As filed with the Securities and Exchange Commission on August 25, 1998.
Registration Nos. 033-54642 and 811-07342
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 54
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 55
J.P. MORGAN INSTITUTIONAL FUNDS
(formerly The JPM Institutional Funds)
(Exact Name of Registrant as Specified in Charter)
60 State Street, Suite 1300, Boston, Massachusetts 02109
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code:
(617) 557-0700
Margaret W. Chambers, c/o Funds Distributor, Inc.
60 State Street, Suite 1300, Boston, Massachusetts 02109
(Name and Address of Agent for Service)
Copy to: Stephen K. West, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
It is proposed that this filing will become effective (check appropriate box):
[ ] Immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[X] on October 1, 1998 pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
The New York Total Return Bond Portfolio has also executed this registration
statement.
<PAGE>
EXPLANATORY NOTE
This post-effective amendment No. 54 to the registration statement of
J.P. Morgan Institutional Funds (the "Registrant") on Form N-1A is being filed
to update the Registrant's disclosure in the Prospectus relating to J.P. Morgan
Institutional New York Total Return Bond Fund (the "Fund"), a series of shares
of the Registrant, to update information in the registration statement in order
to be in compliance with revised Form N-1A requirements and plain english
prospectus disclosure requirements. As a result, the Amendment does not affect
any of the Registrant's other currently effective prospectuses for each other
series of shares of the Registrant.
<PAGE>
OCTOBER 1, 1998 PROSPECTUS
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J.P. MORGAN INSTITUTIONAL NEW YORK
TAX EXEMPT BOND FUND
------------------------------------
Seeking high after-tax income
by investing primarily in
fixed income securities.
This prospectus contains essential information for anyone investing in the fund.
Please read it carefully and keep it for reference.
As with all mutual funds, the fact that these shares are registered with the
Securities and Exchange Commission does not mean that the commission approves
them as an investment or guarantees that the information in this prospectus is
correct or adequate. It is a criminal offense to state or suggest otherwise.
Distributed by Funds Distributor, Inc. JP Morgan
<PAGE>
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<PAGE>
CONTENTS
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2 J.P. MORGAN INSTITUTIONAL NEW YORK TAX EXEMPT BOND
FUND
The fund's goal, Fund description ................................... 2
investment approach,
risks, expenses, and Performance ........................................ 3
performance1
Investor expenses .................................. 3
4 FIXED INCOME MANAGEMENT APPROACH
J.P. Morgan......................................... 4
Who may want to invest.............................. 4
Fixed income investment process .................... 5
6 YOUR INVESTMENT
Investing in the Investing through a financial professional ......... 6
J.P. Morgan
Institutional New Investing directly ................................. 6
York Tax Exempt
Bond Fund Opening your account ............................... 6
Adding to your account ............................. 6
Selling shares ..................................... 7
Account and transaction policies ................... 7
Dividends and distributions ........................ 8
Tax considerations ................................. 8
9 FUND DETAILS
Master/feeder structure ........................... 9
More about risk and
the fund's business Management and administration ..................... 9
operations
Risk and reward elements .......................... 10
Investments ....................................... 12
Financial highlights .............................. 13
FOR MORE INFORMATION ....................... back cover
1
<PAGE>
J.P. MORGAN INSTITUTIONAL NEW YORK
TAX EXEMPT BOND FUND TICKER SYMBOL: JPNTX
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REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INSTITUTIONAL NEW YORK TAX
EXEMPT BOND FUND)
[GRAPHIC]
GOAL
The fund's goal is to provide a high level of tax exempt income for New
York residents consistent with moderate risk of capital. This goal can be
changed without shareholder approval.
[GRAPHIC]
INVESTMENT APPROACH
The fund invests primarily in New York municipal securities whose income
is free from federal, state, and New York City personal income taxes for New
York residents. The fund may also invest to a limited extent in securities of
other states or territories. To the extent that the fund invests in
municipal securities of other states, the income from such securities would
be free from federal personal income taxes for New York residents but would be
subject to New York state and New York City personal income taxes. For non-New
York residents, the income from New York municipal securities is free from
federal personal income taxes only. The fund may also invest in taxable
securities. The fund's securities may be of any maturity, but under normal
market conditions the fund's duration will generally range between three and
seven years, similar to that of the Lehman Brothers 1-16 Year Municipal Bond
Index. At least 90% of assets must be invested in securities that, at the time
of purchase, are rated investment-grade (BBB/Baa or better) or are the unrated
equivalent. No more than 10% of assets may be invested in securities as low as
B.
[GRAPHIC]
RISK/RETURN SUMMARY
The fund's share price and total return will vary in response to changes
in interest rates. How well the fund's performance compares to that of similar
fixed income funds will depend on the success of the investment process, which
is described on page 5. Because most of the fund's investments will typically be
from issuers in the State of New York, its performance will be affected by the
fiscal and economic health of that state and its municipalities. The fund is
non-diversified and may invest more than 5% of assets in a single issuer, which
could further concentrate its risks. To the extent that the fund seeks higher
returns by investing in non-investment-grade bonds, it takes on additional
risks, since these bonds are more sensitive to economic news and their issuers
have a less secure financial condition. The fund's investments and their main
risks, as well as fund strategies, are described in more detail on pages 10-12.
Shares in the fund are not bank deposits and are not guaranteed or insured by
any bank, government entity, or the FDIC. The value of the fund's shares will
fluctuate over time. You could lose money if you sell when the fund's share
price is lower than when you invested.
PORTFOLIO MANAGEMENT
The fund's assets are managed by J.P. Morgan, which currently manages over $300
billion, including more than $8 billion using the same strategy as this fund.
The portfolio management team is led by Robert W. Meiselas, vice president, who
has been at J.P. Morgan since 1987, and Elaine B. Young, vice president, who
joined J.P. Morgan from Scudder, Stevens & Clark, Inc. in 1994 where she was a
municipal bond trader and fixed income portfolio manager. Both have been on the
team since June of 1997.
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Before you invest
Investors considering the fund should understand that:
o There is no assurance that the fund will meet its investment goal.
o The fund invests a portion of assets in non-investment-grade bonds ("junk
bonds"), which offer higher potential yields but have a higher risk of
default and are more sensitive to market risk than investment-grade bonds.
o The fund does not represent a complete investment program.
2 J.P. MORGAN INSTITUTIONAL NEW YORK TAX EXEMPT BOND FUND
<PAGE>
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PERFORMANCE (unaudited)
The table and bar chart shown below indicate the risks of investing in J.P.
Morgan Institutional New York Tax Exempt Bond Fund.
The table indicates the risks by showing how the fund's average annual returns
for the past year and the life of the fund compare to those of the Lehman
Brothers 1-16 Year Municipal Bond Index. This is a widely recognized, unmanaged
index of general obligation and revenue bonds with maturities of 1-16 years.(1)
The bar chart indicates the risks by showing changes in the performance of the
fund's shares from year to year since the fund's inception date.
The fund's past performance does not necessarily indicate how the fund will
perform in the future.
Shows performance over time, for
Average annual total return (%) periods ended December 31, 1997
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Past 1 yr. Life of fund(2)
J.P. Morgan Institutional New York
Tax Exempt Bond Fund (after expenses) 7.68 6.91
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Lehman Brothers New York 1-15 Year
Municipal Bond Index (no expenses) 8.73 7.73
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Lehman Brothers 1-16 Year Municipal
Bond Index (no expenses) 7.97 7.29
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[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL]
Shows changes in returns by
Year-by-year total return (%) calendar year(3)
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1995 1996 1997
J.P. Morgan Institutional New
York Tax Exempt Bond Fund 13.28 4.21 7.68
Lehman Brothers New York 1-15
Year Municipal Bond Index 14.69 4.93 8.73
Lehman Brothers 1-16 Year
Municipal Bond Index 7.97
For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 4.80% (for the quarter ended 3/31/95) and the
lowest quarterly return was -0.59% (for the quarter ended 3/31/96).
================================================================================
INVESTOR EXPENSES
The expenses of the fund before reimbursement are shown at right. The fund has
no sales, redemption, exchange, or account fees, although some institutions may
charge you a fee for shares you buy through them. The annual fund expenses after
reimbursement are deducted from fund assets prior to performance calculations.
Annual fund operating expenses(4) (%)
(expenses that are deducted from fund assets)
Management fees 0.30
Marketing (12b-1) fees none
Other expenses(5) 0.32
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Total annual fund
operating expenses(5) 0.62
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Expense example
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
(before reimbursement) unchanged, and all shares sold at the end of each time
period. The example is for comparison only; the fund's actual return and your
actual costs may be higher or lower.
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1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 63 199 346 774
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================================================================================
(1) The fund's benchmark changed from the Lehman Brothers New York 1-15 Year
Municipal Bond Index, a widely recognized, unmanaged index of New York
general obligation and revenue bonds with maturities of 1-15 years, to the
Lehman Brothers 1-16 Year Municipal Bond Index on 5/1/97 because this
index provided a broader mix of municipal securities and was not
concentrated in New York City bonds.
(2) The fund commenced operations on 4/11/94, and returns reflect performance
of the fund from 4/30/94.
(3) The fund's fiscal year end is 3/31. For the period 1/1/98 through 6/30/98,
the total return for the fund was 2.01% and the total return for the index
was 2.50%.
(4) The fund has a master/feeder structure as described on page 9. This table
is restated to show the current fee arrangements in effect as of 8/1/98, and
shows the fund's expenses and its share of master portfolio expenses for
the past fiscal year before reimbursement, expressed as a percentage of the
fund's average net assets.
(5) After reimbursement, other expenses and total operating expenses for the
past fiscal year were 0.20% and 0.50%, respectively. This reimbursement
arrangement can be changed or terminated at any time at the option of J.P.
Morgan.
J.P. MORGAN INSTITUTIONAL NEW YORK TAX EXEMPT BOND FUND 3
<PAGE>
FIXED INCOME MANAGEMENT APPROACH
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J.P. MORGAN
Known for its commitment to proprietary research and its disciplined investment
strategies, J.P. Morgan is the asset management choice for many of the world's
most respected corporations, financial institutions, governments, and
individuals. Today, J.P. Morgan employs over 300 analysts and portfolio managers
around the world and has more than $300 billion in assets under management,
including assets managed by the fund's advisor, J.P. Morgan Investment
Management Inc.
J.P. MORGAN INSTITUTIONAL NEW YORK TAX EXEMPT BOND FUND
The J.P. Morgan Institutional New York Tax Exempt Bond Fund invests primarily
in bonds and other fixed income securities through a master portfolio (another
fund with the same goal).
The fund's investment philosophy, developed by its advisor, emphasizes the
potential for consistently enhancing performance while managing risk.
WHO MAY WANT TO INVEST
The fund is designed for investors who:
o want to add an income investment to further diversify a portfolio
o want an investment whose risk/return potential is higher than that of
money market funds but generally less than that of stock funds
o want an investment that pays monthly dividends
o are seeking income that is exempt from federal, state and local personal
income taxes in New York
The fund is not designed for investors who:
o are investing for aggressive long-term growth
o require stability of principal
o are investing through a tax-deferred account such as an IRA
4 FIXED INCOME MANAGEMENT APPROACH
<PAGE>
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FIXED INCOME INVESTMENT PROCESS
J.P. Morgan seeks to generate an information advantage through the depth of its
global fixed-income research and the sophistication of its analytical systems.
Using a team-oriented approach, J.P. Morgan seeks to gain insights in a broad
range of distinct areas and may take positions in many different ones, helping
the fund to limit exposure to concentrated sources of risk.
In managing the fund, J.P. Morgan employs a three-step process that combines
sector allocation, fundamental research for identifying portfolio securities,
and duration management.
[GRAPHIC]
The fund invests across a range
of different types of securities
Sector allocation The sector allocation team meets monthly, analyzing the
fundamentals of a broad range of sectors in which the fund may invest. The team
seeks to enhance performance and manage risk by underweighting or overweighting
sectors.
[GRAPHIC]
The fund makes its portfolio decisions as
described earlier in this prospectus
Security selection Relying on the insights of different specialists, including
credit analysts, quantitative researchers, and dedicated fixed income traders,
the portfolio managers make buy and sell decisions according to the fund's goal
and strategy.
[GRAPHIC]
J.P. Morgan uses a disciplined process
to control the fund's sensitivity
to interest rates
Duration management Forecasting teams use fundamental economic factors to
develop strategic forecasts of the direction of interest rates. Based on these
forecasts, strategists establish the fund's target duration (a measure of
average weighted maturity of the securities held by the fund and a common
measurement of sensitivity to interest rate movements), typically remaining
relatively close to the duration of the market as a whole, as represented by the
fund's benchmark. The strategists closely monitor the fund and make tactical
adjustments as necessary.
FIXED INCOME MANAGEMENT APPROACH 5
<PAGE>
YOUR INVESTMENT
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For your convenience, the J.P. Morgan Institutional Funds offer several ways to
start and add to fund investments.
INVESTING THROUGH A FINANCIAL PROFESSIONAL
If you work with a financial professional, either at J.P. Morgan or elsewhere,
he or she is prepared to handle your planning and transaction needs. Your
financial professional will be able to assist you in establishing your fund
account, executing transactions, and monitoring your investment. If your fund
investment is not held in the name of your financial professional and you prefer
to place a transaction order yourself, please use the instructions for investing
directly.
INVESTING DIRECTLY
Investors may establish accounts without the help of an intermediary by using
the instructions below and at right:
o Determine the amount you are investing. The minimum amount for initial
investments is $5,000,000 and for additional investments $25,000, although
these minimums may be less for some investors. For more information on
minimum investments, call 1-800-766-7722.
o Complete the application, indicating how much of your investment you want
to allocate to which fund(s). Please apply now for any account privileges
you may want to use in the future, in order to avoid the delays associated
with adding them later on.
o Mail in your application, making your initial investment as shown at
right.
For answers to any questions, please speak with a J.P. Morgan Funds Services
Representative at 1-800-766-7722.
OPENING YOUR ACCOUNT
By wire
o Mail your completed application to the Shareholder Services Agent.
o Call the Shareholder Services Agent to obtain an account number and to
place a purchase order. Funds that are wired without a purchase order will
be returned uninvested.
o After placing your purchase order, instruct your bank to wire the amount
of your investment to:
Morgan Guaranty Trust Company of New York
Routing number: 021-000-238
Credit: J.P. Morgan Institutional Funds
Account number: 001-57-689
FFC: your account number, name of registered owner(s) and fund name
By check
o Make out a check for the investment amount payable to J.P. Morgan
Institutional Funds.
o Mail the check with your completed application to the Shareholder Services
Agent.
By exchange
o Call the Shareholder Services Agent to effect an exchange.
ADDING TO YOUR ACCOUNT
By wire
o Call the Shareholder Services Agent to place a purchase order. Funds that
are wired without a purchase order will be returned uninvested.
o Once you have placed your purchase order, instruct your bank to wire the
amount of your investment as described above.
By check
o Make out a check for the investment amount payable to J.P. Morgan
Institutional Funds.
o Mail the check with a completed investment slip to the Shareholder
Services Agent. If you do not have an investment slip, attach a note
indicating your account number and how much you wish to invest in which
fund(s).
By exchange
o Call the Shareholder Services Agent to effect an exchange.
6 YOUR INVESTMENT
<PAGE>
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SELLING SHARES
By phone -- wire payment
o Call the Shareholder Services Agent to verify that the wire redemption
privilege is in place on your account. If it is not, a representative can
help you add it.
o Place your wire request. If you are transferring money to a non-Morgan
account, you will need to provide the representative with the personal
identification number (PIN) that was provided to you when you opened your
fund account.
By phone -- check payment
o Call the Shareholder Services Agent and place your request. Once your
request has been verified, a check for the net amount, payable to the
registered owner(s), will be mailed to the address of record. For checks
payable to any other party or mailed to any other address, please make
your request in writing (see below).
In writing
o Write a letter of instruction that includes the following information: The
name of the registered owner(s) of the account; the account number; the
fund name; the amount you want to sell; and the recipient's name and
address or wire information, if different from those of the account
registration.
o Indicate whether you want the proceeds sent by check or by wire.
o Make sure the letter is signed by an authorized party. The Shareholder
Services Agent may require additional information, such as a signature
guarantee.
o Mail the letter to the Shareholder Services Agent.
By exchange
o Call the Shareholder Services Agent to effect an exchange.
ACCOUNT AND TRANSACTION POLICIES
Telephone orders The fund accepts telephone orders from all shareholders. To
guard against fraud, the fund requires shareholders to use a PIN, and may record
telephone orders or take other reasonable precautions. However, if the fund does
take such steps to ensure the authenticity of an order, you may bear any loss if
the order later proves fraudulent.
Exchanges You may exchange shares in this fund for shares in any other J.P.
Morgan Institutional or J.P. Morgan mutual fund at no charge (subject to the
securities laws of your state). When making exchanges, it is important to
observe any applicable minimums. Keep in mind that for tax purposes an exchange
is considered a sale.
The fund may alter, limit, or suspend its exchange policy at any time.
Business hours and NAV calculations The fund's regular business days and hours
are the same as those of the New York Stock Exchange (NYSE). The fund calculates
its net asset value per share (NAV) every business day as of the close of
trading on the NYSE (normally 4:00 p.m. eastern time). The fund's securities are
typically priced using pricing services or market quotes, but may be priced
using fair value pricing when these methods are not readily available.
Timing of orders Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Orders are accepted until the
close of trading on the NYSE every business day and are executed the same day,
at that day's NAV. The fund has the right to suspend redemption of shares and to
postpone payment of proceeds for up to seven days or as permitted by law.
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Shareholder Services Agent
J.P. Morgan Funds Services
522 Fifth Avenue
New York, NY 10036
Representatives are available 8:00 a.m to
5:00 p.m. eastern time on fund business days.
YOUR INVESTMENT 7
<PAGE>
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Timing of settlements When you buy shares, you will become the owner of record
when the fund receives your payment, generally the day following execution. When
you sell shares, proceeds are generally available the day following execution
and will be forwarded according to your instructions.
When you sell shares that you recently purchased by check, your order will be
executed at the next NAV but the proceeds will not be available until your check
clears. This may take up to 15 days.
Statements and reports The fund sends monthly account statements as well as
confirmations after each purchase or sale of shares (except reinvestments).
Every six months the fund sends out an annual or semi-annual report containing
information on the fund's holdings and a discussion of recent and anticipated
market conditions and fund performance.
Accounts with below-minimum balances If your account balance falls below the
minimum for 30 days as a result of selling shares (and not because of
performance), the fund reserves the right to request that you buy more shares or
close your account. If your account balance is still below the minimum 60 days
after notification, the fund reserves the right to close out your account and
send the proceeds to the address of record.
DIVIDENDS AND DISTRIBUTIONS
The fund typically declares income dividends daily and pays them monthly. If an
investor's shares are redeemed during the month, accrued but unpaid dividends
are paid with the redemption proceeds. Shares of the fund earn dividends on the
business day the purchase is effective, but not on the business day the
redemption is effective. The fund distributes capital gains, if any, once a
year. However, the fund may make more or fewer payments in a given year,
depending on its investment results and its tax compliance situation. These
dividends and distributions consist of most or all of the fund's net investment
income and net realized capital gains.
Dividends and distributions are reinvested in additional fund shares.
Alternatively, you may instruct your financial professional or J.P. Morgan Funds
Services to have them sent to you by check, credited to a separate account, or
invested in another J.P. Morgan Institutional Fund.
TAX CONSIDERATIONS
In general, selling shares, exchanging shares, and receiving distributions
(whether reinvested or taken in cash) are all taxable events. These transactions
typically create the following tax liabilities for taxable accounts:
================================================================================
Transaction Tax status
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Income dividends Exempt from federal, state, and New
York City personal income taxes for
New York residents only
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Short-term capital gains Ordinary income
distributions
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Long-term capital gains Capital gains
distributions
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Sales or exchanges of Capital gains or losses
shares owned for more
than one year
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Sales or exchanges of Gains are treated as ordinary
shares owned for one year income; losses are subject
or less to special rules
- --------------------------------------------------------------------------------
Because long-term capital gains distributions are taxable as capital gains
regardless of how long you have owned your shares, you may want to avoid making
a substantial investment when the fund is about to declare a long-term capital
gains distribution.
A portion of the fund's returns may be subject to federal, state, or local tax,
or the alternative minimum tax.
Every January, the fund issues tax information on its distributions for the
previous year.
Any investor for whom the fund does not have a valid taxpayer identification
number will be subject to backup withholding for taxes.
The tax considerations described in this section do not apply to tax-deferred
accounts or other non-taxable entities.
Because each investor's tax circumstances are unique, please consult your tax
professional about your fund investment.
8 YOUR INVESTMENT
<PAGE>
FUND DETAILS
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MASTER/FEEDER STRUCTURE
As noted earlier, the fund is a "feeder" fund that invests in a master
portfolio. (Except where indicated, this prospectus uses the term "the fund" to
mean the feeder fund and its master portfolio taken together.)
The master portfolio accepts investments from other feeder funds, and the
feeders bear the master portfolio's expenses in proportion to their assets.
However, each feeder can set its own transaction minimums, fund-specific
expenses, and other conditions. This means that one feeder could offer access to
the same master portfolio on more attractive terms, or could experience better
performance, than another feeder. Information about other feeders is available
by calling 1-800-766-7722. Generally, when the master portfolio seeks a vote,
the fund will hold a shareholder meeting and cast its vote proportionately, as
instructed by its shareholders. Fund shareholders are entitled to one full or
fractional vote for each dollar or fraction of a dollar invested.
The fund and its master portfolio expect to maintain consistent goals, but if
they do not, the fund will withdraw from the master portfolio, receiving its
assets either in cash or securities. The fund's trustees would then consider
whether the fund should hire its own investment adviser, invest in a different
master portfolio, or take other action.
MANAGEMENT AND ADMINISTRATION
The fund and its master portfolio are governed by the same trustees. The
trustees are responsible for overseeing all business activities. The trustees
are assisted by Pierpont Group, Inc., which they own and operate on a cost
basis; costs are shared by all funds governed by these trustees. Funds
Distributor, Inc., as co-administrator, along with J.P. Morgan, provides fund
officers. J.P. Morgan, as co-administrator, oversees the fund's other service
providers.
J.P. Morgan, subject to the expense reimbursements described earlier in this
prospectus, receives the following fees for investment advisory and other
services:
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Advisory services 0.30% of the master portfolio's
average net assets
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Administrative services Master portfolio's and fund's
(fee shared with Funds pro-rata portions of 0.09% of the
Distributor, Inc.) first $7 billion in J.P.
Morgan-advised portfolios, plus 0.04%
of average net assets over $7 billion
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Shareholder services 0.10% of the fund's average net assets
- --------------------------------------------------------------------------------
J.P. Morgan may pay fees to certain firms and professionals for providing
recordkeeping or other services in connection with investments in the fund.
YEAR 2000
Fund operations and shareholders could be adversely affected if the computer
systems used by J.P. Morgan, the fund's other service providers and other
entities with computer systems linked to the fund, do not properly process and
calculate January 1, 2000 and after date-related information. J.P. Morgan is
working to avoid these problems and to obtain assurances from other service
providers that they are taking similar steps. However, it is not certain that
these actions will be sufficient to prevent January 1, 2000 and after
date-related problems from adversely impacting fund operations and
shareholders.
FUND DETAILS 9
<PAGE>
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RISK AND REWARD ELEMENTS
This table discusses the main elements that make up the fund's overall risk and
reward characteristics (described on page 2). It also outlines the fund's
policies toward various securities, including those that are designed to help
the fund manage risk.
<TABLE>
<CAPTION>
====================================================================================================================================
Potential risks Potential rewards Policies to balance risk and reward
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<S> <C> <C>
Market conditions
o The fund's share price, yield, and o Bonds have generally outperformed o Under normal circumstances the
total return will fluctuate in money market investments over the fund plans to remain fully
response to bond market movements long term, with less risk than invested in bonds and other fixed
stocks income securities as noted in the
o The value of most bonds will fall table on page 12
when interest rates rise; the o Most bonds will rise in value when
longer a bond's maturity and the interest rates fall o The fund seeks to limit risk and
lower its credit quality, the more enhance total return or yields
its value typically falls o Asset-backed securities can offer through careful management, sector
attractive returns allocation, individual securities
o Adverse market conditions may from selection, and duration management
time to time cause the fund to
take temporary defensive positions o During severe market downturns,
that are inconsistent with its the fund has the option of
principal investment strategies investing up to 100% of assets in
and may hinder the fund from investment-grade short-term
acheiving its investment objective securities
o Asset-backed securities o J.P. Morgan monitors interest rate
(securities representing an trends, as well as geographic and
interest in, or secured by, a pool demographic information related to
of assets such as receivables) asset-backed securities and
could generate capital losses or prepayments
periods of low yields if they are
paid off substantially earlier or
later than anticipated
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Management choices
o The fund could underperform its o The fund could outperform its o J.P. Morgan focuses its active
benchmark due to its sector, benchmark due to these same management on those areas where it
securities, or duration choices choices believes its commitment to
research can most enhance returns
and manage risks in a consistent
way
- ------------------------------------------------------------------------------------------------------------------------------------
Credit quality
o The default of an issuer would o Investment-grade bonds have a o The fund maintains its own
leave the fund with unpaid lower risk of default policies for balancing credit
interest or principal quality against potential yields
o Junk bonds offer higher yields and and gains in light of its
o Junk bonds (those rated BB/Ba or higher potential gains investment goals
lower) have a higher risk of
default, tend to be less liquid, o J.P. Morgan develops its own
and may be more difficult to value ratings of unrated securities and
makes a credit quality
determination for unrated
securities
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
10 FUND DETAILS
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
====================================================================================================================================
Potential risks Potential rewards Policies to balance risk and reward
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Illiquid holdings
o The fund could have difficulty o These holdings may offer more o The fund may not invest more than
valuing these holdings precisely attractive yields or potential 15% of net assets in illiquid
growth than comparable widely traded holdings
o The fund could be unable to sell securities
these holdings at the time or price o To maintain adequate liquidity to
desired meet redemptions, the fund may hold
investment-grade short-term
securities (including repurchase
agreements) and, for temporary or
extraordinary purposes, may borrow
from banks up to 33 1/3% of the value
of its assets
- ------------------------------------------------------------------------------------------------------------------------------------
When-issued and delayed
delivery securities
o When the fund buys securities before o The fund can take advantage of o The fund uses segregated accounts to
issue or for delayed delivery, it attractive transaction opportunities offset leverage risk
could be exposed to leverage risk if
it does not use segregated accounts
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term trading
o Increased trading would raise the o The fund could realize gains in a o The fund anticipates a portfolio
fund's transaction costs short period of time turnover rate of approximately 75%
o Increased short-term capital gains o The fund could protect against o The fund generally avoids short-term
distributions would raise losses if a bond is overvalued and trading, except to take advantage of
shareholders' income tax liability its value later falls11 attractive or unexpected
opportunities or to meet demands
generated by shareholder activity
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The fund is also permitted to enter into futures and options transactions,
however, these transactions result in taxable gains or losses so it is expected
that the fund will utilize them infrequently.
FUND DETAILS 11
<PAGE>
- --------------------------------------------------------------------------------
Investments
This table discusses the customary types of securities which can be held by the
fund. In each case the principal types of risk are listed (see below for
definitions).
<TABLE>
<CAPTION>
|X| Permitted
|_| Permitted, but not
typically used New York
Tax Exempt
Principal Types of Risk Bond Fund
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Asset-backed securities Interests in a credit, interest rate, market, |_|
stream of payments from specific assets, prepayment
such as auto or credit card receivables.
- ----------------------------------------------------------------------------------------
Bank obligations Negotiable certificates credit, liquidity |_|
of deposit, time deposits and bankers'
acceptances.
- ----------------------------------------------------------------------------------------
Commercial paper Unsecured short term credit, interest rate, |X|
debt issued by banks or corporations. liquidity, market
These securities are usually discounted
and are rated by S&P or Moody's.
- ----------------------------------------------------------------------------------------
Private placements Bonds or other credit, interest rate, |X|
investments that are sold directly to an liquidity, market, valuation
institutional investor.
- ----------------------------------------------------------------------------------------
Repurchase agreements Contracts whereby credit |_|
the seller of a security agrees to
repurchase the same security from the
buyer on a particular date and at a
specific price.
- ----------------------------------------------------------------------------------------
Synthetic variable rate instruments Debt credit, interest rate, |X|
instruments whereby the issuer agrees to leverage, liquidity, market
exchange one security for another in
order to change the maturity or quality
of a security in the fund.
- ----------------------------------------------------------------------------------------
Tax exempt municipal securities credit, interest rate, market, |X|(1)
Securities, generally issued as general natural event, political
obligation and revenue bonds, whose
interest is exempt from federal taxation
and state and/or local taxes in the
state where the securities were issued.
- ----------------------------------------------------------------------------------------
U.S. government securities Debt interest rate |X|
instruments (Treasury bills, notes, and
bonds) guaranteed by the U.S. government
for the timely payment of principal and
interest.
- ----------------------------------------------------------------------------------------
Zero coupon, pay-in-kind, and deferred credit, interest rate, |X|
payment securities Securities offering liquidity, market, valuation
non-cash or delayed-cash payment. Their
prices are typically more volatile than
those of some other debt instruments and
involve certain special tax
considerations.
- ----------------------------------------------------------------------------------------
</TABLE>
Risk related to certain securities held by J.P. Morgan Institutional New York
Tax Exempt Bond Fund:
Credit risk The risk a financial obligation will not be met by the issuer of a
security or the counterparty to a contract, resulting in a loss to the
purchaser.
Interest rate risk The risk a change in interest rates will adversely affect
the value of an investment. The value of fixed income securities generally moves
in the opposite direction of interest rates (decreases when interest rates rise
and increases when interest rates fall).
Leverage risk The risk of gains or losses disproportionately higher than the
amount invested.
Liquidity risk The risk the holder may not be able to sell the security at the
time or price it desires.
Market risk The risk that when the market as a whole declines, the value of a
specific investment will decline proportionately. This systematic risk is common
to all investments and the mutual funds that purchase them.
Natural event risk The risk of a natural disaster, such as a hurricane or
similar event, will cause severe economic losses and default in payments by the
issuer of the security.
Political risk The risk governmental policies or other political actions will
negatively impact the value of the investment.
Prepayment risk The risk declining interest rates will result in unexpected
prepayments, causing the value of the investment to fall.
Valuation risk The risk the estimated value of a security does not match the
actual amount that can be realized if the security is sold.
(1) At least 65% of assets must be in New York municipal securities.
12 FUND DETAILS
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance for the past four fiscal periods. Certain information
reflects financial results for a single fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with the fund's financial statements, are included in the
annual report, which is available upon request.
================================================================================
<TABLE>
<CAPTION>
Per-share data For fiscal periods ended March 31
- -------------------------------------------------------------------------------------------------------------
1995(1) 1996 1997 1998
<S> <C> <C> <C> <C>
Net asset value, beginning of period ($) 10.00 10.11 10.34 10.31
- -------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.42 0.49 0.48 0.48
Net realized and unrealized gain (loss)
on investment ($) 0.11 0.25 (0.02) 0.40
- -------------------------------------------------------------------------------------------------------------
Total from investment operations ($) 0.53 0.74 0.46 0.88
- -------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income ($) (0.42) (0.49) (0.48) (0.48)
Net realized gain ($) -- (0.02) (0.01) (0.04)
- -------------------------------------------------------------------------------------------------------------
Total distributions ($) (0.42) (0.51) (0.49) (0.52)
- -------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($) 10.11 10.34 10.31 10.67
Total return (%) 5.49(2) 7.40 4.54 8.64
- -------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- -------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 20,621 47,926 90,792 111,418
- -------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Expenses (%) 0.50(3) 0.50 0.50 0.50
- -------------------------------------------------------------------------------------------------------------
Net investment income (%) 4.65(3) 4.67 4.70 4.54
- -------------------------------------------------------------------------------------------------------------
Decrease reflected in expense ratio due to
expense reimbursement (%) 0.55(3) 0.17 0.14 0.09
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund commenced operations on 4/11/94.
(2) Not annualized.
(3) Annualized.
FUND DETAILS 13
<PAGE>
FOR MORE INFORMATION
- --------------------------------------------------------------------------------
For investors who want more information on the fund, the following documents are
available free upon request:
Annual/Semi-annual Reports Contain financial statements, performance data,
information on portfolio holdings, and a written analysis of market conditions
and fund performance for the fund's most recently completed fiscal year or
half-year.
Statement of Additional Information (SAI) Provides a fuller technical and legal
description of the fund's policies, investment restrictions, and business
structure. This prospectus incorporates the fund's SAI by reference.
Copies of the current versions of these documents, along with other information
about the fund, may be obtained by contacting:
J.P. Morgan Institutional New York Tax Exempt Bond Fund
J.P. Morgan Funds Services
522 Fifth Avenue
New York, NY 10036
Telephone: 1-800-766-7722
Hearing impaired: 1-888-468-4015
Email: [email protected]
Text-only versions of these documents and this prospectus are available, upon
payment of a duplicating fee, from the Public Reference Room of the Securities
and Exchange Commission in Washington, D.C. (1-800-SEC-0330) and may be viewed
on-screen or downloaded from the SEC's Internet site at http://www.sec.gov. The
fund's investment company and 1933 Act registration numbers are 811-07342 and
033-54642.
J.P. MORGAN INSTITUTIONAL FUNDS AND THE MORGAN TRADITION
The J.P. Morgan Institutional Funds combine a heritage of integrity and
financial leadership with comprehensive, sophisticated analysis and management
techniques. Drawing on J.P. Morgan's extensive experience and depth as an
investment manager, the J.P. Morgan Institutional Funds offer a broad array of
distinctive opportunities for mutual fund investors.
JP Morgan
- --------------------------------------------------------------------------------
J.P. Morgan Institutional Funds
Advisor Distributor
J.P. Morgan Investment Management Inc. Funds Distributor, Inc.
522 Fifth Avenue 60 State Street
New York, NY 10036 Boston, MA 02109
1-800-766-7722 1-800-221-7930
PROS392-9810
<PAGE>
PART C
ITEM 23. EXHIBITS.
(a) Declaration of Trust, as amended, was filed as Exhibit No. 1 to
Post-Effective Amendment No. 25 to the Registration Statement filed on September
26, 1996 (Accession Number 0000912057-96-021281).
(a)1 Amendment No. 5 to Declaration of Trust; Amendment and Fifth Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest.*
(a)2 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).
(a)3 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).
(a)4 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. 1(d) to Post-Effective Amendment No. 40 to the
Registration Statement on October 9, 1997 (Accession Number
0001016964-97-000158).
(a)5 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. 1(e) to Post-Effective Amendment No. 50 to the
Registration Statement on December 29, 1997 (Accession Number
0001041455-97-000014).
(a)6 Form of Amendment No. 10 to Declaration of Trust (filed herewith).
(b) Restated By-Laws of Registrant.*
(e) Distribution Agreement between Registrant and Funds Distributor, Inc.
("FDI").*
(g) Custodian Contract between Registrant and State Street Bank and Trust
Company ("State Street").*
(h)1 Co-Administration Agreement between Registrant and FDI.*
(h)2 Restated Shareholder Servicing Agreement between Registrant and Morgan
Guaranty Trust Company of New York ("Morgan Guaranty")(filed herewith).
(h)3 Transfer Agency and Service Agreement between Registrant and State
Street.*
(h)4 Restated Administrative Services Agreement between Registrant and
Morgan Guaranty.*
(h)5 Fund Services Agreement, as amended, between Registrant and Pierpont
Group, Inc.*
(h)6 Service Plan with respect to Registrant's Service Money Market Funds.**
<PAGE>
(i) Opinion and consent of Sullivan & Cromwell.*
(j) Consent of independent accountants (to be filed by amendment).
(l) Purchase agreements with respect to Registrant's initial shares.*
(n) Financial Data Schedules (to be filed by amendment).
- -------------------------
* Incorporated herein by reference to Post-Effective Amendment No. 29 to
the Registration Statement filed on December 26, 1996 (Accession Number
0001016964-96-000061).
** Incorporated herein by reference to Post-Effective Amendment No. 33 to
the Registration Statement filed on April 30, 1997 (Accession Number
00001016964-97-000059).
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND.
Not applicable.
ITEM 25. 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, suite 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 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER.
Not Applicable.
ITEM 27. PRINCIPAL UNDERWRITERS.
(a) Funds Distributor, Inc. (the "Distributor") is the principal
underwriter of the Registrant's shares.
<PAGE>
Funds Distributor, Inc. acts as principal underwriter for the following
investment companies other than the Registrant:
American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
BJB Investment Funds
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
Founders Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
J.P. Morgan Funds
J.P. Morgan Series Trust
J.P. Morgan Series Trust II
LaSalle Partners Funds, Inc.
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
Orbitex Group of Funds
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds, Inc.
WEBS Index Fund, Inc.
Funds Distributor, Inc. does not act as depositor or investment adviser to
any of the investment companies.
Funds Distributor, Inc. is registered with the Securities and Exchange
Commission as a broker-dealer and is a member of the National Association of
Securities Dealers. Funds Distributor, Inc. is located at 60 State Street, Suite
1300, Boston, Massachusetts 02109. Funds Distributor, Inc. is an indirect
wholly-owned subsidiary of Boston Institutional Group, Inc., a holding company
all of whose outstanding shares are owned by key employees.
(b) The following is a list of the executive officers, directors and
partners of Funds Distributor, Inc.:
Director, President and Chief Executive Officer: Marie E. Connolly
Executive Vice President: George Rio
Executive Vice President: Donald R. Roberson
Executive Vice President: William S. Nichols
Senior Vice President: Michael S. Petrucelli
Director, Senior Vice President, Treasurer and
Chief Financial Officer: Joseph F. Tower, III
Senior Vice President: Paula R. David
Senior Vice President: Allen B. Closser
<PAGE>
Senior Vice President: Bernard A. Whalen
Director: William J. Nutt
(c) Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
PIERPONT GROUP, INC.: 461 Fifth Avenue, New York, New York 10017 (records
relating to its assisting the Trustees in carrying out their duties in
supervising the Registrant's affairs).
MORGAN GUARANTY TRUST COMPANY OF NEW YORK: 60 Wall Street, New York, New York
10260-0060, 522 Fifth Avenue, New York, New York 10036 or 9 West 57th Street,
New York, New York 10019 (records relating to its functions as shareholder
servicing agent and administrative services agent).
STATE STREET BANK AND TRUST COMPANY: 1776 Heritage Drive, North Quincy,
Massachusetts 02171 and 40 King Street West, Toronto, Ontario, Canada M5H 3Y8
(records relating to its functions as fund accountant, custodian, transfer agent
and dividend disbursing agent).
FUNDS DISTRIBUTOR, INC.: 60 State Street, Suite 1300, Boston, Massachusetts
02109 (records relating to its functions as distributor and co-administrator).
ITEM 29. MANAGEMENT SERVICES.
Not Applicable.
ITEM 30. UNDERTAKINGS.
(a) If the information called for by Item 5A of Form N-1A is contained in
the latest annual report to shareholders, the Registrant shall furnish
each person to whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders upon request and
without charge.
(b) The Registrant undertakes to comply with Section 16(c) of the 1940 Act
as though such provisions of the 1940 Act were applicable to the
Registrant, except that the request referred to in the third full
paragraph thereof may only be made by shareholders who hold in the
aggregate at least 10% of the outstanding shares of the Registrant,
regardless of the net asset value of shares held by such requesting
shareholders.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereto duly authorized, in the
City of New York and State of New York on the 25th day of August, 1998.
J.P. MORGAN INSTITUTIONAL FUNDS
By /s/ Michael S. Petrucelli
----------------------------
Michael S. Petrucelli
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 August 25, 1998.
/s/ Michael S. Petrucelli
- ------------------------------
Michael S. Petrucelli
Vice President and Assistant Secretary
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/ Michael S. Petrucelli
----------------------------
Michael S. Petrucelli
as attorney-in-fact pursuant to a power of attorney.
<PAGE>
SIGNATURES
The New York Total Return Bond Portfolio has duly caused this registration
statement on Form N-1A ("Registration Statement") of J.P. Morgan Institutional
Funds (the "Trust") (File No. 033-54642) to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of New York and State of New
York on the 25th day of August, 1998.
THE NEW YORK TOTAL RETURN BOND PORTFOLIO
/s/ Michael S. Petrucelli
By ----------------------------
Michael S. Petrucelli
Vice President and Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, the Trust's
Registration Statement has been signed below by the following persons in the
capacities indicated on August 25, 1998.
/s/ Michael S. Petrucelli
- ----------------------------
Michael S. Petrucelli
Vice President and Assistant Secretary of the Portfolio
Matthew Healey*
- ----------------------------
Matthew Healey
Trustee, Chairman and Chief Executive Officer (Principal Executive Officer)
of the Portfolio
Frederick S. Addy*
- ----------------------------
Frederick S. Addy
Trustee of the Portfolio
William G. Burns*
- ----------------------------
William G. Burns
Trustee of the Portfolio
Arthur C. Eschenlauer*
- ----------------------------
Arthur C. Eschenlauer
Trustee of the Portfolio
Michael P. Mallardi*
- ----------------------------
Michael P. Mallardi
Trustee of the Portfolio
/s/ Michael S. Petrucelli
*By -----------------------------
Michael S. Petrucelli
as attorney-in-fact pursuant to a power of attorney.
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
- ------------- ----------------------
EX-99.Ba6 Form of Amendment No. 10 to Declaration of Trust
EX-99.Bh2 Restated Shareholder Servicing Agreement between Registrant and
Morgan Guaranty Trust Company of New York
J.P. MORGAN INSTITUTIONAL FUNDS
AMENDMENT NO. 10 TO DECLARATION OF TRUST
Amendment dated , 1998, effective October 1, 1998
Pursuant to Section 6.8 of the Declaration of Trust, dated as of
November 4, 1992, as amended (the "Declaration of Trust"), of J.P. Morgan
Institutional Funds (the "Trust"), the Trustees of the Trust hereby amend the
voting powers so that they reflect dollar based voting rights.
SECTION 6.8 VOTING POWERS. The Shareholders shall have power to vote
only (i) for the removal of Trustees as provided in Section 2.2 hereof, (ii)
with respect to any investment advisory or management contract as provided in
Section 4.1 hereof, (iii) with respect to termination of the Trust as provided
in Section 9.2 hereof, (iv) with respect to any amendment of this Declaration to
the extent and as provided in Section 9.3 hereof, (v) with respect to any
merger, consolidation or sale of assets as provided in Sections 9.4 and 9.6
hereof, (vi) with respect to incorporation of the Trust or any series to the
extent and as provided in Sections 9.5 and 9.6 hereof, (vii) to the same extent
as the stockholders of a Massachusetts business corporation as to whether or not
a court action, proceeding or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the Trust or the
Shareholders, and (viii) with respect to such additional matters relating to the
Trust as may be required by the Declaration, the By-Laws or any registration of
the Trust with the Commission (or any successor agency) or any state, or as the
Trustees may consider necessary or desirable. Each share of a Fund shall be
entitled to one vote for each dollar of net asset value (or a proportionate
fractional vote in respect of a fractional dollar amount), on matters on which
shares of the Fund shall be entitled to vote. Shares shall be voted by
individual series on any matter submitted to a vote of the Shareholders of the
Trust except as provided in Section 6.9(g) hereof. There shall be no cumulative
voting in the election of Trustees. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take any action required by law, the
Declaration or the By-Laws to be taken by Shareholders. At any meeting of
Shareholders of the Trust or of any series of the Trust, a Shareholder Servicing
Agent may vote any shares as to which such Shareholder Servicing Agent is the
agent of record and which are not otherwise represented in person or by proxy at
the meeting, proportionately in accordance with the votes cast by holders of all
shares otherwise represented at the meeting in person or by proxy as to which
such Shareholder Servicing Agent is the agent of record. Any shares so voted by
a Shareholder Servicing Agent will be deemed represented at the meeting for
quorum purposes. The By-Laws may include further provisions for Shareholder
votes and meetings and related matters.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
the date first written above. This instrument may be executed by the Trustees on
separate counterparts but shall be effective on October 1, 1998 and only when
signed by a majority of the Trustees.
Frederick S. Addy
William G. Burns
Arthur C. Eschenlauer
Matthew Healey
Michael P. Mallardi
THE JPM INSTITUTIONAL FUNDS
RESTATED SHAREHOLDER SERVICING AGREEMENT
THIS AGREEMENT originally made as of the 23rd day of December 1992 and
restated as of July 7, 1994 between THE JPM INSTITUTIONAL FUNDS, an
unincorporated business trust organized under the laws of the Commonwealth of
Massachusetts (the "Trust"), and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a
New York trust company ("Morgan").
W I T N E S S E T H:
WHEREAS, the Trust is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, transactions in shares of the Trust ("Shares") may be made by
investors who are using the services of a financial institution which is acting
as shareholder servicing agent pursuant to an agreement with the Trust; and
WHEREAS, Morgan wishes to act as the shareholder servicing agent for
its customers and for other investors in the Trust who are customers of an
Eligible Institution as contemplated by the currently effective prospectus of
the respective Series of the Trust (the "Customers") in performing certain
administrative functions in connection with purchases and redemptions of Shares
from time to time upon the order and for the account of Customers and to provide
related services to Customers in connection with their investments in the Trust;
and
WHEREAS, it is in the interest of the Trust to make the shareholder
services of Morgan available to Customers who are or may become shareholders of
the Trust; and
NOW, THEREFORE, the Trust and Morgan hereby agree as follows:
1. Appointment. Morgan hereby agrees to perform certain shareholder
services as agent for Customers with respect to each Fund (as defined in the
next sentence) as hereinafter set forth. As used herein, a "Fund" means the
assets and liabilities of the Trust attributable to any series of Shares as may
be created from time to time by the Trustees of the Trust and to which the Trust
and Morgan agree this Agreement shall apply.
2. Services to be Performed.
2.1. Shareholder Services. Morgan shall be responsible for performing
shareholder account administrative and servicing functions, which shall include
without limitation:
(a) answering Customer inquiries regarding account status and history,
the manner in which purchases and redemptions of the Shares may be effected, and
certain other matters pertaining to the Trust; (b) assisting Customers in
designating and changing dividend options, account designations and addresses;
<PAGE>
(c) providing necessary personnel and facilities to coordinate the establishment
and maintenance of shareholder accounts and records with the Trust's transfer
agent; (d) receiving Customers' purchase and redemption orders on behalf of, and
transmitting such orders to the Trust's transfer agent; (e) arranging for the
wiring or other transfer of funds to and from Customer accounts in connection
with Customer orders to purchase or redeem Shares; (f) verifying purchase and
redemption orders, transfers among and changes in Customer-designated accounts;
(g) informing the distributor of the Trust of the gross amount of purchase and
redemption orders for Shares; (h) monitoring the activities of the Trust's
transfer agent related to Customers' accounts, and to statements, confirmations
or other reports furnished to Customers by the Trust's transfer agent; and (i)
providing such other related services as the Trust or a Customer may reasonably
request, to the extent permitted by applicable law. Morgan shall provide all
personnel and facilities necessary in order for it to perform the functions
contemplated by this paragraph with respect to Customers.
2.2 Standard of Services. All services to be rendered by Morgan
hereunder shall be performed in a professional, competent and timely manner
subject to the supervision of the Trustees of the Trust. The details of the
operating standards and procedures to be followed by Morgan in the performance
of the services described above shall be determined from time to time by
agreement between Morgan and the Trust.
3. Fees. As full compensation for the services described in Section 2
hereof and expenses incurred by Morgan, the Trust shall pay Morgan a fee at an
annual rate of the daily net asset values of each Fund's shares owned by or for
Customers and attributable to the Trust as set forth on Schedule A attached
hereto. This fee will be computed daily and will be payable as agreed by the
Trust and Morgan, but no more frequently than monthly.
4. Information Pertaining to the Shares; Etc. Morgan and its officers,
employees and agents are not authorized to make any representations concerning
the Trust or the Shares except to communicate to Customers accurately factual
information contained in the Fund's Prospectus and Statement of Additional
Information and objective historical performance information. Morgan shall act
as agent for Customers only in furnishing information regarding the Trust or the
Shares and shall have no authority to act as agent for the Trust in its capacity
as shareholder servicing agent hereunder.
<PAGE>
During the term of this Agreement, the Trust agrees to furnish Morgan
all prospectuses, statements of additional information, proxy statements,
reports to shareholders, sales literature, or other material the Trust will
distribute to shareholders of each Fund or the public, which refer in any way to
Morgan, and Morgan agrees to furnish the Trust all material prepared for
Customers, in each case prior to use thereof, and not to use such material if
the other party reasonably objects in writing within five business days (or such
other time as may be mutually agreed in writing) after receipt thereof. In the
event of termination of this Agreement, the Trust will continue to furnish to
Morgan copies of any of the above-mentioned materials which refer in any way to
Morgan. The Trust shall furnish or otherwise make available to Morgan such other
information relating to the business affairs of the Trust as Morgan at any time,
or from time to time, reasonably requests in order to discharge its obligations
hereunder.
Nothing in this Section 4 shall be construed to make the Trust liable
for the use of any information about the Trust which is disseminated by Morgan.
5. Use of Morgan's Name. The Trust shall not use the name of Morgan in
any prospectus, sales literature or other material relating to the Trust in a
manner not approved by Morgan prior thereto in writing; provided, however, that
the approval of Morgan shall not be required for any use of its name which
merely refers in accurate and factual terms to its appointment hereunder or as
investment advisor to the Trust or which is required by the Securities and
Exchange Commission or any state securities authority or any other appropriate
regulatory, governmental or judicial authority; provided, further, that in no
event shall such approval be unreasonably withheld or delayed.
6. Use of the Fund's Name. Morgan shall not use the name of the Trust
on any checks, bank drafts, bank statements or forms for other than internal use
in a manner not approved by the Trust prior thereto in writing; provided,
however, that the approval of the Trust shall not be required for the use of the
Trust's name in connection with communications permitted by Sections 2 and 4
hereof or for any use of the Trust's name which merely refers in accurate and
factual terms to Morgan's role hereunder or as investment advisor to the Trust
or which is required by the Securities and Exchange Commission or any state
securities authority or any other appropriate regulatory, governmental or
judicial authority; provided, further, that in no event shall such approval be
unreasonably withheld or delayed.
7. Security. Morgan represents and warrants that the various procedures
and systems which it has implemented with regard to safeguarding from loss or
damage attributable to fire, theft or any other cause any Trust records and
other data and Morgan's records, data, equipment, facilities and other property
used in the performance of its obligations hereunder are adequate and that it
will make such changes therein from
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time to time as in its judgment are required for the secure performance of
its obligations hereunder. The parties shall review such systems and procedures
on a periodic basis, and the Trust shall from time to time specify the types of
records and other data of the Trust to be safeguarded in accordance with this
Section 7.
8. Compliance with Laws; etc. Morgan assumes no responsibilities under
this Agreement other than to render the services called for hereunder, on the
terms and conditions provided herein. Morgan shall comply with all applicable
federal and state laws and regulations. Morgan represents and warrants to the
Trust that the performance of all its obligations hereunder will comply with all
applicable laws and regulations, the provisions of its charter documents and
by-laws and all material contractual obligations binding upon Morgan. Morgan
furthermore undertakes that it will promptly inform the Trust of any change in
applicable laws or regulations (or interpretations thereof) which would prevent
or impair full performance of any of its obligations hereunder.
9. Force Majeure. Morgan shall not be liable or responsible for delays
or errors by reason of circumstances beyond its control, including, but not
limited to, acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown, flood or catastrophe, Acts of God,
insurrection, war, riots or failure of communication or power supply.
10. Indemnification.
10.1. Indemnification of Morgan. The Trust will indemnify and hold
Morgan harmless, from all losses, claims, damages, liabilities or expenses
(including reasonable fees and disbursements of counsel) from any claim, demand,
action or suit (collectively, "Claims") (a) arising in connection with
misstatements or omissions in each Fund's Prospectus, actions or inactions by
the Trust or any of its agents or contractors or the performance of Morgan's
obligations hereunder and (b) not resulting from the willful misfeasance, bad
faith, or gross negligence of Morgan, its officers, employees or agents, in the
performance of Morgan's duties or from reckless disregard by Morgan, its
officers, employees or agents of Morgan's obligations and duties under this
Agreement. Notwithstanding anything herein to the contrary, the Trust will
indemnify and hold Morgan harmless from any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses)
resulting from any Claim as a result of Morgan's acting in accordance with any
written instructions reasonably believed by Morgan to have been executed by any
person duly authorized by the Trust, or as a result of acting in reliance upon
any instrument or stock certificate reasonably believed by Morgan to have been
genuine and signed, countersigned or executed by a person duly authorized by the
Trust, excepting only the gross negligence or bad faith of Morgan.
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In any case in which the Trust may be asked to indemnify or hold Morgan
harmless, the Trust shall be advised of all pertinent facts concerning the
situation in question and Morgan shall use reasonable care to identify and
notify the Trust promptly concerning any situation which presents or appears
likely to present a claim for indemnification against the Trust. The Trust shall
have the option to defend Morgan against any Claim which may be the subject of
indemnification under this Section 10.1. In the event that the Trust elects to
defend against such Claim, the defense shall be conducted by counsel chosen by
the Trust and reasonably satisfactory to Morgan. Morgan may retain additional
counsel at its expense. Except with the prior written consent of the Trust,
Morgan shall not confess any Claim or make any compromise in any case in which
the Trust will be asked to indemnify Morgan.
10.2. Indemnification of the Trust. Without limiting the rights of the
Trust under applicable law, Morgan will indemnify and hold the Trust harmless
from all losses, claims, damages, liabilities or expenses (including reasonable
fees and disbursements of counsel) from any Claim (a) resulting from the willful
misfeasance, bad faith or gross negligence of Morgan, its officers, employees,
or agents, in the performance of Morgan's duties or from reckless disregard by
Morgan, its officers, employees or agents of Morgan's obligations and duties
under this Agreement, and (b) not resulting from Morgan's actions in accordance
with written instructions reasonably believed by Morgan to have been executed by
any person duly authorized by the Trust, or in reliance upon any instrument or
stock certificate reasonably believed by Morgan to have been genuine and signed,
countersigned or executed by a person authorized by the Trust.
In any case in which Morgan may be asked to indemnify or hold the Trust
harmless, Morgan shall be advised of all pertinent facts concerning the
situation in question and the Trust shall use reasonable care to identify and
notify Morgan promptly concerning any situation which presents or appears likely
to present a claim for indemnification against Morgan. Morgan shall have the
option to defend the Trust against any Claim which may be the subject of
indemnification under this Section 10.2. In the event that Morgan elects to
defend against such Claim, the defense shall be conducted by counsel chosen by
Morgan and reasonably satisfactory to the Trust. The Trust may retain additional
counsel at its expense. Except with the prior written consent of Morgan, the
Trust shall not confess any Claim or make any compromise in any case in which
Morgan will be asked to indemnify the Trust.
10.3. Survival of Indemnities. The indemnities granted by the parties
in this Section 10 shall survive the termination of this Agreement.
11. Insurance. Morgan shall maintain reasonable insurance coverage
against any and all liabilities which may arise in connection with the
performance of its duties hereunder.
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12. Further Assurances. Each party agrees to perform such further acts
and execute further documents as are necessary to effectuate the purposes
hereof.
13. Termination. This Agreement shall continue in effect for a period
of one year and may thereafter be renewed by the Trustees of the Trust;
provided, however, that this Agreement may be terminated by the Trust at any
time without the payment of any penalty, by the Trustees of the Trust or by vote
of a majority of the outstanding voting securities (as defined in the 1940 Act)
of the Trust, upon not less than six (6) months' written notice to Morgan or by
Morgan at any time, without the payment of any penalty, on not less than ninety
(90) days' written notice to the Trust. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940 Act).
14. Subcontracting by Morgan. Morgan may subcontract for the
performance of its obligations hereunder with any one or more persons, including
but not limited to any one or more persons which is an affiliate of Morgan;
provided however, unless the Trust otherwise expressly agrees in writing, Morgan
shall be as fully responsible to the Trust for the acts and omissions of any
subcontractor as it would be for its own acts or omissions.
15. Nothing in this Agreement shall limit or restrict the right of
Morgan to engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
16. Changes; Amendments. This Agreement may be amended only by mutual
written consent.
17. Notices. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to Morgan at Morgan Guaranty Trust Company
of New York, 9 West 57th Street, 10019, Attention: Managing Director, Funds
Management Division, or (2) to the Trust at The JPM Institutional Funds c/o
Signature Broker-Dealer Services, Inc., 6 St. James Avenue, Boston,
Massachusetts 02116, Attention: Treasurer, or at such other address as either
party may designate by notice to the other party.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
written.
THE JPM INSTITUTIONAL FUNDS
By /s/ James B. Craver
James B. Craver
Secretary and Treasurer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Kathleen H. Tripp
Kathleen H. Tripp
Vice President
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Schedule A
Shareholder Servicing Fees
J.P. Morgan Institutional Service Prime Money Market Fund
J.P. Morgan Institutional Service Tax Exempt Money Market Fund
J.P. Morgan Institutional Service Federal Money Market Fund
J.P. Morgan Institutional Service Treasury Money Market Fund
J.P. Morgan Institutional Bond Fund - Ultra
0.05% of the average daily net asset value of Fund shares owned by or for
Customers
J.P. Morgan Institutional Prime Money Market Fund
J.P. Morgan Institutional Tax Exempt Money Market Fund
J.P. Morgan Institutional Federal Money Market Fund
J.P. Morgan Institutional Treasury Money Market Fund
J.P. Morgan Institutional Short Term Bond Fund
J.P. Morgan Institutional Bond Fund
J.P. Morgan Institutional Tax Exempt Bond Fund
J.P. Morgan Institutional New York Tax Exempt Bond Fund
J.P. Morgan Institutional International Bond Fund
J.P. Morgan Institutional U.S. Equity Fund
J.P. Morgan Institutional U.S. Small Company Fund
J.P. Morgan Institutional International Equity Fund
J.P. Morgan Institutional Emerging Markets Equity Fund
J.P. Morgan Institutional Diversified Fund
J.P. Morgan Institutional Japan Equity Fund
J.P. Morgan Institutional European Equity Fund
J.P. Morgan Institutional Disciplined Equity Fund
J.P. Morgan Institutional Global Strategic Income Fund
J.P. Morgan Institutional International Opportunities Fund
0.10% of the average daily net asset value of Fund shares owned by or for
Customers
Approved July 9, 1998
Effective August 1, 1998
