 8,705 9,125 9,125
------------------------------------------------
14,517 12,612 - 27,129
------------------------------------------------
MEDICAL PROVIDERS & SERVICES -
(Z)
Mariner Post-Acute Network
Inc., Series B, 9.50%,
4/1/06(d)+ - 2,000 2,000 10 10
------------------------------------------------
- 10 - 10
------------------------------------------------
MOTOR VEHICLES & PARTS /
AUTOMOTIVE - 0.3%
DaimlerChrysler NA Holding
Corp., 6.90%, 9/1/04 - 2,500 2,500 2,467 2,467
GMAC, 7.50%, 7/15/05 5,800 5,800 5,851 5,851
------------------------------------------------
5,851 2,467 - 8,318
------------------------------------------------
MULTI-INDUSTRY - 0.2%
Cendant Corporation, 7.75%,
12/1/03 - 5,000 5,000 4,893 4,893
------------------------------------------------
- 4,893 - 4,893
------------------------------------------------
OIL SERVICES - 1.3%
Enron Corp., 144A, 7.11%,
12/12/00, resets quarterly off
the 3-month LIBOR - 15,000 15,000 14,993 14,993
plus 0.45% with no caps
Express Pipeline LP, 144A,
Series 1998 B, 7.39%, 12/31/17 - 1,497 1,497 1,278 1,278
Phillips Petroleum Co., 8.75%,
5/25/10 - 4,000 4,000 4,363 4,363
Valero Energy Corp., 8.38%,
6/15/05 6,000 6,000 6,221 6,221
Valero Energy Corp., 8.75%,
6/15/30 5,600 5,600 5,894 5,894
Williams Cos. Inc., 6.20%,
8/1/02 - 350 350 344 344
------------------------------------------------
12,115 20,978 - 33,093
------------------------------------------------
PACKAGING - 0.1%
See Notes to Pro Forma Financial Statements
13
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
THE U.S. FORMA THE U.S. FORMA
JPMORGAN FIXED PRO COMBINED JPMORGAN FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND II(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND II(1) PORTFOLIO ADJUSTMENTS BOND FUND
-------------------------------------------------- ------------------------------------------------
Tenneco Packaging, Inc., 8.00%,
4/15/07 3,775 3,775 3,759 3,759
------------------------------------------------
3,759 - - 3,759
------------------------------------------------
PIPELINES - 0.4%
Duke Energy Field Services LLC,
7.88%, 8/16/10 5,750 5,750 5,860 5,860
El Paso Energy Corp., 6.75%,
5/15/09 5,170 5,170 4,913 4,913
------------------------------------------------
10,773 - - 10,773
------------------------------------------------
RAILROADS - 0.3%
Burlington Northern Railroad
Co., 7.33%, 6/23/10 - 1,601 1,601 1,605 1,605
Canadian National Railway Co.,
7.00%, 3/15/04 - 5,350 5,350 5,287 5,287
------------------------------------------------
- 6,892 - 6,892
------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS -
(Z)
Felcor Lodging LP, 144A, 9.50%,
9/15/08 - 830 830 820 820
------------------------------------------------
- 820 - 820
------------------------------------------------
SEMICONDUCTOR - 0.1%
Charter Communications
Holdings, LLC/ Charter
Communications Holdings - 3,125 3,125 2,797 2,797
Capital Corp., 8.25%, 4/1/07
------------------------------------------------
- 2,797 - 2,797
------------------------------------------------
TELEPHONE / TELECOMMUNICATIONS
- - 1.0%
Global Crossing Holding
Limited, 9.13%, 11/15/06 - 4,125 4,125 3,939 3,939
McLeodUSA Inc., 9.25%, 7/15/07 - 3,000 3,000 2,790 2,790
Qwest Capital Funding Inc.,
6.88%, 7/15/28 - 700 700 615 615
Sprint Capital Corp., 5.88%,
5/1/04 - 10,000 10,000 9,518 9,518
U.S. West Capital Funding,
Inc., 6.25%, 7/15/05 5,575 5,575 5,328 5,328
Williams Communications Group,
10.70%, 10/1/07 - 2,000 2,000 1,720 1,720
WorldCom, Inc., 6.40%, 8/15/05 - 500 500 482 482
XO Communications Inc., 9.63%,
10/1/07 - 1,000 1,000 835 835
------------------------------------------------
5,328 19,899 - 25,227
------------------------------------------------
TRUCKING & SHIPPING & AIR
FREIGHT - 0.2%
Atlantic Express, 10.75%, 2/1/04 - 1,900 1,900 1,634 1,634
FedEx Corp., Series 1999-1,
Class C, 8.25%, 1/15/19 - 4,682 4,682 4,729 4,729
------------------------------------------------
- 6,363 - 6,363
------------------------------------------------
------------------------------------------------
TOTAL CORPORATE BONDS & NOTES - 141,605 206,408 - 348,013
------------------------------------------------
PREFERRED STOCKS - 0.1%
ENTERTAINMENT - 0.1%
AT&T Corp., 10.00%, 5/31/45 - 150 150 3,797 3,797
------------------------------------------------
TOTAL PREFERRED STOCKS - - 3,797 - 3,797
------------------------------------------------
FOREIGN CORPORATE BONDS - 3.1%
BANKS - 0.2%
Barclays Bank Plc, 144A, 8.55%,
9/29/49 - 4,000 4,000 4,027 4,027
------------------------------------------------
- 4,027 - 4,027
------------------------------------------------
ELECTRICAL EQUIPMENT - 0.1%
Legrand S.A., 8.50%, 2/15/25 - 1,785 1,785 1,864 1,864
------------------------------------------------
- 1,864 - 1,864
------------------------------------------------
ELECTRICAL UTILITY / UTILITIES
- - 0.2%
Israel Electric Corp. (Israel),
7.75%, 12/15/27 5,500 5,500 4,676 4,676
See Notes to Pro Forma Financial Statements
14
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
THE U.S. FORMA THE U.S. FORMA
JPMORGAN FIXED PRO COMBINED JPMORGAN FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND II(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND II(1) PORTFOLIO ADJUSTMENTS BOND FUND
-------------------------------------------------- ------------------------------------------------
------------------------------------------------
4,676 - - 4,676
------------------------------------------------
FINANCIAL SERVICES - 0.4%
HSBC Capital Funding LP, 144A,
10.18%, 12/29/49,
resets
quarterly off the 3-month - 7,220 7,220 7,901 7,901
LIBOR plus 4.98% with no
caps
Montell Finance Co. B.V., 144A,
8.10%, 3/15/27 - 2,250 2,250 2,023 2,023
------------------------------------------------
- 9,924 - 9,924
------------------------------------------------
INFORMATION SERVICES - 0.3%
Marconi Corporation Plc, 8.38%,
9/15/30 - 8,760 8,760 8,354 8,354
------------------------------------------------
- 8,354 - 8,354
------------------------------------------------
OIL SERVICES - 0.8%
PEMEX Finance Limited (Cayman
Islands), 9.14%, 8/15/04 7,040 7,040 7,201 7,201
Repsol International Finance BV
(Netherlands), 7.45%, 7/15/05 7,900 7,900 7,940 7,940
YPF Sociedad Anonima
(Argentina), 7.25%, 3/15/03 6,525 6,525 6,375 6,375
------------------------------------------------
21,516 - - 21,516
------------------------------------------------
TELEPHONE - 1.1%
Deutsche Telekom International
Finance, 8.25%, 6/15/30 - 10,000 10,000 10,205 10,205
Microcell Telecommunications
Inc., Series B, 11.99%,
6/1/06(y) - 300 300 288 288
Telefonica Europe B.V., 8.25%,
9/15/30 - 12,150 12,150 12,441 12,441
Vodafone AirTouch Plc, 144A,
7.63%, 2/15/05 5,800 5,800 5,884 5,884
------------------------------------------------
5,884 22,935 - 28,819
------------------------------------------------
------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS - 32,076 47,104 - 79,180
------------------------------------------------
MORTGAGE PASS THRU - 28.0%
FHLMC, 12.50%, 8/1/14 - 1 1 1 1
FHLMC, 6.00%, 3/1/11 to 4/1/11 - 1,033 1,033 1,001 1,001
FNMA, 6.00%, 12/1/28 to 2/1/29 - 58,466 58,466 54,836 54,836
FNMA, 6.50%, 1/1/28 to 9/1/29 - 11,407 11,407 10,966 10,966
FNMA, 7.00%, 7/1/28 to 10/1/29 - 3,179 3,179 3,115 3,115
FNMA, 7.50%, 5/1/30 - 167 167 167 167
FNMA, 8.00%, 8/1/22 to 6/1/27 - 1,899 1,899 1,924 1,924
FNMA, 7.00%, 5/1/28 85 85 83 83
FNMA, 6.50%, 11/1/28 12,075 12,075 11,610 11,610
FNMA, 6.00%, 3/1/29 11,027 11,027 10,341 10,341
FNMA, 6.00%, 5/1/14 2,146 2,146 2,066 2,066
FNMA,, 6.50%, 9/1/29 3,442 3,442 3,308 3,308
FNMA, 7.00%, 4/1/30 37 37 37 37
FNMA, 7.00%, 3/1/29 23,754 23,754 23,279 23,279
FNMA, 7.50%, 4/1/29 21,319 21,319 21,332 21,332
FNMA, 7.50%, 3/1/29 4,321 4,321 4,324 4,324
FNMA, 6.00%, 1/1/29 3,452 3,452 3,237 3,237
FNMA, 6.50%, 3/1/29 8,855 8,855 8,509 8,509
FNMA, 6.00%, 3/1/29 10,555 10,555 9,899 9,899
FNMA, 6.50%, 4/1/29 11,362 11,362 10,918 10,918
FNMA, 7.00%, 9/1/29 47 47 46 46
FNMA, 7.00%, 2/1/30 1,682 1,682 1,648 1,648
FNMA, 7.00%, 3/1/30 499 499 488 488
FNMA, 8.00%, 3/1/30 8,574 8,574 8,678 8,678
FNMA, 6.00%, 11/1/14 21,666 21,666 20,853 20,853
FNMA, 7.50%, 6/1/15 12,522 12,522 12,608 12,608
FNMA, 7.50%, 7/1/30 5,710 5,710 5,701 5,701
FNMA, 7.00%, 7/1/30 99 99 97 97
FNMA, TBA, 6.50%, 11/1/30 - 8,010 8,010 7,697 7,697
FNMA, TBA, 7.00%, 11/1/15 - 71,310 71,310 70,864 70,864
See Notes to Pro Forma Financial Statements
15
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
THE U.S. FORMA THE U.S. FORMA
JPMORGAN FIXED PRO COMBINED JPMORGAN FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND II(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND II(1) PORTFOLIO ADJUSTMENTS BOND FUND
-------------------------------------------------- ------------------------------------------------
FNMA, TBA, 7.00%, 9/1/29 - 107,234 107,234 105,056 105,056
FNMA, TBA, 7.50%, 12/1/30 - 157,605 157,605 157,211 157,211
GNMA, 6.50%, 6/15/28 to 12/15/28 - 51,325 51,325 49,554 49,554
GNMA, 7.00%, 12/15/08 - 194 194 195 195
GNMA, 7.50%, 1/15/27 to 2/15/27 - 8,480 8,480 8,516 8,516
GNMA, 8.50%, 5/15/27 - 218 218 224 224
GNMA, 9.00%, 12/15/19 - 63 63 66 66
GNMA, 6.50%, 5/15/29 14,475 14,475 13,973 13,973
GNMA, 7.00%, 8/15/29 12,250 12,250 12,074 12,074
GNMA, 7.50%, 9/15/29 8,542 8,542 8,571 8,571
GNMA, 8.00%, 3/15/30 9,973 9,973 10,138 10,138
GNMA, 8.00%, 7/15/30 11,530 11,530 11,721 11,721
GNMA, TBA, 7.00%, 11/1/30 - 28,460 28,460 28,051 28,051
------------------------------------------------
TOTAL MORTGAGE PASS THRU - 215,539 499,445 - 714,984
------------------------------------------------
PRIVATE PLACEMENTS - 0.7%
CO-OP APARTMENTS - 0.7%
180 East End Avenue Note,
secured by first mortgage and
agreement on co-opapartment
building - 4,415 4,415 4,176 4,176
in New York City,6.88%,
1/1/29(f)
200 East 57th Street, secured
by first mortgage and agreement
on co-op apartment building - 10,900 10,900 10,110 10,110
in New York City, 6.50%,
1/1/14(f)
81 Irving Place Note, secured
by first mortgage and agreement
on co-op apartment building - 3,239 3,239 3,071 3,071
in New York City, 6.95%,
1/1/29(f)
-
------------------------------------------------
TOTAL PRIVATE PLACEMENTS - - 17,357 - 17,357
------------------------------------------------
SOVEREIGN GOVERNMENTS &
AGENCIES - 1.0%
Bancomext Trust Division,
11.25%, 5/30/06 1,800 1,800 1,944 1,944
Korea Development Bank, 6.50%,
11/15/02 6,722 6,722 6,541 6,541
Province of Quebec, 6.50%,
1/17/06 4,700 4,700 4,610 4,610
Quebec Province, 7.50%, 9/15/29 7,900 7,900 8,011 8,011
United Mexican States, 9.88%,
2/1/10 4,200 4,200 4,358 4,358
------------------------------------------------
TOTAL SOVEREIGN GOVERNMENTS AND
AGENCIES - 20,854 4,610 - 25,464
------------------------------------------------
U.S. GOVERNMENT AGENCY
SECURITIES - 7.4%
FHLB 7.25%, 5/13/05 15,000 15,000 15,403 15,403
FHLB, 7.63%, 5/15/07 15,000 15,000 15,804 15,804
FHLB, 4.88%, 1/22/02 - - -
FHLMC, 6.88%, 9/15/10(s) - 61,175 61,175 61,959 61,959
FHLMC, 5.00%, 1/15/04 - - -
FHLMC,5.13%, 10/15/08 - - -
FNMA, 7.00%, 7/15/05(s) - 59,297 59,297 60,418 60,418
FNMA, 7.13%, 6/15/10(s) - 29,271 29,271 30,154 30,154
FNMA, 7.25%, 1/15/10 5,000 5,000 5,183 5,183
FNMA, 5.13%, 2/13/04 - - -
FNMA,5.75%, 4/15/03 - - -
FNMA, 5.88%, 4/23/04 - - -
FNMA, 6.00%, 5/15/08 - - -
FNMA, 6.63%, 9/15/09 - - -
------------------------------------------------
TOTAL U. S. GOVERNMENT AGENCY
SECURITIES - 36,390 152,531 - 188,921
------------------------------------------------
U.S. TREASURY SECURITIES - 12.2%
See Notes to Pro Forma Financial Statements
16
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
THE U.S. FORMA THE U.S. FORMA
JPMORGAN FIXED PRO COMBINED JPMORGAN FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND II(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND II(1) PORTFOLIO ADJUSTMENTS BOND FUND
-------------------------------------------------- ------------------------------------------------
U.S. Treasury Bonds, 5.25%,
2/15/29 - 7,005 7,005 6,376 6,376
U.S. Treasury Bonds, 6.75%,
8/15/26 - 40,743 40,743 44,856 44,856
U.S. Treasury Bonds, 8.00%,
11/15/21 - 4,150 4,150 5,129 5,129
U.S. Treasury Bonds, 8.88%,
2/15/19 - 70,195 70,195 92,252 92,252
U.S. Treasury Notes & Bonds,
8.13%, 8/15/19 44,000 44,000 54,368 54,368
U.S. Treasury Notes, 5.75%,
8/15/10(s) - 50,965 50,965 50,917 50,917
U.S. Treasury Notes, 6.75%,
5/15/05(s) 24,000 330 24,330 24,881 342 25,223
U.S. Treasury Notes, 6.88%,
5/15/06(s) - 14,950 14,950 15,665 15,665
U.S. Treasury STRIPS, PO,
6.47%, 11/15/15 - 38,155 38,155 15,604 15,604
------------------------------------------------
TOTAL U.S. TREASURY SECURITIES - 79,249 231,140 - 310,389
------------------------------------------------
SHORT-TERM INVESTMENTS - 16.1%
COMMERCIAL PAPER - 3.2%
Morgan Stanley, 6.58%,
11/1/00(s) - 50,000 50,000 49,991 49,991
Salomon Smith Barney 6.60%,
11/1/00(s) - 30,719 30,719 30,713 30,713
------------------------------------------------
- 80,704 - 80,704
------------------------------------------------
INVESTMENT COMPANIES - 12.5%
J.P. Morgan Institutional Prime (A)
Money Market Fund(s)* - 320,834 (499) 320,335 320,834 (499)(a) 320,335
------------------------------------------------
- 320,834 (499) 320,335
------------------------------------------------
U.S. TREASURY SECURITIES - 0.2%
U.S. Treasury Notes, 5.63%,
11/30/00(s) - 2,700 2,700 2,699 2,699
U.S. Treasury Bill, 6.18%,
12/7/00 2,000 2,000 1,988 1,988
------------------------------------------------
1,988 2,699 - 4,687
------------------------------------------------
REPURCHASE AGREEMENTS - 0.2%
Greenwich Capital Markets,
Inc., 6.55%, due 11/01/00,
(dated 10/31/00, proceeds
$4,731,
secured by FNMA, $4,805,
6.75%, due 6/18/21; value
$4,829) 4,730 4,730 4,730 4,730
------------------------------------------------
4,730 - 4,730
------------------------------------------------
------------------------------------------------
TOTAL SHORT TERM INVESTMENTS 6,718 404,237 (499) 410,456
------------------------------------------------
------------------------------------------------
TOTAL INVESTMENT SECURITIES -
(COST $2,553,926) 582,001 1,972,306 (499) 2,553,808
------------------------------------------------
FUTURES CONTRACTS
UNDERLYING
FACE
AMOUNT NET UNREALIZED
PURCHASED EXPIRATION DATE AT VALUE NUMBER OF CONTRACTS APPRECIATION (DEPRECIATION)
- --------- --------------- ----------- --------------------- ----------------------------------------
U.S. Two-Year Treasury Note December 2000 $84,052,500 420 420 (160,122) (160,122)
U.S. Five-Year Treasury Note December 2000 35,613,039 700 353 1,053 130 334,510 334,640
----------------------------------------
130 174,388 - 174,518
----------------------------------------
See Notes to Pro Forma Financial Statements
17
UNDERLYING
FACE
AMOUNT NET UNREALIZED
PURCHASED EXPIRATION DATE AT VALUE NUMBER OF CONTRACTS APPRECIATION (DEPRECIATION)
- --------- --------------- ----------- --------------------- ----------------------------------------
SOLD
U.S. Ten-Year Treasury Note December 2000 112,343,985 600 1,115 1,715 (427) (746,864) (747,291)
U.S. Five-Year Treasury Note December 2000 13,279,219 133 133 25,956 25,956
----------------------------------------
(427) (720,908) - (721,335)
----------------------------------------
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
FRN - Floating Rate Note. The maturity date is the actual maturity date; the
rate shown is the rate in effect at October 31, 2000.
GNMA - Government National Mortgage Association
LIBOR - London Interbank Offered Rate
MTN - Medium Term Note
PO - Principal only resets - The frequency with which a security's coupon
changes, based on current market conditions or an underlying index.
SEQ - Sequential Payor
STRIPS - Separate Trading of Registered Interest and Principal of Securities.
SUB - Step-up Bond. The maturity date shown is the earlier of the call date of
maturity date; the reate shown is the rate in ecfect at October 31, 2000.
TBA - Securities purchased (sold) on a forward commitment basis with an
approximate principal amount and no definite maturity date. The actual principal
amount and maturity will be determined upon settlement.
144A - Securities restricted for resale to Qualified Institutional Buyers
(a) Reflects the redemption of short-term securities of the J.P. Morgan U.S.
Fixed Income - Advisor Series
(d) Defaulted security
(f) Illiquid and fair valued security. Approximately $17,356,656 or 0.9% of the
market value of the securities have been valued at fair value.
(s) Security is fully or partially segregated with custodian as collateral for
futures or with brokers as initial margin for futures contracts.
(y) Yield to maturity
(z) Category is less than 0.05% of total investment securities.
* Money Market Mutual Fund registered under the Investment Act of 1940, as
amended, and advised by J.P. Morgan Investment Management, Inc.
+ Non-income producing security
(1) Formerly Chase Vista Select Bond Fund.
See Notes to Pro Forma Financial Statements
18
PRO FORMA FINANCIAL STATEMENTS
JPMORGAN INTERMEDIATE BOND FUND (1) /
THE J.P. MORGAN INSTITUTIONAL BOND FUND
OCTOBER 31, 2000
COMBINING STATEMENT OF INVESTMENTS
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
THE U.S. FORMA THE U.S. FORMA
JPMORGAN FIXED PRO COMBINED JPMORGAN FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND I(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND I(1) PORTFOLIO ADJUSTMENTS BOND FUND
----------------------------------------------- --------------------------------------------------
ASSET-BACKED SECURITIES - 6.4%
FINANCIAL SERVICES - 6.4%
American Express Credit Account
Master Trust, Ser. 1997-1,
Class A, 6.40%, 4/15/05 4,750 - - 4,750 4,724 - - 4,724
Citibank Credit Card Master
Trust I,Series 1998-9, Class A,
5.30%, 1/9/06 - 10,000 - 10,000 - 9,609 - 9,609
Citibank Credit Card Master
Trust I, Ser. 1997-2, Class A,
6.55%, 2/15/04 1,700 - - 1,700 1,693 - - 1,693
Conseco Finance Securitizations
Corp., Series 2000-5, Class A3
SEQ, 7.21%, 2/1/32 - 15,000 - 15,000 - 15,000 - 15,000
Daimler Chrysler Auto Trust,
Series 2000 C, Class A2 SEQ,
6.81%, 7/6/03 - 6,600 - 6,600 - 6,606 - 6,606
Daimler-Benz Vehicle Trust,
Series 1998 A, Class A4 SEQ,
5.22%, 12/22/03 - 21,000 - 21,000 - 20,626 - 20,626
Discover Card Master Trust I,
Series 1998-4, Class A, 5.75%,
10/16/03 - 12,000 - 12,000 - 11,925 - 11,925
First USA Credit Card Master
Trust, Series1999-1, Class C,
6.42%, 10/19/06 - 5,000 - 5,000 - 4,847 - 4,847
Ford Credit Auto Owner Trust,
Series 1998 C, Class D, 7.70%,
1/15/04 - 5,000 - 5,000 - 5,013 - 5,013
Ford Credit Auto Owner Trust,
Series 1999A, Class D, 8.00%,
6/15/04 - 5,000 - 5,000 - 5,036 - 5,036
Ford Credit Auto Owner Trust,
Series 2000 D, Class A2 SEQ,
7.06%, 4/15/03 - 11,000 - 11,000 - 11,014 - 11,014
Green Tree Financial
Corporation, Series 1999-5,
Class B1, 9.20%, 4/1/31 - 10,000 - 10,000 - 9,438 - 9,438
Green Tree Financial
Corporation,Series 1993-3,
Class B, 6.85%, 10/15/18 - 15,486 - 15,486 - 13,168 - 13,168
MBNA Master Credit Card Trust,
Ser. 1999-J, Class A, 7.00%,
2/15/12 2,710 - - 2,710 2,722 - - 2,722
Nomura CBO LTD, Series 1997-1,
Class A2, FRN, 144A, SUB,
6.67%, 5/15/09 5,000 - - 5,000 4,561 - - 4,561
Sears Credit Account Master
Trust, Series 1999-2, Class A,
6.35%, 2/16/07 19,855 - 19,855 - 19,712 - 19,712
Standard Credit Card Trust,
Ser. 93, 5.95%, 10/7/04 4,000 - - 4,000 3,919 - - 3,919
-
--------------------------------------------------
TOTAL ASSET-BACKED SECURITIES - 17,619 131,994 - 149,613
--------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATIONS - 12.0%
FINANCIAL SERVICES - 12.0%
Chase Commercial Mortgage
Securities Corp., Series
1998-2, Class A2 SEQ, 6.39%,
11/18/08 - 26,550 26,550 25,500 25,500
Chase Manhattan Bank-First
Union National Bank, Series
1999-1, Class A2 SEQ, 7.44%,
7/15/09 - 20,000 20,000 20,363 20,363
COMM, Series 2000 FL2A, Class
H-NW, Floater, 7.97%, 11/15/00,
resets monthly off the 1-month - 4,900 4,900 4,900 4,900
LIBOR plus 1.35% with no
caps
Commercial Mortgage Acceptance
Corp., Series 1998-C2, Class D,
6.75%, 11/15/09 - 10,000 10,000 9,400 9,400
DLJ Commercial Mortgage
Corporation, Series 2000-CF1,
Class A1B SEQ, 7.62%, 5/10/10 - 42,660 42,660 43,673 43,673
FHLMC, Series 1980, Class C
SEQ, 6.85%, 10/15/21 - 530 530 528 528
FHLMC, Ser. 2155, Class PC,
6.00%, 11/15/17 5,225 5,225 5,120 5,120
FNMA, Ser. 1999-17, Class PC,
6.00%, 12/25/22 4,200 4,200 4,044 4,044
First Nationwide Trust, Series
1999-4, Class 3PA1 SEQ, 6.50%,
10/19/29 - 28,873 28,873 27,123 27,123
First Union Commercial Mortgage
Trust, Series 1999-C1, Class A2
SEQ, 6.07%, 10/15/08 - 20,000 20,000 18,813 18,813
GMAC Commercial Mortgage
Securities Inc., Series
1997-C1, Class A3 SEQ, 6.87%,
8/15/07 - 8,895 8,895 8,787 8,787
GS Mortgage, Series 2000 F,
Floater, 8.37%, 11/15/00 - 5,000 5,000 5,000 5,000
Heller Financial Commercial
Mortgage Asset, Series
1999-PH1, Class A2 SEQ, 6.85%,
5/15/31 - 6,950 6,950 6,829 6,829
LB-UBS Commerical Mortgage
Trust, Series 2000-C3, Class A2
SEQ, 7.95%, 1/15/10 - 42,943 42,943 44,594 44,594
Morgan Stanley Capital I,
Series 1998-XL2, Class A2 SEQ,
6.17%, 10/3/08 - 7,830 7,830 7,393 7,393
Mortgage Capital Funding, Inc.,
Series 1998-MC2, Class A2 SEQ,
6.42%, 5/18/08 - 30,000 30,000 28,800 28,800
PNC Mortgage Acceptance Corp.,
Series 2000-C1, Class A2 SEQ,
7.61%, 2/15/10 - 12,500 12,500 12,828 12,828
PNC Mortgage Acceptance Corp.,
Series 2000-C2, Class A2 SEQ,
7.30%, 9/12/10 - 6,245 6,245 6,269 6,269
See Notes to Pro Forma Financial Statements
19
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
THE U.S. FORMA THE U.S. FORMA
JPMORGAN FIXED PRO COMBINED JPMORGAN FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND I(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND I(1) PORTFOLIO ADJUSTMENTS BOND FUND
----------------------------------------------- --------------------------------------------------
SACO I Inc. Series 1997-2,
Class 1A5 SEQ, 7.00%, 8/25/36 - 2,253 2,253 2,084 2,084
Vendee Mortgage Trust, Series
1997-1, Class 2C SEQ, 7.50%,
9/15/17 - 802 802 801 801
--------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS - 9,164 273,684 282,848
--------------------------------------------------
COMMERCIAL MORTGAGE BACKED
SECURITIES - 0.2%
Bear Stearns Commercial
Mortgage Securities, Ser.
2000-WF2, Class A1, 7.11%,
9/15/09 3,000 3,000 3,014 3,014
Credit Suisse First Boston
Mortgage Securities Corp., Ser.
1997-SPCE, Class A, 144A,
6.65%, 6/20/03 536 536 533 533
LB-UBS Commercial Mortgage
Trust, Ser. 2000-C4, Class A1,
7.18%, 9/15/09 897 897 899 899
--------------------------------------------------
TOTAL COMMERCIAL MORTGAGE
BACKED SECURITIES - 4,446 0 4,446
--------------------------------------------------
CORPORATE BONDS & NOTES - 13.9%
BANKS - 1.9%
Bank One Capital III, 8.75%,
9/1/30 2,010 2,010 1,955 1,955
Bank One Corp., 7.88%, 8/1/10 5,000 5,000 5,020 5,020
Capital One Bank, 8.25%, 6/15/05 8,500 8,500 8,546 8,546
First Union National Bank,
7.80%, 8/18/10 9,975 9,975 9,940 9,940
J.P. Morgan & Co., Inc., MTN,
6.00%, 1/15/09 5,000 5,000 4,575 4,575
Manufacturers & Traders Trust
Co., 8.00%, 10/1/10 4,815 4,815 4,763 4,763
MBNA America Bank, N.A., 7.75%,
9/15/05 4,831 4,831 4,779 4,779
U.S. Bank, NA, 5.70%, 12/15/08 5,575 5,575 4,892 4,892
--------------------------------------------------
24,029 20,440 0 44,469
--------------------------------------------------
BROADCASTING/CABLE - 0.4%
Jones Intercable, Inc., 7.63%,
4/15/08 5,425 5,425 5,309 5,309
USA Networks, Inc., 6.75%,
11/15/05 4,275 4,275 4,173 4,173
--------------------------------------------------
9,482 0 0 9,482
--------------------------------------------------
CHEMICALS - 0.3%
Cytec Industries, Inc., 6.85%,
5/11/05 1,000 1,000 931 931
Rohm & Haas Co., 7.85%, 7/15/29 5,110 5,110 4,986 4,986
--------------------------------------------------
0 5,917 0 5,917
--------------------------------------------------
COMPUTERS/COMPUTER HARDWARE -
0.2%
Hewlett-Packard Co., 7.15%,
6/15/05 4,500 4,500 4,549 4,549
--------------------------------------------------
4,549 0 0 4,549
--------------------------------------------------
CONSUMER PRODUCTS - 0.3%
Procter & Gamble Co., 6.60%,
12/15/04 5,890 0 0 5,890 5,867 0 0 5,867
--------------------------------------------------
5,867 0 0 5,867
--------------------------------------------------
DEFENSE/AEROSPACE - 0.5%
Lockheed Martin Corp., 8.20%,
12/1/09 8,530 8,530 8,879 8,879
Raytheon Co., 144A, 7.90%,
3/1/03 3,270 3,270 3,320 3,320
--------------------------------------------------
3,320 8,879 0 12,199
--------------------------------------------------
ELECTRICAL UTILITY / UTILITIES
- - 0.6%
Cogentrix Energy Inc., 8.75%,
10/15/08 506 506 507 507
Dominion Resources Inc., Series
2010-A, 8.13%, 6/15/10 4,025 4,025 4,150 4,150
Dominion Resources Inc./VA,
Series 2000 B, 7.63%, 7/15/05 7,940 7,940 8,027 8,027
--------------------------------------------------
0 12,685 0 12,685
--------------------------------------------------
ENERGY RESERVES & PRODUCTION -
(z)
Lasmo (USA) Inc., 6.75%,
12/15/07 500 500 477 477
--------------------------------------------------
0 477 0 477
--------------------------------------------------
FINANCIAL SERVICES - 3.7%
500 Grant St. Association,
144A, Series 1999 A, 6.46%,
12/1/08 5,493 5,493 5,257 5,257
CitiFinancial, 8.70%, 6/15/10 3,400 3,400 3,681 3,681
Comdisco Inc., 9.50%, 8/15/03 4,205 4,205 3,154 3,154
See Notes to Pro Forma Financial Statements
20
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
THE U.S. FORMA THE U.S. FORMA
JPMORGAN FIXED PRO COMBINED JPMORGAN FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND I(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND I(1) PORTFOLIO ADJUSTMENTS BOND FUND
----------------------------------------------- --------------------------------------------------
Comdisco, Inc., 6.38%, 11/30/01 3,490 3,490 2,928 2,928
ERAC USA Finance Co., 144A,
6.38%, 5/15/03 5,000 5,000 4,795 4,795
FleetBoston Financial Corp.,
7.25%, 9/15/05 4,080 4,080 4,102 4,102
Ford Motor Credit Co., 7.25%,
1/15/03 135 135 135 135
Ford Motor Credit Co., 7.38%,
10/28/09 1,010 1,010 981 981
Heller Financial, Inc., 8.00%,
6/15/05 5,000 5,000 5,071 5,071
Household Finance Corp., 8.00%,
5/9/05 6,500 6,500 6,647 6,647
Keycorp Institutional Capital,
Series 1996 B, 8.25%, 12/15/26 2,200 2,200 2,001 2,001
Lehman Brothers Holdings, Inc.,
8.25%, 6/15/07 5,000 5,000 5,104 5,104
McKesson Financial of Canada,
144A, 6.55%, 11/1/02 4,475 4,475 4,292 4,292
National Rural Utilities
Cooperative Finance Corp.,
5.50%, 1/15/05 5,000 5,000 4,719 4,719
Newcourt Credit Group Inc.,
6.88%, 2/16/05 6,000 6,000 5,796 5,796
NGC Corp. Capital Trust, Series
1997 B, 8.32%, 6/1/27 8,835 8,835 7,776 7,776
Oil Purchase Company, 144A,
7.10%, 4/30/02 1,835 1,835 1,752 1,752
Provident Financing Trust I,
7.41%, 3/15/38 1,765 1,765 1,304 1,304
Washington Mutual Financial
Corp., 8.25%, 6/15/05 17,500 17,500 18,059 18,059
--------------------------------------------------
18,996 68,557 0 87,553
--------------------------------------------------
FOOD & BEVERAGE - 0.4%
Smithfield Foods Inc., 7.63%,
2/15/08 1,410 1,410 1,280 1,280
Coca-Cola Enterprises, 7.13%,
9/30/09 3,975 3,975 3,901 3,901
Conagra Foods, Inc., 7.88%,
9/15/10 4,320 4,320 4,385 4,385
--------------------------------------------------
8,286 1,280 0 9,566
--------------------------------------------------
FOREST PRODUCTS & PAPER - 0.5%
Champion International Corp.,
7.10%, 9/1/05 5,000 5,000 4,899 4,899
International Paper Co., 144A,
8.13%, 7/8/05 5,900 5,900 6,072 6,072
--------------------------------------------------
6,072 4,899 0 10,971
--------------------------------------------------
GAS & WATER UTILITIES - 0.2%
United Utilities Plc, 6.88%,
8/15/28 6,970 6,970 5,544 5,544
--------------------------------------------------
0 5,544 0 5,544
--------------------------------------------------
INSURANCE - 0.4%
Conseco, Inc., 8.50%, 10/15/02 6,025 6,025 4,700 4,700
GE Global Insurance Holding
Corp., 7.75%, 6/15/30 5,000 5,000 5,040 5,040
--------------------------------------------------
9,740 0 0 9,740
--------------------------------------------------
MEDIA - 0.8%
Adelphia Communications Corp.,
9.38%, 11/15/09 3,125 3,125 2,664 2,664
Clear Channel Communications,
7.88%, 6/15/05 5,540 5,540 5,583 5,583
Fox Sports Networks LLC, 8.88%,
8/15/07 2,500 2,500 2,513 2,513
Lamar Media Corp., 8.63%,
9/15/07 1,900 1,900 1,853 1,853
Time Warner Entertainment Co.
LP, 8.38%, 3/15/23 5,000 5,000 5,242 5,242
--------------------------------------------------
5,242 12,612 0 17,854
--------------------------------------------------
MEDICAL PROVIDERS & SERVICES -
(z)
Mariner Post-Acute Network
Inc., Series B, 9.50%,
4/1/06(d)+ 2,000 2,000 10 10
--------------------------------------------------
0 10 0 10
--------------------------------------------------
MOTOR VEHICLES & PARTS /
AUTOMOTIVE - 0.2%
DaimlerChrysler NA Holding
Corp., 6.90%, 9/1/04 2,500 2,500 2,467 2,467
TRW, Inc., 6.45%, 6/15/01 3,850 3,850 3,831 3,831
--------------------------------------------------
3,831 2,467 0 6,298
--------------------------------------------------
MULTI-INDUSTRY - 0.2%
Cendant Corporation, 7.75%,
12/1/03 5,000 5,000 4,893 4,893
--------------------------------------------------
0 4,893 0 4,893
--------------------------------------------------
OIL SERVICES - 1.3%
Amerada Hess Corp., 7.38%,
10/1/09 6,150 6,150 6,135 6,135
Enron Corp., 144A, 7.11%,
12/12/00, resets quarterly off
the 3-month LIBOR plus 0.45%
with no caps 15,000 15,000 14,993 14,993
Enron Corp., 7.88%, 6/15/03 4,500 4,500 4,591 4,591
Express Pipeline LP, 144A,
Series 1998 B, 7.39%, 12/31/17 1,497 1,497 1,278 1,278
See Notes to Pro Forma Financial Statements
21
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
THE U.S. FORMA THE U.S. FORMA
JPMORGAN FIXED PRO COMBINED JPMORGAN FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND I(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND I(1) PORTFOLIO ADJUSTMENTS BOND FUND
----------------------------------------------- --------------------------------------------------
Phillips Petroleum Co., 8.75%,
5/25/10 4,000 4,000 4,363 4,363
Williams Cos. Inc., 6.20%,
8/1/02 350 350 344 344
--------------------------------------------------
10,726 20,978 0 31,704
--------------------------------------------------
RAILROADS - 0.3%
Burlington Northern Railroad
Co., 7.33%, 6/23/10 1,601 1,601 1,605 1,605
Canadian National Railway Co.,
7.00%, 3/15/04 5,350 5,350 5,287 5,287
--------------------------------------------------
0 6,892 0 6,892
--------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS -
(z)
Felcor Lodging LP, 144A, 9.50%,
9/15/08 830 830 820 820
--------------------------------------------------
0 820 0 820
--------------------------------------------------
RETAILING - 0.2%
Wal-Mart Stores, Inc., 6.88%,
8/10/09 5,175 5,175 5,139 5,139
--------------------------------------------------
5,139 0 0 5,139
--------------------------------------------------
SEMICONDUCTOR - 0.1%
Charter Communications
Holdings, LLC/ Charter
Communications Holdings Capital
Corp., 8.25%, 4/1/07 3,125 3,125 2,797 2,797
--------------------------------------------------
0 2,797 0 2,797
--------------------------------------------------
TELEPHONE / TELECOMMUNICATIONS
- - 1.1%
Global Crossing Holding
Limited, 9.13%, 11/15/06 4,125 4,125 3,939 3,939
MCI Worldcom, Inc., 7.55%,
4/1/04 7,000 7,000 7,058 7,058
McLeodUSA Inc., 9.25%, 7/15/07 3,000 3,000 2,790 2,790
Qwest Capital Funding Inc.,
6.88%, 7/15/28 700 700 615 615
Sprint Capital Corp., 5.88%,
5/1/04 10,000 10,000 9,518 9,518
Williams Communications Group,
10.70%, 10/1/07 2,000 2,000 1,720 1,720
WorldCom, Inc., 6.40%, 8/15/05 500 500 482 482
XO Communications Inc., 9.63%,
10/1/07 1,000 1,000 835 835
--------------------------------------------------
7,058 19,899 0 26,957
--------------------------------------------------
TRUCKING & SHIPPING & AIR
FREIGHT - 0.3%
Atlantic Express, 10.75%, 2/1/04 1,900 1,900 1,634 1,634
FedEx Corp., Series 1999-1,
Class C, 8.25%, 1/15/19 4,682 4,682 4,729 4,729
--------------------------------------------------
0 6,363 0 6,363
--------------------------------------------------
--------------------------------------------------
TOTAL CORPORATE BONDS & NOTES - 122,337 206,408 0 328,745
--------------------------------------------------
PREFERRED STOCKS - 0.2%
ENTERTAINMENT - 0.2%
AT&T Corp., 10.00%, 5/31/45 150 150 3,797 3,797
--------------------------------------------------
TOTAL PREFERRED STOCKS - 0 3,797 0 3,797
--------------------------------------------------
FOREIGN CORPORATE BONDS - 3.5%
BANKS - 0.2%
Barclays Bank Plc, 144A, 8.55%,
9/29/49 4,000 4,000 4,027 4,027
--------------------------------------------------
0 4,027 0 4,027
--------------------------------------------------
ELECTRICAL EQUIPMENT - 0.1%
Legrand S.A., 8.50%, 2/15/25 1,785 1,785 1,864 1,864
--------------------------------------------------
0 1,864 0 1,864
--------------------------------------------------
ELECTRICAL UTILITY / UTILITIES
- - 0.2%
Israel Electronic Corp., 144A,
MTN, 8.25%, 10/15/09 6,000 6,000 5,739 5,739
--------------------------------------------------
5,739 5,739
--------------------------------------------------
FINANCIAL SERVICES - 0.4%
HSBC Capital Funding LP, 144A,
10.18%, 12/29/49,
resets quarterly off the 3-month LIBOR
plus 4.98% with no caps 7,220 7,220 7,901 7,901
Montell Finance Co. B.V., 144A,
8.10%, 3/15/27 2,250 2,250 2,023 2,023
--------------------------------------------------
0 9,924 0 9,924
--------------------------------------------------
See Notes to Pro Forma Financial Statements
22
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
THE U.S. FORMA THE U.S. FORMA
JPMORGAN FIXED PRO COMBINED JPMORGAN FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND I(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND I(1) PORTFOLIO ADJUSTMENTS BOND FUND
----------------------------------------------- --------------------------------------------------
INFORMATION SERVICES - 0.4%
Marconi Corporation Plc, 8.38%,
9/15/30 8,760 8,760 8,354 8,354
--------------------------------------------------
0 8,354 0 8,354
--------------------------------------------------
MOTOR VEHICLES & PARTS /
AUTOMOTIVE - 0.2%
Daimler Chrysler NA Holding
Corp., 8.00%, 6/15/10 5,600 5,600 5,689 5,689
--------------------------------------------------
5,689 0 0 5,689
--------------------------------------------------
OIL SERVICES - 0.4%
PEMEX Finance LTD, 144A, 9.03%,
2/15/11 2,560 2,560 2,678 2,678
Repsol International Finance
BV, 7.45%, 7/15/05 6,885 6,885 6,920 6,920
--------------------------------------------------
9,598 0 0 9,598
--------------------------------------------------
TELEPHONE - 1.6%
Deutsche Telekom International
Finance, 8.25%, 6/15/30 10,000 10,000 10,205 10,205
Metronet Communications Corp.,
144A, SUB, 0.0%, 6/15/03 4,000 4,000 3,201 3,201
Microcell Telecommunications
Inc., Series B, 11.99%,
6/1/06(y) 300 300 288 288
Telefonica Europe B.V., 8.25%,
9/15/30 12,150 12,150 12,441 12,441
Telefonica Europe BV, 7.75%,
9/15/10 6,000 6,000 6,024 6,024
Vodafone AirTouch PLC, 144A,
7.63%, 2/15/05 5,200 5,200 5,275 5,275
--------------------------------------------------
14,500 22,935 0 37,435
--------------------------------------------------
--------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS - 35,526 47,104 0 82,630
--------------------------------------------------
MORTGAGE PASS THRU - 22.0%
FHLMC, 12.50%, 8/1/14 1 1 1 1
FHLMC, 6.00%, 3/1/11 to 4/1/11 1,033 1,033 1,001 1,001
FNMA, 6.00%, 12/1/28 to 2/1/29 58,466 58,466 54,836 54,836
FNMA, 6.50%, 1/1/28 to 9/1/29 11,407 11,407 10,966 10,966
FNMA, 7.00%, 7/1/28 to 10/1/29 3,179 3,179 3,115 3,115
FNMA, 7.50%, 5/1/30 167 167 167 167
FNMA, 8.00%, 8/1/22 to 6/1/27 1,899 1,899 1,924 1,924
FNMA, TBA, 6.50%, 11/1/30 8,010 8,010 7,697 7,697
FNMA, TBA, 7.00%, 11/1/15 71,310 71,310 70,864 70,864
FNMA, TBA, 7.00%, 9/1/29 107,234 107,234 105,056 105,056
FNMA, TBA, 7.50%, 12/1/30 157,605 157,605 157,211 157,211
FNMA, 6.50, 6/1/29 7,848 7,848 7,541 7,541
FNMA, 6.50, 9/1/14 1,981 1,981 1,940 1,940
FNMA, 7.50%, 7/1/30 7,430 7,430 7,419 7,419
FNMA, 7.50%, 8/1/15 1,968 1,968 1,982 1,982
GNMA, 6.50%, 6/15/28 to 12/15/28 51,325 51,325 49,554 49,554
GNMA, 7.00%, 12/15/08 194 194 195 195
GNMA, 7.50%, 1/15/27 to 2/15/27 8,480 8,480 8,516 8,516
GNMA, 8.50%, 5/15/27 218 218 224 224
GNMA, 9.00%, 12/15/19 63 63 66 66
GNMA, TBA, 7.00%, 11/1/30 28,460 28,460 28,051 28,051
--------------------------------------------------
TOTAL MORTGAGE PASS THRU - 18,882 499,445 0 518,327
--------------------------------------------------
PRIVATE PLACEMENTS - 0.7%
CO-OP APARTMENTS - 0.7%
180 East End Avenue Note,
secured by first mortgage and
agreement on co-op apartment
building - 4,415 4,415 4,176 4,176
in New York City,6.88%,
1/1/29(f)
200 East 57th Street, secured
by first mortgage and agreement
on co-op apartment building - 10,900 10,900 10,110 10,110
in New York City, 6.50%,
1/1/14(f)
81 Irving Place Note, secured
by first mortgage and agreement
on co-op apartment building - 3,239 3,239 3,071 3,071
in New York City, 6.95%,
1/1/29(f)
--------------------------------------------------
TOTAL PRIVATE PLACEMENTS - 0 17,357 0 17,357
--------------------------------------------------
See Notes to Pro Forma Financial Statements
23
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
THE U.S. FORMA THE U.S. FORMA
JPMORGAN FIXED PRO COMBINED JPMORGAN FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND I(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND I(1) PORTFOLIO ADJUSTMENTS BOND FUND
----------------------------------------------- --------------------------------------------------
SOVEREIGN GOVERNMENTS &
AGENCIES - 0.4%
Province of Quebec, 6.50%,
1/17/06 4,700 4,700 4,610 4,610
Quebec Province, 7.50%, 9/15/29 4,200 4,200 4,259 4,259
--------------------------------------------------
TOTAL SOVEREIGN GOVERNMENTS AND
AGENCIES - 4,259 4,610 0 8,869
--------------------------------------------------
U.S. GOVERNMENT AGENCY
SECURITIES - 8.8%
FHLB, 4.88%, 1/22/02 8,000 8,000 7,849 7,849
FHLMC, 6.88%, 9/15/10(s) 61,175 61,175 61,959 61,959
FHLMC, 5.00%, 1/15/04 8,000 8,000 7,654 7,654
FHLMC,5.13%, 10/15/08 3,500 3,500 3,165 3,165
FNMA, 7.00%, 7/15/05(s) 59,297 59,297 60,418 60,418
FNMA, 7.13%, 6/15/10(s) 29,271 29,271 30,154 30,154
FNMA, 5.13%, 2/13/04 9,800 9,800 9,405 9,405
FNMA,5.75%, 4/15/03 7,500 7,500 7,383 7,383
FNMA, 5.88%, 4/23/04 3,500 3,500 3,392 3,392
FNMA, 6.00%, 5/15/08 7,000 7,000 6,723 6,723
FNMA, 6.63%, 9/15/09 10,000 10,000 9,941 9,941
--------------------------------------------------
TOTAL U. S. GOVERNMENT AGENCY
SECURITIES - 55,512 152,531 0 208,043
--------------------------------------------------
U.S. TREASURY SECURITIES - 14.4%
U.S. Treasury Bonds, 5.25%,
2/15/29 7,005 7,005 6,376 6,376
U.S. Treasury Bonds, 6.75%,
8/15/26 40,743 40,743 44,856 44,856
U.S. Treasury Bonds, 8.00%,
11/15/21 4,150 4,150 5,129 5,129
U.S. Treasury Bonds, 8.88%,
2/15/19 70,195 70,195 92,252 92,252
U.S. Treasury Notes, 5.75%,
8/15/10(s) 50,965 50,965 50,917 50,917
U.S. Treasury Notes, 6.75%,
5/15/05(s) 330 330 342 342
U.S. Treasury Notes, 6.88%,
5/15/06(s) 14,950 14,950 15,665 15,665
U.S. Treasury STRIPS, PO,
6.47%, 11/15/15 38,155 38,155 15,604 15,604
U.S. Treasury Notes & Bonds,
5.25%, 2/15/29 1,500 1,500 1,365 1,365
U.S. Treasury Notes & Bonds,
5.88%, 11/15/05 23,000 23,000 23,079 23,079
U.S. Treasury Notes & Bonds,
6.13%, 8/15/29 6,000 6,000 6,214 6,214
U.S. Treasury Notes & Bonds,
6.25%, 8/31/02 9,000 9,000 9,035 9,035
U.S. Treasury Notes & Bonds,
6.5%, 5/31/02 11,000 11,000 11,065 11,065
U.S. Treasury Notes & Bonds,
6.5%, 8/15/05 25,290 25,290 25,990 25,990
U.S. Treasury Notes & Bonds,
8.13%, 8/15/19 26,000 26,000 32,126 32,126
--------------------------------------------------
TOTAL U.S. TREASURY SECURITIES - 108,874 231,140 0 340,014
--------------------------------------------------
SHORT-TERM INVESTMENTS - 17.5%
COMMERCIAL PAPER - 3.4%
Morgan Stanley, 6.58%,
11/1/00(s) 50,000 50,000 49,991 49,991
Salomon Smith Barney 6.60%,
11/1/00(s) 30,719 30,719 30,713 30,713
--------------------------------------------------
0 80,704 80,704
--------------------------------------------------
INVESTMENT COMPANIES - 13.7%
J.P. Morgan Institutional Prime
Money Market Fund(s)* 320,834 (499)(a) 320,335 320,834 (499)(a) 320,335
--------------------------------------------------
0 320,834 (499) 320,335
--------------------------------------------------
U.S. TREASURY SECURITIES - 0.1%
U.S. Treasury Notes, 5.63%,
11/30/00(s) 2,700 2,700 2,699 2,699
--------------------------------------------------
0 2,699 0 2,699
--------------------------------------------------
REPURCHASE AGREEMENTS - 0.3%
Greenwich Capital Markets,
Inc., 6.55%, due 11/01/00,
(dated 10/31/00, proceeds
$6,706, secured by FNMA,
$6,805, 6.75%, due 6/18/21;
value $6,840) 6,705 6,705 6,705 6,705
--------------------------------------------------
6,705 0 6,705
--------------------------------------------------
See Notes to Pro Forma Financial Statements
24
SHARES/PRINCIPAL AMOUNT MARKET VALUE
----------------------- ------------
PRO PRO
THE U.S. FORMA THE U.S. FORMA
JPMORGAN FIXED PRO COMBINED JPMORGAN FIXED PRO COMBINED
BOND INCOME FORMA JPMORGAN BOND INCOME FORMA JPMORGAN
FUND I(1) PORTFOLIO ADJUSTMENTS BOND FUND FUND I(1) PORTFOLIO ADJUSTMENTS BOND FUND
----------------------------------------------- --------------------------------------------------
TOTAL INVESTMENT SECURITIES -
(COST $2,358,612) 383,324 1,972,306 (499) 2,355,131
FUTURES CONTRACTS
UNDERLYING
FACE
AMOUNT NET UNREALIZED
PURCHASED EXPIRATION DATE AT VALUE NUMBER OF CONTRACTS APPRECIATION (DEPRECIATION)
- --------- --------------- ----------- --------------------- ----------------------------------------
U.S. Two-Year Treasury Note December 2000 $84,052,500 420 420 (160,122) (160,122)
U.S. Five-Year Treasury Note December 2000 35,542,688 353 353 334,510 334,510
----------------------------------------
- 174,388 - 174,388
----------------------------------------
SOLD
- ----
U.S. Ten-Year Treasury Note December 2000 112,283,990 1,115 1,115 (746,864) (746,864)
U.S. Five-Year Treasury Note December 2000 13,279,219 133 133 25,956 25,956
----------------------------------------
- (720,908) - (720,908)
----------------------------------------
FHLB - Feneral Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
FRN - Floating Rate Note. The maturity date is the actual maturity date; the
rate shown is the rate in effect at October 31, 2000.
GNMA - Government National Mortgage Association
LIBOR - London Interbank Offered Rate
MTN - Medium Term Note
PO - Principal only resets - The frequency with which a security's coupon
changes, based on current market conditions or an underlying index.
SEQ - Sequential Payor
STRIPS - Separate Trading of Registered Interest and Principal of Securities.
SUB - Step-up Bond. The maturity date shown is the earlier of the call date of
maturity date; the reate shown is the rate in ecfect at October 31, 2000.
TBA - Securities purchased (sold) on a forward commitment basis with an
approximate principal amount and no definite maturity date. The actual principal
amount and maturity will be determined upon settlement.
144A - Securities restricted for resale to Qualified Institutional Buyers
(a) Reflects the redemption of short-term securities of the J.P. Morgan U.S.
Fixed Income - Advisor Series
(d) Defaulted security
(f) Illiquid and fair valued security. Approximately $17,356,656 or 0.9% of the
market value of the securities have been valued at fair value.
(s) Security is fully or partially segregated with custodian as collateral for
futures or with brokers as initial margin for futures contracts.
(y) Yield to maturity
(z) Category is less than 0.05% of total investment securities.
* Money Market Mutual Fund registered under the Investment Act of 1940, as
amended, and advised by J.P. Morgan Investment Management, Inc.
+ Non-income producing security
(1) Formerly Chase Vista Select Intermediate Bond Fund.
See Notes to Pro Forma Financial Statements
25
J.P. MORGAN BOND FUND/ J.P. MORGAN INSTITUTIONAL BOND FUND/
J.P. MORGAN INSTITUTIONAL BOND FUND - ULTRA/ THE
U.S. FIXED INCOME PORTFOLIO / JPMORGAN INTERMEDIATE BOND FUND (1)
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AS OF OCTOBER 31, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN THE U.S. FIXED
BOND FUND INSTITUTIONAL INSTITUTIONAL INCOME
BOND FUND BOND FUND - ULTRA PORTFOLIO
----------- ------------- ----------------- --------------
ASSETS:
Investments at Value $ - $ - $ - $ 1,972,306
Investment in The U.S. Fixed Income Portfolio, at value 242,750 909,964 469,196 -
Cash - - - -
Receivable for Investment Sold - - - 215,450
Dividend and Interest Receivable - - - 16,802
Receivable for Shares of Beneficial Interest Sold 407 726 37 -
Variation Margin Receivable - - 297
Receivable for Expense Reimbursements - - - -
Prepaid Trustees' Fees and Expenses 1 1 1 6
Deferred Organization Expense - - 3 -
Prepaid Expenses and Other Assets 1 2 - 57
------------ ------------ ------------ ------------
TOTAL ASSETS 243,159 910,693 469,237 2,204,918
------------ ------------ ------------ ------------
LIABILITIES:
Securities Purchased Payable - - - 581,888
Payable for Shares of Beneficial Interest Redeemed 2,719 908 2,414 -
Dividends Payable to Shareholders 154 2,229 688 -
Advisory Fee Payable - - - 411
Shareholder Servicing Fee Payable 51 77 20 -
Administration Services Fee Payable 5 18 10 33
Due to Custodian - - - 52
Administration Fee Payable - - - -
Fund Services Fee Payable 1 1 1 1
Accrued Expenses and Other Liabilities 49 49 78 124
------------ ------------ ------------ ------------
TOTAL LIABILITIES 2,979 3,282 3,211 582,509
------------ ------------ ------------ ------------
NET ASSETS:
Paid-in Capital 248,018 950,359 476,531 -
Undistributed (Distributions in Excess of) Net Investment Income 315 787 923 -
Accumulated Net Realized Loss (7,952) (43,481) (10,844) -
Net Unrealized Appreciation (Depreciation) of Investments (201) (254) (584) -
------------ ------------ ------------ ------------
Net Assets $ 240,180 $ 907,411 $ 466,026 1,622,409
============ ============ ============ ============
Shares of beneficial interest outstanding 24,290 96,271 48,475 -
Shares Outstanding - - - -
Net Asset Value Per Share 9.89 9.43 9.61 -
PRO FORMA WITH CONCURRENT REORGANIZATION
J.P. MORGAN INSTITUTIONAL BOND FUND
Shares outstanding
Select - - - -
Institutional - - - -
Agency - - - -
Net Asset Value Per Share
Select - - - -
Institutional - - - -
Agency - - - -
============ ============ ============ ============
Cost of Investments $ - $ - $ - $ 1,972,799
============ ============ ============ ============
PRO FORMA
JPMORGAN COMBINED
INTERMEDIATE PRO FORMA JPMORGAN
BOND FUND (1) ADJUSTMENTS BOND FUND
ASSETS:
Investments at Value $ 383,324 $ (499)(f) $ 2,355,131
Investment in The U.S. Fixed Income Portfolio, at value - (1,621,910)(a) -
Cash 1 - 1
Receivable for Investment Sold - - 15,450
Dividend and Interest Receivable 5,702 - 22,504
Receivable for Shares of Beneficial Interest Sold 400 - 1,570
Variation Margin Receivable - - 297
Receivable for Expense Reimbursements - 3 (b) 3
Prepaid Trustees' Fees and Expenses - - 9
Deferred Organization Expense - (3)(b) -
Prepaid Expenses and Other Assets 10 - 70
------------ ------------ ------------
TOTAL ASSETS 389,437 (1,622,409) 2,595,035
------------ ------------ ------------
LIABILITIES:
Securities Purchased Payable - - 581,888
Payable for Shares of Beneficial Interest Redeemed 24 - 6,065
Dividends Payable to Shareholders 1,933 - 5,004
Advisory Fee Payable 98 - 509
Shareholder Servicing Fee Payable 82 - 230
Administration Services Fee Payable - - 66
Due to Custodian 7 - 59
Administration Fee Payable 49 - -
Fund Services Fee Payable - - -
Accrued Expenses and Other Liabilities 179 - 479
------------ ------------ ------------
TOTAL LIABILITIES 2,372 - 594,353
------------ ------------ ------------
NET ASSETS:
Paid-in Capital 402,912 2,077,820
Undistributed (Distributions in Excess of) Net Investment Income (58) - 1,967
Accumulated Net Realized Loss (13,300) - (75,577)
Net Unrealized Appreciation (Depreciation) of Investments (2,489) - (3,528)
------------ ------------ ------------
Net Assets $ 387,065 $ (1,622,409) $ 2,000,682
============ ============ ============
Shares of beneficial interest outstanding - (169,086)(c) -
Shares Outstanding 40,050 (40,050)(d) -
Net Asset Value Per Share 9.66 -
PRO FORMA WITH CONCURRENT REORGANIZATION
JPMORGAN INSTITUTIONAL BOND FUND
Shares outstanding
Select - 66,541(e) 66,541
Institutional - 96,271(e) 96,271
Agency - 49,443(e) 49,443
Net Asset Value Per Share
Select - - 9.43
Institutional - - 9.43
Agency - - 9.43
============ ============ ============
Cost of Investments $ 385,813 $ - $ 2,358,612
============ ============ ============
(a) Reflects reallocation of investment from the feeder funds to
master portfolio.
(b) Write-off of deferred organization expenses of the portfolio.
(c) Reallocation of feeder fund's beneficial interest to Class A, Select,
Institutional, and Agency Shares due to the Concurrent Reorganization.
(d) Reallocation of Chase Vista Select Intermediate Bond Fund shares to
Institutional Shares due to the Concurrent Reorganization.
(e) Reflects the additional number of shares outstanding due to the Concurrent
Reorganization.
(f) Reflects the redemption in short-term securities of the J.P. Morgan Bond
Fund- Advisor Series.
(1) Formerly Chase Vista Select Intermediate Bond Fund
See Notes to Pro Forma Financial Statements
JP MORGAN BOND FUND / JP MORGAN INSTITUTIONAL BOND FUND /
JP MORGAN INSTITUTIONAL BOND FUND - ULTRA / THE US
FIXED INCOME PORTFOLIO / JPMORGAN INTERMEDIATE BOND FUND (1)
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED OCTOBER 31, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN THE U.S. FIXED
BOND FUND INSTITUTIONAL INSTITUTIONAL INCOME
BOND FUND BOND FUND - PORTFOLIO
ULTRA
INCOME:
Allocated Investment Income From Portfolio $ 15,598 $ 64,228 $ 26,181 $ -
Interest Income - - - 84,404
Dividend Income from Affiliated Investments (includes
reimbursement from affiliate of $719) - - - 20,928
Dividend income - - - 857
Allocated Portfolio Expenses (796) (3,281) (1,162) -
------------------------------------------------------------------
Investment Income 14,802 60,947 25,019 106,189
------------------------------------------------------------------
EXPENSES:
Advisory Fee - - - 4,648
Administrative Services Fee 55 228 93 377
Shareholder Servicing Fee 567 935 192 -
Insurance Expense - - - 4
Custodian Fees and Expenses - - - 265
Registration Fees 27 32 70 -
Transfer Agent Fees 42 24 20 -
Amortization of Organizational Expenses - - - -
Professional Fees 13 17 14 62
Fund Services Fee 4 15 6 24
Financial and Fund Accounting Services Fee - 24 24 -
Trustees' Fees and Expenses 3 11 4 18
Printing Expenses 8 4 12 11
Administration Fee 2 11 4 11
Distribution Fee - - 1 -
Miscellaneous 35 35 15 -
------------------------------------------------------------------
Total Expenses 756 1,336 455 5,420
------------------------------------------------------------------
Less: Amounts Waived
Less: Reimbursement of Expenses - - (276) -
------------------------------------------------------------------
Net Expenses 756 1,336 179 5,420
------------------------------------------------------------------
------------------------------------------------------------------
Net Investment Income 14,046 59,611 24,840 100,769
------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (2,881) (16,527) (1,248) (33,777)
Futures Contracts 3,486
Foreign Currency Contracts and Transactions 9,635
------------------------------------------------------------------
Net Realized (Loss) (2,881) (16,527) (1,248) (20,656)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 3,149 16,693 3,410 24,018
Futures Contracts 110
Foreign Currency Contacts and Translations (876)
------------------------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) 3,149 16,693 3,410 23,252
------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 14,314 $ 59,777 $ 27,002 $ 103,365
==================================================================
JPMORGAN PRO FORMA PRO FORMA
INTERMEDIATE ADJUSTMENTS COMBINED
BOND FUND (1) JPMORGAN
BOND FUND
INCOME:
Allocated Investment Income From Portfolio $ - ($106,007)(c) -
Interest Income 24,517 (1)(h) 108,920
Dividend Income from Affiliated Investments (includes
reimbursement from affiliate of $719) - 20,928
Dividend income - - 857
Allocated Portfolio Expenses - 5,239(b) -
----------------------------------------------------
Investment Income 24,517 (100,769) 130,705
----------------------------------------------------
EXPENSES:
Advisory Fee 1,137 - 5,785
Administrative Services Fee 568 1,564(a) 2,885
Shareholder Servicing Fee 791 156(a) 2,641
Insurance Expense - - 4
Custodian Fees and Expenses 92 (88)(f,g) 269
Registration Fees 10 - 139
Transfer Agent Fees 18 - 104
Amortization of Organizational Expenses - 3(e) 3
Professional Fees 33 (63)(g) 76
Fund Services Fee - - 49
Financial and Fund Accounting Services Fee - (48)(f) -
Trustees' Fees and Expenses 19 - 55
Printing Expenses 24 (20)(g) 39
Administration Fee - - 28
Distribution Fee - - 1
Miscellaneous 20 - 105
----------------------------------------------------
Total Expenses 2,712 1,504 - 12,183
----------------------------------------------------
Less: Amounts Waived (1,504) (a) (1,504)
Less: Reimbursement of Expenses (73) - (349)
----------------------------------------------------
Net Expenses 2,639 - 10,330
----------------------------------------------------
----------------------------------------------------
Net Investment Income 21,878 (100,769) 120,374
----------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (7,915) 20,656(d) (41,692)
Futures Contracts 3,486
Foreign Currency Contracts and Transactions 9,635
----------------------------------------------------
Net Realized (Loss) (7,915) 20,656 (28,571)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 7,215 (23,252)(d) 31,233
Futures Contracts 110
Foreign Currency Contacts and Translations (876)
----------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) 7,215 (23,252) 30,467
----------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 21,178 (103,365) $ 122,270
====================================================
(a) Reflects adjustments to investment advisory fee, administrative fees
and shareholder servicing fees and/or related waivers based on the
surviving Fund's revised fee schedule.
(b) Reflects the elimination of master portfolio expenses which have been
disclosed under feeder expenses.
(c) Reallocation of investments income to feeder funds
(d) Reallocation of realized and unrealized loss to feeder funds.
(e) Reflects write-off of deferred organization expenses of the portfolio.
(f) Reclassification of fund accounting into Custody charge.
(g) Reduction reflects expected benefit from combined operations.
(h) Reflects the elimination of J.P. Morgan - Advisor Series allocated income.
(1) Formerly Chase Vista Select Intermediate Bond Fund
JP MORGAN BOND FUND / JP MORGAN INSTITUTIONAL BOND FUND /
JP MORGAN INSTITUTIONAL BOND FUND - ULTRA / THE US FIXED INCOME PORTFOLIO
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED OCTOBER 31, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN
BOND FUND INSTITUTIONAL INSTITUTIONAL
BOND FUND BOND FUND
- ULTRA
INCOME:
Allocated Investment Income From Portfolio $ 15,598 $ 64,228 $ 26,181
Interest Income - - -
Dividend Income from Affiliated Investments (includes
reimbursement from affiliate of $719) - - -
Dividend income - - -
Allocated Portfolio Expenses (796) (3,281) (1,162)
----------------------------------------------------
Investment Income 14,802 60,947 25,019
----------------------------------------------------
EXPENSES:
Advisory Fee - - -
Administrative Services Fee 55 228 93
Shareholder Servicing Fee 567 935 192
Custodian Fees and Expenses - - -
Registration Fees 27 32 70
Transfer Agent Fees 42 24 20
Professional Fees 13 17 14
Fund Services Fee 4 15 6
Financial and Fund Accounting Services Fee - 24 24
Trustees' Fees and Expenses 3 11 4
Printing Expenses 8 4 12
Administration Fee 2 11 4
Insurance Expense - - -
Amortization of Organizational Expenses - - -
Distribution Fee - - 1
Miscellaneous 35 35 15
----------------------------------------------------
Total Expenses 756 1,336 455
----------------------------------------------------
Less: Amounts Waived - - -
Less: Reimbursement of Expenses - - (276)
----------------------------------------------------
Net Expenses 756 1,336 179
----------------------------------------------------
----------------------------------------------------
Net Investment Income 14,046 59,611 24,840
----------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (2,881) (16,527) (1,248)
Futures Contracts - - -
Foreign Currency Contracts and Transactions - - -
----------------------------------------------------
Net Realized (Loss) (2,881) (16,527) (1,248)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 3,149 16,693 3,410
Futures Contracts - - -
Foreign Currency Contacts and Translations - - -
----------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) 3,149 16,693 3,410
----------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 14,314 $ 59,777 $ 27,002
====================================================
PRO FORMA
THE U.S. PRO FORMA COMBINED
FIXED INCOME ADJUSTMENTS JPMORGAN
PORTFOLIO BOND FUND
INCOME:
Allocated Investment Income From Portfolio - $ (106,007)(c) -
Interest Income 84,404 (1)(h) 84,403
Dividend Income from Affiliated Investments (includes
reimbursement from affiliate of $719) 20,928 - 20,928
Dividend income 857 - 857
Allocated Portfolio Expenses - 5,239(b) -
----------------------------------------------------
Investment Income 106,189 (100,769) 106,188
----------------------------------------------------
EXPENSES:
Advisory Fee 4,648 - 4,648
Administrative Services Fee 377 1,564(a) 2,317
Shareholder Servicing Fee - - 1,694
Custodian Fees and Expenses 265 5(f,g) 270
Registration Fees - - 129
Transfer Agent Fees - - 86
Professional Fees 62 (33)(g) 73
Fund Services Fee 24 - 49
Financial and Fund Accounting Services Fee - (48)(f) -
Trustees' Fees and Expenses 18 - 36
Printing Expenses 11 (10)(g) 25
Administration Fee 11 - 28
Insurance Expense 4 - 4
Amortization of Organizational Expenses - 3(e) 3
Distribution Fee - - 1
Miscellaneous - - 85
----------------------------------------------------
Total Expenses 5,420 1,481 - 9,448
----------------------------------------------------
Less: Amounts Waived - (1,481)(a) (1,481)
Less: Reimbursement of Expenses - - (276)
----------------------------------------------------
Net Expenses 5,420 - 7,691
----------------------------------------------------
----------------------------------------------------
Net Investment Income 100,769 (100,769) 98,497
----------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (33,777) 20,656(d) (33,777)
Futures Contracts 3,486 - 3,486
Foreign Currency Contracts and Transactions 9,635 - 9,635
----------------------------------------------------
Net Realized (Loss) (20,656) 20,656 (20,656)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 24,018 (23,252)(d) 24,018
Futures Contracts 110 - 110
Foreign Currency Contacts and Translations (876) - (876)
----------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) 23,252 (23,252) 23,252
----------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 103,365 $ (103,365) $ 101,093
====================================================
(a) Reflects adjustments to investment advisory fee, administrative fees and
shareholder servicing fees and/or related waivers based on the surviving
Fund's revised fee schedule.
(b) Reflects the elimination of master portfolio expenses which have been
disclosed under feeder expenses.
(c) Reallocation of investments income to feeder funds
(d) Reallocation of realized and unrealized loss to feeder funds.
(e) Reflects write-off of deferred organization expenses of the portfolio.
(f) Reclassification of fund accounting into Custody charge.
(g) Reduction reflects expected benefit from combined operations.
(h) Reflects the elimination of J.P. Morgan - Advisor Series allocated income.
See Notes to Pro Forma Financial Statements
26
JP MORGAN BOND FUND / JP MORGAN INSTITUTIONAL BOND FUND /
JP MORGAN INSTITUTIONAL BOND FUND - ULTRA/ THE U.S. FIXED INCOME PORTFOLIO
PRO FORMA COMBINING STATEMENT OF ASSETS & LIABILITIES
AS OF OCTOBER 31, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN
BOND FUND INSTITUTIONAL INSTITUTIONAL BOND
BOND FUND FUND - ULTRA
ASSETS:
Investments at Value ( Cost $1,972,799,418) $ - $ - $ -
Investment in The U.S. Fixed Income Portfolio, at value 242,750 909,964 469,196
Cash - - -
Receivable for Investment Sold - - -
Dividend and Interest Receivable - - -
Receivable for Shares of Beneficial Interest Sold 407 726 37
Variation Margin Receivable - - -
Receivable for Expense Reimbursements - - -
Deferred Organization Expense - - 3
Prepaid Trustees' Fees and Expenses 1 1 1
Prepaid Expenses and Other Assets 1 2 -
----------- ---------- ----------
TOTAL ASSETS 243,159 910,693 469,237
----------- ---------- ----------
LIABILITIES:
Securities Purchased Payable - - -
Payable for Shares of Beneficial Interest Redeemed 2,719 908 2,414
Dividends Payable to Shareholders 154 2,229 688
Advisory Fee Payable - - -
Shareholder Servicing Fee Payable 51 77 20
Due to Custodian - - -
Administration Services Fee Payable 5 18 10
Fund Services Fee Payable 1 1 1
Accrued Expenses and Other Liabilities 49 49 78
----------- ---------- ----------
TOTAL LIABILITIES 2,979 3,282 3,211
----------- ---------- ----------
NET ASSETS:
Paid-in Capital 248,018 950,359 476,531
Undistributed (Distributions in Excess of) Net Investment Income 315 787 923
Accumulated Net Realized Loss (7,952) (43,481) (10,844)
Net Unrealized Depreciation of Investments (201) (254) (584)
----------- ---------- ----------
Net Assets $ 240,180 $ 907,411 $ 466,026
=========== ========== ==========
Shares of beneficial interest outstanding 24,290 96,271 48,475
Net Asset Value Per Share 9.89 9.43 9.61
PRO FORMA WITH REORGANIZATION
JPMORGAN BOND FUND
Shares Outstanding
Select - - -
Institutional - - -
Ultra - - -
Net Asset Value Per Share
Select - - -
Institutional - - -
Ultra - - -
=========== ========== ==========
PRO FORMA
COMBINED
THE U.S. FIXED PRO FORMA JPMORGAN
INCOME PORTFOLIO ADJUSTMENTS BOND FUND
ASSETS:
Investments at Value ( Cost $1,972,799,418) $ 1,972,306 $ (499)(e) $ 1,971,807
Investment in The U.S. Fixed Income Portfolio, at value - (1,621,910)(a) -
Cash - - -
Receivable for Investment Sold 215,450 - 215,450
Dividend and Interest Receivable 16,802 - 16,802
Receivable for Shares of Beneficial Interest Sold - - 1,170
Variation Margin Receivable 297 - 297
Receivable for Expense Reimbursements - 3(b) 3
Deferred Organization Expense - (3)(b) -
Prepaid Trustees' Fees and Expenses 6 - 9
Prepaid Expenses and Other Assets 57 - 60
----------- ----------- ------------
TOTAL ASSETS 2,204,918 (1,622,409) 2,205,598
----------- ----------- ------------
LIABILITIES:
Securities Purchased Payable 581,888 - 581,888
Payable for Shares of Beneficial Interest Redeemed - - 6,041
Dividends Payable to Shareholders - - 3,071
Advisory Fee Payable 411 - 411
Shareholder Servicing Fee Payable - - 148
Due to Custodian 52 - 52
Administration Services Fee Payable 33 - 66
Fund Services Fee Payable 1 - 4
Accrued Expenses and Other Liabilities 124 - 300
- -
----------- ----------- ------------
TOTAL LIABILITIES 582,509 - 591,981
----------- ----------- ------------
NET ASSETS:
Paid-in Capital - - 1,674,908
Undistributed (Distributions in Excess of) Net Investment Income - - 2,025
Accumulated Net Realized Loss - - (62,277)
Net Unrealized Depreciation of Investments - - (1,039)
-
----------- ----------- ------------
Net Assets $ 1,622,409 $(1,622,409) $ 1,613,617
=========== =========== ============
Shares of beneficial interest outstanding - (169,036)(c) -
Net Asset Value Per Share - - -
PRO FORMA WITH REORGANIZATION
JPMORGAN BOND FUND
Shares Outstanding
Select - 25,482(d) 25,482
Institutional - 96,271(d) 96,271
Ultra - 49,443(d) 49,443
Net Asset Value Per Share
Select - - 9.43
Institutional - - 9.43
Ultra - - 9.43
=========== =========== ============
(a) Reflects reallocation of investment from the feeder funds to the master
portfolio.
(b) Write-off of deferred organization expenses of the portfolio.
(c) Reallocation of feeder fund's beneficial interest to Class A, Select,
Institutional, and Agency Shares due to the Reorganization
(d) Reflects the additional number of shares outstanding due to the
Reorganization
(e) Reflects the redemption in short-term securities of the J.P. Morgan Bond
Fund- Advisor Series.
See Notes to Pro Forma Financial Statements
27
J.P. MORGAN BOND FUND / J.P. MORGAN INSTITUTIONAL BOND FUND /
J.P. MORGAN INSTITUTIONAL BOND FUND - ULTRA
THE U.S. FIXED INCOME PORTFOLIO / JPMORGAN BOND FUND II (1) /
JPMORGAN INTERMEDIATE BOND FUND (2)
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED OCTOBER 31, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN THE U.S. FIXED
BOND FUND INSTITUTIONAL INSTITUTIONAL INCOME
BOND FUND BOND FUND - ULTRA PORTFOLIO
INCOME:
Allocated Investment Income From Portfolio $ 15,598 $ 64,228 $ 26,181 $ -
Interest Income - - - 84,404
Dividend Income from Affiliated Investments (includes
reimbursement from affiliate of $719) - - - 20,928
Dividend income - - - 857
Allocated Portfolio Expenses (796) (3,281) (1,162) -
--------------------------------------------------------------
Investment Income 14,802 60,947 25,019 106,189
--------------------------------------------------------------
EXPENSES:
Advisory Fee - - - 4,648
Administrative Services Fee 55 228 93 377
Shareholder Servicing Fee 567 935 192 -
Custodian Fees and Expenses - - - 265
Registration Fees 27 32 70 -
Printing Expenses 8 4 12 11
Transfer Agent Fees 42 24 20 -
Professional Fees 13 17 14 62
Trustees' Fees and Expenses 3 11 4 18
Fund Services Fee 4 15 6 24
Financial and Fund Accounting Services Fee - 24 24 -
Administration Fee 2 11 4 11
Insurance Expense - - - 4
Amortization of Organizational Expenses - - - -
Distribution Fee - - 1 -
Miscellaneous 35 35 15 -
--------------------------------------------------------------
Total Expenses 756 1,336 455 5,420
--------------------------------------------------------------
Less: Amounts Waived - - - -
Less: Reimbursement of Expenses - - (276) -
--------------------------------------------------------------
Net Expenses 756 1,336 179 5,420
--------------------------------------------------------------
--------------------------------------------------------------
Net Investment Income 14,046 59,611 24,840 100,769
--------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (2,881) (16,527) (1,248) (33,777)
Futures Contracts - - - 3,486
Foreign Currency Contracts and Transactions - - - 9,635
--------------------------------------------------------------
Net Realized (Loss) (2,881) (16,527) (1,248) (20,656)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 3,149 16,693 3,410 24,018
Futures Contracts - - - 110
Foreign Currency Contacts and Translations - - - (876)
--------------------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) 3,149 16,693 3,410 23,252
--------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 14,314 $ 59,777 $ 27,002 $ 103,365
===============================================================
JPMORGAN JPMORGAN PRO FORMA PRO FORMA
BOND INTERMEDIATE ADJUSTMENTS COMBINED
FUND II(1) BOND FUND(2) JPMORGAN
BOND FUND
INCOME:
Allocated Investment Income From Portfolio $ - $ - $ (106,007)(c) -
Interest Income 41,374 24,517 (1)(h) 150,294
Dividend Income from Affiliated Investments (includes
reimbursement from affiliate of $719) - - - 20,928
Dividend income - - - 857
Allocated Portfolio Expenses - - 5,239(b) -
--------------------------------------------------------------
Investment Income 41,374 24,517 (100,769) 172,079
--------------------------------------------------------------
EXPENSES:
Advisory Fee 1,777 1,137 (16) 7,546
Administrative Services Fee 888 568 1,524(a) 3,733
Shareholder Servicing Fee 1,223 791 412(a) 4,120
Custodian Fees and Expenses 141 92 (228)(f,g) 270
Registration Fees 29 10 - 168
Printing Expenses 29 24 31(g) 119
Transfer Agent Fees 12 18 - 116
Professional Fees 46 33 (94)(g) 91
Trustees' Fees and Expenses 30 19 - 85
Fund Services Fee - - - 49
Financial and Fund Accounting Services Fee - - (48)(f) -
Administration Fee - - - 28
Insurance Expense - - - 4
Amortization of Organizational Expenses - - - -
Distribution Fee - - - 1
Miscellaneous 39 20 3(e) 147
--------------------------------------------------------------
Total Expenses 4,214 2,712 1,584 - 16,477
--------------------------------------------------------------
Less: Amounts Waived - - (1,584)(a) (1,584)
Less: Reimbursement of Expenses (126) (73) (852)(a) (1,327)
--------------------------------------------------------------
Net Expenses 4,088 2,639 (852) 13,566
--------------------------------------------------------------
--------------------------------------------------------------
Net Investment Income 37,286 21,878 (99,917) 158,513
--------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (17,973) (7,915) 20,656(d) (59,665)
Futures Contracts (3,015) - - 471
Foreign Currency Contracts and Transactions - - - 9,635
--------------------------------------------------------------
Net Realized (Loss) (20,988) (7,915) 20,656 (49,559)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 15,076 7,215 (23,252)(d) 46,309
Futures Contracts (188) - - (78)
Foreign Currency Contacts and Translations - - - (876)
--------------------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) 14,888 7,215 (23,252) 45,355
--------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 31,186 $ 21,178 $ (102,513) $ 154,309
==============================================================
(a) Reflects adjustments to investment advisory fee, administrative fees and
shareholder servicing fees and/or related waivers based on the surviving
Fund's revised fee schedule.
(b) Reflects the elimination of master portfolio expenses which have been
disclosed under feeder expenses.
(c) Reallocation of investments income to feeder funds
(d) Reallocation of realized and unrealized loss to feeder funds.
(e) Reflects write-off of deferred organization expenses of the portfolio.
(f) Reclassification of fund accounting into Custody charge.
(g) Reduction reflects expected benefit from combined operations.
(h) Reflects the elimination of J.P. Morgan - Advisor Series allocated income.
(1) Formerly Chase Vista Select Bond Fund
(2) Formerly Chase Vista Select Intermediate Bond Fund
See Notes to Pro Forma Financial Statements
28
J.P. MORGAN BOND FUND/ J.P. MORGAN INSTITUTIONAL BOND FUND/
J.P. MORGAN INSTITUTIONAL BOND FUND - ULTRA/ THE U.S. FIXED INCOME PORTFOLIO/
JPMORGAN BOND FUND II(1) / JPMORGAN INTERMEDIATE BOND FUND (2)
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES AS OF OCTOBER 31, 2000
(UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
J.P. MORGAN
J.P. MORGAN INSTITUTIONAL THE U.S.
J. P. MORGAN INSTITUTIONAL BOND FUND FIXED INCOME
BOND FUND BOND FUND - ULTRA PORTFOLIO
ASSETS:
Investments at Value $ - $ - $ - $ 1,972,306
Investment in The U.S. Fixed Income Portfolio, at value 242,750 909,964 469,196 -
Cash - - - -
Receivable for Investment Sold - - - 215,450
Dividend and Interest Receivable - - - 16,802
Receivable for Shares of Beneficial Interest Sold 407 726 37 -
Variation Margin Receivable - - - 297
Receivable for Expense Reimbursements - - - -
Deferred Organization Expense - - 3 -
Prepaid Trustees' Fees and Expenses 1 1 1 6
Prepaid Expenses and Other Assets 1 2 - 57
----------- ----------- ----------- -------------
TOTAL ASSETS 243,159 910,693 469,237 2,204,918
----------- ----------- ----------- -------------
LIABILITIES:
Securities Purchased Payable - - - 581,888
Dividends Payable to Shareholders 154 2,229 688 -
Payable for Shares of Beneficial Interest Redeemed 2,719 908 2,414 -
Advisory Fee Payable - - - 411
Shareholder Servicing Fee Payable 51 77 20 -
Administration Fee Payable - - - -
Due to Custodian - - - 52
Administration Services Fee Payable 5 18 10 33
Fund Services Fee Payable 1 1 1 1
Accrued Expenses and Other Liabilities 49 49 78 124
----------- ----------- ----------- -------------
TOTAL LIABILITIES 2,979 3,282 3,211 582,509
----------- ----------- ----------- -------------
NET ASSETS:
Paid-in Capital 248,018 950,359 476,531 -
Undistributed (Distributions in Excess of) Net
Investment Income 315 787 923 -
Accumulated Net Realized Loss (7,952) (43,481) (10,844) -
Net Unrealized Appreciation of Investment (201) (254) (584) -
----------- ----------- ----------- -------------
Net Assets $ 240,180 $ 907,411 $ 466,026 1,622,409
=========== =========== =========== =============
Shares of Beneficial Interest Outstanding 24,290 96,271 48,475 -
Shares Outstanding - - - -
Net Asset Value Per Share 9.89 9.43 9.61 -
PRO FORMA WITH CONCURRENT REORGANIZATION
JPMORGAN BOND FUND
Shares Outstanding
Select - - -
Institutional - - -
Agency - - -
Net Asset Value Per Share
Select - - -
Institutional - - -
Agency - - -
=========== =========== =========== =============
Cost of Investments $ - $ - $ - $ 1,972,799
=========== =========== =========== =============
JPMORGAN JPMORGAN PRO FORMA PRO FORMA
BOND INTERMEDIATE ADJUSTMENTS COMBINED
FUND II(1) BOND FUND(2) JPMORGAN
BOND FUND
ASSETS:
Investments at Value $ 582,001 $ 383,324 $ (499)(f) $2,937,132
Investment in The U.S. Fixed Income Portfolio, at value - - (1,621,910)(a) -
Cash - 1 - -
Receivable for Investment Sold - - - 215,450
Dividend and Interest Receivable 7,981 5,702 - 30,485
Receivable for Shares of Beneficial Interest Sold 1,116 400 - 2,686
Variation Margin Receivable 97 - - 394
Receivable for Expense Reimbursements - - 3(b) 3
Deferred Organization Expense - - (3)(b) -
Prepaid Trustees' Fees and Expenses - - - 9
Prepaid Expenses and Other Assets 16 10 - 86
------------ ----------- ----------- -----------
TOTAL ASSETS 591,211 389,437 (1,622,409) 3,186,245
------------ ----------- ----------- -----------
LIABILITIES:
Securities Purchased Payable - - - 581,888
Dividends Payable to Shareholders 3,161 1,933 - 8,165
Payable for Shares of Beneficial Interest Redeemed 125 24 - 6,190
Advisory Fee Payable 149 98 - 658
Shareholder Servicing Fee Payable 124 82 - 354
Administration Fee Payable 75 49 - 124
Due to Custodian 47 7 - 106
Administration Services Fee Payable - - - 66
Fund Services Fee Payable - - - 4
Accrued Expenses and Other Liabilities 161 179 - 640
------------ ----------- ----------- -----------
TOTAL LIABILITIES 3,842 2,372 - 598,195
------------ ----------- ----------- -----------
NET ASSETS:
Paid-in Capital 619,499 402,912 - 2,697,319
Undistributed (Distributions in Excess of) Net
Investment Income 65 (58) - 2,032
Accumulated Net Realized Loss (32,772) (13,300) - (108,349)
Net Unrealized Appreciation of Investment 577 (2,489) - (2,951)
------------ ----------- ----------- -----------
Net Assets $ 587,369 $ 387,065 $(1,622,409) $ 2,588,051
============ =========== =========== ===========
Shares of Beneficial Interest Outstanding - - (169,036)(c) -
Shares Outstanding 15,449 40,050 (55,499)(d) -
Net Asset Value Per Share 38.02 9.66
PRO FORMA WITH CONCURRENT REORGANIZATION
JPMORGAN BOND FUND
Shares Outstanding
Select - - 128,863(e) 128,863
Institutional - - 96,271(e) 96,271
Agency - - 49,443(e) 49,443
Net Asset Value Per Share
Select - - - 9.43
Institutional - - - 9.43
Agency - - - 9.43
============ =========== =========== ===========
Cost of Investments $ 581,127 $ 385,813 $ - $ 2,939,739
============ =========== =========== ===========
(a) Reflects reallocation of investment from the feeder funds to master
portfolio.
(b) Write-off of deferred organization expenses of the portfolio.
(c) Reallocation of feeder fund's beneficial interest to Class A, Select,
Institutional, and Agency Shares due to the Concurrent Reorganization.
(d) Reallocation of Chase Vista Select Bond Fund and Chase Vista Select
Intermediate Bond Fund shares to Institutional Shares due to the Concurrent
Reorganization
(e) Reflects the additional number of shares outstanding due to the Concurrent
Reorganization.
(f) Reflects the redemption in short-term securities of the J.P. Morgan Bond
Fund- Advisor Series.
(1) Formerly Chase Vista Select Bond Fund.
(2) Formerly Chase Vista Select Intermediate Bond Fund.
See Notes to Pro Forma Financial Statements
29
JP MORGAN BOND FUND / JP MORGAN INSTITUTIONAL BOND FUND /
JP MORGAN INSTITUTIONAL BOND FUND - ULTRA / THE US FIXED INCOME PORTFOLIO /
JPMORGAN BOND FUND II(1) PRO FORMA COMBINING STATEMENT OF OPERATIONS FOR
THE TWELVE MONTHS ENDED OCTOBER 31, 2000
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
J.P. MORGAN THE U.S.
J.P. MORGAN INSTITUTIONAL FIXED
J.P. MORGAN INSTITUTIONAL BOND FUND INCOME
BOND FUND BOND FUND - ULTRA PORTFOLIO
INCOME:
Allocated Investment Income From Portfolio $ 15,598 $ 64,228 $ 26,181 $ -
Interest Income - - - 84,404
Dividend Income from Affiliated Investments (includes reimbursement
from affiliate of $719) - - - 20,928
Dividend income - - - 857
Allocated Portfolio Expenses (796) (3,281) (1,162) -
---------------------------------------------------------
Investment Income 14,802 60,947 25,019 106,189
---------------------------------------------------------
EXPENSES:
Advisory Fee - - - 4,648
Administrative Services Fee 55 228 93 377
Shareholder Servicing Fee 567 935 192 -
Custodian Fees and Expenses - - - 265
Registration Fees 27 32 70 -
Transfer Agent Fees 42 24 20 -
Professional Fees 13 17 14 62
Fund Services Fee 4 15 6 24
Financial and Fund Accounting Services Fee - 24 24 -
Trustees' Fees and Expenses 3 11 4 18
Printing Expenses 8 4 12 11
Administration Fee 2 11 4 11
Insurance Expense - - - 4
Amortization of Organizational Expenses - - - -
Distribution Fee - - 1 -
Miscellaneous 35 35 15 -
---------------------------------------------------------
Total Expenses 756 1,336 455 5,420
---------------------------------------------------------
Less: Amounts Waived
Less: Reimbursement of Expenses - - (276) -
---------------------------------------------------------
Net Expenses 756 1,336 179 5,420
---------------------------------------------------------
---------------------------------------------------------
Net Investment Income 14,046 59,611 24,840 100,769
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (2,881) (16,527) (1,248) (33,777)
Futures Contracts - - - 3,486
Foreign Currency Contracts and Transactions - - - 9,635
---------------------------------------------------------
Net Realized (Loss) (2,881) (16,527) (1,248) (20,656)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 3,149 16,693 3,410 24,018
Futures Contracts - - - 110
Foreign Currency Contacts and Translations - - - (876)
---------------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) 3,149 16,693 3,410 23,252
---------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 14,314 $ 59,777 $ 27,002 $ 103,365
=========================================================
PRO FORMA
JPMORGAN COMBINED
BOND PRO FORMA JPMORGAN
FUND II(1) ADJUSTMENTS BOND FUND
INCOME:
Allocated Investment Income From Portfolio $ - (106,007)(c) -
Interest Income 41,374 (1)(h) 125,777
Dividend Income from Affiliated Investments (includes reimbursement
from affiliate of $719) - - 20,928
Dividend income - - 857
Allocated Portfolio Expenses - 5,239(b) -
---------------------------------------------------------
Investment Income 41,374 (100,769) 147,562
---------------------------------------------------------
EXPENSES:
Advisory Fee 1,777 - 6,425
Administrative Services Fee 888 1,564(a) 3,205
Shareholder Servicing Fee 1,223 257(a) 3,174
Custodian Fees and Expenses 141 136(f,g) 542
Registration Fees 29 - 158
Transfer Agent Fees 12 - 98
Professional Fees 46 (64)(g) 88
Fund Services Fee - - 49
Financial and Fund Accounting Services Fee - (48)(f) -
Trustees' Fees and Expenses 30 - 66
Printing Expenses 29 (20)(g) 44
Administration Fee - - 28
Insurance Expense - - 4
Amortization of Organizational Expenses - - -
Distribution Fee - - 1
Miscellaneous 39 3(e) 127
---------------------------------------------------------
Total Expenses 4,214 1,828 14,009
---------------------------------------------------------
Less: Amounts Waived - (1,828)(a) (1,828)
Less: Reimbursement of Expenses (126) - (402)
---------------------------------------------------------
Net Expenses 4,088 - 11,779
---------------------------------------------------------
---------------------------------------------------------
Net Investment Income 37,286 (100,769) 135,783
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED LOSS
Investment Transactions (17,973) 20,656(d) (51,750)
Futures Contracts (3,015) - 471
Foreign Currency Contracts and Transactions - - 9,635
---------------------------------------------------------
Net Realized (Loss) (20,988) 20,656 (41,644)
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON
Investment Transactions 15,076 (23,252)(d) 39,094
Futures Contracts (188) - (78)
Foreign Currency Contacts and Translations - - (876)
---------------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) 14,888 (23,252) 38,140
---------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations 31,186 (103,365) $ 132,279
=========================================================
(a) Reflects adjustments to investment advisory fee, administrative fees and
shareholder servicing fees and/or related waivers based on the surviving
Fund's revised fee schedule.
(b) Reflects the elimination of master portfolio expenses which have been
disclosed under feeder expenses.
(c) Reallocation of investments income to feeder funds
(d) Reallocation of realized and unrealized loss to feeder funds.
(e) Reflects write-off of deferred organization expenses of the portfolio.
(f) Reclassification of fund accounting into Custody charge.
(g) Reduction reflects expected benefit from combined operations.
(h) Reflects the elimination of J.P. Morgan - Advisor Series allocated income.
(1) Formerly Chase Vista Select Bond Fund.
See Notes to Pro Forma Financial Statements
30
J.P. MORGAN BOND FUND/ J.P. MORGAN INSTITUTIONAL BOND FUND/
J.P. MORGAN INSTITUTIONAL BOND FUND - ULTRA/ THE U.S. FIXED INCOME PORTFOLIO/
JPMORGAN BOND FUND II (1) PRO FORMA COMBINING STATEMENT OF ASSETS AND
LIABILITIES AS OF OCTOBER 31, 2000
(UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
J.P. MORGAN THE U.S.
J.P. MORGAN INSTITUTIONAL FIXED
J. P. MORGAN INSTITUTIONAL BOND FUND INCOME
BOND FUND BOND FUND - ULTRA PORTFOLIO
ASSETS:
Investments at Value $ - $ - $ - $ 1,972,306
Investment in The U.S. Fixed Income Portfolio, at value 242,750 909,964 469,196 -
Receivable for Investment Sold - - - 215,450
Dividend and Interest Receivable - - - 16,802
Receivable for Shares of Beneficial Interest Sold 407 726 37 -
Variation Margin Receivable - - - 297
Receivable for Expense Reimbursements - - - -
Deferred Organization Expense - - 3 -
Prepaid Trustees' Fees and Expenses 1 1 1 6
Prepaid Expenses and Other Assets 1 2 - 57
------------ ---------- ----------- ------------
TOTAL ASSETS 243,159 910,693 469,237 2,204,918
------------ ---------- ----------- ------------
LIABILITIES:
Securities Purchased Payable - - - 581,888
Dividends Payable to Shareholders 154 2,229 688 -
Payable for Shares of Beneficial Interest Redeemed 2,719 908 2,414 -
Advisory Fee Payable - - - 411
Shareholder Servicing Fee Payable 51 77 20 -
Due to Custodian - - - 52
Administration Fee Payable - - - -
Administration Services Fee Payable 5 18 10 33
Fund Services Fee Payable 1 1 1 1
Accrued Expenses and Other Liabilities 49 49 78 124
------------ ---------- ----------- ------------
TOTAL LIABILITIES 2,979 3,282 3,211 582,509
------------ ---------- ----------- ------------
NET ASSETS:
Paid-in Capital 248,018 950,359 476,531 -
Undistributed (Distributions in Excess of) Net Investment Income 315 787 923 -
Accumulated Net Realized Loss (7,952) (43,481) (10,844) -
Net Unrealized Appreciation of Investment (201) (254) (584) -
------------ ---------- ----------- ------------
Net Assets $ 240,180 $ 907,411 $ 466,026 1,622,409
============ ========== =========== ============
Shares of Beneficial Interest Outstanding 24,290 96,271 48,475 -
Shares Outstanding - - - -
Net Asset Value Per Share 9.89 9.43 9.61 -
PRO FORMA WITH CONCURRENT REORGANIZATION
JPMORGAN BOND FUND
Shares Outstanding
Select - - - -
Institutional - - - -
Agency - - - -
Net Asset Value Per Share
Select - - - -
Institutional - - - -
Agency - - - -
============ ========== =========== ============
Cost of Investments $ - $ - $ - $ 1,972,799
============ ========== =========== ============
PRO FORMA
JPMORGAN COMBINED
BOND PRO FORMA JPMORGAN
FUND II(1) ADJUSTMENTS BOND FUND
ASSETS:
Investments at Value $ 582,001 (499)(f) $ 2,553,808
Investment in The U.S. Fixed Income Portfolio, at value - (1,621,910)(a) -
Receivable for Investment Sold - - 215,450
Dividend and Interest Receivable 7,981 - 24,783
Receivable for Shares of Beneficial Interest Sold 1,116 - 2,286
Variation Margin Receivable 97 - 394
Receivable for Expense Reimbursements - 3(b) 3
Deferred Organization Expense - (3)(b) -
Prepaid Trustees' Fees and Expenses - - 9
Prepaid Expenses and Other Assets 16 - 76
------------- ----------- ------------
TOTAL ASSETS 591,211 (1,622,409) 2,796,809
------------- ----------- ------------
LIABILITIES:
Securities Purchased Payable - - 581,888
Dividends Payable to Shareholders 3,161 - 6,232
Payable for Shares of Beneficial Interest Redeemed 125 - 6,166
Advisory Fee Payable 149 - 560
Shareholder Servicing Fee Payable 124 - 272
Due to Custodian 47 - 99
Administration Fee Payable 75 - 75
Administration Services Fee Payable - - 66
Fund Services Fee Payable - - 4
Accrued Expenses and Other Liabilities 161 - 461
------------- ----------- ------------
TOTAL LIABILITIES 3,842 - 595,823
------------- ----------- ------------
NET ASSETS:
Paid-in Capital 619,499 - 2,294,407
Undistributed (Distributions in Excess of) Net Investment Income 65 - 2,090
Accumulated Net Realized Loss (32,772) - (95,049)
Net Unrealized Appreciation of Investment 577 - (462)
------------- ----------- ------------
Net Assets $ 587,369 (1,622,409) $ 2,200,986
============= =========== ============
Shares of Beneficial Interest Outstanding - (169,086)(c) -
Shares Outstanding 15,449 (15,449)(d) -
Net Asset Value Per Share 38.02 - -
PRO FORMA WITH CONCURRENT REORGANIZATION
J.P. MORGAN INSTITUTIONAL BOND FUND
Shares Outstanding
Select - 87,804(e) 87,804
Institutional - 96,271(e) 96,271
Agency - 49,443(e) 49,443
Net Asset Value Per Share
Select - - 9.43
Institutional - - 9.43
Agency - - 9.43
============= =========== ============
Cost of Investments $ 581,127 $ - $ 2,553,926
============= =========== ============
(a) Reflects reallocation of investment from the feeder funds to master
portfolio.
(b) Write-off of deferred organization expenses of the portfolio.
(c) Reallocation of feeder fund's beneficial interest to Class A, Select,
Institutional, and Agency Shares due to the Concurrent Reorganization.
(d) Reallocation of Chase Vista Select Bond Fund shares to Institutional
Shares due to the Concurrent Reorganization.
(e) Reflects the additional number of shares outstanding due to the Concurrent
Reorganization.
(f) Reflects the redemption in short-term securities of the J.P. Morgan Bond
Fund- Advisor Series.
(1) Formerly Chase Vista Select Bond Fund.
See Notes to Pro Forma Financial Statements
31
THE U.S. FIXED INCOME PORTFOLIO - SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
OCTOBER 31, 2000
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------
ASSET BACKED SECURITIES-6.7%
FINANCIAL SERVICES - 6.7%
$10,000,000 Citibank Credit Card Master Trust I,
Series 1998-9, Class A, 5.30%, 1/9/06 $ 9,609,300
15,000,000 Conseco Finance Securitizations Corp.,
Series 2000-5, Class A3 SEQ, 7.21%, 2/1/32 15,000,000
6,600,000 Daimler Chrysler Auto Trust, Series 2000
C, Class A2 SEQ, 6.81%, 7/6/03 6,605,940
21,000,000 Daimler-Benz Vehicle Trust, Series 1998 A,
Class A4 SEQ, 5.22%, 12/22/03 20,625,780
12,000,000 Discover Card Master Trust I,
Series 1998-
4, Class A, 5.75%, 10/16/03 11,925,000
5,000,000 First USA Credit Card Master Trust, Series
1999-1, Class C, 6.42%, 10/19/06 4,846,875
5,000,000 Ford Credit Auto Owner Trust, Series 1998
C, Class D, 7.70%, 1/15/04 5,013,280
5,000,000 Ford Credit Auto Owner Trust, Series 1999
A, Class D, 8.00%, 6/15/04 5,035,940
11,000,000 Ford Credit Auto Owner Trust, Series 2000
D, Class A2 SEQ, 7.06%, 4/15/03 11,013,750
15,486,192 Green Tree Financial Corporation,
Series 1993-3, Class B, 6.85%, 10/15/18 13,168,064
10,000,000 Green Tree Financial Corporation,
Series 1999-5, Class B1, 9.20%, 4/1/31 9,437,500
19,855,000 Sears Credit Account Master Trust,
Series 1999-2, Class A, 6.35%, 2/16/07 19,712,243
----------------------
TOTAL ASSET BACKED SECURITIES 131,993,672
----------------------
(Cost $132,976,489)
COLLATERALIZED MORTGAGE OBLIGATIONS - 13.9%
FINANCIAL SERVICES - 13.9%
26,549,732 Chase Commercial Mortgage Securities
Corp., Series 1998-2, Class A2 SEQ,
6.39%, 11/18/08 25,500,195
20,000,000 Chase Manhattan Bank-First Union
National Bank, Series 1999-1, Class A2 SEQ,
7.44%, 7/15/09 20,362,500
4,900,000 COMM, Series 2000 FL2A, Class H-NW,
Floater, 7.97%, 11/15/00, resets monthly
off the 1-month LIBOR plus 1.35% with
no caps 4,900,000
10,000,000 Commercial Mortgage Acceptance Corp.,
Series 1998-C2, Class D, 6.75%, 11/15/09 9,400,000
42,660,000 DLJ Commercial Mortgage Corporation,
Series 2000-CF1, Class A1B SEQ,
7.62%, 5/10/10 43,673,175
529,704 FHLMC, Series 1980, Class C SEQ,
6.85%, 10/15/21 527,717
28,873,164 First Nationwide Trust, Series 1999-4,
Class 3PA1 SEQ, 6.50%, 10/19/29 27,122,584
20,000,000 First Union Commercial Mortgage Trust,
Series 1999-C1, Class A2 SEQ,
6.07%, 10/15/08 18,812,500
8,895,000 GMAC Commercial Mortgage Securities
Inc., Series 1997-C1, Class A3 SEQ,
6.87%, 8/15/07 8,786,597
5,000,000 GS Mortgage, Series 2000 F, Floater,
8.37%, 11/15/00 5,000,000
6,950,000 Heller Financial Commercial Mortgage
Asset, Series 1999-PH1, Class A2 SEQ,
6.85%, 5/15/31 6,829,459
42,943,000 LB-UBS Commerical Mortgage Trust,
Series 2000-C3, Class A2 SEQ,
7.95%, 1/15/10 44,593,643
7,830,000 Morgan Stanley Capital I,
Series 1998-XL2, Class A2 SEQ,
6.17%, 10/3/08 7,393,235
30,000,000 Mortgage Capital Funding, Inc.,
Series 1998-MC2, Class A2 SEQ,
6.42%, 5/18/08 28,800,000
12,500,000 PNC Mortgage Acceptance Corp.,
Series 2000-C1, Class A2 SEQ,
7.61%, 2/15/10 12,828,125
6,245,000 PNC Mortgage Acceptance Corp.,
Series 2000-C2, Class A2 SEQ,
7.30%, 9/12/10 6,269,393
2,253,150 SACO I Inc. Series 1997-2,
Class 1A5 SEQ, 7.00%, 8/25/36 2,083,812
801,712 Vendee Mortgage Trust, Series 1997-1,
Class 2C SEQ, 7.50%, 9/15/17 800,959
----------------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS 273,683,894
----------------------
(Cost $271,173,312)
CORPORATE BONDS-10.5%
BANKS - 1.1%
2,010,000 Bank One Capital III, 8.75%, 9/1/30 1,954,524
8,500,000 Capital One Bank, 8.25%, 6/15/05 8,545,985
9,975,000 First Union National Bank, 7.80%, 8/18/10 9,939,689
----------------------
20,440,198
----------------------
CHEMICALS - 0.3%
1,000,000 Cytec Industries, Inc., 6.85%, 5/11/05 931,120
5,110,000 Rohm & Haas Co., 7.85%, 7/15/29 4,986,338
----------------------
5,917,458
----------------------
DEFENSE/AEROSPACE - 0.5%
8,530,000 Lockheed Martin Corp., 8.20%, 12/1/09 8,878,621
----------------------
ELECTRICAL UTILITY - 0.6%
506,000 Cogentrix Energy Inc., 8.75%, 10/15/08 507,265
4,025,000 Dominion Resources Inc., Series 2010-A,
8.13%, 6/15/10 4,150,017
7,940,000 Dominion Resources Inc./VA, Series 2000 B,
7.63%, 7/15/05 8,027,236
----------------------
12,684,518
----------------------
ENERGY RESERVES & PRODUCTION(z)
500,000 Lasmo (USA) Inc., 6.75%, 12/15/07 476,620
----------------------
The Accompanying Notes are an Integral Part of the Financial Statements.
32
THE U.S. FIXED INCOME PORTFOLIO - SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
(Continued)
OCTOBER 31, 2000
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - 3.6%
$5,493,316 500 Grant St. Association, 144A,
Series 1999 A, 6.46%, 12/1/08 $ 5,256,554
3,400,000 CitiFinancial, 8.70%, 6/15/10 3,681,010
3,490,000 Comdisco, Inc., 6.38%, 11/30/01 2,928,110
4,205,000 Comdisco Inc., 9.50%, 8/15/03 3,153,750
5,000,000 ERAC USA Finance Co., 144A, 6.38%, 5/15/03 4,794,900
135,000 Ford Motor Credit Co., 7.25%, 1/15/03 135,342
1,010,000 Ford Motor Credit Co., 7.38%, 10/28/09 980,660
6,500,000 Household Finance Corp., 8.00%, 5/9/05 6,647,095
2,200,000 Keycorp Institutional Capital, Series 1996 B,
8.25%, 12/15/26 2,000,944
4,475,000 McKesson Financial of Canada, 144A,
6.55%, 11/1/02 4,291,659
6,000,000 Newcourt Credit Group Inc., 6.88%, 2/16/05 5,796,480
8,835,000 NGC Corp. Capital Trust, Series 1997 B,
8.32%, 6/1/27 7,775,772
1,834,912 Oil Purchase Company, 144A, 7.10%, 4/30/02 1,752,341
1,765,000 Provident Financing Trust I, 7.41%, 3/15/38 1,303,523
17,500,000 Washington Mutual Financial Corp.,
8.25%, 6/15/05 18,058,600
----------------------
68,556,740
----------------------
FOOD & BEVERAGE - 0.1%
1,410,000 Smithfield Foods Inc., 7.63%, 2/15/08 1,279,575
----------------------
FOREST PRODUCTS & PAPER - 0.2%
5,000,000 Champion International Corp., 7.10%, 9/1/05 4,899,250
----------------------
GAS & WATER UTILITIES - 0.3%
6,970,000 United Utilities Plc, 6.88%, 8/15/28 5,544,077
----------------------
MEDIA - 0.6%
3,125,000 Adelphia Communications Corp.,
9.38%, 11/15/09 2,664,063
5,540,000 Clear Channel Communications, 7.88%, 6/15/05 5,583,433
2,500,000 Fox Sports Networks LLC, 8.88%, 8/15/07 2,512,500
1,900,000 Lamar Media Corp., 8.63%, 9/15/07 1,852,500
----------------------
12,612,496
----------------------
MEDICAL PROVIDERS & SERVICES(z)
2,000,000 Mariner Post-Acute Network Inc., Series B,
9.50%, 4/1/06(d)+ 10,000
----------------------
MOTOR VEHICLES & PARTS - 0.1%
2,500,000 DaimlerChrysler NA Holding Corp.,
6.90%, 9/1/04 2,466,600
----------------------
MULTI-INDUSTRY - 0.2%
5,000,000 Cendant Corporation, 7.75%, 12/1/03 4,893,300
----------------------
OIL SERVICES - 1.2%
15,000,000 Enron Corp., 144A, 7.11%, 12/12/00,
resets quarterly off the 3-month LIBOR plus
0.45% with no caps 14,992,500
1,497,000 Express Pipeline LP, 144A, Series 1998 B,
7.39%, 12/31/17 1,278,064
4,000,000 Phillips Petroleum Co., 8.75%, 5/25/10 4,362,560
350,000 Williams Cos. Inc., 6.20%, 8/1/02 344,442
----------------------
20,977,566
----------------------
RAILROADS - 0.3%
1,601,413 Burlington Northern Railroad Co.,
7.33%, 6/23/10 1,605,240
5,350,000 Canadian National Railway Co.,
7.00%, 3/15/04 5,286,710
----------------------
6,891,950
----------------------
REAL ESTATE INVESTMENT TRUST(z)
830,000 Felcor Lodging LP, 144A, 9.50%, 9/15/08 820,131
----------------------
SEMICONDUCTOR - 0.1%
3,125,000 Charter Communications Holdings,
LLC/ Charter Communications Holdings
Capital Corp., 8.25%, 4/1/07 2,796,875
----------------------
TELEPHONE - 1.0%
4,125,000 Global Crossing Holding Limited,
9.13%, 11/15/06 3,939,375
3,000,000 McLeodUSA Inc., 9.25%, 7/15/07 2,790,000
1,000,000 XO Communications Inc., 9.63%, 10/1/07 835,000
700,000 Qwest Capital Funding Inc., 6.88%, 7/15/28 614,936
10,000,000 Sprint Capital Corp., 5.88%, 5/1/04 9,518,100
2,000,000 Williams Communications Group,
10.70%, 10/1/07 1,720,000
500,000 WorldCom, Inc., 6.40%, 8/15/05 482,035
----------------------
19,899,446
----------------------
TRUCKING & SHIPPING & AIR FREIGHT - 0.3%
1,900,000 Atlantic Express, 10.75%, 2/1/04 1,634,000
4,681,987 FedEx Corp., Series 1999-1, Class C,
8.25%, 1/15/19 4,729,369
----------------------
6,363,369
----------------------
TOTAL CORPORATE BONDS 206,408,790
----------------------
(Cost $216,432,996)
PREFERRED STOCKS - 0.2%
ENTERTAINMENT - 0.2%
150,000 AT&T Corp., 10.00%, 5/31/45 3,796,875
----------------------
(Cost $4,087,500)
FOREIGN CORPORATE BONDS - 2.4%
BANKS - 0.2%
4,000,000 Barclays Bank Plc, 144A, 8.55%, 9/29/49 4,026,800
----------------------
ELECTRICAL EQUIPMENT - 0.1%
1,785,000 Legrand S.A., 8.50%, 2/15/25 1,864,450
----------------------
The Accompanying Notes are an Integral Part of the Financial Statements.
33
THE U.S. FIXED INCOME PORTFOLIO - SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
(Continued)
OCTOBER 31, 2000
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - 0.5%
$7,220,000 HSBC Capital Funding LP, 144A,
10.18%, 12/29/49, resets quarterly off the
3-month LIBOR plus 4.98% with no caps $ 7,901,207
2,250,000 Montell Finance Co. B.V., 144A, 8.10%, 3/15/27 2,022,885
----------------------
9,924,092
----------------------
INFORMATION SERVICES - 0.4%
8,760,000 Marconi Corporation Plc, 8.38%, 9/15/30 8,353,799
----------------------
TELEPHONE - 1.2%
10,000,000 Deutsche Telekom International Finance,
8.25%, 6/15/30 10,205,200
300,000 Microcell Telecommunications Inc.,
Series B, 11.99%, 6/1/06(y) 288,000
12,150,000 Telefonica Europe B.V., 8.25%, 9/15/30 12,441,357
----------------------
22,934,557
----------------------
TOTAL FOREIGN CORPORATE BONDS 47,103,698
----------------------
(Cost $48,063,160)
MORTGAGE PASS THRU - 25.2%
1,032,790 FHLMC, 6.00%, 3/1/11 to 4/1/11 1,000,680
337 FHLMC, 12.50%, 8/1/14 379
58,465,854 FNMA, 6.00%, 12/1/28 to 2/1/29 54,836,488
11,406,862 FNMA, 6.50%, 1/1/28 to 9/1/29 10,966,121
3,178,859 FNMA, 7.00%, 7/1/28 to 10/1/29 3,115,249
166,863 FNMA, 7.50%, 5/1/30 166,659
1,899,247 FNMA, 8.00%, 8/1/22 to 6/1/27 1,924,476
8,010,000 FNMA, TBA, 6.50%, 11/1/30 7,697,129
71,310,000 FNMA, TBA, 7.00%, 11/1/15 70,864,314
107,234,000 FNMA, TBA, 7.00%, 9/1/29 105,056,078
157,605,000 FNMA, TBA, 7.50%, 12/1/30 157,210,989
51,325,080 GNMA, 6.50%, 6/15/28 to 12/15/28 49,554,364
193,732 GNMA, 7.00%, 12/15/08 194,521
8,479,978 GNMA, 7.50%, 1/15/27 to 2/15/27 8,516,441
218,242 GNMA, 8.50%, 5/15/27 223,955
62,710 GNMA, 9.00%, 12/15/19 65,512
28,460,000 GNMA, TBA, 7.00%, 11/1/30 28,051,030
----------------------
TOTAL MORTGAGE PASS THRU 499,444,385
----------------------
(Cost $497,587,636)
PRIVATE PLACEMENTS - 0.9%
CO-OP APARTMENTS - 0.9%
4,414,909 180 East End Avenue Note, secured by
first mortgage and agreement on co-op
apartment building in New York City,
6.88%, 1/1/29(f) 4,175,577
10,900,383 200 East 57th Street, secured by first
mortgage and agreement on co-op
apartment building in New York City,
6.50%, 1/1/14(f) 10,110,105
3,239,184 81 Irving Place Note, secured by first mortgage
and agreement on co-op apartment building
in New York City, 6.95%, 1/1/29(f) $ 3,070,974
----------------------
TOTAL PRIVATE PLACEMENTS 17,356,656
----------------------
(Cost $18,554,476)
SOVEREIGN GOVERNMENTS AND AGENCIES - 0.2%
4,700,000 Province of Quebec, 6.50%, 1/17/06 4,610,465
----------------------
(Cost $4,751,612)
U.S. GOVERNMENT AGENCY SECURITIES - 7.7%
61,175,000 FHLMC, 6.88%, 9/15/10(s) 61,958,652
59,297,000 FNMA, 7.00%, 7/15/05(s) 60,418,306
29,271,000 FNMA, 7.13%, 6/15/10(s) 30,153,813
----------------------
TOTAL U.S. GOVERNMENT AGENCY SECURITIES 152,530,771
----------------------
(Cost $151,845,810)
U.S. TREASURY SECURITIES - 11.8%
38,155,000 U.S. Treasury STRIPS, PO, 6.47%, 11/15/15 15,604,250
70,195,000 U.S. Treasury Bonds, 8.88%, 2/15/19 92,251,673
4,150,000 U.S. Treasury Bonds, 8.00%, 11/15/21 5,129,151
40,743,000 U.S. Treasury Bonds, 6.75%, 8/15/26 44,855,598
7,005,000 U.S. Treasury Bonds, 5.25%, 2/15/29 6,375,671
330,000 U.S. Treasury Notes, 6.75%, 5/15/05(s) 342,118
14,950,000 U.S. Treasury Notes, 6.88%, 5/15/06(s) 15,664,760
50,965,000 U.S. Treasury Notes, 5.75%, 8/15/10(s) 50,917,093
----------------------
TOTAL U.S. TREASURY SECURITIES 231,140,314
----------------------
(Cost $223,074,002)
Pro Forma
Combined
SHORT-TERM INVESTMENTS - 20.5% Pro Forma JP Morgan
Adjustments Bond Fund
---------------------- ----------------------
COMMERCIAL PAPER - 4.1%
50,000,000 Morgan Stanley, 6.58%, 11/1/00(s) 49,990,861 -- 49,990,861
30,719,000 Salomon Smith Barney 6.60%, 11/1/00(s) 30,713,368 -- 30,713,368
--------------------- ---------------------- ----------------------
80,704,229 -- 80,704,229
---------------------- ---------------------- ----------------------
INVESTMENT COMPANIES - 16.3%
320,833,615 J.P. Morgan Institutional Prime
Money Market Fund(s)* 320,833,615 (499,000) 320,334,615
---------------------- ---------------------- ----------------------
Pro Forma Adjustments
- ----------------------
(499,000)
- --------------------------------------
Pro Forma Combined JPMorgan Bond Fund
- --------------------------------------
320,334,615
U.S. TREASURY SECURITIES - 0.1%
$ 2,700,000 U.S. Treasury Notes, 5.63%, 11/30/00(s) 2,698,552 -- 2,698,552
---------------------- ---------------------- ----------------------
TOTAL SHORT-TERM INVESTMENTS 404,236,396 (499,000) 403,737,396
---------------------- ---------------------- ----------------------
(Cost $404,252,425)
TOTAL INVESTMENT SECURITIES - 100.0% $1,972,305,916 (499,000) $1,971,806,916
====================== ====================== ======================
(Cost $1,972,799,418)
The Accompanying Notes are an Integral Part of the Financial Statements.
34
THE U.S. FIXED INCOME PORTFOLIO - SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
(Continued)
OCTOBER 31, 2000
FUTURES CONTRACTS
NET
UNREALIZED
EXPIRATION UNDERLYING FACE APPRECIATION
PURCHASED DATE AMOUNT AT VALUE (DEPRECIATION)
- ---------------------------------------------------------------------------------------------
420 U.S. Two-Year Treasury Note December 2000 $84,052,500 $(160,122)
353 U.S. Five-Year Treasury Note December 2000 35,542,688 334,510
- ---------------------------------------------------------------------------------------------
$119,595,188 $174,388
=========================================
NET
UNREALIZED
EXPIRATION UNDERLYING FACE APPRECIATION
SOLD DATE AMOUNT AT VALUE (DEPRECIATION)
- ---------------------------------------------------------------------------------------------
1,115 U.S. Ten-Year Treasury Note December 2000 $112,283,990 $(746,864)
- ---------------------------------------------------------------------------------------------
133 U.S. Five-Year Treasury Note December 2000 13,279,219 25,956
- ---------------------------------------------------------------------------------------------
$125,563,209 $(720,908)
=========================================
PERCENT OF FOREIGN BONDS
CANADA 0.2%
FRANCE 0.1%
GERMANY 0.5%
NETHERLANDS 0.8%
UNITED KINGDOM 1.0%
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
LIBOR - London Interbank Offered Rate
PO - Principal only
resets - The frequency with which a security's coupon changes, based
on current market conditions or an underlying index.
SEQ - Sequential Payor
STRIPS - Separate Trading of Registered Interest and Principal of Securities.
TBA - Securities purchased (sold) on a forward commitment basis with an
approximate principal amount and no definite maturity date. The actual
principal amount and maturity will be determined upon settlement.
144A - Securities restricted for resale to Qualified Institutional Buyers
(d) Defaulted security
(f) Illiquid and fair valued security. Approximately $17,356,656 or 0.9% of the
market value of the securities have been valued at fair value.
(s) Security is fully or partially segregated with custodian as collateral for
futures or with brokers as initial margin for futures contracts.
(y) Yield to maturity
(z) Category is less than 0.05% of total investment securities.
* Money Market Mutual Fund registered under the Investment Act of 1940, as
amended, and advised by J.P. Morgan Investment Management, Inc.
+ Non-income producing security
The Accompanying Notes are an Integral Part of the Financial Statements.
35
PRO FORMA FINANCIAL STATEMENTS
J.P. MORGAN BOND FUND / C / J.P. MORGAN INSTITUTIONAL BOND FUND / J.P. MORGAN
INSTITUTIONAL BOND-ULTRA / THE U.S. FIXED INCOME PORTFOLIO / JPMORGAN
BOND FUND II(1) / JPMORGAN INTERMEDIATE BOND FUND(2)
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 U.S. Fixed Income Portfolio ("Master Portfolio"), J.P. Morgan
Bond Fund ("Bond Fund"), J.P. Morgan Institutional Bond Fund ("Institutional
Fund"), J.P. Morgan Institutional Bond Fund-Ultra ("Ultra Fund"),
(collectively the "feeder funds" of the Master Portfolio), JPMorgan Bond Fund
("JPMBF") and JPMorgan Intermediate Bond Fund ("JPMIBF") as if the proposed
Reorganization and Concurrent Reorganization occurred as of and for the
twelve months ended October 31, 2000.
The Pro Forma Statements give effect to the proposed transfer of all assets and
liabilities of Master Portfolio, Bond Fund, and Ultra Fund ("Reorganization"),
JPMBF ("Chase Vista Select Bond Fund") and JPMIBF ("Chase Vista Select
Intermediate Concurrent Reorganization") in exchange for shares in Institutional
Bond Fund. The Pro Forma Financial 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:
The existing shares of Institutional Bond Fund, Bond Fund, Ultra Fund would be
renamed Institutional Shares, Select Shares, and Agency Shares respectively. The
net asset value per share for Select, and Agency Shares at the commencement of
offering would be identical to the closing net asset value per share for the
Institutional Shares immediately prior to the Reorganization.
The existing shares of Institutional Bond Fund, Bond Fund, Ultra Fund, JPMBF,
and JPMIBF would be renamed Institutional Shares, Select Shares, Agency Shares
and Select Shares respectively. The net asset value per share for Select, and
Agency Shares at the commencement of offering would be identical to the closing
net asset value per share for the Institutional Shares immediately prior to the
Concurrent Reorganization.
36
Under the proposed Feeder Reorganization, each shareholder of Bond Fund and
Ultra Fund would receive shares of Institutional Fund with a value equal to
their holdings in their respective funds. Holders of Bond Fund and Ultra Fund
will receive Select Shares and Agency Shares in Institutional Fund.
Therefore, as a result of the proposed Reorganization current shareholders of
Bond Fund and Ultra Fund will become shareholders of Institutional Fund.
Under the proposed Concurrent Reorganization, each shareholder of JPMBF and
JPMIBF would receive Select Shares of Institutional Fund with a value equal to
their holdings in their respective funds. Holders of JPMBF and JPMIBF will
receive Select Shares in Institutional Fund. Therefore, as a result of the
proposed Concurrent Reorganization, current shareholders of JPMBF and JPMIBF
will become shareholders of Institutional Fund.
The Pro Forma net asset value per share assumes the ISSUANCE OF ADDITIONAL
SHARES OF INSTITUTIONAL FUND, which would have been issued on October 31, 2000
in connection with the proposed Reorganization and the proposed Concurrent
Reorganization. The amount of additional shares assumed to be issued was
calculated based on the October 31, 2000 net assets of Bond Fund, Ultra Fund,
CVSBF and CVSIBF and the net asset values per share of Institutional Fund.
J.P. MORGAN INSTITUTIONAL BOND FUND WITH REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Ultra
------------
Increase in Shares Issued 49,443
Net Assets 10-31-00 $466,026
Pro Forma Net Asset Value 10-31-00 9.43
J.P. MORGAN INSTITUTIONAL BOND FUND WITH JPMORGAN BOND FUND II (1)
REORGANIZATION AND FEEDER REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Ultra
---------
Increase in Shares Issued 49,443
Net Assets 10-31-00 $466,026
Pro Forma Net Asset Value 10-31-00 9.43
J.P. MORGAN INSTITUTIONAL BOND FUND WITH JPMORGAN INTERMEDIATE BOND FUND (2)
REORGANIZATION AND FEEDER REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Ultra
---------
Increase in Shares Issued 49,443
Fund
Net Assets 10-31-00 $466,026
Pro Forma Net Asset Value 10-31-00 9.43
J.P. MORGAN INSTITUTIONAL BOND FUND WITH JPMORGAN BOND FUND II AND JPMORGAN
INTERMEDIATE BOND FUND (2) CONCURRENT REORGANIZATION (AMOUNTS IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)
Ultra
---------
INCREASE IN SHARES ISSUED 49,443
NET ASSETS 10-31-00 $466,026
PRO FORMA NET ASSET VALUE 10-31-00 9.43
37
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, including the change in administration fee and new
expected expense cap. The pro forma investment advisory, shareholder
servicing and distribution fees of the combined Fund are based on the fee
schedule in effect for the Surviving Fund at the combined level of average
net assets for the twelve months ended October 31, 2000.
4. As the Chase Income Fund and the Chase Vista Bond Fund merged intot he
JPMorgan Bond Fund II (formerly the Chase Vista Select Bond Fund) and the
Chase Intermediate Term Bond Fund merged into the JPMorgan Intermediate Bond
Fund (formerly the Chase Vista Select Intermediate Bond Fund) on March 2,
2001 and February 16, 2001, respectively, their net assets are not included
in the pro forma combining statement as of October 31, 2000. Such net assets
are less than 10% of pro forma conbined net assets. The net assets of Class
A and Class B shares of JPMorgan Bond Fund II and JPMorgan Intermediate Bond
Fund will become Class A and Class B shares in the Surviving Fund, as
applicable. The pro forma net asset value per share of Class A and Class B
shares would be $9.43 each, similiar to all other classes, if included.
38
FORM N-14
---------
PART C - OTHER INFORMATION
--------------------------
Item 15. Indemnification.
----------------
Reference is made to Section 5.3 of Registrant's Declaration of Trust
and Section 5 of Registrant's Distribution Agreement.
Registrant, its Trustees and officers are insured against certain
expenses in connection with the defense of claims, demands, actions, suits, or
proceedings, and certain liabilities that might be imposed as a result of such
actions, suits or proceedings.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "1933 Act"), may be permitted to directors,
trustees, officers and controlling persons of the Registrant and the principal
underwriter pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the 1933 Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, trustee, officer, or controlling person of the
Registrant and the principal underwriter in connection with the successful
defense of any action, suit or proceeding) is asserted against the Registrant by
such director, trustee, officer or controlling person or principal underwriter
in connection with the shares being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
Item 16. Exhibits.
---------------
1 Declaration of Trust.
(a) Declaration of Trust, as amended, was filed as Exhibit No. 1
to Post-Effective Amendment No. 25 to the Registrant's Registration
Statement on Form N-1A (File No. 033-54642) (the "Registration Statement")
filed on September 26, 1996 (Accession Number 0000912057-96-021281).
(b) Amendment No. 5 to Declaration of Trust; Amendment and
Fifth Amended and Restated Establishment and Designation of Series of Shares
of Beneficial Interest. Incorporated
Part C-1
herein by reference to Post-Effective Amendment No. 29 to the Registration
Statement filed on December 26, 1996 (Accession Number 0001016964-96-000061).
(c) Amendment No. 6 to Declaration of Trust; Amendment and
Sixth Amended and Restated Establishment and Designation of Series of Shares
of Beneficial Interest was filed as Exhibit No. 1(b) to Post-Effective
Amendment No. 31 to the Registration Statement on February 28, 1997
(Accession Number 0001016964-97-000041).
(d) Amendment No. 7 to Declaration of Trust; Amendment and
Seventh Amended and Restated Establishment and Designation of Series of
Shares of Beneficial Interest was filed as Exhibit No. 1(c) to Post-Effective
Amendment No. 32 to the Registration Statement on April 15, 1997 (Accession
Number 0001016964-97-000053).
(e) Amendment No. 8 to Declaration of Trust; Amendment and
Eighth Amended and Restated Establishment and Designation of Series of Shares
of Beneficial Interest was filed as Exhibit No. l(d) to Post-Effective
Amendment No. 40 to the Registration Statement on October 9, 1997 (Accession
Number 0001016964-97-000158).
(f) Amendment No. 9 to Declaration of Trust; Amendment and
Ninth Amended and Restated Establishment and Designation of Series of Shares
of Beneficial Interest was filed as Exhibit No. l(e) to Post-Effective
Amendment No. 50 to the Registration Statement on December 29, 1997
(Accession Number 0001041455-97-000014).
(g) Amendment No. 10 to Declaration of Trust; Amendment and
Tenth Amended and Restated Establishment and Designation of Series of Shares
of Beneficial Interest and change voting procedures to dollar-based voting
was filed as Exhibit No. (a)6 to Post-Effective Amendment No. 60 to the
Registration Statement on December 31, 1998 (Accession Number
0001041455-98-000097).
(h) Amendment No. 11 to Declaration of Trust. Incorporated
herein by reference to Post-Effective Amendment No. 63 to the Registration
Statement filed on April 29, 1999 (Accession Number 00001041455-99-000041).
(i) Amendment No. 12 to Declaration of Trust. Incorporated
herein by reference to Post-Effective Amendment No. 72 to the Registration
Statement filed on April 12, 2000 (Accession Number 0001041455-00-000084).
(j) Amendment No. 13 to Declaration of Trust, incorporated
herein by reference to Post-Effective Amendment No. 78 to the Registration
Statement filed on August 1, 2000 (Accession Number 0000894088-00-000008).
(k) Amendment No.14 to Declaration of Trust incorporated herein
by reference to Post-Effective Amendment No. 78 to the Registration Statement
filed on August 1, 2000 (Accession Number 0000894088-00-000008).
Part C-2
2 By-laws.
(a) Restated By-Laws of Registrant. Incorporated herein by
reference to Post-Effective Amendment No. 29 to the Registration Statement
filed on December 26, 1996 (Accession Number 0001016964-96-000061).
(b) Amendment to Restated By-laws of Registrant. Incorporated
herein by reference to Post-Effective Amendment No. 71 to the Registration
Statement filed on February 28, 2000 (Accession Number 0001041455-00-000056).
3 Not Applicable
4 Agreement and Plan of Reorganization filed herewith as
Appendix A to the Combined Prospectus/Proxy Statement.
5 Not Applicable
6 Not Applicable.
7 Distribution Agreement filed herewith.
8 Not Applicable
9 Custodian Agreement
(a) Custodian Contract between Registrant and State Street Bank
and Trust Company ("State Street"). Incorporated herein by reference to
Post-Effective Amendment No. 29 to the Registration Statement filed on
December 26, 1996 (Accession Number 0001016964-96-000061).
(b) Custodian Contract between Registrant and The Bank of New
York. Incorporated herein by reference to Post-Effective Amendment No. 71 to
the Registration Statement filed on February 28, 2000 (Accession Number
0001041455-00-000056).
10 None.
11 None.
12 Opinion and Consent of Simpson Thacher & Bartlett as to Tax
Consequences to be filed by Amendment.
13 Material Contracts.
(a) Co-Administration Agreement between Registrant and FDI.
Incorporated herein by reference to Post-Effective Amendment No. 29 to the
Registration Statement filed on December 26, 1996 (Accession Number
0001016964-96-000061).
Part C-3
(b) Restated Shareholder Servicing Agreement between Registrant
and Morgan Guaranty Trust Company of New York ("Morgan Guaranty") filed as
Exhibit (h)2 to Post Effective Amendment No. 54 to the Registration Statement
on August 25, 1998 (Accession No. 0001041455-98-000053).
(c) Transfer Agency and Service Agreement between Registrant
and State Street. Incorporated herein by reference to Post-Effective
Amendment No. 29 to the Registration Statement filed on December 26,1996
(Accession Number 0001016964-96-000061).
(d) Restated Administrative Services Agreement between
Registrant and Morgan Guaranty. Incorporated herein by reference to
Post-Effective Amendment No. 29 to the Registration Statement filed on
December 26, 1996 (Accession Number 0001016964-96-000061).
(e) Fund Services Agreement, as amended, between Registrant and
Pierpont Group, Inc. Incorporated herein by reference to Post-Effective
Amendment No. 29 to the Registration Statement filed on December 26, 1996
(Accession Number 0001016964-96-000061).
(f) Service Plan with respect to Registrant's Service Money
Market Funds. Incorporated herein by reference to Post-Effective Amendment
No. 33 to the Registration Statement filed on April 30, 1997 (Accession
Number 00001016964-97-000059).
(g) Service Plan with respect to Registrant's Small Company
Fund Advisor Series, Small Company Opportunities Fund -- Advisor Series,
International Equity Fund -- Advisor Series, International Opportunities Fund
- -- Advisor Series, U.S. Equity Fund -- Advisor Series, Diversified Fund --
Advisor Series incorporated herein by reference to Post-Effective Amendment
No. 78 to the Registration Statement filed on August 1, 2000 (Accession
Number 0000894088-00-000008).
(h) Amended Service Plan with respect to Registrant's
Disciplined Equity -- Advisor series and Direct Prime Money Market Funds.
Incorporated herein by reference to Post-Effective Amendment No. 72 to the
Registration Statement filed on April 12, 2000 (Accession Number
0001041455-00-000084).
(i) Amended Service Plan with respect to Registrant's J.P.
Morgan Prime Cash Management Fund. Incorporated herein by reference to
Post-Effective Amendment No. 75 to Registration Statement filed on May 17,
2000 (Accession Number 0001041455-00-000122).
(j) Form of Administration Agreement filed herewith.
14 Consent of PricewaterhouseCoopers LLP.
15 None
16 Powers of Attorney filed herewith.
17 (a) Form of Proxy Card.
17 (b) Preliminary Prospectus for the Surviving Fund filed herewith.
Part C-4
17 (c) Prospectus for the Merging Fund incorporated herein by
reference to Registration Statement on Form N-14 filed on
April 16, 2001 (Accession Number 0000912057-01-508963).
17 (d) Preliminary Statement of Additional Information for the
Surviving Fund filed herewith.
17 (e) Statement of Additional Information for the Merging Fund
incorporated herein by reference to Registration Statement on
Form N-14 filed on April 16, 2001 (Accession
Number 0000912057-01-508963).
17 (f) Annual Report of the Surviving Fund (including the Annual
Report of the Master Portfolio) dated October 31, 2000
incorporated herein by reference to Registration Statement on
Form N-14 filed on April 16, 2001 (Accession
Number 0000912057-01-508963).
17 (g) Annual Report of the Merging Fund (including the Annual
Report of the Master Portfolio) dated October 31, 2000
incorporated herein by reference to Registration Statement on
Form N-14 filed on April 16, 2001 (Accession
Number 0000912057-01-508963).
Item 17. Undertakings.
---------------
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus which is
part of this registration statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the Securities Act of 1933,
as amended (the "1933 Act"), the reoffering prospectus will contain the
information called for by the applicable registration form for reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
Part C-5
SIGNATURES
As required by the Securities Act of 1933, this registration statement
has been signed on behalf of the registrant, in the City of New York and the
State of New York, on the 15th day of May, 2001.
J.P. MORGAN INSTITUTIONAL FUNDS
Registrant
By: /s/ Joseph J. Bertini
-----------------------------------------
Joseph J. Bertini
Vice President and Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on May 15, 2001.
George Rio*
- ------------------------------------
George Rio
President and Treasurer
Matthew Healey*
- ------------------------------------
Matthew Healey
Trustee, Chairman and Chief Executive Officer (Principal Executive Officer)
Frederick S. Addy*
- ------------------------------------
Frederick S. Addy
Trustee
William G. Burns*
- ---------------------------
William G. Burns
Trustee
Arthur C. Eschenlauer*
- ------------------------------------
Arthur C. Eschenlauer
Trustee
Michael P. Mallardi*
- ------------------------------------
Michael P. Mallardi
Trustee
*By /s/ Joseph J. Bertini
-----------------------------------
Joseph J. Bertini
as attorney-in-fact pursuant to a power of attorney.
EXHIBITS
ITEM DESCRIPTION
- ---- -----------
(7) Form of Distribution Agreement
(13) (j) Form of Administration Agreement
(16) Powers of Attorney.
(17) (a) Form of Proxy Card.
(b) Preliminary Prospectus for the Surviving Fund.
(d) Preliminary Statement of Additional Information for the
Surviving Fund.