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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 15
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SIGNATURE GEORGE A. RIO
TITLE TREASURER
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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</TABLE>
To the Shareholders and Board of Directors of
J.P. Morgan Institutional Tax Exempt Bond Fund and
J.P. Morgan Institutional Tax Exempt Money Market Fund
J.P. Morgan Institutional Service Tax Exempt Money Market Fund
October 15, 1998
Report of Independent Accountants
October 15, 1998
To the Shareholders and Trustees of
J.P. Morgan Institutional Tax Exempt Bond Fund
J.P. Morgan Institutional Tax Exempt Money Market Fund
J.P. Morgan Institutional Service Tax Exempt Money Market Fund
In planning and performing our audits of the financial statements of J.P. Morgan
Institutional Tax Exempt Bond Fund and J.P. Morgan Institutional Tax Exempt
Money Market Fund for the year ended August 31, 1998 and J.P. Morgan
Institutional Service Tax Exempt Money Market Fund (the "Funds") for the period
November 4, 1997 (commencement of operations) through August 31, 1998, we
considered its internal control, including control activities for safeguarding
securities, in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to comply with the
requirements of Form N-SAR, not to provide assurance on internal control.
The management of the Funds is responsible for establishing and maintaining
internal control. In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of
control activities. Generally, control activities that are relevant to an audit
pertain to the entity's objective of preparing financial statements for external
purposes that are fairly presented in conformity with generally accepted
accounting principles. Those control activities include the safeguarding of
assets against unauthorized acquisition, use or disposition.
<PAGE>
Because of inherent limitations in internal control, errors or fraud may occur
and not be detected. Also, projection of any evaluation of internal control to
future periods is subject to the risk that it may become inadequate because of
changes in conditions or that the effectiveness of the design and operation may
deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of any
specific internal control components does not reduce to a relatively low level
the risk that errors or fraud in amounts that would be material in relation to
the financial statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing their assigned
functions. However, we noted no matters involving internal control, including
control for safeguarding securities, that we consider to be material weaknesses
as defined above as of August 31, 1998.
This report is intended solely for the information and use of management and the
Trustees of the Funds and the Securities and Exchange Commission.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
FOR J.P. MORGAN INSTITUTIONAL TAX EXEMPT MONEY MARKET FUND
Supplemental Proxy Information: A Joint Special Meeting of Shareholders of the
J.P. Morgan Family of Funds was held on June 25, 1998, adjourned to August 20,
1998. Each of the applicable funds voted in favor of adopting the following
proposals, therefore, the results are aggregated for the Trust unless otherwise,
specified.
1. To elect a slate of five Trustees to hold office for a term of unlimited
duration subject to the current retirement age of 70 (applicable to J.P. Morgan
Funds, J.P. Morgan Institutional Funds and J.P. Morgan Series Trust):
Votes in Votes
Favor of Against
Frederick S. Addy 2,592,561,591 8,840,251
William G. Burns 2,592,561,591 8,840,251
Arthur C. Eschenlauer 2,592,561,591 8,840,251
Matthew Healey 2,592,561,591 8,840,251
Michael P. Mallardi 2,592,561,591 8,840,251
2. To standardize the funds' and their corresponding portfolios' fundamental
investment restrictions:
2A. Diversification of investments (applicable to all funds and portfolios
except for J.P. Morgan Japan Equity, J.P. Morgan Institutional Equity, J.P.
Morgan Institutional International Bond, J.P. New York Total Return Bond, J.P.
Morgan Institutional New York Total Return Bond, J.P. Morgan Emerging Markets
Debt and J.P. Morgan California Bond Funds and their corresponding portfolios)
Votes in Votes Votes
Favor of Against Abstained
354,691,768 0 0
2B. Concentration of assets in a particular industry (applicable to all funds
and portfolios)
Votes in Votes Votes
Favor of Against Abstained
354,691,768 0 0
2C. Issuance of senior securities (applicable to all funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
354,691,768 0 0
2D. Borrowing (applicable to all funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
354,691,768 0 0
2E. Underwriting (applicable to all funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
354,691,768 0 0
2F. Investment in Real Estate (applicable to all funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
354,691,768 0 0
2G. Commodities (applicable to all funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
354,691,768 0 0
2H. Lending (applicable to all funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
354,691,768 0 0
2I. Reclassification of Other Fundamental Restrictions as Nonfundamental
(applicable to all funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
354,660,624 31,144 0
3. Reclassification of Investment Objectives from Fundamental to
Nonfundamental (applicable to all funds and portfolios except for J.P. Morgan
Disciplined Equity, J.P. Morgan Institutional Disciplined Equity, J.P. Morgan
International Opportunities, J.P. Morgan Institutional International
Opportunities, J.P. Morgan Global Strategic Income, J.P. Morgan Institutional
Global Strategic Income, J.P. Morgan Emerging Markets Debt, J.P. Morgan U.S.
Small Company Opportunities, J.P. Morgan Tax Aware U.S. Equity, J.P. Morgan
California Bond, J.P. Morgan Institutional Treasury Money Market and J.P. Morgan
Institutional Service Treasury Money Market Funds)
Votes in Votes Votes
Favor of Against Abstained
354,691,768 0 0
4. Approval of New Investment Advisory Agreement (applicable to all funds and
portfolios)
Votes in Votes Votes
Favor of Against Abstained
354,691,768 0 0
5. Amendment of the Declaration of Trust (applicable to J.P. Morgan Funds
and J.P. Morgan Institutional Funds)
Votes in Votes Votes
Favor of Against Abstained
2,411,567,264 7,638,329 179,591,823
6. Ratification of the selection of independent accountants (applicable to
J.P. Morgan Funds, J.P. Morgan Institutional Funds and J.P. Morgan Series Trust)
Votes in Votes Votes
Favor of Against Abstained
2,402,592,025 19,567,729 179,242,087
FOR J.P. MORGAN INSTITUTIONAL TAX EXEMPT BOND FUND
Supplemental Proxy Information: A Joint Special Meeting of Shareholders of the
J.P. Morgan Family of Funds was held on June 25, 1998, adjourned to August 20,
1998. Each of the applicable funds voted in favor of adopting the following
proposals, therefore, the results are aggregated for the Trust unless otherwise,
specified.
1. To elect a slate of five Trustees to hold office for a term of unlimited
duration subject to the current retirement age of 70 (applicable to J.P. Morgan
Funds, J.P. Morgan Institutional Funds and J.P. Morgan Series Trust):
Votes in Votes
Favor of Against
Frederick S. Addy 2,592,561,591 8,840,251
William G. Burns 2,592,561,591 8,840,251
Arthur C. Eschenlauer 2,592,561,591 8,840,251
Matthew Healey 2,592,561,591 8,840,251
Michael P. Mallardi 2,592,561,591 8,840,251
2. To standardize the funds' and their corresponding portfolios' fundamental
investment restrictions:
2A. Diversification of investments (applicable to all funds and portfolios
except for J.P. Morgan Japan Equity, J.P. Morgan Institutional Equity, J.P.
Morgan Institutional International Bond, J.P. New York Total Return Bond, J.P.
Morgan Institutional New York Total Return Bond, J.P. Morgan Emerging Markets
Debt and J.P. Morgan California Bond Funds and their corresponding portfolios)
Votes in Votes Votes
Favor of Against Abstained
13,202,292 107,473 66,610
2B. Concentration of assets in a particular industry (applicable to all
funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
13,202,292 107,473 66,610
2C. Issuance of senior securities (applicable to all funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
13,202,292 107,473 66,610
2D. Borrowing (applicable to all funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
13,202,292 107,473 66,610
2E. Underwriting (applicable to all funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
13,202,292 107,473 66,610
2F. Investment in Real Estate (applicable to all funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
13,202,292 107,473 66,610
2G. Commodities (applicable to all funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
13,111,834 107,473 157,068
2H. Lending (applicable to all funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
13,111,834 107,473 157,068
2I. Reclassification of Other Fundamental Restrictions as Nonfundamental
(applicable to all funds and portfolios)
Votes in Votes Votes
Favor of Against Abstained
13,111,834 107,473 157,068
3. Reclassification of Investment Objectives from Fundamental to
Nonfundamental (applicable to all funds and portfolios except for J.P. Morgan
Disciplined Equity, J.P. Morgan Institutional Disciplined Equity, J.P. Morgan
International Opportunities, J.P. Morgan Institutional International
Opportunities, J.P. Morgan Global Strategic Income, J.P. Morgan Institutional
Global Strategic Income, J.P. Morgan Emerging Markets Debt, J.P. Morgan U.S.
Small Company Opportunities, J.P. Morgan Tax Aware U.S. Equity, J.P. Morgan
California Bond, J.P. Morgan Institutional Treasury Money Market and J.P. Morgan
Institutional Service Treasury Money Market Funds)
Votes in Votes Votes
Favor of Against Abstained
13,111,834 107,473 157,068
4. Approval of New Investment Advisory Agreement (applicable to all funds and
portfolios)
Votes in Votes Votes
Favor of Against Abstained
13,132,304 0 264,257
5. Amendment of the Declaration of Trust (applicable to J.P. Morgan Funds
and J.P. Morgan Institutional Funds)
Votes in Votes Votes
Favor of Against Abstained
2,411,567,264 7,638,329 179,591,823
6. Ratification of the selection of independent accountants (applicable to
J.P. Morgan Funds, J.P. Morgan Institutional Funds and J.P. Morgan Series Trust)
Votes in Votes Votes
Favor of Against Abstained
2,402,592,025 19,567,729 179,242,087
