<PAGE>
J.P. MORGAN FAMILY OF FUNDS
AND
THE MANAGERS MONEY MARKET FUND
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT
MAY 14, 1998
<PAGE>
TABLE OF CONTENTS
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PAGE
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Introduction.............................................................. 1
Proposal One: Election of Trustees....................................... 3
Proposal Two: Changes to Fundamental Investment Restrictions............. 5
Proposal Three: Reclassification as Nonfundamental of the Investment
Objective of Those Funds Whose Investment Objective is Currently
Classified as Fundamental............................................... 15
Proposal Four: Approval of New and Separate Investment Advisory
Agreements Between Each Fund or Portfolio in Which the Fund Invests, as
Applicable, and J.P. Morgan Investment Management Inc................... 17
Proposal Five: Amendment of the Declaration of Trust of J.P. Morgan Funds
and J.P. Morgan Institutional Funds to Provide Dollar-Based Voting
Rights for Shareholders................................................. 20
Proposal Six: Ratification of Selection of Independent Accountants of the
Trusts.................................................................. 21
Other Business............................................................ 24
Exhibit A: Executive Officers of the Trust............................... A-1
Exhibit B: Proposed Standardized Fundamental Restrictions................ B-1
Exhibit C: Current Fundamental Investment Restrictions................... C-1
Exhibit D: Terms of Investment Advisory Agreement and Schedule of Fees
Paid to Affiliates of the Advisor....................................... D-1
Exhibit E: Summary of Investment Advisory Agreements..................... E-1
Exhibit F: Directors and Principal Executive Officers of Morgan Guaranty
Trust Company of New York............................................... F-1
Exhibit G: Amended Article VI of the Declaration of Trust of J.P. Morgan
and J.P. Morgan Institutional Funds..................................... G-1
Exhibit H: Number of Shares of Each Fund (or Class) Outstanding as of the
Close of Business on April 13, 1998..................................... H-1
Exhibit I: Principal Holders of Voting Securities........................ I-1
</TABLE>
<PAGE>
IMPORTANT NEWS
FOR SHAREHOLDERS OF J.P. MORGAN FUNDS, J.P.
MORGAN INSTITUTIONAL FUNDS, J.P. MORGAN SERIES
TRUST AND THE MANAGERS MONEY MARKET FUND
We encourage you to read the attached proxy statement in full. By way of
introduction, we have included the following questions and answers regarding
this proxy.
WHEN WILL THE SPECIAL MEETING BE HELD? WHO IS ELIGIBLE TO VOTE?
The meeting will be held on Thursday, June 25, 1998, at 10:00 a.m. eastern
time at 522 Fifth Avenue, 7th Floor, New York, New York 10036. Please note that
this meeting will only cover the items listed in this proxy statement. There
will be no presentations about the Funds. The record date is the close of
business on April 13, 1998. Only shareholders who owned shares at that time are
entitled to vote at the meeting.
WHAT ARE THE ISSUES CONTAINED IN THIS PROXY?
Your Board of Trustees is recommending that shareholders consider the
following proposals:
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<CAPTION>
PROPOSAL FUNDS AFFECTED
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<S> <C>
1. To elect the Board of Trustees; All
2. To approve the adoption of standardized All
investment restrictions and reclassification
of others as nonfundamental;
3. To approve the reclassification of the All except J.P. Morgan and J.P. Morgan
investment objective from fundamental to Institutional Disciplined Equity,
nonfundamental; International Opportunities and Global
Strategic Income Funds, J.P. Morgan Emerging
Markets Debt and U.S. Small Company
Opportunities Funds, J.P. Morgan Series Trust
Tax Aware U.S. Equity, Tax Aware Disciplined
Equity and California Bond Funds, and J.P.
Morgan Institutional Treasury Money Market
and Service Treasury Money Market Funds
4. To approve a new investment advisory All
agreement between each Fund (or the portfolio
in which the Fund invests, as applicable) and
J.P. Morgan Investment Management Inc.;
5. To amend the Declaration of Trust to J.P. Morgan Funds
provide dollar-based voting rights; J.P. Morgan Institutional Funds
</TABLE>
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<TABLE>
<CAPTION>
PROPOSAL FUNDS AFFECTED
- --------------------------------------------------------------------------------------------
<S> <C>
6. To ratify the selection of independent All
accountants;
7. To transact any other business which may All
properly come before the Meeting or any
adjournments thereof.
</TABLE>
WHO ARE THE NOMINEES TO BE MY TRUSTEES?
Each of the Nominees currently serves as a Trustee of J.P. Morgan Funds,
J.P. Morgan Institutional Funds and J.P. Morgan Series Trust. They are Frederick
S. Addy, William G. Burns, Arthur C. Eschenlauer, Matthew Healey and Michael P.
Mallardi. Biographical information for these Nominees can be found on page 3.
WHY AM I BEING ASKED TO ADOPT STANDARDIZED FUNDAMENTAL INVESTMENT RESTRICTIONS?
Currently the Funds have fundamental investment restrictions (restrictions
which may only be changed with a shareholder vote) that vary between Trusts and
between Funds within the same Trust. These fundamental investment restrictions
reflect legal, regulatory or industry conditions or practices which are or need
no longer be applicable to the Funds. To promote greater efficiency in the
management of the Funds, Morgan Guaranty Trust Company of New York ("MGT" or the
"Advisor") has analyzed the fundamental investment limitations and policies of
the Funds in an effort to formulate a standard set of policies for all Funds
which reflect current industry practice and will allow the Funds to respond to
changes in regulatory and industry practice without the expense and delay of a
shareholder vote.
Except as noted in the proposal, the adoption of the proposed changes is not
expected to materially affect the way the Funds are managed.
Some of the proposed changes are quite technical. A full discussion of the
specific changes, as well as a further discussion of the benefits of
standardization, begins on page 5.
WHY AM I BEING ASKED TO APPROVE THE RECLASSIFICATION OF CERTAIN FUND
INVESTMENT OBJECTIVES?
Some of the Funds' investment objectives were adopted as fundamental
policies and therefore may be changed only by a vote of the Fund shareholders.
In order to respond more quickly to market or regulatory changes, without the
costs associated with a shareholder meeting, it is proposed that these Funds
reclassify their investment objectives as nonfundamental. These objectives could
then be changed at any time without a vote of Fund shareholders. A full
discussion of this proposal, along with discussion of proposed changes to the
investment objectives of J.P. Morgan and J.P. Morgan Institutional Short Term
Bond and New York Total Return Bond Funds, begins on page 15.
WHAT CHANGES ARE BEING PROPOSED REGARDING THE INVESTMENT ADVISORY ARRANGEMENTS?
Currently, MGT is the investment advisor to the Funds or the portfolios in
which they invest. The Trustees propose changing the investment advisor to J.P.
Morgan Investment Management Inc. ("JPMIM"), an affiliate of MGT. Each of MGT
and JPMIM is a directly wholly-owned subsidiary of
<PAGE>
J.P. Morgan & Co. Incorporated ("JP Morgan"). JP Morgan believes that the change
will enhance fund marketing because of the greater name recognition accorded to
JP Morgan than to MGT. The proposed change will not affect the Funds' investment
or other operations and would not involve a change in the personnel providing
advisory services to the Funds or the portfolios in which they invest.
A full discussion of the specific proposal begins on page 17.
WHY AM I BEING ASKED TO AMEND THE DECLARATIONS OF TRUST TO PROVIDE
FOR DOLLAR-BASED VOTING RIGHTS?
Currently, under each of J.P. Morgan and J.P Morgan Institutional Funds'
Declarations of Trust, each share is entitled to one vote, regardless of the
relative value of shares of each Fund. The original intent of the one-share,
one-vote provision was to provide equitable voting rights to all shareholders as
required by the Investment Company Act of 1940 (the "1940 Act"). In the case
where a trust has several funds, voting rights may have become disproportionate
since the net asset value per share ("NAV") of the separate funds generally
diverge over time.
The proposed amendment would provide voting rights based on a shareholder's
total dollar interest in a Fund (dollar-based voting), rather than on the number
of shares owned. As a result, voting power would be allocated according to the
value of each shareholder's investment. A full discussion of this proposal
begins on page 20.
WHAT IS THE "RATIFICATION" OF THE INDEPENDENT ACCOUNTANTS?
The 1940 Act requires your Board of Trustees to select independent
accountants for the Funds and also requires the Trustees to submit their
selection to the shareholders for their approval (technically called a
"ratification") in any year that a shareholder meeting is being held.
A full discussion of the proposal to ratify the selection of Price
Waterhouse LLP as independent accountants to J.P. Morgan and J.P. Morgan
Institutional Funds and J.P. Morgan Series Trust begins on page 21.
HOW DO THE TRUSTEES OF MY FUND RECOMMEND THAT I VOTE?
The Trustees recommend that you vote FOR all of the proposals on the
enclosed proxy card.
WHOM DO I CALL FOR MORE INFORMATION OR TO PLACE MY VOTE?
Please call D.F. King at 800-290-6429 or J.P. Morgan Funds Services at
800-521-5411 for additional information. You can vote using any of the following
methods:
Use the enclosed proxy card to record your vote for each proposal, then
return the card in the postpaid envelope provided.
OR
Complete the enclosed proxy card and FAX it to (212) 809-6028.
OR
Call D.F. King at 800-290-6429 and record your vote by telephone.
<PAGE>
[LOGO]
May 1998
Dear fellow Shareholder:
We are writing to inform you of a special shareholder meeting to be held on
June 25, 1998. Before that meeting we would like you to vote on the important
issues affecting your Fund(s) as described in the attached proxy statement.
We are asking you to vote on several proposals, which are explained in
further detail in the proxy statement.
THE BOARDS OF TRUSTEES HAVE UNANIMOUSLY APPROVED THE PROPOSALS AND RECOMMEND
THAT YOU VOTE FOR ALL OF THE PROPOSALS DESCRIBED IN THIS DOCUMENT.
We realize that this proxy statement will take time to review, but your vote
is very important. Please familiarize yourself with the proposals and sign and
return your proxy card(s) in the enclosed postage-paid envelope today. You may
receive more than one proxy card if you own shares in more than one Fund. Please
sign and return each card you receive.
If your completed proxy cards are not received, you may be contacted by
officers or employees of J.P. Morgan, its affiliates or other representatives of
the Fund(s) or by our proxy solicitor, D.F. King & Co., Inc. D.F. King has been
engaged to assist your Fund(s) in soliciting proxies. They will remind you to
vote your shares. You may also call D.F. King directly at 800-290-6429 and vote
by phone.
Thank you for taking this matter seriously and participating in this
important process.
Sincerely,
<TABLE>
<CAPTION>
<S> <C>
Ramon de Oliveira Keith M. Schappert
Chairman of Asset Management Services President of Asset Management Services
</TABLE>
<PAGE>
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<PAGE>
J.P. MORGAN FUNDS
J.P. MORGAN INSTITUTIONAL FUNDS
J.P. MORGAN SERIES TRUST
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
THE MANAGERS MONEY MARKET FUND
(A SERIES OF THE MANAGERS FUNDS)
40 RICHARDS AVENUE
NORWALK, CONNECTICUT 06854
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 25, 1998
NOTICE IS HEREBY GIVEN that a Joint Special Meeting (the "Meeting") of
Shareholders of each series of J.P. Morgan Funds, J.P. Morgan Institutional
Funds and J.P. Morgan Series Trust (each a "Trust") and Managers Money Market
Fund (the "Managers Fund"), a series of The Managers Funds (each individual
series and the Managers Fund, each a "Fund"), will be held at 522 Fifth Avenue,
7th Floor, New York, New York 10036 on Thursday, June 25, 1998 at 10:00 a.m.,
Eastern time, for the following purposes, all of which are more fully described
in the accompanying Proxy Statement dated May 14, 1998:
1. To elect the Board of Trustees;
2. To approve the adoption of standardized fundamental investment
restrictions and the reclassification of certain fundamental investment
restrictions as nonfundamental;
3. For each Fund which has a fundamental investment objective, to approve
the proposed reclassification of the investment objective from
fundamental to nonfundamental. Upon approval, the investment objectives
of J.P Morgan and J.P. Morgan Institutional Short Term Bond and New York
Total Return Bond Funds will be changed as described more fully in the
proxy statement;
4. To approve a new investment advisory agreement between each Fund (or the
portfolio in which the Fund invests) and J.P. Morgan Investment
Management Inc.;
5. To amend the Declaration of Trust of J.P. Morgan Funds and J.P. Morgan
Institutional Funds to provide dollar-based voting rights;
6. To ratify the selection of the independent accountants; and
7. To transact any other business which may properly come before the
Meeting or any adjournments thereof.
The Boards of Trustees of each Trust and of Managers Fund have fixed the
close of business on April 13, 1998 as the record date for the determination of
shareholders of each Fund entitled to notice of and to vote at the Meeting or
any adjournments thereof. The enclosed proxy is being solicited on behalf of the
Boards of Trustees of each Trust and of Managers Fund.
YOUR VOTE IS IMPORTANT
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS ARE URGED TO
SIGN WITHOUT DELAY AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE, SO THAT THEIR SHARES MAY BE REPRESENTED AT THE MEETING.
YOUR PROMPT ATTENTION TO THE ENCLOSED PROXY WILL HELP TO AVOID THE EXPENSE OF
FURTHER SOLICITATION.
J.P. MORGAN FUNDS
J.P. MORGAN INSTITUTIONAL FUNDS
J.P. MORGAN SERIES TRUST
By Order of the Boards of Trustees
Christopher J. Kelley
ASSISTANT SECRETARY
THE MANAGERS MONEY MARKET FUND
(a series of The Managers Funds)
By Order of the Board of Trustees
Donald S. Rumery
SECRETARY
<PAGE>
May 14, 1998
<PAGE>
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for signing proxy cards may be of assistance to
you and may help to avoid the time and expense involved in validating your vote
if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears on the
proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to a name shown on the proxy card.
3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the name on the proxy
card. For example:
<TABLE>
<CAPTION>
REGISTRATION VALID SIGNATURE
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<S> <C>
Corporate Accounts
(1) ABC Corp. (1) ABC Corp.
John Doe, Treasurer
(2) ABC Corp. (2) John Doe, Treasurer
c/o John Doe, Treasurer
(3) ABC Corp. Profit Sharing Plan (3) John Doe, Trustee
Trust Accounts
(1) ABC Trust (1) Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee (2) Jane B. Doe
u/t/d 12/28/78
Custodial or Estate Accounts
(1) John B. Smith, Cust. (1) John B. Smith
f/b/o John B. Smith, Jr. UGMA
(2) John B. Smith, Jr. (2) John B. Smith, Jr., Executor
</TABLE>
<PAGE>
PROXY STATEMENT
J.P. MORGAN FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
<TABLE>
<S> <C> <C>
BOND FUND INTERNATIONAL OPPORTUNITIES FUND TAX EXEMPT MONEY MARKET FUND
DISCIPLINED EQUITY FUND JAPAN EQUITY FUND U.S. EQUITY FUND
DIVERSIFIED FUND NEW YORK TOTAL RETURN BOND FUND U.S. SMALL COMPANY FUND
EMERGING MARKETS EQUITY FUND PRIME MONEY MARKET FUND EMERGING MARKETS DEBT FUND
EUROPEAN EQUITY FUND SHORT TERM BOND FUND U.S. SMALL COMPANY
FEDERAL MONEY MARKET FUND TAX EXEMPT BOND FUND OPPORTUNITIES FUND
GLOBAL STRATEGIC INCOME FUND
INTERNATIONAL EQUITY FUND
</TABLE>
J.P. MORGAN INSTITUTIONAL FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
<TABLE>
<S> <C> <C>
BOND FUND NEW YORK TOTAL RETURN BOND FUND SERVICE FEDERAL MONEY
DISCIPLINED EQUITY FUND PRIME MONEY MARKET FUND MARKET FUND
DIVERSIFIED FUND SHORT TERM BOND FUND SERVICE PRIME MONEY MARKET FUND
EMERGING MARKETS EQUITY FUND TAX EXEMPT BOND FUND SERVICE TAX EXEMPT MONEY MARKET FUND
EUROPEAN EQUITY FUND TAX EXEMPT MONEY MARKET FUND SERVICE TREASURY MONEY MARKET FUND
FEDERAL MONEY MARKET FUND U.S. EQUITY FUND TREASURY MONEY MARKET FUND
GLOBAL STRATEGIC INCOME FUND U.S. SMALL COMPANY FUND
INTERNATIONAL EQUITY FUND BOND FUND--ULTRA
INTERNATIONAL OPPORTUNITIES FUND INTERNATIONAL BOND FUND
JAPAN EQUITY FUND
</TABLE>
J.P. MORGAN SERIES TRUST
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
<TABLE>
<S> <C> <C>
CALIFORNIA BOND FUND: TAX AWARE DISCIPLINED EQUITY FUND: TAX AWARE U.S. EQUITY FUND:
SELECT SHARES INSTITUTIONAL SHARES SELECT SHARES
INSTITUTIONAL SHARES
</TABLE>
THE MANAGERS MONEY MARKET FUND
(A SERIES OF THE MANAGERS FUNDS)
40 RICHARDS AVENUE
NORWALK, CONNECTICUT 06854
JOINT SPECIAL MEETING OF SHAREHOLDERS
JUNE 25, 1998
<PAGE>
(This page has been intentionally left blank.)
<PAGE>
INTRODUCTION
This proxy statement is furnished in connection with the solicitation of
proxies by the Boards of Trustees of J.P. Morgan Funds, J.P. Morgan
Institutional Funds and J.P. Morgan Series Trust (each a "Trust," and
collectively, the "Trusts") and The Managers Funds (the "Managers Funds"), for
use at the joint special meeting of shareholders to be held at 522 Fifth Avenue,
7th Floor, New York, New York 10036 on Thursday, June 25, 1998 at 10:00 a.m.
eastern time, and all adjournments thereof (the "Meeting"). Shareholders of
record at the close of business on April 13, 1998 (the "Record Date") are
entitled to notice of, and to vote at, the Meeting. This proxy statement and the
accompanying notice of meeting and proxy card(s) are first being mailed to
shareholders on or about May 14, 1998.
Each Trust is composed of one or more separate series or portfolios. The
Managers Money Market Fund (the "Managers Fund") is a series of Managers Funds
that invests in the Prime Money Market Portfolio (each individual series and
Managers Fund, a "Fund"). Each Trust and the Managers Funds is a registered
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and is organized as a Massachusetts business trust.
Certain Funds (the "Feeder Funds") seek to achieve their investment objective by
investing in a Master Portfolio (a "Portfolio" and collectively the
"Portfolios") with the same investment objective and policies as the Feeder
Fund. The Portfolios are also registered management investment companies under
the 1940 Act. Whenever a Feeder Fund is requested to vote on a matter pertaining
to a Portfolio, the Feeder Fund is required to hold a meeting of its
shareholders to consider the matter. Accordingly, the shareholders of each
Feeder Fund are also being asked to vote on the proposals insofar as they relate
to its corresponding Portfolio.
The Trusts' principal underwriter is Funds Distributor, Inc., 60 State
Street, Suite 1300, Boston, Massachusetts 02109 ("FDI"), which is also the
Trusts' co-administrator.
Set forth below is a summary of the proposals on which the shareholders of
each Fund will vote. The summary also identifies which proposals relate to the
Portfolios.
SUMMARY OF PROPOSALS REQUIRING SHAREHOLDER VOTE
<TABLE>
<S> <C>
PROPOSAL 1. ELECTION OF THE BOARD OF TRUSTEES
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FUNDS FOR WHICH SHAREHOLDER VOTE IS REQUIRED
----------------------------------------------------------------------------------------
J.P. Morgan Funds, J.P. Morgan Institutional
Funds, the Portfolios and J.P. Morgan Series Trust
PROPOSAL 2. CHANGES TO FUNDAMENTAL INVESTMENT RESTRICTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
STANDARDIZATION OF FUNDAMENTAL INVESTMENT RESTRICTIONS (PROPOSALS 2A-2H)
MATTER REQUIRING SHAREHOLDER VOTE FUNDS FOR WHICH SHAREHOLDER VOTE IS REQUIRED
- ------------------------------------------ ----------------------------------------------------------------------------------------
2A. Diversification of Investments All Funds and Portfolios except J.P. Morgan Japan Equity,
J.P. Morgan Institutional Japan Equity, J.P. Morgan
Institutional International Bond, J.P. Morgan 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
2B. Concentration of Assets in a All Funds and Portfolios
Particular Industry
</TABLE>
1
<PAGE>
<TABLE>
<S> <C>
2C. Issuance of Senior Securities All Funds and Portfolios
2D. Borrowing All Funds and Portfolios
2E. Underwriting All Funds and Portfolios
2F. Investment in Real Estate All Funds and Portfolios
2G. Commodities All Funds and Portfolios
2H. Lending All Funds and Portfolios
PROPOSAL 2I.
RECLASSIFICATION OF OTHER FUNDAMENTAL RESTRICTIONS AS NONFUNDAMENTAL.
MATTER REQUIRING SHAREHOLDER VOTE FUNDS FOR WHICH SHAREHOLDER VOTE IS REQUIRED
- ------------------------------------------ ----------------------------------------------------------------------------------------
2I.--See current fundamental All Funds and Portfolios
restrictions indicated by an "NF",
"NFA" & "E" in Exhibit C
PROPOSAL 3. RECLASSIFICATION OF INVESTMENT OBJECTIVES FROM FUNDAMENTAL TO NONFUNDAMENTAL
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FUNDS FOR WHICH SHAREHOLDER VOTE IS REQUIRED
----------------------------------------------------------------------------------------
All Funds and Portfolios except J.P. Morgan and J.P. Morgan Institutional Disciplined
Equity, International Opportunities and Global Strategic Income Funds; J.P. Morgan
Emerging Markets Debt and U.S. Small Company Opportunities Funds; J.P. Morgan Tax Aware
U.S. Equity, Tax Aware Disciplined Equity and California Bond Funds; and J.P. Morgan
Institutional Treasury Money Market and Service Treasury Money Market Funds and their
corresponding portfolios
PROPOSAL 4. APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENT
- ------------------------------------------------------------------------------------------------------------------------------------
MATTER REQUIRING SHAREHOLDER VOTE FUNDS FOR WHICH SHAREHOLDER VOTE IS REQUIRED
- ------------------------------------------ ----------------------------------------------------------------------------------------
To approve a new investment advisory All Funds and Portfolios
agreement between each Fund (or the
Portfolio in which the Fund invests)
and J.P. Morgan Investment Management
Inc.
PROPOSAL 5. AMENDMENT OF THE DECLARATION OF TRUST
- ------------------------------------------------------------------------------------------------------------------------------------
MATTER REQUIRING SHAREHOLDER VOTE FUNDS FOR WHICH SHAREHOLDER VOTE IS REQUIRED
- ------------------------------------------ ----------------------------------------------------------------------------------------
To amend the Declaration of Trust to J.P. Morgan Funds and J.P. Morgan Institutional Funds
provide dollar-based voting rights
PROPOSAL 6. RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
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FUNDS FOR WHICH SHAREHOLDER VOTE IS REQUIRED
----------------------------------------------------------------------------------------
J.P. Morgan Funds, J.P. Morgan Institutional Funds, the Portfolios and J.P. Morgan
Series Trust
</TABLE>
FEEDER FUNDS. Each Proposal, other than Proposals 4 and 5, requires
corresponding action with respect to each relevant Portfolio, and Proposal 4
represents an instruction by the Feeder Fund to vote on the new advisory
agreement between the relevant Portfolio and JP Morgan Investment Management
Inc. ("JPMIM"). Accordingly, where shareholders of a Feeder Fund or an entire
Trust are asked to vote on these Proposals, the Feeder Fund will cast all of its
votes at its corresponding Portfolio's shareholder meeting in the same
proportion as the votes of the Feeder Fund's shareholders, even if all Feeder
Fund
2
<PAGE>
shareholders did not vote. As a result of this so-called "pass-through voting"
requirement, the proxy tabulator shall tally the votes of each Feeder Fund
separately, regardless of the statements herein of the requisite votes for
approving the various Proposals. Most Portfolios, however, have more than one
Feeder Fund investor and, accordingly, it is possible that the shareholders of
one Feeder Fund may vote differently from the other investors in the Portfolio.
In such event, although the Trustees of the Feeder Fund may determine to
withdraw the Feeder Fund's investment in its corresponding Portfolio, the
Trustees of each Feeder Fund currently anticipate that each Feeder Fund will
continue to invest in its corresponding Portfolio. Where appropriate, this proxy
statement uses the term "the Fund" to mean the feeder fund and its master
portfolio taken together, or separately in the context of "pass-through" voting
requirements, as the case may be.
PROPOSAL ONE
ELECTION OF BOARD OF TRUSTEES
It is proposed that shareholders of J.P. Morgan Funds, J.P. Morgan
Institutional Funds and J.P. Morgan Series Trust consider the election of the
individuals listed below (each, a "Nominee" and collectively, the "Nominees") as
Trustees of each Trust. Each Nominee is currently a Trustee of each Trust (and
each Portfolio, including, for example, the Prime Money Market Portfolio as it
relates to the Managers Fund). Each Trustee will hold office for a term of
unlimited duration subject to the current retirement age of 70. The Trustees
have no reason to believe that any Nominee will be unavailable for election.
The persons named in the accompanying form of proxy intend to vote each such
proxy for the election of the Nominees, unless shareholders specifically
indicate on their proxies the desire to withhold authority to vote for elections
to office. It is not contemplated that any Nominee will be unable to serve as a
Trustee for any reason, but if that should occur prior to the Meeting, the proxy
holders reserve the right to substitute another person or persons of their
choice as nominee or nominees.
Certain information concerning Trustees of J.P. Morgan Funds, J.P. Morgan
Institutional Funds and J.P. Morgan Series Trust is set forth below:
<TABLE>
<CAPTION>
NAME, AGE, POSITIONS AND OFFICES WITH THE TRUSTS, PRINCIPAL YEAR FIRST
OCCUPATIONS BECAME
DURING THE PAST FIVE YEARS AND OTHER DIRECTORSHIPS A TRUSTEE
- ------------------------------------------------------------- ---------------
<S> <C>
Frederick S. Addy, 66, Trustee; Retired; Former Executive 1982 (1)
Vice President and Chief Financial Officer, Amoco 1992 (2)
Corporation; Director, Enserch Corporation, 1994-1996; 1996 (3)
Interim Chairman, President and Chief Executive Officer, EEX
Corporation, 1996-1997; Director, EEX Corporation; Trustee,
Baker, Fentress & Co.
William G. Burns, 65, Trustee; Retired; Former Vice Chairman 1982 (1)
and Chief Financial Officer, NYNEX; Director, New York Life 1992 (2)
Insurance Co.; Director, Witco Corporation. 1996 (3)
Arthur C. Eschenlauer, 63, Trustee; Retired; Former Senior 1987 (1)
Vice President, Morgan Guaranty Trust Company of New York; 1992 (2)
Director, North American Royalties, Inc. 1996 (3)
Matthew Healey*, 60, Trustee and Chairman and Chief Executive 1982 (1)
Officer of each of the Trusts and Portfolios; Chairman, 1992 (2)
Pierpont Group, Inc. 1996 (3)
</TABLE>
3
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<TABLE>
<CAPTION>
NAME, AGE, POSITIONS AND OFFICES WITH THE TRUSTS, PRINCIPAL YEAR FIRST
OCCUPATIONS BECAME
DURING THE PAST FIVE YEARS AND OTHER DIRECTORSHIPS A TRUSTEE
- ------------------------------------------------------------- ---------------
<S> <C>
Michael P. Mallardi, 64, Trustee; Retired; Former Senior Vice 1982 (1)
President, Capital Cities/ ABC, Inc. and President, Broadcast 1992 (2)
Group; Director, EEX Corporation; Chairman, Tri-State Health 1996 (3)
Systems, member Franciscan Health Partnership.
</TABLE>
Each Trustee invests in at least one of the Funds. The Trustees neither
individually nor as a group own more than 1% of the outstanding shares of any
fund, except that Mr. Healey owns 1.59% of J.P. Morgan Institutional Global
Strategic Income Fund.
- ------------------------
*Mr. Healey is an "interested person" (as defined in the 1940 Act) of each
Trust. Mr. Healey is also an "interested person" (as defined in the 1940 Act) of
the Advisor due to his son's affiliation with JPMIM.
(1) For J.P. Morgan Funds
(2) For J.P. Morgan Institutional Funds
(3) For J.P. Morgan Series Trust
The Trustees of the Trusts are also the Trustees of each of the Portfolios.
A majority of the disinterested Trustees have adopted written procedures
reasonably believed to be appropriate to deal with potential conflicts of
interest arising from the fact that the same individuals are Trustees of each
Trust and each of the Portfolios, up to and including creating a separate board
of trustees.
Each Trustee is currently paid an annual fee of $75,000 for serving as
Trustee of each of the Portfolios, the J.P. Morgan Funds, J.P. Morgan
Institutional Funds and J.P. Morgan Series Trust. Each Trustee is also
reimbursed for expenses incurred in connection with service as a Trustee,
including travel and out-of-pocket expenses relating to attendance at meetings.
Trustee compensation paid by the Trusts and the Portfolios for the calendar
year ended December 31, 1997 are set forth below.
<TABLE>
<CAPTION>
TOTAL TRUSTEE
COMPENSATION
ACCRUED BY THE
PORTFOLIOS(*),
AGGREGATE J.P. MORGAN
AGGREGATE TRUSTEE AGGREGATE FUNDS, J.P.
TRUSTEE COMPENSATION TRUSTEE MORGAN
COMPENSATION PAID BY COMPENSATION INSTITUTIONAL
PAID BY J.P. MORGAN PAID BY FUNDS AND J.P.
J.P. MORGAN INSTITUTIONAL J.P. MORGAN MORGAN SERIES
FUNDS FUNDS SERIES TRUST TRUST (**)
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Each Trustee $ 12,644.75 $ 11,786.38 $ 90.92 $ 72,500
</TABLE>
- ------------------------
(*) Includes 22 Portfolios for which Morgan Guaranty Trust Company of New York
("MGT") acts as investment advisor.
(**) No investment company within the fund complex has a pension or retirement
plan. Currently there are 18 investment companies (15 investment companies
comprising the Portfolios, the J.P. Morgan Funds, J.P. Morgan Institutional
Funds and J.P. Morgan Series Trust) in the fund complex.
4
<PAGE>
During 1997, Pierpont Group, Inc. paid Mr. Healey, in his role as Chairman
of Pierpont Group, Inc., compensation in the amount of $147,500, contributed
$22,100 to a defined contribution plan on his behalf and paid $20,500 in
insurance premiums for his benefit.
The Trustees decide upon matters of general policies and are responsible for
overseeing the Trusts' and Portfolios' business affairs. Each Portfolio and
Trust has entered into a Fund Services Agreement with Pierpont Group, Inc.
("PGI") to assist the Trustees in exercising their overall supervisory
responsibilities over the affairs of the Portfolios and the Trusts. PGI was
organized to provide services for The Pierpont Family of Funds (now the J.P.
Morgan Family of Funds), and the Trustees are its equal and sole shareholders.
The Trusts and the Portfolios have agreed to pay PGI a fee in an amount
representing its reasonable costs in performing these services. These costs are
periodically reviewed by the Trustees. The principal offices of PGI are located
at 461 Fifth Avenue, New York, New York 10017.
Each of the Boards of Trustees held four regularly scheduled meetings during
1997; each Trustee attended at least 75% of those meetings. The Boards of
Trustees do not have audit or nominating committees. Audit-related matters are
reviewed as they arise throughout the year by the Boards of Trustees as a whole.
The executive officers of the Trusts and of the Managers Funds and the shares of
the Funds beneficially owned by such officers are set forth in Exhibit A.
RECOMMENDATION OF TRUSTEES
The Trustees of each Trust voted for the approval of the election of
Trustees. If elected, the Trustees will hold office subject to the current
retirement age except (a) any Trustee may resign, (b) any Trustee may be removed
by shareholders upon an affirmative vote of a majority of all the shares
entitled to be cast for the election of Trustees, and (c) any Trustee may be
removed with cause by at least two-thirds of the remaining Trustees.
REQUIRED VOTE
The affirmative vote of more than 50% of the voting securities present at
the meeting, either in person or by proxy, is required to elect a Trustee of the
Trust provided that at least one-third of the outstanding shares of the Trust is
represented at the meeting, either in person or by proxy.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE TO APPROVE PROPOSAL 1.
PROPOSAL TWO
CHANGES TO FUNDAMENTAL INVESTMENT RESTRICTIONS
(PROPOSALS 2A-2I)
ADOPTION OF STANDARDIZED INVESTMENT RESTRICTIONS
The primary purpose of Proposals 2A through 2I is to revise and standardize
the Funds' and, where applicable, the Portfolios' investment restrictions that
are fundamental (the "Restrictions"). These Restrictions may only be changed
with a shareholder vote. The Trustees have concurred with Morgan Guaranty Trust
Company of New York's ("MGT" or the "Advisor") efforts to analyze the
fundamental and nonfundamental investment restrictions of the Funds and
Portfolios and propose to shareholders adoption of standardized Restrictions.
Certain of the current Restrictions reflect regulatory, business or industry
conditions, practices or requirements that are or need no longer be in effect.
Other Restrictions reflect regulatory requirements
5
<PAGE>
which remain in effect, but which are not required to be fundamental
restrictions. Also, as new Funds have been created over a period of years,
substantially similar Restrictions often have been phrased in slightly different
ways, sometimes resulting in minor but unintended differences in effect or
potentially giving rise to unintended differences in interpretation.
Accordingly, the Advisor proposed and the Trustees approved revision to the
respective Funds' Restrictions in order to simplify, modernize and make more
uniform those investment restrictions that are required to be fundamental, and
to make nonfundamental those Restrictions that are not legally required to be
fundamental. Following shareholder approval of the reclassification of the
current Restrictions that need not be fundamental as nonfundamental, certain of
these nonfundamental restrictions will be amended or eliminated as outlined in
Proposal 2I.
The Trustees believe that eliminating the disparities among the Funds'
Restrictions will enhance the Advisor's ability to respond to changing
regulatory and investment conditions, practices and requirements. By reducing to
a minimum those policies that can be changed only by shareholder vote, each Fund
will more often be able to avoid the costs and delays associated with a
shareholder meeting when making changes to its investment policies that, at a
future time, its Advisor considers desirable. The Trustees must approve any
changes to nonfundamental restrictions. Although the proposed changes in
Restrictions will allow the Funds greater investment flexibility to respond to
future investment opportunities, the Advisor does not anticipate that the
changes, except as discussed in this proposal, will result at this time in a
material change in the level of investment risk associated with an investment in
any Fund.
Set forth below, as sub-sections of this Proposal, are general descriptions
of each of the proposed changes. You are given the option to approve all, some,
or none of the proposed Restrictions on the proxy card enclosed with this proxy
statement.
A listing of the proposed standardized Restrictions to be adopted by each
Fund is set forth in Exhibit B to this proxy statement. A listing of the current
Restrictions of each Fund is set forth in Exhibit C. Exhibit C contains an index
to assist you in locating the page(s) at which your Fund(s)' current
Restrictions are described. Those Restrictions that you are being requested to
vote to standardize are shown in Exhibit C by an "S", which stands for "To be
Standardized."
Because of the variety of ways in which the various Funds' current
Restrictions are expressed, the discussions below are general. To compare your
Fund's current Restriction to the proposed changed Restriction, please refer to
Exhibit C.
If the proposed changes are approved, the Funds' prospectuses and statements
of additional information ("SAI") will be revised, as appropriate and as soon as
practicable, to reflect these changes. Shareholders will be notified by the Fund
of any future investment policy changes either in the Fund's prospectus or SAI,
which are updated at least annually, or in other Fund correspondence.
If approved by shareholders, the revised Restrictions described in Proposals
2A through 2H will remain fundamental and, as such, cannot be changed without a
further shareholder vote. On the other hand, if a proposed standardized
Restriction is not approved by shareholders of a particular Fund, the current
Restriction will remain in place as a fundamental restriction, and shareholder
approval (and its attendant costs and delays) will continue to be required prior
to any change in the Restriction.
6
<PAGE>
PROPOSAL 2A: TO AMEND THE FUNDAMENTAL RESTRICTION CONCERNING DIVERSIFICATION OF
INVESTMENTS
DIVERSIFIED FUNDS
Many of the Funds' current Restrictions concerning diversification of
investments provide generally that the Fund cannot purchase the securities of an
issuer if the purchase would cause more than 5% of the Fund's total assets taken
at market value to be invested in the securities of such issuer, except U.S.
government securities, or if the purchase would cause more than 10% of the
outstanding voting securities of any one issuer to be held in the Fund's
portfolio. Most Funds apply this limitation to 75% of their total assets (and
the Money Market Funds apply this limitation to 100% of their total assets).
These Funds express this Restriction in a variety of ways. It is proposed that
shareholders approve new language standardizing this Restriction.
Most of the Funds have elected to be "diversified" open-end management
investment companies under the 1940 Act, which requires that the 5% of assets
and 10% of outstanding voting securities tests described above apply to 75% of
the total assets of the Fund. The current Restrictions of J.P. Morgan Federal
Money Market, J.P. Morgan Institutional Federal Money Market and J.P. Morgan
Institutional Service Federal Money Market Funds are generally more restrictive
than required by the 1940 Act. The primary purpose of the proposed change with
respect to these Funds is to allow the Funds to respond more quickly to changes
in money market standards as well as other legal and regulatory changes without
the cost of holding a shareholder meeting. The proposed change would allow these
Funds the flexibility to purchase larger amounts of issuers' securities when
their investment adviser deems an opportunity attractive and in accordance with
1940 Act rules applicable to money market funds.
With respect to those Funds currently applying the 1940 Act "diversified"
standard, the amendment of the fundamental Restriction will allow such Funds to
respond more quickly to changes of that standard, as well as to other legal,
regulatory, and market developments, without the delay or expense of a
shareholder vote. The amendment of the fundamental Restriction would also
standardize the Restrictions across the Funds. Adoption of this change is not
expected to materially affect the operation of the Funds.
NON-DIVERSIFIED FUNDS
J.P. Morgan Japan Equity, J.P. Morgan Institutional Japan Equity and J.P.
Morgan Institutional International Bond, J.P. Morgan 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 are classified as
"non-diversified" under the 1940 Act and therefore are not subject to the 1940
Act requirement. For these Funds, no change is being proposed.
No Fund is changing its current classification from diversified to
non-diversified or vice versa. Each diversified Fund's fundamental Restriction
will be replaced with the following fundamental Restriction:
"The Fund may not make any investment inconsistent with the Fund's
classification as a diversified investment company under the
Investment Company Act of 1940."
PROPOSAL 2B: TO AMEND THE FUNDAMENTAL RESTRICTION CONCERNING CONCENTRATION OF A
FUND'S ASSETS IN A PARTICULAR INDUSTRY
All of the Funds currently have a Restriction concerning the concentration
of investments in a particular industry. The staff of the Securities and
Exchange Commission ("SEC") takes the position that a mutual fund "concentrates"
its investments in a particular industry if more than 25% of the mutual fund's
7
<PAGE>
assets (exclusive of cash and U.S. government securities) are invested in the
securities of issuers in such industry. The Restrictions generally embody the
SEC staff interpretation by stating that a Fund will not concentrate its
investments in a particular industry by investing more than 25% of its assets,
exclusive of cash and U.S. Government securities, in securities of issuers in
any one industry. Additionally, those Funds that are money market funds
currently exclude investments in negotiable certificates of deposit, time
deposits, and bankers' acceptances of U.S. branches of U.S. banks for purposes
of industry concentration.
Shareholders of the Funds are being requested to approve an amendment of the
foregoing fundamental Restriction. As proposed, each Fund's current fundamental
Restriction regarding concentration of the Fund's assets in a particular
industry will be replaced by the following fundamental Restriction:
"The Fund may not purchase any security which would cause the Fund
to concentrate its investments in the securities of issuers
primarily engaged in any particular industry except as permitted
by the SEC except that in the case of J.P. Morgan Prime Money
Market, J.P. Morgan Institutional Prime Money Market and Service
Prime Money Market Funds and the Managers Fund, this restriction
does not apply to instruments considered to be domestic bank money
market instruments."
The purpose of the proposed amendment is to allow for future investment
flexibility in response to changes in regulatory requirements, for example, if
the SEC increased the current 25% concentration limitation, without the
necessity of a further shareholder vote. Adoption of this change is not expected
to materially affect the operation of the Funds.
PROPOSAL 2C: TO AMEND THE FUNDAMENTAL RESTRICTION CONCERNING THE ISSUANCE OF
SENIOR SECURITIES
The Funds' current Restrictions regarding the issuance of senior securities
generally state that a Fund shall not issue any senior security or state the
criteria under which a security is deemed not to be a senior security as
described in Exhibit C.
The proposed Restriction clarifies that the Funds may issue senior
securities to the full extent permitted under the 1940 Act. Although the
definition of a "senior security" involves complex statutory and regulatory
concepts, a senior security is generally an obligation of a Fund which has a
claim to the Fund's assets or earnings that takes precedence over the claims of
the Fund's shareholders. The 1940 Act generally prohibits mutual funds from
issuing any senior securities with limited exceptions; however, under current
SEC staff interpretations, mutual funds are permitted to engage in certain types
of transactions that might be considered "senior securities" as long as certain
conditions are satisfied. For example, a transaction that obligates a Fund to
pay money at a future date (E.G., the purchase of securities to be settled on a
date that is farther away than the normal settlement period) may be considered a
"senior security." A mutual fund is permitted to enter into this type of
transaction if it maintains a segregated account containing liquid securities in
an amount equal to its obligation to pay cash for the securities at a future
date. Funds currently engage and would engage in transactions that could be
considered to involve "senior securities" only in accordance with applicable
regulatory requirements under the 1940 Act.
It is proposed that shareholders approve replacing the Funds' current
Restrictions concerning the issuance of senior securities with the following
fundamental Restriction governing the issuance of senior securities:
"The Fund may not issue senior securities, except as permitted
under the Investment Company Act of 1940 or any rule, order or
interpretation thereunder."
8
<PAGE>
The primary purpose of this proposed change is to standardize the Funds'
Restrictions regarding senior securities.
Reverse Repurchase Agreements that are supported by segregated assets
("covered") in compliance with guidance from the SEC or its staff are not
considered to be senior securities and may be entered into without limit. Please
see the proposed amendment to the borrowing Restriction (Proposal 2D) inasmuch
as the topics are interrelated.
Adoption of the proposed Restriction concerning senior securities is not
expected to materially affect the operation of the Funds. However, adoption of a
standardized Restriction will allow the Funds to respond to legal, regulatory
and market developments which may make the use of permissible senior securities
advantageous to the Funds and their shareholders.
PROPOSAL 2D: TO AMEND THE FUNDAMENTAL RESTRICTION CONCERNING BORROWING
The Restrictions for Funds with the most restrictive provisions concerning
borrowing state that a Fund shall not borrow money except in an amount not in
excess of 10% of the total assets of the Fund, and then only for emergency and
extraordinary purposes. Some Funds have broader borrowing authority. When
reviewing your Fund(s)' policies on borrowings as set forth in Exhibit C, you
should also review your Fund(s)' policies on the issuance of senior securities
and reverse repurchase agreements since the topics are interrelated.
In general, under the 1940 Act, a Fund may not borrow money, except that (i)
a Fund may borrow from banks (as defined in the 1940 Act) in amounts up to
33 1/3% of its total assets (including the amount borrowed) less liabilities
(other than borrowings), (ii) a Fund may borrow up to 5% of its total assets for
temporary purposes, (iii) a Fund may obtain such short-term credit as may be
necessary for the clearance of purchases and sales of portfolio securities, and
(iv) a Fund may not pledge its assets other than to secure such borrowings or,
to the extent permitted by the Fund's investment policies as set forth in its
current prospectus and statement of additional information, in connection with
hedging transactions, short sales, when-issued and forward commitment
transactions and similar investment strategies. Reverse repurchase agreements
that are not covered are both senior securities and considered to be borrowings
and will not be entered into. Reverse repurchase agreements that are "covered"
are neither senior securities nor a form of borrowing and may be entered into
without limit if the proposed restriction is adopted. (See the discussion under
Proposal 2C above.)
It is proposed that shareholders approve replacing the Funds' current
Restrictions regarding borrowing with the following Restriction:
"The Fund may not borrow money, except to the extent permitted by
applicable law."
The primary purpose of the proposed change to the Restriction concerning
borrowing is to standardize the Restriction and conform it to the current
regulatory requirements and evolving market environment.
While the proposed Restriction is more liberal, adoption of the proposed
Restriction is not expected to materially affect the operations of the Funds.
However, many of the Funds' current Restrictions restrict borrowing to a lower
percentage of total assets than the 33 1/3% permitted under the 1940 Act. In
addition, certain funds are currently prohibited from purchasing securities
while borrowings representing more than 5% of total assets are outstanding. The
proposed Restriction would allow a Fund to purchase a security while borrowings
represent more than 5% of total assets. While the Funds have no current
intention to purchase securities while borrowings represent more than 5% of
total assets, the flexibility to purchase securities in such circumstances may
be beneficial to a Fund under certain circumstances. This may be
9
<PAGE>
considered a form of indirect leverage. Even though the Advisor does not intend
to borrow specifically to purchase securities, purchasing securities when
borrowings incurred for other purposes remain outstanding has a similar effect
to leveraging the Portfolio.
PROPOSAL 2E: TO AMEND THE FUNDAMENTAL RESTRICTION CONCERNING UNDERWRITING
Each Fund is currently subject to a Restriction concerning underwriting. The
Restrictions generally provide that a Fund shall not underwrite any securities.
It is proposed that shareholders approve replacing the current Restriction with
the following Restriction concerning underwriting:
"The Fund may not underwrite securities of other issuers, except
to the extent that the Fund, in disposing of portfolio securities,
may be deemed an underwriter within the meaning of the 1933 Act."
The primary purpose of the proposed change is to clarify that the Funds are
not prohibited from selling securities if, as a result of the sale, the Funds
would technically be considered underwriters under the federal securities laws.
It is also intended to standardize the Funds' Restrictions regarding
underwriting. While the proposed change will have no current impact on the
Funds, adoption of the proposed Restriction will advance the goals of
standardization.
PROPOSAL 2F: TO AMEND THE FUNDAMENTAL RESTRICTION CONCERNING INVESTMENT IN REAL
ESTATE
Each Fund currently has a Restriction concerning the purchase of real
estate. In general, the Restrictions state that a Fund shall not purchase or
sell real estate. This Restriction does not currently preclude investment in
securities of issuers that deal in real estate.
Shareholders are being asked to approve amendments of these Restrictions in
order to clarify the types of investments in which the Funds are authorized to
invest and to standardize the Funds' Restrictions concerning real estate. As
proposed, the Funds' current Restrictions relating to investment in real estate
will be replaced by the following Restriction:
"The Fund may not purchase or sell real estate, except that, to
the extent permitted by applicable law, the Fund may (a) invest in
securities or other instruments directly or indirectly secured by
real estate, (b) invest in securities or other instruments issued
by issuers that invest in real estate, and (c) in the case of the
fixed income funds and J.P. Morgan Diversified and J.P. Morgan
Institutional Diversified Funds make direct investments in
mortgages."
The adoption of this proposal would allow the fixed income funds and
Diversified Funds, most of which are currently prohibited from investing in
direct mortgages, to do so in the future. The proposed Restriction would also
make it explicit that a Fund may acquire a security or other instrument whose
payments of interest and principal may be secured by real property with a right
to foreclose on real estate, in the event of default. Investments in these
securities are, of course, subject to the Fund's investment objective and
policies and to other Restrictions, such as diversification and concentration.
These investment opportunities can provide attractive potential yields
compared to other investments. However, to the extent that a Fund buys
securities and instruments of companies in the real estate business or invests
directly in mortgages, the Fund's performance will be affected by the condition
of the real estate market. This industry is sensitive to factors such as changes
in real estate values and property taxes, overbuilding, variations in rental
income, and interest rates. Performance could also be affected by the structure,
cash flow, and management skill of real estate companies. Direct investments in
mortgages and securities directly or indirectly secured by real estate are often
subject to more rapid repayment than their
10
<PAGE>
stated maturity dates would indicate as a result of principal prepayments on the
underlying loans. This can result in significantly greater price and yield
volatility than traditional fixed income securities. During periods of declining
interest rates, prepayments can be expected to accelerate and thus impair the
Fund's ability to reinvest the returns of principal at comparable yields.
Conversely, in a rising interest rate environment, a declining prepayment rate
will extend the average life of many mortgage-backed securities and prevent the
Fund from taking advantage of such higher yields. In the event that the Fund
forecloses on any non-performing mortgage, and acquires a direct interest in the
real property, the Fund will be subject to the risks generally associated with
the ownership of real property, such as the possibility of fluctuation in the
market value of the foreclosed property and its occupancy rates, rent schedules
and operating expenses. There may be adverse changes in local, regional or
general economic conditions, deterioration of the real estate market and
financial circumstances of tenants and sellers, unfavorable changes in zoning,
building, environmental and other laws, increased real property taxes, rising
interest rates, reduced availability and increased cost of mortgage borrowings,
the need for unanticipated renovations, unexpected increases in the cost of
energy, environmental factors, acts of God and other factors which are beyond
the control of the Advisor. Hazardous or toxic substances may be present on, at
or under the mortgaged property and adversely affect the value of the property.
In addition, the owners of property containing such substances may be held
responsible, under various laws, for containing, monitoring, removing or
cleaning up such substances. The presence of such substances may also provide a
basis for other claims by third parties. Costs of clean-up or of liabilities to
third parties may exceed the value of the property. In addition, these risks may
be uninsurable. In light of these and similar risks, it may be impossible to
dispose profitably of properties in foreclosure.
It is anticipated that upon approval of this proposal, J.P. Morgan and J.P.
Morgan Institutional Short Term Bond, Bond, Tax Exempt Bond, New York Total
Return Bond and Diversified Funds, J.P. Morgan Emerging Markets Debt Fund, J.P.
Morgan Institutional Bond Fund--Ultra, J.P. Morgan Institutional International
Bond Fund and J.P. Morgan California Bond Fund may enter into direct mortgages.
Only J.P. Morgan and J.P. Morgan Institutional Short Term Bond, Diversified and
Bond Funds and J.P. Morgan Institutional Bond Fund--Ultra intend to do so at
this time. J.P. Morgan and J.P. Morgan Institutional Tax Exempt and New York
Total Return Bond Funds, J.P. Morgan Emerging Markets Debt Fund and J.P. Morgan
Institutional International Bond Fund and J.P. Morgan California Bond Fund would
be able to enter into direct mortgages, but currently do not intend to do so.
PROPOSAL 2G: TO AMEND THE FUNDAMENTAL INVESTMENT RESTRICTION CONCERNING
COMMODITIES
The Funds currently are subject to various Restrictions concerning
commodities, and certain Funds' Restrictions concerning commodities also include
Restrictions with respect to various option transactions. The Restrictions of
the Funds that are money market funds prohibit engaging in commodities and
option transactions. Certain other Funds' Restrictions (J.P. Morgan and J.P.
Morgan Institutional Short Term Bond, Bond, Tax Exempt Bond, U.S. Equity, U.S.
Small Company and International Equity Funds) prohibit the purchase or sale of
commodities or commodity contracts except that the Funds may for hedging
purposes buy or sell futures contracts and buy put and call options. Certain
Funds' (the Funds which are the money market funds, J.P. Morgan and J.P. Morgan
Institutional Short Term Bond, Bond, Diversified, U.S. Equity and International
Equity Funds) Restrictions with respect to commodities also specifically
prohibit purchasing interests in oil, gas or mineral exploration or development
programs.
It is proposed that shareholders approve replacing the current Restrictions
with the following Restriction concerning commodities:
11
<PAGE>
"The Fund may not purchase or sell commodities or commodity
contracts unless acquired as a result of ownership of securities
or other instruments issued by persons that purchase or sell
commodities or commodities contracts, but this shall not prevent
the Fund from purchasing, selling and entering into financial
futures contracts (including futures contracts on indices of
securities, interest rates and currencies), options on financial
futures contracts, warrants, swaps, forward contracts, foreign
currency spot and forward contracts, or other derivative
instruments that are not related to physical commodities."
The proposed Restriction is intended to standardize the Funds' Restriction
on purchasing and selling commodities and expand the ability of certain Funds to
engage in futures and options transactions. Currently, certain of the Funds'
investment restrictions permit such Funds to use futures and options for hedging
purposes only. The proposed Restriction if adopted will permit the J.P. Morgan
and J.P. Morgan Institutional Short Term Bond, Bond, Tax Exempt Bond, U.S.
Equity, U.S. Small Company and International Equity Funds to take advantage of
potential risk management opportunities and techniques. The proposed Restriction
will also eliminate certain Funds' prohibition regarding purchasing interests in
oil, gas, or mineral exploration or development programs, consistent with
Proposal 2I's purpose.
The use of derivatives involves market and other risks. Entering into a
derivative contract involves a risk that the applicable market will move against
the Fund's position and that the Fund will incur a loss. For derivative
contracts other than purchased options, this loss may substantially exceed the
amount of any initial payment made or received by the Fund. Derivatives may
sometimes increase or leverage the Fund's exposure to a particular market risk.
In addition to market risks, leverage may enhance the price volatility of the
Fund's net asset value. If the Fund enters into futures contracts or swap
agreements, writes options, engages in certain foreign currency exchange
transactions, or enters into certain other types of transactions that could be
viewed as leveraging, it is required by applicable policies of the SEC staff to
maintain a segregated account consisting of cash or liquid assets or to
otherwise maintain "cover" which may partially offset the leverage inherent in
these transactions. Over-the-counter derivatives, including swap agreements,
also involve a risk that the counterparty will fail to perform its contractual
obligations. Some derivatives may have a limited or no trading market. Illiquid
derivatives may be difficult to value due to the unavailability of reliable
broker quotes for these contracts.
If the proposed amendment is approved, all Funds will then have the ability
to purchase and sell (write) put and call options and to enter into futures
contracts and options on futures contracts for risk management and other
non-hedging purposes. Examples of non-hedging risk management strategies include
increasing a Fund's exposure to the equity markets of particular countries by
purchasing futures contracts on the stock indices of those countries and
effectively increasing the duration of a bond portfolio by purchasing futures
contracts on fixed income securities. Such risk management techniques, unlike
other non-hedging derivative strategies, are not intended to be speculative but,
like all leveraged transactions, they involve the possibility of losses as well
as gains that are greater than the purchase and sale of the underlying
securities. If this proposal is adopted, the Funds which are the money market
funds will theoretically have the ability to enter into futures contracts and
related option contracts and to utilize other derivatives. However, money market
funds are prohibited from engaging in such transactions by current regulations.
For the Funds currently allowed to utilize derivatives for hedging and risk
management purposes, these changes will have no effect on the management style
but would advance the goal of standardization.
Adoption of this proposal will not affect any Fund's policy on investments
in foreign currencies or currency contracts.
12
<PAGE>
PROPOSAL 2H: TO AMEND THE FUNDAMENTAL INVESTMENT RESTRICTION CONCERNING LENDING
The Funds' current Restrictions concerning lending state generally that a
Fund may not make direct loans but may purchase and hold debt securities and may
lend portfolio securities in accordance with the Funds' investment objectives
and policies.
It is proposed that shareholders approve the replacement of the foregoing
Restriction with the following amended fundamental Restriction concerning
lending:
"The Fund may make loans to other persons, in accordance with the
Fund's investment objectives and policies and to the extent
permitted by applicable law."
The proposed Restriction would permit the Funds to invest in direct debt
instruments such as loans and loan participations, which are interests in
amounts owed to another party. Loans may be made to companies, governments and
other borrowers, including one or more Funds or Portfolios. These types of
investments may have additional risks beyond conventional debt securities,
because they may provide less legal protection for the Fund, or because there
may be a requirement that the Fund supply additional cash to a borrower on
demand, in particular in the event of default by the borrower. In the event of a
default, the Fund may take possession of collateral, with its attendant risks.
The Advisor will evaluate the creditworthiness of prospective borrowers to
reduce the risk of default.
An amendment to this Restriction is also consistent with Proposal 2F
pursuant to which the Funds would be permitted to enter into direct mortgage
arrangements, and the adoption of the proposed standardized Restriction would
allow the Funds to take advantage of potentially attractive yields as compared
to other investments.
PROPOSAL 2I: RECLASSIFICATION AS NONFUNDAMENTAL OF ALL CURRENT FUNDAMENTAL
RESTRICTIONS OTHER THAN THE FUNDAMENTAL RESTRICTIONS DESCRIBED IN
THE FOREGOING PROPOSALS 2A THROUGH 2H.
Like all mutual funds, when the Funds were established the Trustees adopted
certain investment Restrictions that would govern the efforts of the Funds to
achieve their respective investment objectives. Some of these Restrictions were
designated as "fundamental" and, as such, may not be changed unless the change
has first been approved by the Trustees and then by the shareholders of the
relevant Fund. Many of the Funds' investment restrictions were required to be
classified as fundamental under the securities laws of various states. Since
October 1996, all state securities laws and regulations regarding fundamental
investment restrictions have been preempted by federal law and no longer apply.
The Funds' Restrictions were established to reflect certain regulatory,
business or industry conditions as they existed at the time a Fund was
established. Many such conditions no longer exist. The 1940 Act requires only
that the Restrictions discussed in Proposals 2A through 2H above be classified
as fundamental.
Nonfundamental Restrictions may be changed or eliminated by a Fund's
Trustees at any time WITHOUT APPROVAL OF THE FUND'S SHAREHOLDERS. The current
Restrictions which are not being standardized in Proposals 2A through 2H will be
reclassified as nonfundamental if this proposal is approved. Some of these
restrictions will be eliminated or amended after their classification as "NF"
has been approved. Current Restrictions proposed to be reclassified as
nonfundamental are shown in Exhibit C by an "NF" (to be reclassified as
Non-Fundamental), by an "E" (to be eliminated) or by an "NFA" (to be
reclassified as Non-Fundamental and amended). You will find the page(s) in which
your Fund's(s') Restrictions are described in the index at the beginning of
Exhibit C. Exhibit B lists for your Funds the standardized Non-Fundamental)
Investment Restrictions applicable to your Fund's(s') following approval of this
proposal.
13
<PAGE>
Below is a summary of the investment policy changes that are expected to result
from the amendment or elimination of the nonfundamental restrictions.
SHORT SALES
It is anticipated that upon approval of Proposal 2I nonfundamental
restrictions related to short sales will be amended for all Funds except for
J.P. Morgan and J.P. Morgan Institutional Prime Money Market, Tax Exempt Money
Market and Federal Money Market Funds and J.P. Morgan Institutional Treasury
Money Market, Service Prime Money Market, Service Tax Exempt Money Market,
Service Federal Money Market and Service Treasury Money Market Funds to enable
the Funds to engage in "covered" short sales. Each of these Funds may sell any
security short if it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short or if it covers such short sales as
required by the current rules or positions of the SEC or its staff. Transactions
in futures contracts and options shall not constitute selling securities short.
INVESTMENTS IN OTHER AFFILIATED FUNDS
The Funds have submitted an exemptive application to the SEC requesting
permission to invest more than 5% of a Fund's assets in other J.P. Morgan, J.P.
Morgan Institutional or J.P. Morgan Series Trust Funds. Upon approval of
Proposal 2I and the granting of exemptive relief by the SEC, certain Funds
intend to invest in other Funds to achieve asset allocation goals more
efficiently, and each Fund may invest in one or more of the money market Funds,
to more efficiently invest in money market instruments.
None of these proposed changes will alter any Fund's investment objective.
Indeed, the Trustees believe that approval of the reclassification of
fundamental Restrictions to nonfundamental Restrictions will enhance the ability
of the Funds to achieve their respective investment objectives because the Funds
will have greater investment management flexibility to respond to changing
market, industry or regulatory conditions without the uncertainty, delay and
expense associated with the solicitation of shareholder approval.
RECOMMENDATION OF TRUSTEES
The Trustees have reviewed the potential benefits associated with the
proposed standardization of the Funds' fundamental Restrictions (Proposals 2A
through 2H) as well as the potential benefits associated with the
reclassification of certain of the Funds' other Restrictions to nonfundamental,
the elimination of certain Restrictions and the amendment and reclassification
of others (Proposal 2I).
The Trustees of each Trust voted to approve the proposed standardization of
the Funds' fundamental Restrictions (Proposals 2A through 2H) and the
reclassification from fundamental to nonfundamental or the elimination or
amendment of certain of the Funds' other Restrictions (Proposal 2I). In making
this recommendation, the Trustees considered that the Funds and their
corresponding Portfolios remain subject to specific restrictions under the 1940
Act and the Internal Revenue Code, which limit certain investments and
strategies, but do not eliminate risk.
At a meeting of the Trustees of The Managers Funds called for the purpose on
March 9, 1998, the Trustees of The Managers Funds voted to approve the changes
to the Managers Fund's fundamental Restrictions (Proposals 2A through 2H) and
the reclassification from fundamental to nonfundamental or the elimination of
certain of the Funds' other Restrictions (Proposal 2I). The Trustees also
recommended
14
<PAGE>
that shareholders vote in favor of the corresponding changes for the Prime Money
Market Portfolio's fundamental Restrictions. In making this recommendation, the
Trustees considered that as money market funds, the Managers Fund, and its
corresponding Portfolio, are subject to detailed restrictions under the 1940 Act
on the types of investments they can make and practices that they can engage in,
so that the proposed changes are not likely to have a material effect on the
operations of the Fund or the Portfolio. The Trustees also considered the
advantages to the Managers Fund and its shareholders from investing in the
Portfolio, and the fact that if the Managers Fund does not approve the proposed
changes but the changes are approved at the Portfolio level, the Fund may not be
able to continue to invest in the Portfolio.
REQUIRED VOTE
With respect to each of the proposals regarding fundamental Restrictions
(Proposals 2A through 2H), the affirmative vote of the holders of "a majority of
the outstanding voting securities" of a Fund is required for approval of such
change for such Fund and the reclassification of other fundamental Restrictions
to nonfundamental (Proposal 2I). Under the 1940 Act, the affirmative vote of "a
majority of the outstanding voting securities" of a Fund is defined as the
lesser of (a) 67% or more of the voting securities of the Fund present or
represented by proxy at the Meeting, if the holders of more than 50% of the
outstanding voting securities of the Fund are present or represented by proxy,
or (b) more than 50% of the outstanding voting securities of the Fund ("1940 Act
Majority").
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE TO APPROVE PROPOSAL 2.
PROPOSAL THREE
RECLASSIFICATION AS NONFUNDAMENTAL OF THE INVESTMENT
OBJECTIVE OF THOSE FUNDS WHOSE INVESTMENT OBJECTIVE IS CURRENTLY
CLASSIFIED AS FUNDAMENTAL
RECLASSIFICATION OF FUNDAMENTAL INVESTMENT OBJECTIVES AS NONFUNDAMENTAL
Under the 1940 Act, a Fund's investment objective is not required to be
classified as "fundamental." A fundamental investment objective may be changed
only by vote of a Fund's shareholders. Nevertheless, certain Funds' investment
objectives were established as fundamental in response to then current
regulatory practices. In order to provide the Advisor with enhanced investment
management flexibility to respond to market, industry or regulatory changes, the
Advisor of these Funds proposed and the Trustees approved the reclassification
from fundamental to nonfundamental of each such Fund's investment objective. A
nonfundamental investment objective may be changed at any time by the Trustees
of a Fund without approval by the Fund's shareholders.
For a complete description of the investment objective(s) of your Fund(s),
please consult your Fund(s)' prospectuses. The reclassification from fundamental
to nonfundamental will not alter any Fund's investment objective, except that it
is anticipated that, upon approval of this proposal, the investment objectives
of J.P. Morgan and J.P. Morgan Institutional Short Term Bond Funds and New York
Total Return Bond Funds will promptly be reclassified and changed as described
below. If at any time in the future, the Trustees of a Fund approve a change in
a Fund's nonfundamental investment objective, shareholders of such Fund will be
given notice of such change prior to its implementation; however, if such a
change were to occur, shareholders would not be asked to approve such change.
15
<PAGE>
If the reclassification of any Fund's investment objective from fundamental
to nonfundamental is not approved by shareholders of a particular Fund, such
Fund's investment objective will remain fundamental and shareholder approval
will continue to be required prior to any change in investment objective.
It is anticipated that upon approval of this proposal of the investment
objective of J.P. Morgan and J.P. Morgan Institutional Short Term Bond Funds and
New York Total Return Bond Funds will be replaced with the following:
<TABLE>
<CAPTION>
J.P. MORGAN AND
J.P. MORGAN INSTITUTIONAL CURRENT INVESTMENT OBJECTIVE PROPOSED INVESTMENT OBJECTIVE
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Short Term Bond Fund To provide a high total return while To provide a high total return,
attempting to limit the likelihood consistent with low volatility of
of negative quarterly returns principal
New York Total Return Bond Fund To provide a high after tax total To provide a high level of income
return for New York residents exempt from Federal, New York State
consistent with moderate risk of and local income taxes consistent
capital with moderate risk of principal
</TABLE>
If this proposal is adopted, J.P. Morgan and J.P. Morgan Institutional New
York Total Return Bond Funds plan on changing their names to J.P. Morgan and
J.P. Morgan Institutional New York Tax Exempt Bond Funds.
RECOMMENDATION OF TRUSTEES
The Trustees have considered the enhanced management flexibility to respond
to market, industry or regulatory changes that would accrue to the Funds if each
Fund's fundamental investment objectives were reclassified as nonfundamental. In
addition, for J.P. Morgan and J.P. Morgan Institutional Short Term Bond Funds
and New York Total Return Bond Funds, the Trustees have determined that changing
the current investment objectives as stated above would clarify the investment
objectives of the J.P. Morgan and J.P. Morgan Institutional Short Term Bond
Funds and will emphasize the production of triple tax free income for J.P.
Morgan and J.P. Morgan Institutional New York Total Return Bond Funds. In other
words, the change of objective for the New York Total Return Bond Funds is
expected to result in closer attention to triple tax free income, but is not
otherwise expected to significantly affect the Funds' investments.
The Trustees voted to approve the reclassification of the investment
objective of each Fund currently classified as fundamental to nonfundamental as
well as changing the investment objectives of J.P. Morgan and J.P. Morgan
Institutional Short Term Bond Funds and New York Total Return Bond Funds.
REQUIRED VOTE
The affirmative vote of the holders of a 1940 Act Majority is required to
approve the reclassification of a Fund's investment objective from fundamental
to nonfundamental.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE TO APPROVE PROPOSAL 3.
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<PAGE>
PROPOSAL FOUR
APPROVAL OF NEW AND SEPARATE INVESTMENT ADVISORY AGREEMENTS
BETWEEN EACH FUND OR THE PORTFOLIO IN WHICH THE FUND INVESTS,
AS APPLICABLE, AND J.P. MORGAN INVESTMENT MANAGEMENT INC.
J.P. Morgan & Co. Incorporated ("JP Morgan") has proposed changing the
investment advisor of each Fund of J.P. Morgan Series Trust and each of the
portfolios in which the Feeder Funds invest from MGT to its affiliate, J.P.
Morgan Investment Management Inc. ("JPMIM"). Both MGT and JPMIM are wholly owned
subsidiaries of JP Morgan, all of which are located at 522 Fifth Avenue, New
York, NY 10036. The proposed change would not affect the Funds' investments or
other operations.
JPMIM manages accounts for mutual funds, pension funds, and other
institutional accounts. As of December 31, 1997, JPMIM managed approximately
$221 billion in assets including approximately $20 billion in mutual fund
assets, and was one of the top 7 out of 3,378 investment managers in the U.S.
based on assets under management. With offices in London and Singapore, JPMIM
draws from a worldwide resource base to provide comprehensive service to an
international group of clients. Investment management activities in Japan,
Australia, and Germany are carried out by affiliates such as J.P. Morgan
Investment Management Australia Limited in Melbourne, and J.P. Morgan Investment
GMBH in Frankfurt.
If this proposal is approved, a new investment advisory agreement with JPMIM
(the "New Agreement") will be adopted for each Portfolio and each Fund of J.P.
Morgan Series Trust. The terms of the New Agreement are identical to the terms
of the current investment advisory agreement (the "Current Agreement"), except
for the name of the advisor and the date. A copy of the terms of investment
advisory agreement is attached as Exhibit D. For each Portfolio, the contractual
rate chargeable for investment advisory services will remain the same. Set forth
in Exhibit E is the date of each Current Agreement, the rate of compensation
thereunder and the fee paid to MGT during the last fiscal year (and any fee
waivers), the date the agreement was last submitted to shareholders and the
purpose of such submission, and the date each agreement was last continued in
effect by the Trustees as well as a schedule of the fees paid to affiliates of
the Advisor for each Fund's most recently completed fiscal year.
In connection with each Fund's/Portfolio's approval of the New Agreement,
its Trustees considered that the change in investment advisor will not result in
any change in the investment objectives, policies, investment operations of a
Fund/Portfolio because investment personnel providing investment services will
not change. The Trustees also considered that the proposed change of investment
advisor will not affect shareholder services or other business activities of the
Funds as these are provided to the Funds under separate agreements. This change
will also not affect the administration and shareholder services agreements
between MGT and the Funds/Portfolios. The amount of payments by the
Funds/Portfolios to MGT during the last fiscal year under the investment
advisory agreements is also set forth in Exhibit E.
While the change would not have any impact on Fund/Portfolio investment
operations, it would bring the Funds'/Portfolios' advisory arrangements more in
line with the current business alignment within Morgan and would also facilitate
marketing efforts for the Funds. When the Funds started in the early 1980's, JP
Morgan's U.S. investment operations were conducted by MGT. In response to
developments in the market for asset management services and in light of
evolving regulatory requirements and their respective franchises, MGT continues
to be responsible for investments for Morgan's individual private banking
clients and investment products designed for their use, and JPMIM advises
institutional clients. In
17
<PAGE>
light of easing regulatory considerations and because mutual funds are similar
to institutional accounts, JP Morgan is now proposing that the advisor be
changed to JPMIM.
The proposed changes would also facilitate marketing efforts designed to
enable the Funds to grow. The names of the Trusts and the Funds thereof were
recently changed to J.P. Morgan and J.P. Morgan Institutional Funds to take
greater advantage of the name recognition accorded to JP Morgan and as a direct
way of advising investors and potential investors of JP Morgan's roles in
connection with these Funds. These marketing efforts could, however, be advanced
even further with JPMIM as the advisor. The name J.P. Morgan Investment
Management Inc. emphasizes the investment management business of JP Morgan.
Because many potential investors access information about mutual funds by
reference to the investment advisor, those familiar with JP Morgan, and not
Morgan Guaranty Trust Company of New York, would upon accessing JP Morgan
instead of Morgan Guaranty Trust Company of New York assume that, there are no
available proprietary investment companies managed by JP Morgan.
There are, of course, some differences between MGT and JPMIM. At December
31, 1997, JPMIM's capital was approximately $90 million, while MGT's at that
date was over $10 billion. This difference reflects the substantial differences
in the overall businesses in which the two affiliates are engaged. In addition,
the two entities are subject to different regulatory requirements. JP Morgan has
advised the Trustees that it does not expect these differences, discussed
further below, to have any effect on Fund shareholders.
The amount of an advisor's capital generally does not affect a fund's
operations. There is no minimum capital required by law specifically for fund
advisors, although MGT as a bank is subject to minimum capital requirements.
Capital becomes relevant only when adverse financial developments or the
incurrence of liabilities may adversely affect the ability of an advisor to
operate its business. JP Morgan does not expect these circumstances to arise.
The other difference between the Funds'/Portfolios' having JPMIM as advisor
instead of MGT relates to technical regulatory requirements. JPMIM is an SEC
registered investment adviser subject to the Investment Advisers Act of 1940
(the "Advisers Act"); as a bank affiliate, it is also subject to a variety of
federal banking law provisions. MGT as a bank is not subject to the Advisers
Act, but is subject to comprehensive regulation under federal and state banking
laws. Although these regulatory schemes differ in their particulars and are
enforced by separate regulatory bodies, their substance is so similar that a
change in advisor to JPMIM is not expected to have any effect on Fund operations
or shareholders. In any event, the provisions of the 1940 Act applicable to the
relationship between the Funds and their advisor (whether MGT or JPMIM) are
unaffected by the identity of the advisor.
18
<PAGE>
The directors and principal executive officers of JPMIM and their principal
occupations are listed below.
<TABLE>
<CAPTION>
NAME AND ADDRESS* POSITION WITH JPMIM AND PRINCIPAL OCCUPATION
- ------------------------------------------------ ----------------------------------------------------------------
<S> <C>
Keith M. Schappert.............................. President, Chairman, Director and Managing Director. **
Jeff M. Garrity................................. Director and Managing Director. **
Isabel H. Sloane................................ Director and Managing Director. **
Kenneth W. Anderson............................. Director and Managing Director. **
Gilbert Van Hassel.............................. Director and Managing Director. **
Akasaka Park Building
2-20, Akasaka 5-chome
Minato-ku, Tokyo, Japan
Hendrik Van Riel................................ Director and Managing Director.**
28 King Street
London, England SW1Y 6XA
John W. Schmidlin............................... Director.
9 West 57th Street
New York, New York 10019
Michael E. Patterson+........................... Director.
60 Wall Street
New York, New York 10260
</TABLE>
- ------------------------
* Unless otherwise noted, the address for each is 522 Fifth Avenue, New York,
NY 10036.
** Managing Director is an officer's title, and those who hold it are not
necessarily directors of JPMIM.
+ Vice Chairman and Director of J.P. Morgan & Co. Incorporated
The directors and principal executive officers of MGT, their addresses and
their principal occupations are set forth in Exhibit F.
Each of the Boards of Trustees, including the Trustees who are not
"interested persons" approved the proposed Investment Advisory Agreements and
the terms thereof.
REQUIRED VOTE
With respect to each Fund of JPM Series Trust, the affirmative vote of the
holders of a 1940 Act Majority is required to approve for such Fund the proposed
change of investment advisor from MGT to JPMIM.
With respect to each Portfolio, the affirmative vote of the holders of a
1940 Act Majority (based on the aggregate interests of all Feeder Funds that
invest in such Portfolio) is required to approve for such Portfolio the proposed
change of investment advisor from MGT to JPMIM.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE TO APPROVE PROPOSAL 4.
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<PAGE>
PROPOSAL FIVE
AMENDMENT OF THE DECLARATIONS OF TRUST OF J.P. MORGAN FUNDS
AND J.P. MORGAN INSTITUTIONAL FUNDS
TO PROVIDE DOLLAR-BASED VOTING RIGHTS FOR SHAREHOLDERS
The Board of Trustees has approved, and recommends that shareholders of J.P.
Morgan Funds and J.P. Morgan Institutional Funds approve, a proposal to amend
Article VI, Section 6.8 of each Trust's Declaration of Trust (see Exhibit G).
The amendment would provide voting rights based on a shareholder's total dollar
interest in a Fund (dollar-based voting), rather than on the number of shares
owned, for all shareholder votes for a Fund. As a result, voting power would be
allocated in proportion to the value of each shareholder's investment.
Currently, under these Trusts' Declarations of Trust, each share is entitled
to one vote, regardless of the relative value of the shares of each Trust. The
original intent of the one-share, one-vote provision was to provide equitable
voting rights to all shareholders as required by the 1940 Act. In the case where
a Trust has several funds, voting rights may have become disproportionate since
the net asset value per share ("NAV") of the separate funds generally diverge
over time.
If approved, the amendment would provide a more equitable distribution of
voting rights for certain votes than the one-share, one-vote system currently in
effect. The voting power of each shareholder would be commensurate with the
value of the shareholder's dollar investment rather than with the number of
shares held. Under the current voting provisions, an investment in a fund with a
lower NAV may have significantly greater voting power than the same dollar
amount invested in a fund with a higher NAV. The table below shows a
hypothetical example of this.
<TABLE>
<CAPTION>
$1,000 INVESTMENT IN
FUND NET ASSET VALUE TERMS OF NUMBER OF SHARES
- ----- --------------- -------------------------
<S> <C> <C>
A $10.00 100.00
B $ 7.57 132.100
C $10.93 91.491
D $ 1.00 1,000.00
</TABLE>
For example, Fund D shareholders would have ten times the voting power of
Fund A shareholders, because a $1,000 investment in Fund D would buy ten times
as many shares as a $1,000 investment in Fund
A. Accordingly, a one-share, one-vote system may provide certain shareholders
with a disproportionate ability to affect the vote relative to shareholders of
other funds in the trust. If dollar-based voting had been in effect, each
shareholder would have had 1,000 voting shares i.e., the number of Fund shares
owned times the NAV per share. Their voting power would be proportionate to
their economic interest, which J.P. Morgan believes is a more equitable result,
and which is the result with respect to a typical corporation where each voting
share generally has an equal market price.
Article VI, Section 6.8 sets forth the method of calculating voting rights
for all shareholder votes for J.P. Morgan Funds and J.P. Morgan Institutional
Funds. If approved, Article VI, Section 6.8 will be amended as in Exhibit G
(material to be added is underlined and material to be deleted is [bracketed]).
20
<PAGE>
RECOMMENDATION OF TRUSTEES
The Trustees of J.P. Morgan Funds and J.P. Morgan Institutional Funds have
concluded that the proposal will benefit the Trusts and their shareholders. The
Trustees of each Trust voted for the approval of the amendments to the
Declaration of Trust. The amendment will become effective upon shareholder
approval. If the proposal is not approved by the shareholders of a Trust,
Article VI, Section 6.8 of such Trust's Declaration of Trust will remain
unchanged.
REQUIRED VOTE
The affirmative vote of a majority of the outstanding voting securities as
defined in the 1940 Act is required to approve the amendment to J.P. Morgan and
J.P. Morgan Institutional Funds' Declaration of Trust to provide dollar-based
voting rights for each shareholder of such Trust.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE TO APPROVE PROPOSAL 5.
PROPOSAL SIX
RATIFICATION OF SELECTION OF
INDEPENDENT ACCOUNTANTS OF THE TRUSTS
The 1940 Act requires that every registered investment company be audited at
least once a year by independent accountants selected by its Trustees, including
a majority of the Trustees who are not "interested persons" (as defined in the
1940 Act). The 1940 Act also requires that the selection be submitted for
ratification by shareholders at their next meeting following the selection.
The Boards of Trustees of J.P. Morgan Funds, J.P. Morgan Institutional Funds
and J.P. Morgan Series Trust (and the Board of Trustees of the Managers Fund, as
it relates to the Portfolio) recommend that the shareholders of each Trust
ratify the selection of Price Waterhouse LLP as independent accountants. Their
selection was approved by the vote, cast in person, of a majority of the
Trustees of each Trust. Price Waterhouse LLP has audited the accounts of each
Trust since 1992 and does not have any direct financial interest or any material
indirect interest in any Trust, MGT or JPMIM. A representative of Price
Waterhouse LLP is expected to attend the Meeting and to have the opportunity to
make a statement and to respond to appropriate questions from the shareholders.
REQUIRED VOTE
The affirmative vote of the holders present at the Meeting, in person or by
proxy, holding more than 50% of the voting securities of a Trust present at the
Meeting is required to ratify the selection of the independent accountants for
the Trust.
THE TRUSTEES OF EACH TRUST RECOMMEND THAT SHAREHOLDERS VOTE TO APPROVE
PROPOSAL 6.
VOTING INFORMATION CONCERNING THE MEETING
Only shareholders of record as of the close of business on the Record Date
will be entitled to notice of, and to vote at, the Meeting or any adjournment
thereof. The holders of one third of the shares outstanding at the close of
business on the Record Date present in person or represented by proxy will
constitute a quorum for the Meeting.
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<PAGE>
If the enclosed form of proxy is properly executed and returned in time to
be voted at the Meeting, the proxies named therein will vote the shares
represented by the proxy in accordance with the instructions marked thereon.
Proxies that reflect abstentions and "broker non-votes" (i.e., shares held by
brokers or nominees as to which (i) instructions have not been received from the
beneficial owners or the persons entitled to vote or (ii) the broker or nominee
does not have discretionary voting power on a particular matter) will be counted
as shares that are present and entitled to vote for purposes of determining the
presence of a quorum; however, abstentions and broker non-votes will have the
effect of a vote against the proposal. A proxy may be revoked at any time before
the Meeting by written notice to the Secretary of the appropriate Trust or the
Managers Funds, as the case may be, at the applicable mailing address set forth
on the cover page of this proxy statement, or by personally delivering such
revocation to the Secretary at the Meeting. Unless revoked, all valid proxies
will be voted in accordance with the specifications thereon or, in the absence
of such specifications, FOR the proposals described in this proxy statement.
With respect to each Fund other than the Series Trust's Funds, each full
share outstanding as of the Record Date is entitled to one vote, and each
fractional share outstanding is entitled to a proportionate share of one vote.
With respect to shares of the J.P. Morgan Series Trust, each dollar of net asset
value (number of J.P. Morgan Series Trust shares of a class of a Fund owned
times the net asset value per such share) shall be entitled to one vote on any
matter on which such shares are entitled to vote, and each fractional dollar
amount shall be entitled to a proportionate fractional vote. The number of
shares of each Fund outstanding (and the net asset value per share with respect
to each class of shares of J.P. Morgan Series Trust's Funds) as of the close of
business on the Record Date is set forth in Exhibit H.
Proxy solicitations will be made primarily by mail, but proxy solicitations
may also be made by telephone, telegraph or personal solicitations conducted by
officers and employees of Morgan, its affiliates or other representatives of the
Funds, including, in the case of the Managers Fund, by representatives of the
Managers Funds (who will not be paid for their solicitation activities). D.F.
King & Co., Inc. ("DF King") and its agents have been engaged by the Funds to
assist in soliciting proxies, and may call shareholders to ask if they would be
willing to authorize DF King to execute a proxy on their behalf authorizing the
voting of their shares in accordance with the instructions given over the
telephone by the shareholders. In addition, shareholders may call DF King at
1-800-290-6429 between the hours of 8:00 a.m. and 8:00 p.m. eastern time in
order to initiate the processing of their votes by telephone. DF King will
utilize a telephone vote solicitation procedure designed to authenticate the
shareholder's identity by asking the shareholder to provide the last four digits
of his or her social security number (in the case of an individual) or taxpayer
identification number (in the case of an entity). The shareholder's telephone
instructions will be implemented in a proxy executed by DF King and a
confirmation will be sent to the shareholder to ensure that the vote has been
authorized in accordance with the shareholder's instructions. Although a
shareholder's vote may be solicited and cast in this manner, each shareholder
will receive a copy of this proxy statement and may vote by mail using the
enclosed proxy card.
In the event that a quorum is not present at the Meeting, or sufficient
votes to approve a proposal are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of proxies. In determining whether to adjourn the Meeting, the following factors
may be considered: the percentage of votes actually cast, the percentage of
negative votes actually cast, the nature of any further solicitation and the
information to be provided to shareholders with respect to the reasons for the
solicitation. The persons named as proxies will vote upon such adjournment after
consideration of all circumstances which may bear upon a decision to adjourn the
Meeting.
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<PAGE>
No Fund is required or intends to hold annual or other periodic meetings of
shareholders except as may be required by the 1940 Act. Shareholders wishing to
submit proposals for consideration for inclusion in a proxy statement for a
subsequent shareholder meeting should send their written proposals to the
Secretary of the Trust or the Managers Funds, as the case may be, at the
applicable address set forth on the cover of this proxy statement such that they
will be received by the Trust or the Managers Funds, respectively, in a
reasonable period of time prior to any such meeting.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES.
Please advise each Fund whether other persons are beneficial owners of shares
for which proxies are being solicited and, if so, the number of copies of this
proxy statement needed to supply copies to the beneficial owners of the
respective shares.
ADDITIONAL INFORMATION
PAYMENT OF EXPENSES
Each Fund will pay its allocable share of expenses of the preparation,
printing and mailing to its shareholders of the proxy, accompanying notice of
meeting and this proxy statement and any supplementary solicitation of its
shareholders.
It is expected that the cost of retaining DF King to assist in the proxy
solicitation process will not exceed $50,000 which cost will be borne by the
Funds.
BENEFICIAL OWNERSHIP
Exhibit I contains information about the beneficial ownership by
shareholders of five percent or more of each Fund's outstanding Shares, as of
March 31, 1998. On that date, the existing Trustees and officers of the Funds,
together as a group, "beneficially owned" less than 1.59% percent of each Fund's
outstanding shares.
The term "beneficial ownership" is as defined under Section 13(d) of the
1934 Act. The information as to beneficial ownership is based on statements
furnished to each Fund by the existing Trustees, officers of such Fund, and/or
on records of each Fund.
ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS
Each of the Funds will furnish, without charge, a copy of its most recent
annual report (and most recent semi-annual report succeeding the annual report,
if any) to a shareholder of the Fund upon request. Any such request should be
directed to J.P. Morgan Funds Services at (800) 521-5411 for J.P. Morgan Funds,
(800) 766-7722 for J.P. Morgan Institutional Funds, (800) 521-5411 for J.P.
Morgan Series Trust Select Shares, (800) 766-7722 for J.P. Morgan Series Trust
Institutional Shares and (800) 835-3879 for the Managers Fund.
23
<PAGE>
OTHER BUSINESS
The Boards do not intend to present any other business at the Meeting. If,
however, any other matters are properly brought before the Meeting, the persons
named in the accompanying proxy card(s) will vote thereon in accordance with
their judgment.
THE TRUSTEES RECOMMEND APPROVAL OF EACH PROPOSAL AND ANY UNMARKED PROXIES
WITHOUT INSTRUCTIONS TO THE CONTRARY WILL BE VOTED IN FAVOR OF APPROVAL OF THE
PROPOSALS.
May 14, 1998
24
<PAGE>
EXHIBIT A
EXECUTIVE OFFICERS OF THE TRUSTS
The business address of each of the officers unless otherwise noted is Funds
Distributor, Inc., 60 State Street, Suite 1300, Boston Massachusetts 02109.
Except as noted no Executive Officers of the Trusts own shares of the Funds.
MATTHEW HEALEY; Chief Executive Officer; Chairman, Pierpont Group, since
prior to 1993. His address is Pine Tree Club Estates, 10286 Saint Andrews Road,
Boynton Beach, FL 33436. His date of birth is August 23, 1937. As of March 31,
1998, Mr. Healey owned, of record and beneficially, 303,302 shares of J.P.
Morgan Institutional Global Strategic Income Fund, 7,287 shares of J.P. Morgan
Bond Fund, 9,099 shares of J.P. Morgan Prime Money Market Fund, 6,108 shares of
J.P. Morgan Tax Exempt Bond Fund, 5,100,936 shares of J.P. Morgan Tax Exempt
Money Market Fund and 1,518 shares of J.P. Morgan U.S. Equity Fund.
MARGARET W. CHAMBERS, Vice President and Secretary. Senior Vice President
and General Counsel of FDI since April, 1998. From August 1996 to March 1998,
Ms. Chambers was Vice President and Assistant General Counsel for Loomis, Sayles
& Company, L.P. From January 1986 to July 1996, she was an associate with the
law firm of Ropes & Gray. Her date of birth is October 12, 1959. Address: 60
State Street, Boston, MA 02109.
MARIE E. CONNOLLY; Vice President and Assistant Treasurer. President, Chief
Executive Officer, Chief Compliance Officer and Director of FDI, Premier Mutual
Fund Services, Inc., an affiliate of FDI ("Premier Mutual") and an officer of
certain investment companies distributed or administered by FDI. Prior to July
1994, she was President and Chief Compliance Officer of FDI. Her date of birth
is August 1, 1957.
DOUGLAS C. CONROY; Vice President and Assistant Treasurer. Assistant Vice
President and Assistant Department Manager of Treasury Services and
Administration of FDI and an officer of certain investment companies distributed
or administered by FDI. Prior to April 1997, Mr. Conroy was Supervisor of
Treasury Services and Administration of FDI. From April 1993 to January 1995,
Mr. Conroy was a Senior Fund Accountant for Investors Bank & Trust Company. His
date of birth is March 31, 1969.
KAREN JACOPPO-WOOD; Vice President and Assistant Secretary. Vice President
and Senior Counsel of FDI and an officer of certain investment companies
distributed or administered by FDI. From June 1994 to January 1996, Ms.
Jacoppo-Wood was a Manager of SEC Registration at Scudder, Stevens & Clark, Inc.
Prior to May 1994, Ms. Jacoppo-Wood was a senior paralegal at The Boston Company
Advisors, Inc. ("TBCA"). Her date of birth is December 29, 1966.
CHRISTOPHER J. KELLEY; Vice President and Assistant Secretary. Vice
President and Senior Associate General Counsel of FDI and Premier Mutual and an
officer of certain investment companies distributed or administered by FDI. From
April 1994 to July 1996, Mr. Kelley was Assistant Counsel at Forum Financial
Group. Prior to April 1994, Mr. Kelley was employed by Putnam Investments in
legal and compliance capacities. His date of birth is December 24, 1964.
MARY A. NELSON; Vice President and Assistant Treasurer. Vice President and
Manager of Treasury Services and Administration of FDI and Premier Mutual and an
officer of certain investment companies distributed or administered by FDI.
Prior to August 1994, Ms. Nelson was an Assistant Vice President and Client
Manager for The Boston Company, Inc. Her date of birth is April 22, 1964.
A-1
<PAGE>
MARY JO PACE; Assistant Treasurer. Vice President, Morgan Guaranty Trust
Company of New York. Ms. Pace serves in the Funds Administration group as a
Manager for the Budgeting and Expense Processing Group. Prior to September 1995,
Ms. Pace served as a Fund Administrator for Morgan Guaranty Trust Company of New
York. Her address is 60 Wall Street, New York, New York 10260. Her date of birth
is March 13, 1966.
MICHAEL S. PETRUCELLI; Vice President and Assistant Secretary. Senior Vice
President and Director of Strategic Client Initiatives for FDI since December
1996. From December 1989 through November 1996, Mr. Petrucelli was employed with
GE Investments where he held various financial, business development and
compliance positions. He also served as Treasurer of the GE Funds and as
Director of GE Investment Services. Address: 200 Park Avenue, New York, New
York, 10166. His date of birth is May 18, 1961.
STEPHANIE D. PIERCE. Vice President and Assistant Secretary. Vice President,
Client Development Manager for FDI since April, 1998. From April 1997 to March,
1998, Ms. Pierce was employed by Citibank, NA as an officer of Citibank and
Relationship Manager on the Business and Professional Banking team handling over
22,000 clients. Her date of birth is August 18, 1968. Address: 200 Park Avenue,
45th Floor, New York, NY 10166.
GEORGE A. RIO, President and Treasurer of the Trust. Executive Vice
President, Client Service Director of FDI (since April 1998). From June 1995 to
March 1998, Mr. Rio was Senior Vice President, Senior Key Account Manager for
Putnam Mutual Funds. From May 1994 to June 1995, Mr. Rio was Director of
Business Development for First Data Corporation. From September 1983 to May
1994, Mr. Rio was Senior Vice President & Manager of Client Services and
Director of Internal Audit at The Boston Company. His date of birth is January
2, 1955. Address: 60 State Street, Boston, MA 02109.
CHRISTINE ROTUNDO; Assistant Treasurer. Vice President, Morgan Guaranty
Trust Company of New York. Ms. Rotundo serves in the Funds Administration group
as a Manager of the Tax Group and is responsible for U.S. mutual fund tax
matters. Prior to September 1995, Ms. Rotundo served as a Senior Tax Manager in
the Investment Company Services Group of Deloitte & Touche LLP. Her address is
60 Wall Street, New York, New York 10260. Her date of birth is September 26,
1965.
JOSEPH F. TOWER III; Vice President and Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer, Chief Administrative Officer
and Director of FDI. Senior Vice President, Treasurer and Chief Financial
Officer, Chief Administrative Officer and Director of Premier Mutual and an
officer of certain investment companies distributed or administered by FDI.
Prior to November 1993, Mr. Tower was Financial Manager of The Boston Company,
Inc. His date of birth is June 13, 1962.
A-2
<PAGE>
EXHIBIT B
PROPOSED STANDARDIZED FUNDAMENTAL RESTRICTIONS
<TABLE>
<S> <C>
1. DIVERSIFICATION OF INVESTMENTS
The Fund may not make any investment inconsistent with the Fund's classification as a
diversified investment company under the Investment Company Act of 1940.
2. CONCENTRATION OF A FUND'S ASSETS IN A PARTICULAR INDUSTRY
The Fund may not purchase any security which would cause the Fund to concentrate its
investments in the securities of issuers primarily engaged in any particular industry
except as permitted by the SEC except that in the case of J.P. Morgan Prime Money
Market, J.P. Morgan Institutional Prime Money Market and Service Prime Money Market
Funds and the Managers Fund, this restriction does not apply to instruments considered
to be domestic bank money instruments.
3. ISSUANCE OF SENIOR SECURITIES
The Fund may not issue senior securities, except as permitted under the Investment
Company Act of 1940 or any rule, order or interpretation thereunder.
4. BORROWING
The Fund may not borrow money, except to the extent permitted by applicable law.
5. UNDERWRITING
The Fund may not underwrite securities of other issuers, except to the extent that the
Fund, in disposing of portfolio securities, may be deemed an underwriter within the
meaning of the 1933 Act.
6. INVESTMENT IN REAL ESTATE
The Fund may not purchase or sell real estate, except that, to the extent permitted by
applicable law, the Fund may (a) invest in securities or other instruments directly or
indirectly secured by real estate, (b) invest in securities or other instruments issued
by issuers that invest in real estate, and (c) in the case of the fixed income funds and
J.P. Morgan Diversified and J.P. Morgan Institutional Diversified Funds make direct
investments in mortgages.
7. COMMODITIES
The Fund may not purchase or sell commodities or commodity contracts unless acquired as
a result of ownership of securities or other instruments issued by persons that purchase
or sell commodities or commodities contracts; but this shall not prevent the Fund from
purchasing, selling and entering into financial futures contracts (including futures
contracts on indices of securities, interest rates and currencies), options on financial
futures contracts (including futures contracts on indices of securities, interest rates
and currencies), warrants, swaps, forward contracts, foreign currency spot and forward
contracts or other derivative instruments that are not related to physical commodities.
8. LENDING
The Fund may make loans to other persons, in accordance with the Fund's investment
objectives and policies and to the extent permitted by applicable law.
</TABLE>
B-1
<PAGE>
PROPOSED STANDARDIZED NONFUNDAMENTAL RESTRICTIONS
FOR THE MONEY MARKET FUNDS
The Fund may not acquire any illiquid securities, such as repurchase
agreements with more than seven days to maturity or fixed time deposits with a
duration of over seven calendar days, if as a result thereof, more than 10% of
the market value of the Fund's total assets would be in investments which are
illiquid.
The Fund may not purchase securities on margin, make short sales of
securities, or maintain a short position, provided that this restriction shall
not be deemed to be applicable to the purchase or sale of when-issued or delayed
delivery securities.
The Fund may not acquire securities of other investment companies, except as
permitted by the 1940 Act or any order pursuant thereto.
PROPOSED STANDARDIZED NONFUNDAMENTAL RESTRICTIONS
FOR THE NON-MONEY MARKET FUNDS
The Fund may not acquire any illiquid securities, such as repurchase
agreements with more than seven days to maturity or fixed time deposits with a
duration of over seven calendar days, if as a result thereof, more than 15% of
the market value of the Fund's net assets would be in investments which are
illiquid.
The Fund may not purchase securities on margin, make short sales of
securities, or maintain a short position, provided that this restriction shall
not be deemed to be applicable to the purchase or sale of when-issued or delayed
delivery securities, or to short sales that are covered in accordance with SEC
rules.
The Fund may not acquire securities of other investment companies, except as
permitted by the 1940 Act or any order pursuant thereto.
B-2
<PAGE>
EXHIBIT C
INDEX
<TABLE>
<CAPTION>
PAGE C-
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<S> <C>
J.P. MORGAN FUNDS
J.P. Morgan Prime Money Market Fund (JPMPMMF)........................................................................... C-4
J.P. Morgan Tax Exempt Money Market Fund (JPMTEMMF)..................................................................... C-5
J.P. Morgan Federal Money Market Fund (JPMFMMF)......................................................................... C-6
J.P. Morgan Short Term Bond Fund (JPMSTBF).............................................................................. C-8
J.P. Morgan Bond Fund (JPMBF)........................................................................................... C-10
J.P. Morgan Tax Exempt Bond Fund (JPMTEBF).............................................................................. C-11
J.P. Morgan New York Total Return Bond Fund (JPMNYTRBF)................................................................. C-13
J.P. Morgan Diversified Fund (JPMDF).................................................................................... C-13
J.P. Morgan U.S. Equity Fund (JPMUSEF).................................................................................. C-15
J.P. Morgan U.S. Small Company Fund (JPMUSSCF).......................................................................... C-15
J.P. Morgan International Equity Fund (JPMIEF).......................................................................... C-16
J.P. Morgan Emerging Markets Equity Fund (JPMEMEF)...................................................................... C-17
J.P. Morgan European Equity Fund (JPMEEF)............................................................................... C-17
J.P. Morgan Japan Equity Fund (JPMJEF).................................................................................. C-18
J.P. Morgan Disciplined Equity Fund (JPMDEF)............................................................................ C-19
J.P. Morgan International Opportunities Fund (JPMIOF)................................................................... C-19
J.P. Morgan Global Strategic Income Fund (JPMGSIF)...................................................................... C-20
J.P. Morgan Emerging Markets Debt Fund (JPMEMDF)........................................................................ C-21
J.P. Morgan U.S. Small Company Opportunities Fund (JPMUSSCOF)........................................................... C-22
J.P. MORGAN INSTITUTIONAL FUNDS
J.P. Morgan Institutional Prime Money Market Fund (JPMIPMMF)............................................................ C-4
J.P. Morgan Institutional Service Prime Money Market Fund (JPMISPMMF)................................................... C-4
J.P. Morgan Institutional Tax Exempt Money Market Fund (JPMITEMMF)...................................................... C-5
J.P. Morgan Institutional Service Tax Exempt Money Market Fund (JPMISTEMMF)............................................. C-5
J.P. Morgan Institutional Federal Money Market Fund (JPMIFMMF).......................................................... C-6
J.P. Morgan Institutional Service Federal Money Market Fund (JPMISFMMF)................................................. C-6
J.P. Morgan Institutional Treasury Money Market Fund (JPMITMMF)......................................................... C-7
J.P. Morgan Institutional Short Term Bond Fund (JPMISTBF)............................................................... C-8
J.P. Morgan Institutional Bond Fund (JPMIBF)............................................................................ C-10
J.P. Morgan Institutional Bond Fund--Ultra (JPMIBF-U)................................................................... C-10
J.P. Morgan Institutional Tax Exempt Bond Fund (JPMITEBF)............................................................... C-11
J.P. Morgan Institutional New York Total Return Bond Fund (JPMINYTRBF).................................................. C-13
J.P. Morgan Institutional Diversified Fund (JPMIDF)..................................................................... C-13
J.P. Morgan Institutional U.S. Equity Fund (JPMIUSEF)................................................................... C-15
J.P. Morgan Institutional U.S. Small Company Fund (JPMIUSSCF)........................................................... C-15
J.P. Morgan Institutional International Equity Fund (JPMIIEF)........................................................... C-16
J.P. Morgan Institutional Emerging Markets Equity Fund (JPMIEMEF)....................................................... C-17
J.P. Morgan Institutional European Equity Fund (JPMIEEF)................................................................ C-17
J.P. Morgan Institutional International Bond Fund (JPMIIBF)............................................................. C-18
</TABLE>
C-1
<PAGE>
<TABLE>
<CAPTION>
PAGE C-
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<S> <C>
J.P. Morgan Institutional Japan Equity Fund (JPMIJEF)................................................................... C-18
J.P. Morgan Institutional Disciplined Equity Fund (JPMIDEF)............................................................. C-19
J.P. Morgan Institutional International Opportunities Fund (JPMIIOF).................................................... C-19
J.P. Morgan Institutional Global Strategic Income Fund (JPMIGSIF)....................................................... C-20
J.P. MORGAN SERIES TRUST
The Tax Aware U.S. Equity Fund (JPMSTAUSEF)............................................................................. C-23
The Tax Aware Disciplined Equity Fund (JPMSTADEF)....................................................................... C-23
The California Bond Fund (JPMSCBF)...................................................................................... C-23
THE MANAGERS FUND....................................................................................................... C-1
</TABLE>
C-2
<PAGE>
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS
"S": Fundamental Restriction to be Standardized
"NF": Fundamental Restriction to be Reclassified as Non-Fundamental
"E": Fundamental Restriction to be Eliminated
"NFA": Fundamental Restriction to be Reclassified as Non-Fundamental and Amended
C-3
<PAGE>
JPMPMMF, JPMIPMMF, JPMISPMMF and the MANAGERS FUND may not:
NF 1. Acquire any illiquid securities, such as repurchase agreements with more
than seven days to maturity or fixed time deposits with a duration of over
seven calendar days, if as a result thereof, more than 10% of the market
value of the Fund's total assets would be in investments which are
illiquid;
E 2. Enter into reverse repurchase agreements exceeding in the aggregate
one-third of the market value of the Fund's total assets, less liabilities
other than obligations created by reverse repurchase agreements;
S 3. Borrow money, except from banks for extraordinary or emergency purposes
and then only in amounts not to exceed 10% of the value of the Fund's total
assets, taken at cost, at the time of such borrowing. Mortgage, pledge, or
hypothecate any assets except in connection with any such borrowing and in
amounts not to exceed 10% of the value of the Fund's net assets at the time
of such borrowing. The Fund will not purchase securities while borrowings
exceed 5% of the Fund's total assets; provided, however, that the Fund may
increase its interest in an open-end management investment company with the
same investment objective and restrictions as the Fund while such
borrowings are outstanding. This borrowing provision is included to
facilitate the orderly sale of portfolio securities, for example, in the
event of abnormally heavy redemption requests, and is not for investment
purposes and shall not apply to reverse repurchase agreements;
S 4. Purchase the securities or other obligations of any one issuer if,
immediately after such purchase, more than 5% of the value of the Fund's
total assets would be invested in securities or other obligations of any
one such issuer; provided, however, that the Fund may invest all or part of
its investable assets in an open-end management investment company with the
same investment objective and restrictions as the Fund. This limitation
shall not apply to issues of the U.S. Government, its agencies or
instrumentalities and to permitted investments of up to 25% of the Fund's
total assets;
S 5. Purchase the securities or other obligations of issuers conducting their
principal business activity in the same industry if, immediately after such
purchase, the value of its investment in such industry would exceed 25% of
the value of the Fund's total assets; provided, however, that the Fund may
invest all or part of its investable assets in an open-end management
investment company with the same investment objective and restrictions as
the Fund. For purposes of industry concentration, there is no percentage
limitation with respect to investments in U.S. Government securities,
negotiable certificates of deposit, time deposits, and bankers' acceptances
of U.S. branches of U.S. banks;
S 6. Make loans, except through purchasing or holding debt obligations, or
entering into repurchase agreements, or loans of portfolio securities in
accordance with the Fund's investment objective and policies;
S 7. Purchase or sell puts, calls, straddles, spreads, or any combination
thereof, real estate, commodities, or commodity contracts or interests in
oil, gas, or mineral exploration or development programs. However, the Fund
may purchase bonds or commercial paper issued by companies which invest in
real estate or interests therein including real estate investment trusts;
C-4
<PAGE>
NFA 8. Purchase securities on margin, make short sales of securities, or
maintain a short position, provided that this restriction shall not be
deemed to be applicable to the purchase or sale of when-issued securities
or of securities for delivery at a future date;
NFA 9. Acquire securities of other investment companies, except as permitted by
the 1940 Act;
S 10. Act as an underwriter of securities; or
S 11. Issue senior securities, except as may otherwise be permitted by the
foregoing investment restrictions or under the 1940 Act or any rule, order
or interpretation thereunder.
JPMTEMMF, JPMITEMMF AND JPMISTEMMF may not:
S 1. Borrow money, except from banks for temporary, extraordinary or
emergency purposes and then only in amounts up to 10% of the value of the
Fund's total assets, taken at cost at the time of such borrowing; or
mortgage, pledge or hypothecate any assets except in connection with any
such borrowing in amounts up to 10% of the value of the Fund's net assets
at the time of such borrowing. The Fund will not purchase securities while
borrowings exceed 5% of the Fund's total assets, provided, however, that
the Fund may increase its interest in an open-end management investment
company with the same investment objective and restrictions as the Fund's
while such borrowings are outstanding. This borrowing provision, for
example, facilitates the orderly sale of portfolio securities in the event
of abnormally heavy redemption requests or in the event of redemption
requests during periods of tight market supply. This provision is not for
leveraging purposes;
S 2. Invest more than 25% of its total assets in securities of governmental
units located in any one state, territory, or possession of the United
States. The Fund may invest more than 25% of its total assets in industrial
development and pollution control obligations whether or not the users of
facilities financed by such obligations are in the same industry;(1)
E 3. Purchase industrial revenue bonds if, as a result of such purchase, more
than 5% of total Fund assets would be invested in industrial revenue bonds
where payment of principal and interest are the responsibility of companies
with fewer than three years of operating history;
S 4. Purchase the securities or other obligations of any one issuer if,
immediately after such purchase, more than 5% of the value of the Fund's
total assets would be invested in securities or other obligations of any
one such issuer, provided, however, that the Fund may invest all or part of
its investable assets in an open-end management investment company with the
same investment objective and restrictions as the Fund's. Each state and
each political subdivision, agency or instrumentality of such state and
each multi-state agency of which such state is a member will be a separate
issuer if the security is backed only by the assets and revenues of that
issuer. If the security is guaranteed by another entity, the guarantor will
be deemed to be the issuer. This limitation shall not apply to securities
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities or to permitted investments of up to 25% of the Fund's
total assets;(2)
- ------------------------
(1) Pursuant to an interpretation of the staff of the SEC, the Fund may not
invest more than 25% of its assets in industrial development bonds in projects
of similar type or in the same state. The Fund shall comply with this
interpretation until such time as it may be modified by the staff of the SEC.
(2) For purposes of interpretation of Investment Restriction No. 4 "guaranteed
by another entity" includes credit substitutions, such as letters of credit or
insurance, unless the Advisor determines that the security meets the Fund's
credit standards without regard to the credit substitution.
C-5
<PAGE>
S 5. Make loans, except through the purchase or holding of debt obligations,
repurchase agreements, or loans of portfolio securities in accordance with
the Fund's investment objective and policies;
S 6. Purchase or sell puts, calls, straddles, spreads, or any combination
thereof except to the extent that securities subject to a demand
obligation, stand-by commitments and puts may be purchased; real estate;
commodities; commodity contracts; or interests in oil, gas, or mineral
exploration or development programs. However, the Fund may purchase
municipal bonds, notes or commercial paper secured by interests in real
estate;
NFA 7. Purchase securities on margin, make short sales of securities, or
maintain a short position, provided that this restriction shall not be
deemed to be applicable to the purchase or sale of when-issued securities
or of securities for delayed delivery;
NFA 8. Acquire securities of other investment companies, except as permitted by
the 1940 Act;
S 9. Act as an underwriter of securities; or
S 10. Issue senior securities, except as may otherwise be permitted by the
foregoing investment restrictions or under the 1940 Act or any rule, order
or interpretation thereunder.
JPMFMMF, JPMIFMMF AND JPMISFMMF may not:
S 1. Enter into reverse repurchase agreements which together with any other
borrowing exceeds in the aggregate one-third of the market value of the
Fund's or the Portfolio's total assets, less liabilities other than the
obligations created by reverse repurchase agreements;
S 2. Borrow money (not including reverse repurchase agreements), except from
banks for temporary or extraordinary or emergency purposes and then only in
amounts up to 10% of the value of the Fund's or the Portfolio's total
assets, taken at cost at the time of such borrowing (and provided that such
borrowings and reverse repurchase agreements do not exceed in the aggregate
one-third of the market value of the Fund's and the Portfolio's total
assets less liabilities other than the obligations represented by the bank
borrowings and reverse repurchase agreements). Mortgage, pledge, or
hypothecate any assets except in connection with any such borrowing and in
amounts up to 10% of the value of the Fund's or the Portfolio's net assets
at the time of such borrowing. The Fund or the Portfolio will not purchase
securities while borrowings exceed 5% of the Fund's or the Portfolio's
total assets, respectively; provided, however, that the Fund may increase
its interest in an open-end management investment company with the same
investment objective and restrictions as the Fund while such borrowings are
outstanding. This borrowing provision is included to facilitate the orderly
sale of portfolio securities, for example, in the event of abnormally heavy
redemption requests, and is not for investment purposes;
S 3. Purchase the securities or other obligations of any one issuer if,
immediately after such purchase, more than 5% of the value of the Fund's or
the Portfolio's total assets would be invested in securities or other
obligations of any one such issuer; provided, however, that the Fund may
invest all or part of its investable assets in an open-end management
investment company with the same investment objective and restrictions as
the Fund. This limitation also shall not apply to issues of the U.S.
Government and repurchase agreements related thereto;
S 4. Purchase the securities or other obligations of issuers conducting their
principal business activity in the same industry if, immediately after such
purchase, the value of its investment in such industry
C-6
<PAGE>
would exceed 25% of the value of the Fund's or the Portfolio's total
assets; provided, however, that the Fund may invest all or part of its
assets in an open-end management investment company with the same
investment objective and restrictions as the Fund. For purposes of industry
concentration, there is no percentage limitation with respect to
investments in U.S. Government securities and repurchase agreements related
thereto;
S 5. Make loans, except through purchasing or holding debt obligations,
repurchase agreements, or loans of portfolio securities in accordance with
the Fund's or the Portfolio's investment objective and policies;
S 6. Purchase or sell puts, calls, straddles, spreads, or any combination
thereof, real estate, commodities, or commodity contracts or interests in
oil, gas, or mineral exploration or development programs;
NF 7. Purchase securities on margin, make short sales of securities, or
maintain a short position, provided that this restriction shall not be
deemed to be applicable to the purchase or sale of when-issued securities
or of securities for delivery at a future date;
NFA 8. Acquire securities of other investment companies, except as permitted by
the 1940 Act or in connection with a merger, consolidation, reorganization,
acquisition of assets or an offer of exchange; provided, however, that
nothing in this investment restriction shall prevent the Trust from
investing all or part of the Fund's assets in an open-end management
investment company with the same investment objective and restrictions as
the Fund;
S 9. Act as an underwriter of securities; or
S 10. Issue senior securities, except as may otherwise be permitted by the
foregoing investment restrictions or under the 1940 Act or any rule, order
or interpretation thereunder.
JPMITMMF may not:
S 1. Enter into reverse repurchase agreements which together with any other
borrowing exceed in the aggregate one-third of the market value of the
Fund's or the Portfolio's total assets, less liabilities other than the
obligations created by reverse repurchase agreements;
S 2. Borrow money, except in amounts not to exceed one third of the Fund's
total assets (including the amount borrowed) less liabilities (other than
borrowings) (i) from banks for temporary or short-term purposes or for the
clearance of transactions, (ii) in connection with the redemption of Fund
shares or to finance failed settlements of portfolio trades without
immediately liquidating portfolio securities or other assets, (iii) in
order to fulfill commitments or plans to purchase additional securities
pending the anticipated sale of other portfolio securities or assets and
(iv) pursuant to reverse repurchase agreements entered into by the Fund.(3)
S 3. Purchase the securities or other obligations of any one issuer if,
immediately after such purchase, more than 5% of the value of the Fund's or
the Portfolio's total assets would be invested in securities or other
obligations of any one such issuer; provided, however, that the Fund may
invest all or part of its investable assets in an open-end management
investment company with the same
- ------------------------
(3) Although the Fund is permitted to fulfill plans to purchase additional
securities pending the anticipated sale of other portfolio securities or assets,
the Fund has no current intention of engaging in this form of leverage.
C-7
<PAGE>
investment objective and restrictions as the Fund. This limitation also
shall not apply to issues of the U.S. Government and repurchase agreements
related thereto;
S 4. Purchase the securities or other obligations of issuers conducting their
principal business activity in the same industry if, immediately after such
purchase, the value of its investment in such industry would exceed 25% of
the value of the Fund's or the Portfolio's total assets; provided, however,
that the Fund may invest all or part of its assets in an open-end
management investment company with the same investment objective and
restrictions as the Fund. For purposes of industry concentration, there is
no percentage limitation with respect to investments in U.S. Government
securities and repurchase agreements related thereto;
S 5. Make loans, except through purchasing or holding debt obligations,
repurchase agreements, or loans of portfolio securities in accordance with
the Fund's or the Portfolio's investment objective and policies (see
"Investment Objectives and Policies");
S 6. Purchase or sell puts, calls, straddles, spreads, or any combination
thereof, real estate, commodities, or commodity contracts or interests in
oil, gas, or mineral exploration or development programs;
NF 7. Purchase securities on margin, make short sales of securities, or
maintain a short position, provided that this restriction shall not be
deemed to be applicable to the purchase or sale of when-issued securities
or of securities for delivery at a future date;
NFA 8. Acquire securities of other investment companies, except as permitted by
the 1940 Act or in connection with a merger, consolidation, reorganization,
acquisition of assets or an offer of exchange; provided, however, that
nothing in this investment restriction shall prevent the Trust from
investing all or part of the Fund's assets in an open-end management
investment company with the same investment objective and restrictions as
the Fund;
S 9. Act as an underwriter of securities; or
S 10. Issue senior securities, except as may otherwise be permitted by the
foregoing investment restrictions or under the 1940 Act or any rule, order
or interpretation thereunder.
JPMSTBF AND JPMISTBF may not:
S 1. Purchase securities or other obligations of issuers conducting their
principal business activity in the same industry if, immediately after such
purchase the value of its investments in such industry would exceed 25% of
the value of the Fund's total assets; provided, however, that the Fund may
invest all or part of its investable assets in an open-end management
investment company with the same investment objective and restrictions as
the Fund's. For purposes of industry concentration, there is no percentage
limitation with respect to investments in U.S. Government securities;
S 2. Purchase the securities or other obligations of any one issuer if,
immediately after such purchase, more than 5% of the value of the Fund's
total assets would be invested in securities or other obligations of any
one such issuer; provided, however, that the Fund may invest all or part of
its investable assets in an open-end management investment company with the
same investment objective and restrictions as the Fund's. This limitation
shall not apply to securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities or to permitted investments of up to 25%
of the Fund's total assets;
C-8
<PAGE>
S 3. Purchase the securities of an issuer if, immediately after such
purchase, the Fund owns more than 10% of the outstanding voting securities
of such issuer; provided, however, that the Fund may invest all or part of
its investable assets in an open-end management investment company with the
same investment objective and restrictions as the Fund's. This limitation
shall not apply to permitted investments of up to 25% of the Fund's total
assets;
S 4. Borrow money (not including reverse repurchase agreements), except from
banks for temporary or extraordinary or emergency purposes and then only in
amounts up to 30% of the value of the Fund's or the Portfolio's total
assets, taken at cost at the time of such borrowing (and provided that such
borrowings and reverse repurchase agreements do not exceed in the aggregate
one-third of the market value of the Fund's and the Portfolio's total
assets less liabilities other than the obligations represented by the bank
borrowings and reverse repurchase agreements). The Fund will not mortgage,
pledge, or hypothecate any assets except in connection with any such
borrowing and in amounts not to exceed 30% of the value of the Fund's or
the Portfolio's net assets at the time of such borrowing. The Fund or the
Portfolio will not purchase securities while borrowings exceed 5% of the
Fund's total assets; provided, however, that the Fund may increase its
interest in an open-end management investment company with the same
investment objective and restrictions as the Fund's while such borrowings
are outstanding. Collateral arrangements for premium and margin payments in
connection with the Fund's hedging activities are not deemed to be a pledge
of assets;
S 5. Issue any senior security, except as appropriate to evidence
indebtedness which constitutes a senior security and which the Fund is
permitted to incur pursuant to Investment Restriction No. 4 and except that
the Fund may enter into reverse repurchase agreements, provided that the
aggregate of senior securities, including reverse repurchase agreements,
shall not exceed one-third of the market value of the Fund's total assets,
less liabilities other than obligations created by reverse repurchase
agreements. The Fund's arrangements in connection with its hedging
activities as described in "Investment Objectives and Policies" section of
the Statement of Additional Information shall not be considered senior
securities for purposes hereof;
S 6. Make loans, except through the purchase or holding of debt obligations
(including privately placed securities) or the entering into of repurchase
agreements, or loans of portfolio securities in accordance with the Fund's
investment objective and policies;
S 7. Purchase or sell puts, calls, straddles, spreads, or any combination
thereof, real estate, commodities, or commodity contracts, except for the
Fund's interests in hedging activities as described under "Investment
Objectives and Policies" section of the Statement of Additional
Information; or interests in oil, gas, or mineral exploration or
development programs. However, the Fund may purchase securities or
commercial paper issued by companies which invest in real estate or
interests therein, including real estate investment trusts, and purchase
instruments secured by real estate or interests therein;
NFA 8. Purchase securities on margin, make short sales of securities, or
maintain a short position in securities, except to obtain such short-term
credit as necessary for the clearance of purchases and sales of securities;
provided that this restriction shall not be deemed to be applicable to the
purchase or sale of when-issued securities or delayed delivery securities;
NFA 9. Acquire securities of other investment companies, except as permitted by
the 1940 Act or in connection with a merger, consolidation, reorganization,
acquisition of assets or an offer of exchange; provided, however, that
nothing in this investment restriction shall prevent the Trust from
C-9
<PAGE>
investing all or part of the Fund's assets in an open-end management
investment company with the same investment objective and restrictions as
the Fund; or
S 10. Act as an underwriter of securities.
JPMBF, JPMIBF AND JPMIBF-U may not:
S 1. Borrow money, except from banks for extraordinary or emergency purposes
and then only in amounts up to 30% of the value of the Fund's total assets,
taken at cost at the time of such borrowing and except in connection with
reverse repurchase agreements permitted by Investment Restriction No. 8.
Mortgage, pledge, or hypothecate any assets except in connection with any
such borrowing in amounts up to 30% of the value of the Fund's net assets
at the time of such borrowing. The Fund will not purchase securities while
borrowings (including reverse repurchase agreements) exceed 5% of the
Fund's total assets; provided, however, that the Fund may increase its
interest in an open-end management investment company with the same
investment objective and restrictions as the Fund's while such borrowings
are outstanding. This borrowing provision facilitates the orderly sale of
portfolio securities, for example, in the event of abnormally heavy
redemption requests. This provision is not for investment purposes.
Collateral arrangements for premium and margin payments in connection with
the Fund's hedging activities are not deemed to be a pledge of assets;
S 2. Purchase the securities or other obligations of any one issuer if,
immediately after such purchase, more than 5% of the value of the Fund's
total assets would be invested in securities or other obligations of any
one such issuer; provided, however, that the Fund may invest all or part of
its investable assets in an open-end management investment company with the
same investment objective and restrictions as the Fund's. This limitation
shall not apply to securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities or to permitted investments of up to 25%
of the Fund's total assets;
S 3. Purchase the securities of an issuer if, immediately after such
purchase, the Fund owns more than 10% of the outstanding voting securities
of such issuer; provided, however, that the Fund may invest all or part of
its investable assets in an open-end management investment company with the
same investment objective and restrictions as the Fund's. This limitation
shall not apply to permitted investments of up to 25% of the Fund's total
assets;
S 4. Purchase securities or other obligations of issuers conducting their
principal business activity in the same industry if, immediately after such
purchase the value of its investments in such industry would exceed 25% of
the value of the Fund's total assets; provided, however, that the Fund may
invest all or part of its investable assets in an open-end management
investment company with the same investment objective and restrictions as
the Fund's. For purposes of industry concentration, there is no percentage
limitation with respect to investments in U.S. Government securities;
S 5. Make loans, except through the purchase or holding of debt obligations
(including privately placed securities) or the entering into of repurchase
agreements, or loans of portfolio securities in accordance with the Fund's
investment objective and policies;
S 6. Purchase or sell puts, calls, straddles, spreads, or any combination
thereof, real estate, commodities, commodity contracts, except for the
Fund's interest in hedging activities as described under "Investment
Objectives and Policies" section of the Statement of Additional
Information; or
C-10
<PAGE>
interests in oil, gas, or mineral exploration or development programs.
However, the Fund may purchase debt obligations secured by interests in
real estate or issued by companies which invest in real estate or interests
therein including real estate investment trusts;
NFA 7. Purchase securities on margin, make short sales of securities, or
maintain a short position in securities, except in the course of the Fund's
hedging activities, unless at all times when a short position is open the
Fund owns an equal amount of such securities, provided that this
restriction shall not be deemed to be applicable to the purchase or sale of
when-issued securities or delayed delivery securities;
S 8. Issue any senior security, except as appropriate to evidence
indebtedness which constitutes a senior security and which the Fund is
permitted to incur pursuant to Investment Restriction No. 1 and except that
the Fund may enter into reverse repurchase agreements, provided that the
aggregate of senior securities, including reverse repurchase agreements,
shall not exceed one-third of the market value of the Fund's total assets,
less liabilities other than obligations created by reverse repurchase
agreements. The Fund's arrangements in connection with its hedging
activities as described in "Investment Objectives and Policies" section of
the Statement of Additional Information shall not be considered senior
securities for purposes hereof;
NFA 9. Acquire securities of other investment companies, except as permitted by
the 1940 Act; or
S 10. Act as an underwriter of securities.
JPMTEBF AND JPMITEBF may not:
S 1. Borrow money, except from banks for extraordinary or emergency purposes
and then only in amounts up to 10% of the value of the Fund's total assets,
taken at cost at the time of such borrowing; or mortgage, pledge, or
hypothecate any assets except in connection with any such borrowing in
amounts up to 10% of the value of the Fund's net assets at the time of such
borrowing. The Fund will not purchase securities while borrowings exceed 5%
of the Fund's total assets; provided, however, that the Fund may increase
its interest in an open-end management investment company with the same
investment objective and restrictions as the Fund's while such borrowings
are outstanding. This borrowing provision facilitates the orderly sale of
portfolio securities, for example, in the event of abnormally heavy
redemption requests. This provision is not for investment purposes.
Collateral arrangements for premium and margin payments in connection with
the Fund's hedging activities are not deemed to be a pledge of assets;
S 2. Purchase securities or other obligations of any one issuer if,
immediately after such purchase, more than 5% of the value of the Fund's
total assets would be invested in securities or other obligations of any
one such issuer; provided, however, that the Fund may invest all or part of
its investable assets in an open-end management investment company with the
same investment objective and restrictions as the Fund's. Each state and
each political subdivision, agency or instrumentality of such state and
each multi-state agency of which such state is a member will be a separate
issuer if the security is backed only by the assets and revenue of that
issuer. If the security
C-11
<PAGE>
is guaranteed by another entity, the guarantor will be deemed to be the
issuer.(5) This limitation shall not apply to securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities or to
permitted investments of up to 25% of the Fund's total assets;
S 3. Invest more than 25% of its total assets in securities of governmental
units located in any one state, territory, or possession of the United
States. The Fund may invest more than 25% of its total assets in industrial
developments and pollution control obligations whether or not the users of
facilities financed by such obligations are in that same industry;(6)
E 4. Purchase industrial revenue bonds if, as a result of such purchase, more
than 5% of total Fund assets would be invested in industrial revenue bonds
where payment of principal and interest are the responsibility of companies
with fewer than three years of operating history (including predecessors);
S 5. Make loans, except through the purchase or holding of debt obligations
(including privately placed securities) or the entering into of repurchase
agreements, or loans of portfolio securities in accordance with the Fund's
investment objective and policies;
S 6. Purchase or sell puts, calls, straddles, spreads, or any combination
thereof except to the extent that securities subject to a demand
obligation, stand-by commitments and puts may be purchased; real estate;
commodities; commodity contracts, except for the Fund's interests in
hedging activities as described under "Investment Objectives and Policies"
section of the Statement of Additional Information; or interests in oil,
gas, or mineral exploration or development programs. However, the Fund may
purchase municipal bonds, notes or commercial paper secured by interests in
real estate;
NFA 7. Purchase securities on margin, make short sales of securities, or
maintain a short position, except in the course of the Fund's hedging
activities, unless at all times when a short position is open the Fund owns
an equal amount of such securities or owns securities which, without
payment of any further consideration, are convertible into or exchangeable
for securities of the same issue as, and equal in amount to, the securities
sold short; provided that this restriction shall not be deemed to be
applicable to the purchase or sale of when-issued or delayed delivery
securities;
S 8. Issue any senior security, except as appropriate to evidence
indebtedness which the Fund is permitted to incur pursuant to Investment
Restriction No. 1. The Fund's arrangements in connection with its hedging
activities as described in "Investment Objectives and Policies" section of
the Statement of Additional Information shall not be considered senior
securities for purposes hereof;
NFA 9. Acquire securities of other investment companies, except as permitted by
the 1940 Act; or
S 10. Act as an underwriter of securities.
- ------------------------
(5) For purposes of interpretation of Investment Restriction No. 2, "guaranteed
by another entity" includes credit substitutions, such as letters of credit or
insurance, unless the Advisor determines that the security meets the Fund's
credit standards without regard to the credit substitution.
(6) Pursuant to an interpretation of the staff of the SEC, the Fund may not
invest more than 25% of its assets in industrial development bonds in projects
of similar type or in the same state. The Fund shall comply with this
interpretation until such time as it may be modified by the staff of the SEC.
C-12
<PAGE>
JPMNYTRBF AND JPMINYTRBF may not:
S 1. Purchase any security if, as a result, more than 25% of the value of the
Fund's total assets would be invested in securities of issuers having their
principal business activities in the same industry. This limitation shall
not apply to obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities;
S 2. Borrow money, except that the Fund may (i) borrow money from banks for
temporary or emergency purposes (not for leveraging purposes) and (ii)
enter into reverse repurchase agreements for any purpose; provided that (i)
and (ii) in total do not exceed 33 1/3% of the value of the Fund's total
assets (including the amount borrowed) less liabilities (other than
borrowings). If at any time any borrowings come to exceed 33 1/3% of the
value of the Fund's total assets, the Fund will reduce its borrowings
within three business days to the extent necessary to comply with the
33 1/3% limitation;
S 3. Make loans to other persons, except through the purchase of debt
obligations, loans of portfolio securities, and participation in repurchase
agreements;
S 4. Purchase or sell physical commodities or contracts thereon, unless
acquired as a result of the ownership of securities or instruments, but the
Fund may purchase or sell futures contracts or options (including options
on futures contracts, but excluding options or futures contracts on
physical commodities) and may enter into foreign currency forward
contracts;
S 5. Purchase or sell real estate, but the Fund may purchase or sell
securities that are secured by real estate or issued by companies
(including real estate investment trusts) that invest or deal in real
estate;
S 6. Underwrite securities of other issuers, except to the extent the Fund,
in disposing of portfolio securities, may be deemed an underwriter within
the meaning of the 1933 Act;
S 7. Issue senior securities, except as permitted under the 1940 Act or any
rule, order or interpretation thereunder; or
NFA 8. Notwithstanding any other investment restriction of the Fund, the Fund
may invest all of its investable assets in an open-end management
investment company having the same investment objective and restrictions as
the Fund.
JPMDF AND JPMIDF may not:
S 1. Purchase the securities or other obligations of issuers conducting their
principal business activity in the same industry if, immediately after such
purchase the value of its investments in such industry would exceed 25% of
the value of the Fund's total assets; provided, however, that the Fund may
invest all or part of its investable assets in an open-end management
investment company with the same investment objective and restrictions as
the Fund's. For purposes of industry concentration, there is no percentage
limitation with respect to investments in U.S. Government securities;
S 2. Purchase the securities or other obligations of any one issuer if,
immediately after such purchase, more than 5% of the value of the Fund's
total assets would be invested in securities or other obligations of any
one such issuer; provided, however, that the Fund may invest all or part of
its investable assets in an open-end management investment company with the
same investment objective and restrictions as the Fund's. This limitation
shall not apply to securities issued or
C-13
<PAGE>
guaranteed by the U.S. Government, its agencies or instrumentalities or to
permitted investments of up to 25% of the Fund's total assets;
S 3. Purchase the securities of an issuer if, immediately after such
purchase, the Fund owns more than 10% of the outstanding voting securities
of such issuer; provided, however, that the Fund may invest all or part of
its investable assets in an open-end management investment company with the
same investment objective and restrictions as the Fund's. This limitation
shall not apply to permitted investments of up to 25% of the Fund's total
assets;
S 4. Borrow money (not including reverse repurchase agreements), except from
banks for temporary or extraordinary or emergency purposes and then only in
amounts up to 30% of the value of the Fund's or the Portfolio's total
assets, taken at cost at the time of such borrowing (and provided that such
borrowings and reverse repurchase agreements do not exceed in the aggregate
one-third of the market value of the Fund's and the Portfolio's total
assets less liabilities other than the obligations represented by the bank
borrowings and reverse repurchase agreements). The Fund will not mortgage,
pledge, or hypothecate any assets except in connection with any such
borrowing and in amounts not to exceed 30% of the value of the Fund's or
the Portfolio's net assets at the time of such borrowing. The Fund or the
Portfolio will not purchase securities while borrowings exceed 5% of the
Fund's total assets; provided, however, that the Fund may increase its
interest in an open-end management investment company with the same
investment objective and restrictions as the Fund's while such borrowings
are outstanding. This borrowing provision is included to facilitate the
orderly sale of portfolio securities, for example, in the event of
abnormally heavy redemption requests, and is not for investment purposes.
Collateral arrangements for premium and margin payments in connection with
the Fund's use of futures contracts and options are not deemed to be a
pledge of assets;
S 5. Issue any senior security, except as appropriate to evidence
indebtedness which constitutes a senior security and which the Fund is
permitted to incur pursuant to Investment Restriction No. 4 and except that
the Fund may enter into reverse repurchase agreements, provided that the
aggregate of senior securities, including reverse repurchase agreements,
shall not exceed one-third of the market value of the Fund's total assets,
less liabilities other than obligations created by reverse repurchase
agreements. The Fund's arrangements in connection with its use of futures
contracts and options shall not be considered senior securities for
purposes hereof;
S 6. Make loans, except through the purchase or holding of debt obligations
(including privately placed securities), or the entering into of repurchase
agreements, or loans of portfolio securities in accordance with the Fund's
investment objective and policies;
S 7. Purchase or sell commodities or commodity contracts, but this
restriction shall not prohibit the Fund from purchasing or selling futures
contracts or options (including options on futures contracts, but excluding
options or futures contracts on physical commodities) or entering into
foreign currency forward contracts; or purchase or sell real estate or
interests in oil, gas, or mineral exploration or development programs.
However, the Fund may purchase securities or commercial paper issued by
companies which invest in real estate or interests therein, including real
estate investment trusts, and purchase instruments secured by real estate
or interests therein;
NFA 8. Purchase securities on margin, make short sales of securities, or
maintain a short position in securities, except to obtain such short term
credit as necessary for the clearance of purchases and sales of securities,
provided that this restriction shall not be deemed to be applicable to the
C-14
<PAGE>
purchase or sale of when-issued securities or delayed delivery securities
or to restrict the Fund's use of futures contracts or options;
NFA 9. Acquire securities of other investment companies, except as permitted by
the 1940 Act or in connection with a merger, consolidation, reorganization,
acquisition of assets or an offer of exchange; provided, however, that
nothing in this investment restriction shall prevent the Trust from
investing all or part of the Fund's assets in an open-end management
investment company with the same investment objective and restrictions as
the Fund; or
S 10. Act as an underwriter of securities.
JPMUSEF, JPMIUSEF, JPMUSSCF AND JPMIUSSCF may not:
S 1. Purchase the securities or other obligations of issuers conducting their
principal business activity in the same industry if, immediately after such
purchase the value of its investments in such industry would exceed 25% of
the value of the Fund's total assets; provided, however, that the Fund may
invest all or part of its investable assets in an open-end management
investment company with the same investment objective and restrictions as
the Fund's. For purposes of industry concentration, there is no percentage
limitation with respect to investments in U.S. Government securities;
S 2. Borrow money, except from banks for extraordinary or emergency purposes
and then only in amounts not to exceed 10% of the value of the Fund's total
assets, taken at cost, at the time of such borrowing. Mortgage, pledge, or
hypothecate any assets except in connection with any such borrowing and in
amounts not to exceed 10% of the value of the Fund's net assets at the time
of such borrowing. The Fund will not purchase securities while borrowings
exceed 5% of the Fund's total assets; provided, however, that the Fund may
increase its interest in an open-end management investment company with the
same investment objective and restrictions as the Fund's while such
borrowings are outstanding. This borrowing provision is included to
facilitate the orderly sale of portfolio securities, for example, in the
event of abnormally heavy redemption requests, and is not for investment
purposes. Collateral arrangements for premium and margin payments in
connection with the Fund's hedging activities are not deemed to be a pledge
of assets;
S 3. Purchase the securities or other obligations of any one issuer if,
immediately after such purchase, more than 5% of the value of the Fund's
total assets would be invested in securities or other obligations of any
one such issuer; provided, however, that the Fund may invest all or part of
its investable assets in an open-end management investment company with the
same investment objective and restrictions as the Fund's. This limitation
shall not apply to issues of the U.S. Government, its agencies or
instrumentalities and to permitted investments of up to 25% of the Fund's
total assets;
S 4. Purchase the securities of an issuer if, immediately after such
purchase, the Fund owns more than 10% of the outstanding voting securities
of such issuer; provided, however, that the Fund may invest all or part of
its investable assets in an open-end management investment company with the
same investment objective and restrictions as the Fund's;
S 5. Make loans, except through the purchase or holding of debt obligations
(including privately placed securities), or the entering into of repurchase
agreements, or loans of portfolio securities in accordance with the Fund's
investment objective and policies;
C-15
<PAGE>
S 6. Purchase or sell puts, calls, straddles, spreads, or any combination
thereof, real estate, commodities, or commodity contracts, except for the
Fund's interests in hedging activities as described under "Investment
Objectives and Policies" section of the Statement of Additional
Information; or interests in oil, gas, or mineral exploration or
development programs. However, the Fund may purchase securities or
commercial paper issued by companies which invest in real estate or
interests therein, including real estate investment trusts;
NFA 7. Purchase securities on margin, make short sales of securities, or
maintain a short position, except in the course of the Fund's hedging
activities, provided that this restriction shall not be deemed to be
applicable to the purchase or sale of when-issued securities or delayed
delivery securities;
NFA 8. Acquire securities of other investment companies, except as permitted by
the 1940 Act;
S 9. Act as an underwriter of securities;
S 10. Issue any senior security, except as appropriate to evidence
indebtedness which the Fund is permitted to incur pursuant to Investment
Restriction No. 2. The Fund's arrangements in connection with its hedging
activities as described in "Investment Objectives and Policies" section of
the Statement of Additional Information shall not be considered senior
securities for purposes hereof; or
E 11. Purchase any equity security if, as a result, the Fund would then have
more than 5% of its total assets invested in securities of companies
(including predecessors) that have been in continuous operation for fewer
than three years.
JPMIEF AND JPMIIEF may not:
S 1. Borrow money, except from banks for extraordinary or emergency purposes
and then only in amounts up to 30% of the value of the Fund's net assets at
the time of borrowing, and except in connection with reverse repurchase
agreements and then only in amounts up to 33 1/3% of the value of the
Fund's net assets; or purchase securities while borrowings, including
reverse repurchase agreements, exceed 5% of the Fund's total assets;
provided, however, that the Fund may increase its interest in an open-end
management investment company with the same investment objective and
restrictions as the Fund's while such borrowings are outstanding. The Fund
will not mortgage, pledge, or hypothecate any assets except in connection
with any such borrowing and in amounts not to exceed 30% of the value of
the Fund's net assets at the time of such borrowing;
S 2. Purchase the securities or other obligations of any one issuer if,
immediately after such purchase, more than 5% of the value of the Fund's
total assets would be invested in securities or other obligations of any
one such issuer; provided, however, that the Fund may invest all or part of
its investable assets in an open-end management investment company with the
same investment objective and restrictions as the Fund's. This limitation
shall not apply to securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities or to permitted investments of up to 25%
of the Fund's total assets;
S 3. Purchase the securities of an issuer if, immediately after such
purchase, the Fund owns more than 10% of the outstanding voting securities
of such issuer; provided, however, that the Fund may invest all or part of
its investable assets in an open-end management investment company with the
same investment objective and restrictions as the Fund's. This limitation
shall not apply to permitted investments of up to 25% of the Fund's total
assets;
C-16
<PAGE>
S 4. Purchase the securities or other obligations of issuers conducting their
principal business activity in the same industry if, immediately after such
purchase, the value of its investments in such industry would exceed 25% of
the value of the Fund's total assets; provided, however, that the Fund may
invest all or part of its investable assets in an open-end management
investment company with the same investment objective and restrictions as
the Fund's. For purposes of industry concentration, there is no percentage
limitation with respect to investments in U.S. Government securities;
S 5. Make loans, except through the purchase or holding of debt obligations
(including restricted securities), or the entering into of repurchase
agreements, or loans of portfolio securities in accordance with the Fund's
investment objective and policies;
S 6. Purchase or sell puts, calls, straddles, spreads, or any combination
thereof, real property, including limited partnership interests,
commodities, or commodity contracts, except for the Fund's interests in
hedging and foreign exchange activities as described under "Additional
Investment Information" in the Prospectus; or interests in oil, gas,
mineral or other exploration or development programs or leases. However,
the Fund may purchase securities or commercial paper issued by companies
that invest in real estate or interests therein including real estate
investment trusts;
NFA 7. Purchase securities on margin, make short sales of securities, or
maintain a short position in securities, except to obtain such short-term
credit as necessary for the clearance of purchases and sales of securities,
provided that this restriction shall not be deemed to apply to the purchase
or sale of when-issued securities or delayed delivery securities;
NFA 8. Acquire securities of other investment companies, except as permitted by
the 1940 Act;
S 9. Act as an underwriter of securities, except insofar as the Fund may be
deemed to be an underwriter under the 1933 Act by virtue of disposing of
portfolio securities; or
S 10. Issue any senior security, except as appropriate to evidence
indebtedness which the Fund is permitted to incur pursuant to Investment
Restriction No. 1. The Fund's arrangements in connection with its hedging
activities as described in "Additional Investment Information" in the
Prospectus shall not be considered senior securities for purposes hereof.
Unless Sections 8(b)(1) and 13(a) of the 1940 Act, or any SEC or SEC staff
interpretations thereof, are amended or modified, JPMEMEF, JPMIEMEF, JPMEEF AND
JPMIEEF may not:
S 1. Purchase any security if, as a result, more than 25% of the value of the
Fund's total assets would be invested in securities of issuers having their
principal business activities in the same industry. This limitation shall
not apply to obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities;
S 2. Borrow money, except that the Fund may (i) borrow money from banks for
temporary or emergency purposes (not for leveraging purposes) and (ii)
enter into reverse repurchase agreements for any purpose; provided that (i)
and (ii) in total do not exceed 33 1/3% of the value of the Fund's total
assets (including the amount borrowed) less liabilities (other than
borrowings). If at any time any borrowings come to exceed 33 1/3% of the
value of the Fund's total assets, the Fund will reduce its borrowings
within three business days to the extent necessary to comply with the
33 1/3% limitation;
C-17
<PAGE>
S 3. With respect to 75% of its total assets, purchase any security if, as a
result, (a) more than 5% of the value of the Fund's total assets would be
invested in securities or other obligations of any one issuer; or (b) the
Fund would hold more than 10% of the outstanding voting securities of that
issuer. This limitation shall not apply to Government securities (as
defined in the 1940 Act);
S 4. Make loans to other persons, except through the purchase of debt
obligations, loans of portfolio securities, and participation in repurchase
agreements;
S 5. Purchase or sell physical commodities or contracts thereon, unless
acquired as a result of the ownership of securities or instruments, but the
Fund may purchase or sell futures contracts or options (including options
on futures contracts, but excluding options or futures contracts on
physical commodities) and may enter into foreign currency forward
contracts;
S 6. Purchase or sell real estate, but the Fund may purchase or sell
securities that are secured by real estate or issued by companies
(including real estate investment trusts) that invest or deal in real
estate;
S 7. Underwrite securities of other issuers, except to the extent the Fund,
in disposing of portfolio securities, may be deemed an underwriter within
the meaning of the 1933 Act;
S 8. Issue senior securities, except as permitted under the 1940 Act or any
rule, order or interpretation thereunder; and
NFA 9. Notwithstanding any other investment restriction of the Fund, the Fund
may invest all of its investable assets in an open-end management
investment company having the same investment objective and restrictions as
the Fund.
Unless Sections 8(b)(1) and 13(a) of the 1940 Act or any SEC or SEC staff
interpretations thereof are amended or modified, JPMIIBF, JPMJEF AND JPMIJEF may
not:
S 1. Purchase any security if, as a result, more than 25% of the value of the
Fund's total assets would be invested in securities of issuers having their
principal business activities in the same industry. This limitation shall
not apply to obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. In addition, and while subject to changing
interpretations, so long as a single foreign government or supranational
organization is considered to be an "industry" for the purposes of this 25%
limitation, the Portfolio will comply therewith. The staff of the SEC
considers all supranational organizations (as a group) to be a single
industry for concentration purposes;
S 2. Borrow money, except that the Fund may (i) borrow money from banks for
temporary or emergency purposes (not for leveraging purposes) and (ii)
enter into reverse repurchase agreements for any purpose; provided that (i)
and (ii) in total do not exceed 33 1/3% of the value of the Fund's total
assets (including the amount borrowed) less liabilities (other than
borrowings). If at any time any borrowings come to exceed 33 1/3% of the
value of the Fund's total assets, the Fund will reduce its borrowings
within three business days to the extent necessary to comply with the
33 1/3% limitation;
S 3. Make loans to other persons, except through the purchase of debt
obligations, loans of portfolio securities, and participation in repurchase
agreements;
S 4. Purchase or sell physical commodities or contracts thereon, unless
acquired as a result of the ownership of securities or instruments, but the
Fund may purchase or sell futures contracts or
C-18
<PAGE>
options (including options on futures contracts, but excluding options or
futures contracts on physical commodities) and may enter into foreign
currency forward contracts;
S 5. Purchase or sell real estate, but the Fund may purchase or sell
securities that are secured by real estate or issued by companies
(including real estate investment trusts) that invest or deal in real
estate;
S 6. Underwrite securities of other issuers, except to the extent the Fund,
in disposing of portfolio securities, may be deemed an underwriter within
the meaning of the 1933 Act;
S 7. Issue senior securities, except as permitted under the 1940 Act or any
rule, order or interpretation thereunder; and
NFA 8. Notwithstanding any other investment restriction of the Fund, the Fund
may invest all of its investable assets in an open-end management
investment company having substantially the same investment objective and
restrictions as the Fund.
Unless Sections 8(b)(1) and 13(a) of the 1940 Act or any SEC or SEC staff
interpretations thereof are amended or modified, JPMDEF, JPMIDEF, JPMIOF AND
JPMIIOF may not:
S 1. Purchase any security if, as a result, more than 25% its total assets
would be invested in securities of issuers in any single industry. This
limitation shall not apply to securities issued or guaranteed as to
principal or interest by the U.S. Government, its agencies or
instrumentalities.
S 2. Issue senior securities. For purposes of this restriction, borrowing
money in accordance with paragraph 3 below, making loans in accordance with
paragraph 7 below, the issuance of shares of beneficial interest in
multiple classes or series, the purchase or sale of options, futures
contracts, forward commitments, swaps and transactions in repurchase
agreements are not deemed to be senior securities.
S 3. Borrow money, except in amounts not to exceed one third of the Fund's
total assets (including the amount borrowed) (i) from banks for temporary
or short-term purposes or for the clearance of transactions, (ii) in
connection with the redemption of Fund shares or to finance failed
settlements of portfolio trades without immediately liquidating portfolio
securities or other assets, (iii) in order to fulfill commitments or plans
to purchase additional securities pending the anticipated sale of other
portfolio securities or assets and (iv) pursuant to reverse repurchase
agreements entered into by the Fund.
S 4. Underwrite the securities of other issuers, except to the extent that,
in connection with the disposition of portfolio securities, the Fund may be
deemed to be an underwriter under the 1933 Act.
S 5. Purchase or sell real estate except that the Fund may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers
that invest in real estate or interests therein, (iii) invest in securities
that are secured by real estate or interests therein, (iv) purchase and
sell mortgage-related securities and (v) hold and sell real estate acquired
by the Fund as a result of the ownership of securities.
S 6. Purchase or sell commodities or commodity contracts, except the Fund may
purchase and sell financial futures contracts, options on financial futures
contracts and warrants and may enter into swap and forward commitment
transactions.
C-19
<PAGE>
S 7. Make loans, except that the Fund (1) may lend portfolio securities with
a value not exceeding one-third of the Fund's net assets, (2) enter into
repurchase agreements, and (3) purchase all or a portion of an issue of
debt securities (including privately issued debt securities), bank loan
participation interests, bank certificates of deposit, bankers'
acceptances, debentures or other securities, whether or not the purchase is
made upon the original issuance of the securities.
S 8. With respect to 75% of its total assets, purchase securities of an
issuer (other than the U.S. Government, its agencies, instrumentalities or
authorities or repurchase agreements collateralized by U.S. Government
securities), if:
a. such purchase would cause more than 5% of the Fund's total assets to be
invested in the securities of such issuer; or
b. such purchase would cause the Fund to hold more than 10% of the
outstanding voting securities of such issuer.
Unless Section 8(b)(1), and 13(a) of the 1940 Act or any SEC or SEC staff
interpretations thereof, are amended or modified, JPMGSIF AND JPMIGSIF may not:
S 1. Purchase any security if, as a result, more than 25% of the value of the
Fund's total assets would be invested in securities of issuers having their
principal business activities in the same industry. This limitation shall
not apply to obligations issued or guaranteed by the U. S. Government, its
agencies or instrumentalities.
S 2. Issue senior securities. For purposes of this restriction, borrowing
money in accordance with paragraph 3 below, making loans in accordance with
non-fundamental restriction no. (v), the issuance of shares of beneficial
interest in multiple classes or series, the purchase or sale of options,
futures contracts, forward commitments, swaps and transactions in
repurchase agreements are not deemed to be senior securities.
S 3. Borrow money, except in amounts not to exceed one third of the Fund's
total assets (including the amount borrowed) less liabilities (other than
borrowings)(i) from banks for temporary or short-term purposes or for the
clearance of transactions, (ii) in connection with the redemption of Fund
shares or to finance failed settlements of portfolio trades without
immediately liquidating portfolio securities or other assets, (iii) in
order to fulfill commitments or plans to purchase additional securities
pending the anticipated sale of other portfolio securities or assets and
(iv) pursuant to reverse repurchase agreement entered into by the Fund.(7)
S 4. Underwrite the securities of other issuers, except to the extent that,
in connection with the disposition of portfolio securities, the Fund may be
deemed to be an underwriter under the 1933 Act.
S 5. Purchase or sell real estate except that the Fund may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers
that invest in real estate or interests therein, (iii) invest in securities
that are secured by real estate or interests therein, (iv) make direct
investments in
- ------------------------
(7) Although the Portfolio is permitted to fulfill plans to purchase additional
securities pending the anticipated sale of other portfolio securities or assets,
the Portfolio has no current intention of engaging in this form of leverage.
C-20
<PAGE>
mortgages, (v) purchase and sell mortgage-related securities and (vi) hold
and sell real estate acquired by the Fund as a result of the ownership of
securities including mortgages.
S 6. Purchase or sell commodities or commodity contracts, unless acquired as
a result of the ownership of securities or instruments, except the Fund may
purchase and sell financial futures contracts, options on financial futures
contracts and warrants and may enter into swap and forward commitment
transactions.
S 7. With respect to 75% of its total assets, purchase securities of an
issuer (other than the U. S. Government, its agencies, instrumentalities or
authorities or repurchase agreements collateralized by U.S. Government
securities), if:
a. such purchase would cause more than 5% of the Fund's total assets to be
invested in the securities of such issuer; or
b. such purchase would cause the Fund to hold more than 10% of the
outstanding voting securities of such issuer.
Unless Sections 8(b)(1) and 13(a) of the 1940 Act or any SEC or SEC staff
interpretations thereof, are amended or modified, the JPMEMDF may not:
S 1. Purchase any security if, as a result, more than 25% of the value of the
Fund's total assets would be invested in securities of issuers having their
principal business activities in the same industry. This limitation shall
not apply to obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
S 2. Issue senior securities. For purposes of this restriction, borrowing
money in accordance with paragraph 3 below, making loans in accordance with
paragraph 7 below, the issuance of shares of beneficial interest in
multiple classes or series, the purchase or sale of options, futures
contracts, forward commitments, swaps and transactions in repurchase
agreements are not deemed to be senior securities.
S 3. Borrow money, except in amounts not to exceed one third of the Fund's
total assets (including the amount borrowed) less liabilities (other than
borrowings) (i) from banks for temporary or short-term purposes or for the
clearance of transactions, (ii) in connection with the redemption of Fund
shares or to finance failed settlements of portfolio trades without
immediately liquidating portfolio securities or other assets, (iii) in
order to fulfill commitments or plans to purchase additional securities
pending the anticipated sale of other portfolio securities or assets and
(iv) pursuant to reverse repurchase agreement entered into by the Fund.(8)
S 4. Underwrite the securities of other issuers, except to the extent that,
in connection with the disposition of portfolio securities, the Fund may be
deemed to be an underwriter under the 1933 Act.
S 5. Purchase or sell real estate except that the Fund may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers
that invest in real estate or interests therein, (iii) invest in securities
that are secured by real estate or interests therein, (iv) make direct
investments in
- ------------------------
(8) Although the Fund is permitted to fulfill plans to purchase additional
securities pending the anticipated sale of other portfolio securities or assets,
the Fund has no current intention of engaging in this form of leverage.
C-21
<PAGE>
mortgages, (v) purchase and sell mortgage-related securities and (vi) hold
and sell real estate acquired by the Fund as a result of the ownership of
securities including mortgages.
S 6. Purchase or sell commodities or commodity contracts, unless acquired as
a result of the ownership of securities or instruments, except the Fund may
purchase and sell financial futures contracts, options on financial futures
contracts and warrants and may enter into swap and forward commitment
transactions.
S 7. Make loans, except that the Fund (1) may lend portfolio securities with
a value not exceeding one third of the Fund's total assets, (2) enter into
repurchase agreements, and (3) purchase all or a portion of an issue of
debt obligations (including privately issued debt obligations and direct
investments in mortgages), bank loan participation interests, bank
certificates of deposit, bankers' acceptances, debentures or other
securities, whether or not the purchase is made upon the original issuance
of the securities.
JPMUSSCOF may not:
S 1. Purchase any security if, as a result, more than 25% its total assets
would be invested in securities of issuers in any single industry. This
limitation shall not apply to securities issued or guaranteed as to
principal or interest by the U.S. Government, its agencies or
instrumentalities.
S 2. Issue senior securities. For purposes of this restriction, borrowing
money in accordance with paragraph 3 below, making loans in accordance with
paragraph 7 below, the issuance of beneficial interests in multiple classes
or series, the purchase or sale of options, futures contracts, forward
commitments, swaps and transactions in repurchase agreements are not deemed
to be senior securities.
S 3. Borrow money, except in amounts not to exceed one third of the
Portfolio's total assets (including the amount borrowed) (i) from banks for
temporary or short-term purposes or for the clearance of transactions, (ii)
in connection with redemptions or to finance failed settlements of
portfolio trades without immediately liquidating portfolio securities or
other assets, (iii) in order to fulfill commitments or plans to purchase
additional securities pending the anticipated sale of other portfolio
securities or assets and (iv) pursuant to reverse repurchase agreements
entered into by the Portfolio.
S 4. Underwrite the securities of other issuers, except to the extent that,
in connection with the disposition of portfolio securities, the Portfolio
may be deemed to be an underwriter under the 1933 Act.
S 5. Purchase or sell real estate except that the Portfolio may (i) acquire
or lease office space for its own use, (ii) invest in securities of issuers
that invest in real estate or interests therein, (iii) invest in securities
that are secured by real estate or interests therein, (iv) purchase and
sell mortgage-related securities and (v) hold and sell real estate acquired
by the Portfolio as a result of the ownership of securities.
S 6. Purchase or sell commodities or commodity contracts, except the
Portfolio may purchase and sell financial futures contracts, options on
financial futures contracts and warrants and may enter into swap and
forward commitment transactions.
C-22
<PAGE>
S 7. Make loans, except that the Portfolio (1) may lend portfolio securities
with a value not exceeding one-third of the Portfolio's net assets, (2)
enter into repurchase agreements, and (3) purchase all or a portion of an
issue of debt securities (including privately issued debt securities), bank
loan participation interests, bank certificates of deposit, bankers'
acceptances, debentures or other securities, whether or not the purchase is
made upon the original issuance of the securities.
S 8. With respect to 75% of its total assets, purchase securities of an
issuer (other than the U.S. Government, its agencies, instrumentalities or
authorities or repurchase agreements collateralized by U.S. Government
securities), if:
a. such purchase would cause more than 5% of the Portfolio's total assets
to be invested in the securities of such issuer; or
b. such purchase would cause the Portfolio to hold more than 10% of the
outstanding voting securities of such issuer.
Unless Sections 8(b)(1) and 13(a) of the 1940 Act or any SEC or SEC staff
interpretations thereof are amended or modified, JPMSTAUSEF, JPMSTADEF AND
JPMSCBF may not:
S 1. Purchase any security if, as a result, more than 25% of its total assets
would be invested in the securities of issuers in any single industry. This
limitation shall not apply to securities issued or guaranteed as to
principal or interest by the U.S. Government, its agencies or
instrumentalities.
S 2. Issue senior securities. For purposes of this restriction, borrowing
money in accordance with paragraph 3 below, making loans in accordance with
paragraph 8 below, the issuance of shares of beneficial interest in
multiple classes or series, the purchase or sale of options, futures
contracts, forward commitments, swaps and transactions in repurchase
agreements are not deemed to be senior securities.
S 3. Borrow money, except in amounts not to exceed one third of the Fund's
total assets (including the amount borrowed) (i) from banks for temporary
or short-term purposes or for the clearance of transactions, (ii) in
connection with the redemption of Fund shares or to finance failed
settlements of portfolio trades without immediately liquidating portfolio
securities or other assets, (iii) in order to fulfill commitments or plans
to purchase additional securities pending the anticipated sale of other
portfolio securities or assets and (iv) pursuant to reverse repurchase
agreements entered into by the Fund.
S 4. Underwrite the securities of other issuers, except to the extent that,
in connection with the disposition of portfolio securities, the Fund may be
deemed to be an underwriter under the 1933 Act.
S 5. Purchase or sell real estate except that the Fund may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers
that invest in real estate or interests therein, (iii) invest in securities
that are secured by real estate or interests therein, (iv) purchase and
sell mortgage-related securities and (v) hold and sell real estate acquired
by the Fund as a result of the ownership of securities.
NFA 6. Purchase securities on margin (except that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities).
C-23
<PAGE>
S 7. Purchase or sell commodities or commodity contracts, except the Fund may
purchase and sell financial futures contracts, options on financial futures
contracts and warrants and may enter into swap and forward commitment
transactions.
S 8. Make loans, except that the Fund (1) may lend portfolio securities with
a value not exceeding one-third of the Fund's total assets, (2) enter into
repurchase agreements, and (3) purchase all or a portion of an issue of
debt securities (including privately issued debt securities), bank loan
participation interests, bank certificates of deposit, bankers'
acceptances, debentures or other securities, whether or not the purchase is
made upon the original issuance of the securities.
S 9. In the case of each Equity Fund, with respect to 75% of its total
assets, purchase securities of an issuer (other than the U.S. Government,
its agencies, instrumentalities or authorities or repurchase agreements
collateralized by U.S. Government securities), if:
a. such purchase would cause more than 5% of the Fund's total assets to be
invested in the securities of such issuer; or
b. such purchase would cause the Fund to hold more than 10% of the
outstanding voting securities of such issuer.
C-24
<PAGE>
EXHIBIT D
TERMS OF
INVESTMENT ADVISORY AGREEMENT
W I T N E S S E T H:
that in consideration of the premises and mutual promises hereinafter set forth,
the parties hereto agree as follows:
1. The Portfolio hereby appoints the Advisor to act as investment adviser
to the Portfolio for the period and on the terms set forth in this Agreement.
The Advisor accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided.
2. Subject to the general supervision of the Trustees of the Portfolio, the
Advisor shall manage the investment operations of the Portfolio and the
composition of the Portfolio's holdings of securities and investments, including
cash, the purchase, retention and disposition thereof and agreements relating
thereto, in accordance with the Portfolio's investment objectives and policies
as stated in the Registration Statement (as defined in paragraph 3(d) of this
Agreement) and subject to the following understandings:
(a) the Advisor shall furnish a continuous investment program for the
Portfolio and determine from time to time what investments or securities will be
purchased, retained, sold or lent by the Portfolio, and what portion of the
assets will be invested or held uninvested as cash;
(b) the Advisor shall use the same skill and care in the management of the
Portfolio's investments as it uses in the administration of other accounts for
which it has investment responsibility as agent;
(c) the Advisor, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Declaration of Trust, By-Laws
and Registration Statement of the Portfolio and with the instructions and
directions of the Trustees of the Portfolio and will conform to and comply with
the requirements of the 1940 Act and all other applicable federal and state laws
and regulations;
(d) the Advisor shall determine the securities to be purchased, sold or
lent by the Portfolio and as agent for the Portfolio will effect portfolio
transactions pursuant to its determinations either directly with the issuer or
with any broker and/or dealer in such securities; in placing orders with brokers
and/or dealers the Advisor intends to seek best price and execution for
purchases and sales; the Advisor shall also determine whether or not the
Portfolio shall enter into repurchase or reverse repurchase agreements;
On occasions when the Advisor deems the purchase or sale of a security to be
in the best interest of the Portfolio as well as other customers of the Advisor,
the Advisor may, to the extent permitted by applicable laws and regulations, but
shall not be obligated to, aggregate the securities to be so sold or purchased
in order to obtain best execution, including lower brokerage commissions, if
applicable. In such event, allocation of the securities so purchased or sold, as
well as the expenses incurred in the transaction, will be made by the Advisor in
the manner it considers to be the most equitable and consistent with its
fiduciary obligations to the Portfolio;
(e) the Advisor shall maintain books and records with respect to the
Portfolio's securities transactions and shall render to the Portfolio's Trustees
such periodic and special reports as the Trustees may reasonably request; and
D-1
<PAGE>
(f) the investment management services of the Advisor to the Portfolio
under this Agreement are not to be deemed exclusive, and the Advisor shall be
free to render similar services to others.
3. The Portfolio has delivered copies of each of the following documents to
the Advisor and will promptly notify and deliver to it all future amendments and
supplements, if any:
(a) Declaration of Trust of the Portfolio (such Declaration of Trust, as
presently in effect and as amended from time to time, is herein called the
"Declaration of Trust");
(b) By-Laws of the Portfolio (such By-Laws, as presently in effect and as
amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Trustees of the Portfolio authorizing the
appointment of the Advisor and approving the form of this Agreement; and
(d) The Portfolio's Notification of Registration on Form N-8A and
Registration Statement on Form N-1A each under the 1940 Act (the "Registration
Statement") as filed with the Securities and Exchange Commission (the
"Commission") all amendments thereto.
4. The Advisor shall keep the Portfolio's books and records required to be
maintained by it pursuant to paragraph 2(e). The Advisor agrees that all records
which it maintains for the Portfolio are the property of the Portfolio and it
will promptly surrender any of such records to the Portfolio upon the
Portfolio's request. The Advisor further agrees to preserve for the periods
prescribed by Rule 31a-2 of the Commission under the 1940 Act any such records
as are required to be maintained by the Advisor with respect to the Portfolio by
Rule 31a-1 of the Commission under the 1940 Act.
5. During the term of this Agreement the Advisor will pay all expenses
incurred by it in connection with its activities under this Agreement, other
than the cost of securities and investments purchased for the Portfolio
(including taxes and brokerage commissions, if any).
6. For the services provided and the expenses borne pursuant to this
Agreement, the Portfolio will pay to the Advisor as full compensation therefor a
fee at an annual rate equal to .40% of the Portfolio's average daily net assets.
This fee will be computed daily and payable as agreed by the Portfolio and the
Advisor, but no more frequently than monthly.
7. The Advisor shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Portfolio in connection with the matters to
which this Agreement relates, except a loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services (in which case any
award of damages shall be limited to the period and the amount set forth in
Section 36(b)(3) of the 1940 Act) or a loss resulting from willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement.
8. This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated by the Portfolio at any
time, without the payment of any penalty, by vote of a majority of all the
Trustees of the Portfolio or by vote of a majority of the outstanding voting
securities of the Portfolio on 60 days' written notice to the Advisor, or by the
Advisor at any time, without the payment of any penalty, on 90 days' written
notice to the Portfolio. This Agreement will automatically and immediately
terminate in the event of its assignment (as defined in the 1940 Act).
D-2
<PAGE>
9. The Advisor shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided herein or authorized
by the Trustees of the Portfolio from time to time, have no authority to act for
or represent the Portfolio in any way or otherwise be deemed an agent of the
Portfolio.
10. This Agreement may be amended by mutual consent, but the consent of the
Portfolio must be approved (a) by vote of a majority of those Trustees of the
Portfolio who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
amendment, and (b) by vote of a majority of the outstanding voting securities of
the Portfolio.
11. Notices of any kind to be given to the Advisor by the Portfolio shall be
in writing and shall be duly given if mailed or delivered to the Advisor at 522
Fifth Avenue, New York, New York 10019, Attention: Managing Director, Funds
Management Division, or at such other address or to such other individual as
shall be specified by the Advisor to the Portfolio. Notices of any kind to be
given to the Portfolio by the Advisor shall be in writing and shall be duly
given if mailed or delivered to the Portfolio or at such other
address or to such other individual as shall be specified by the Portfolio to
the Advisor.
12. The Trustees have authorized the execution of this Agreement in their
capacity as Trustees and not individually and the Advisor agrees that neither
the shareholders nor the Trustees nor any officer, employee, representative or
agent of the Portfolio shall be personally liable upon, or shall resort be had
to their private property for the satisfaction of, obligations given, executed
or delivered on behalf of or by the Portfolio, that the shareholders, trustees,
officers, employees, representatives and agents of the Portfolio shall not be
personally liable hereunder, and that it shall look solely to the property of
the Portfolio for the satisfaction of any claim thereunder.
13. This Agreement may be executed in one or more counterparts, each of
which shall be seemed to be an original.
14. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York
D-3
<PAGE>
EXHIBIT E
SUMMARY OF INVESTMENT ADVISORY AGREEMENTS
<TABLE>
<CAPTION>
ADVISORY SHAREHOLDER INVESTMENT ADVISORY FEES
FUND/PORTFOLIO NAME AGREEMENT DATE CONSENT DATE(1) ADVISORY RATE PAID TO MGT(2)
- ----------------------------------------------------------- -------------- --------------- ---------------------- --------------
<S> <C> <C> <C> <C>
Prime Money Market Portfolio 6/30/93 6/30/93 0.20% first $1 billion $5,063,662
0.10% thereafter
Federal Money Market Portfolio 12/23/92 12/23/92 0.20% first $1 billion $695,707
0.10% thereafter
Tax Exempt Money Market Portfolio 6/30/93 6/30/93 0.20% first $1 billion $2,267,159
0.10% thereafter
Treasury Money Market Portfolio 5/30/97 6/3/97 0.20% first $1 billion $49,123
0.10% thereafter
U.S. Fixed Income Portfolio 6/30/93 6/30/93 0.30% $2,908,384
Short Term Bond Portfolio 6/30/93 6/30/93 0.25% $92,126
Tax Exempt Bond Portfolio 6/30/93 6/30/93 0.30% $1,620,498
New York Total Return Bond Portfolio 3/28/94 3/28/94 0.30% $243,251
U.S. Equity Portfolio 6/30/93 6/30/93 0.40% $3,049,388
U.S. Small Company Portfolio 6/30/93 6/30/93 0.60% $5,424,514
International Equity Portfolio 6/30/93 6/30/93 0.60% $5,305,885
Emerging Markets Equity Portfolio 10/20/93 10/20/93 1.00% $9,422,758
Diversified Portfolio 6/30/93 6/30/93 0.55% $1,591,589
Non-U.S. Fixed Income Portfolio 9/24/94 9/24/94 0.35% $650,545
European Equity Portfolio 3/21/95 3/21/95 0.65% $3,879,040
Japan Equity Portfolio 3/21/95 3/21/95 0.65% $2,031,363
Disciplined Equity Portfolio 3/21/95 3/21/95 0.35% $73,985
International Opportunities Portfolio 3/21/95 3/21/95 0.60% $904,113
Global Strategic Income Portfolio 2/10/97 2/20/97 0.45% $212,934
Emerging Markets Debt Portfolio 3/21/95 3/7/97 0.70% $652,074
U.S. Small Company Opportunities Portfolio 3/21/95 3/7/97 0.60% $93,167
Tax Aware U.S. Equity(3) 11/4/96 11/4/96 0.45% $62,253
Tax Aware Disciplined Equity(3) 11/4/96 11/4/96 0.35% $16,524
California Bond(3) 11/4/96 11/4/96 0.30% $62,916
</TABLE>
- --------------------------
1 Each shareholder consent date represents the initial consent of the
Investment Advisory Agreement
2 All fees noted are for the Fund's/Portfolio's most recently completed
fiscal year
3 This Fund is a series of J.P. Morgan Series Trust.
Note: Each Investment Advisory Agreement was last continued in effect by the
Fund's/Portfolio's Board of Trustees at a meeting held on July 9, 1997.
E-1
<PAGE>
FEES PAID TO AFFILIATES OF THE ADVISOR
(FOR EACH FUND'S MOST RECENTLY COMPLETED FISCAL YEAR)
<TABLE>
<CAPTION>
SHAREHOLDER ADMINISTRATIVE SHAREHOLDER ADMINISTRATIVE
SERVICING FEES SERVICES FEE SERVICING FEES SERVICES FEES PAID
FUND NAME PAID TO MGT(1) PAID TO MGT(2) PAID TO MGT(3) TO MGT(4)
- ---------------------------------------- -------------- ----------------- -------------- ------------------
<S> <C> <C> <C> <C>
Prime Money Market 3,262,834 700,635 625,222 386,048
Service Prime Money Market N/A N/A 60 36
Federal Money Market 330,316 68,154 54,403 101,963
Service Federal Money Market N/A N/A N/A N/A
Tax Exempt Money Market 1,607,959 336,003 46,640 60,316
Service Tax Exempt Money Market N/A N/A N/A N/A
Treasury Money Market N/A N/A 8,000 4,761
Service Treasury Money Market N/A N/A 5,501 2,510
Bond 311,027 48,241 608,161 234,599
Bond-Ultra N/A N/A N/A N/A
Short Term Bond 25,107 0 18,131 0
Tax Exempt Bond 750,088 169,209 122,850 51,270
New York Total Return Bond 110,663 16,259 53,364 21,188
U.S. Equity Portfolio 843,099 102,534 264,300 80,756
U.S. Small Company Portfolio 540,244 65,674 329,689 100,607
International Equity 455,302 56,612 701,585 217,946
Emerging Markets Equity 148,687 18,465 365,202 113,255
Diversified 151,781 18,797 228,074 70,546
International Bond N/A N/A 5,328 1,669
European Equity 8,926 0 9,835 0
Japan Equity 2,260 0 4,173 0
Disciplined Equity N/A N/A 12,168 3,801
International Opportunities 83,769 10,235 117,243 35,840
Global Strategic Income N/A N/A 47,162 0
Emerging Markets Debt 13,814 1,688 N/A N/A
U.S. Small Company Opportunities 38,814 4,700 N/A N/A
Tax Aware U.S. Equity 34,735 7,649 N/A N/A
Tax Aware Disciplined Equity N/A N/A 11,803 2,693
California Bond 16 1,332(5) 1,543 1,332(5)
</TABLE>
- --------------------------
1 Shareholder Servicing fees paid by J.P. Morgan Funds to Morgan Guaranty
Trust Company of New York, an affiliate of the Advisor, net of
reimbursements.
2 Administrative Services fees paid by J.P. Morgan Funds to Morgan Guaranty
Trust Company of New York, an affiliate of the Advisor, net of
reimbursements.
3 Shareholder Servicing fees paid by J.P. Morgan Institutional Funds to
Morgan Guaranty Trust Company of New York, an affiliate of the Advisor, net
of reimbursements.
4 Administrative Services fees paid by J.P. Morgan Institutional Funds to
Morgan Guaranty Trust Company of New York, an affiliate of the Advisor, net
of reimbursements.
5 Fund level expense not allocated on a class by class basis.
E-2
<PAGE>
EXHIBIT F
DIRECTORS AND PRINCIPAL EXECUTIVE OFFICERS OF MGT
Paul A. Allaire, Director; Chairman and Chief Executive Officer, Xerox
Corporation (office imaging systems). His address is Xerox Corporation, P.O. Box
1600, 800 Long Ridge Road, Stamford, CT 06904.
Riley P. Bechtel, Director; Chairman and Chief Executive Officer, Bechtel Group,
Inc. (architectural design and construction). His address is Bechtel Group,
Inc., P.O. Box 193965, San Francisco, CA 94119-3965.
Lawrence A. Bossidy, Director; Chairman and Chief Executive Officer, Allied
Signal Inc. (advanced technology and manufacturing company). His address is
Allied Signal, Inc., P.O. Box 3000, Morristown, NJ 07962-2245.
Martin Feldstein, Director; President and Chief Executive Officer, National
Bureau of Economic Research, Inc. (national research institution). His address
is National Bureau of Economic Research, Inc., 1050 Massachusetts Avenue,
Cambridge, MA 02138-5398.
Ellen V. Futter, Director; President, American Museum of Natural History
(not-for-profit organization). Her address is American Museum of Natural
History, Central Park West at 79th Street, New York, NY 10024.
Hanna H. Gray, Director; President Emeritus and Harry Pratt Judson Distinguished
Service Professor of History, The University of Chicago (academic institution).
Her address is The University of Chicago, Department of History, 1126 East 59th
Street, Chicago, IL 60637.
Walter A. Gubert, Vice Chairman of the Board and Director of J.P. Morgan & Co.
Incorporated and MGT. His address is J.P. Morgan & Co. Incorporated, P.O. Box
161, 60 Victoria Embankment, London EC4Y OJP, United Kingdom.
James R. Houghton, Director; Retired Chairman of the Board, Corning Incorporated
(glass products). His address is R.D. # 2 Spencer Hill Road, Corning, NY 14830.
James L. Ketelsen, Director; Retired Chairman and Chief Executive Officer,
Tenneco Inc. (oil, pipe-lines, and manufacturing). His address is 10 South Briar
Hollow 7, Houston, TX 77027.
John A. Krol, Director; President and Chief Executive Officer, E.I. du Pont de
Nemours ans Company (chemicals and energy company). His address is E.I. Du Pont
de Nemours and Company, 1007 Market Street, Wilmington, DE 19898.
Roberto G. Mendoza, Vice Chairman of the Board of J.P. Morgan & Co. Incorporated
and MGT. His address is J.P. Morgan & Co. Incorporated, 60 Wall Street, New
York, NY 10260.
Michael E. Patterson, Vice Chairman of the Board of J.P. Morgan & Co.
Incorporated and MGT. His address is J.P. Morgan & Co. Incorporated, 60 Wall
Street, New York, NY 10260.
Lee R. Raymond, Director; Chairman of the Board and Chief Executive Officer,
Exxon Corporation (oil, natural gas, and other petroleum products). His address
is Exxon Corporation, 5959 Las Colinas Boulevard, Irving, TX 75039-2298.
Richard D. Simmons, Director; Retired: Former President, The Washington Post
Company and International Herald Tribune (newspapers). His address is P.O. Box
242, Sperryville, VA 22740.
F-1
<PAGE>
Kurt F. Viermetz, Vice Chairman of the Board of J.P. Morgan & Co. Incorporated
and MGT. His address is J.P. Morgan & Co. Incorporated, 60 Wall Street, New
York, NY 10260.
Douglas A. Warner III, Director; Chairman of the Board and President of J.P.
Morgan & Co. Incorporated and MGT. His address is J.P. Morgan & Co.
Incorporated, 60 Wall Street, New York, NY 10260.
Dennis Weatherstone, Director; Retired Chairman of J.P. Morgan & Co.
Incorporated and MGT. His address is J.P. Morgan & Co. Incorporated, 60 Wall
Street, New York, NY 10260.
Douglas C. Yearley, Director; Chairman, President and Chief Executive Officer,
Phelps Dodge Corporation (chemicals). His address is Phelps Dodge Corporation,
2600 N. Central Avenue, Phoenix, AZ 85004-3014.
F-2
<PAGE>
EXHIBIT G
DECLARATIONS OF TRUST
J.P. MORGAN FUNDS
J.P. MORGAN INSTITUTIONAL FUNDS
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
SECTION 6.8 VOTING POWERS. The Shareholder shall have the power to vote...
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 whole share shall be entitled to one vote
as to any matter on which it is entitled to vote and each fractional share shall
be entitled to a proportionate fractional vote, except that shares held in the
treasury of the Trust shall not be voted.] 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 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 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.
G-1
<PAGE>
EXHIBIT H
NUMBER OF SHARES OF EACH FUND (OR CLASS)
OUTSTANDING AS OF THE CLOSE OF BUSINESS ON
APRIL 13, 1998
J.P. MORGAN FUNDS
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF FUND
NAME OF FUND OUTSTANDING
- ---------------------------------------------------------------------------------------------- ------------------
<S> <C>
JPM FEDERAL MM................................................................................ 344,123,479.42
JPM PRIME MM.................................................................................. 2,776,871,760.15
JPM T/E MONEY MKT............................................................................. 1,236,274,928.69
JPM BOND...................................................................................... 18,467,914.28
JPM T/E BOND.................................................................................. 35,744,946.62
JPM U.S. EQUITY............................................................................... 17,646,152.08
JPM U.S. SMALL CO............................................................................. 9,485,194.98
JPM DISC EQUITY............................................................................... 415,088.91.
JPM EMERG MKTS DEBT........................................................................... 1,405,126.36
JPM SMALL CO. OPP............................................................................. 13,877,409.50
JPM INTL OPP.................................................................................. 7,781,038.12
JPM INTL EQUITY............................................................................... 10,157,432.15
JPM GLOBAL STRATEGIC.......................................................................... 1,039,658.55
JPM EUROPE FUND............................................................................... 760,755.61
JPM JAPAN FUND................................................................................ 166,521.71
JPM NY BOND FUND.............................................................................. 8,320,794.33
JPM EMERGING MARKETS.......................................................................... 6,031,722.38
JPM DIVERSIFIED FD............................................................................ 14,803,549.24
JPM S/T BOND.................................................................................. 2,363,838.43
</TABLE>
H-1
<PAGE>
J.P. MORGAN INSTITUTIONAL FUNDS
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF FUND
NAME OF FUND OUTSTANDING
- ---------------------------------------------------------------------------------------------- ------------------
<S> <C>
JPM INST FEDERAL MM........................................................................... 658,076,376.66
JPM INST PRIME MM............................................................................. 2,072,368,445.35
JPM INST TEMM FUND............................................................................ 649,753,166.68
JPM INST S/T BOND............................................................................. 7,269,925.04
JPM INST BOND FUND............................................................................ 90,348,542.66
JPM INST TEB FUND............................................................................. 25,858,138.60
JPM INST U.S. EQUITY.......................................................................... 22,725,399.06
JPM INST BOND ULTRA........................................................................... 5,335,279.33
JPM INST SVC TAX EX MNY....................................................................... 283,401.85
JPM INST SVC FEDERAL MNY...................................................................... 929,271.43
JPM INST SVC PRIME MNY MK..................................................................... 273,049,607.57
JPM INST SVC TREASURY MNY..................................................................... 499,376,836.73
JPM INST TREASURY MNY MKT..................................................................... 148,167,715.06
JPM INST INTL OPP............................................................................. 38,236,641.16
JPM INST GLOBAL STRATEGIC..................................................................... 17,875,337.02
JPM INST DISCIPLINED EQ....................................................................... 18,154,515.18
JPM INST SMALL COMPANY........................................................................ 27,660,652.33
JPM INST EUROPE EQUITY........................................................................ 1,019,806.66
JPM INST JAPAN EQUITY......................................................................... 251,599.39
JPM INST NY BOND FUND......................................................................... 10,592,844.43
JPM INST EMERGING MKTS........................................................................ 28,237,818.19
JPM INST INTL BOND FUND....................................................................... 772,667.94
JPM INST DIV FUND............................................................................. 23,625,712.84
JPM INST INTL EQUITY.......................................................................... 41,399,085.69
</TABLE>
***
J.P. MORGAN SERIES TRUST
<TABLE>
<CAPTION>
NUMBER OF SHARES OF NET ASSET VALUE
NAME OF FUND AND CLASS CLASS OUTSTANDING PER SHARE
- ---------------------------------------------------------------------------- ------------------- -----------------
<S> <C> <C>
JPM TAX AWARE US EQ: SELECT SHARES.......................................... 3,775,744.92 15.02
JPM TAX AWARE DIS EQUITY: INST. SHARES...................................... 4,263,072.95 14.70
JPM CALIFORNIA BOND:SELECT SHARES........................................... 536,066.94 10.42
JPM CALIFORNIA BOND: INST. SHARES........................................... 4,885,088.08 10.27
</TABLE>
THE MANAGERS FUND
<TABLE>
<S> <C>
THE MANAGERS MONEY MARKET FUND................................................ 30,122,825.54
</TABLE>
H-2
<PAGE>
EXHIBIT I
PRINCIPAL HOLDERS OF VOTING SECURITIES
As of March 31, 1998, the following shareholders were known to the Trusts
and to the Managers Fund to own beneficially 5% or more of the shares of a Fund
(or a Class thereof):
J.P. MORGAN FUNDS
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER SHARES OWNED SHARES OF FUND
- ----------------------------------- ------------------------------------------------ ------------- --------------
<S> <C> <C> <C>
Bond Fund.......................... BSD&T as Trustee for Gannett Co. Inc. 1,680,302 9.17%
401(K) Savings Plan
Medford, MA
Tamko Roofing Products Employee 1,433,749 7.82%
Profit Sharing Plan Retirement Plan
Joplin, MO
Disciplined Equity Fund............ Morgan Guaranty Trust Company of 37,456 10.14%
NY as agent for Africa University
Charitable Trust
Newark, DE
DE Frey & Co. Inc. 19,799 5.36%
Littleton, CO
Diversified Fund................... Wheels Inc. 4,805,096 33.46%
c/o National Financial Services Corp
New York, NY
Insilco Corp Employee Thrift Plan Trust 1,363,448 9.50%
Dated 1/16/96
UMB Bank NA Trustee
Kansas City, MO
Quincy Newspapers Profit Sharing & 1,024,784 7.14%
Retirement Plan
Kansas City, MO
Emerging Markets Debt Fund......... Morgan Guaranty Trust Co. of NY as agent 657,362 48.67%
for Three M Operating Subsidiary Ltd
Newark, DE
N. Lear Trust 318,152 23.55%
New York, NY
Morgan Guaranty Trust Co. of NY as 94,351 6.98%
agent for D.M. Pheasant Trust
Newark, DE
European Equity Fund............... V. Madrigal 96,007 14.28%
New York, NY
Morgan Guaranty Trust Co. of NY 60,394 8.98%
as agent for A. Rowski
Newark, DE
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER SHARES OWNED SHARES OF FUND
- ----------------------------------- ------------------------------------------------ ------------- --------------
<S> <C> <C> <C>
Federal Money Market Fund.......... R. Lauder 40,843,381 10.11%
Newark, DE
J.P. Morgan Delaware as agent for Market Street 32,977,676 8.14%
Trust Co Omnibus Acct
Newark, DE
Morgan Guaranty Trust Co. of NY as 30,221,425 7.46%
agent for Alfred Dunner Inc.
Newark, DE
Global Strategic Income Fund....... Morgan Guaranty Trust Co. of NY 198,879 19.70%
as agent for B. Davis Trust
Newark, DE
Morgan Guaranty Trust Co. of NY 142,075 14.07%
as agent for Africa University Charitable
Trust
Newark, DE
Morgan Guaranty Trust Co. of NY 99,863 9.89%
as agent for E.Y. Generous
Newark, DE
Morgan Guaranty Trust Co. of NY 75,351 7.46%
as agent for A. Rowski
Newark, DE
Japan Equity Fund.................. State Street Bk & Trust Co. C/F of D.M. 53,458 32.71%
Feuerstein IRA
Potomac, MD
The D.O. Marston Trust 15,322 9.37%
Rockville, MD
Nations Bank for the benefit of R. Morgan 14,783 9.04%
c/o National Financial Services Corp.
New York, NY
R. McGimpsey & L. McGimpsey 11,378 6.96%
JTWROS Canton, MI
Morgan Guaranty Trust Co. of NY as Agent for T. 10,777 6.59%
R. Lamia
Newark, DE
State Street Bk & Trust Co. C/F I. Benson 10,493 6.42%
Lee, MA
Morgan Guaranty Trust Co of NY as 9,408 5.76%
Agent for Dr. G. Falk
Newark, DE
State Street Bk & Trust Co. C/F Dr. G. Falk IRA 8,656 5.30%
New York, NY
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER SHARES OWNED SHARES OF FUND
- ----------------------------------- ------------------------------------------------ ------------- --------------
<S> <C> <C> <C>
New York Total Return Bond Fund.... M.B. Account 436,278 5.44%
Newark, DE
A. Newman 408,295 5.09%
New York, NY
Short Term Bond Fund............... Morgan Guaranty Trust Co. of NY As 440,629 17.66%
Agent for Towermark Corp
Newark, DE
Morgan Guaranty Trust Co. of NY 388,000 15.55%
as Agent for Associated Universities Inc
Newark, DE
Morgan Guaranty Trust Co. of NY 356,463 14.29%
as Agent for Africa University
Charitable Trust
Newark, DE
E. Chang Revocable Trust 251,345 10.07%
Honolulu HI
Morgan Guaranty Trust Co. of NY as 156,687 6.28%
Agent for D. O'Brien
Newark, DE
U.S. Equity Fund................... Forest Laboratories Inc. 1,033,363 5.85%
Savings & Profit Sharing Plan
New York, NY
U.S. Small Company Fund............ Forest Laboratories Inc. 703,015 7.40%
Savings & Profit Sharing Plan
New York, NY
</TABLE>
J.P. MORGAN INSTITUTIONAL FUNDS
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER SHARES OWNED SHARES OF FUND
- ------------------------------------ ---------------------------------------------- ------------- --------------
<S> <C> <C> <C>
Bond Fund........................... JPMIM as Agent for Ameritech Union 4,943,856 5.51%
Welfare Benefit Tr
New York, NY
Bond-Ultra.......................... Morgan Guaranty Trust Co of 2,519,264 47.22%
NY as Agent for 1984
Geisel Trust
Newark, DE
Bankers Trust Co FBO Magnetek 190526 1,614,158 30.25%
Nashville, TN
Morgan Guaranty Trust Co of 1,201,858 22.53%
NY as Agent for 1984
Geisel Trust
Newark, DE
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER SHARES OWNED SHARES OF FUND
- ------------------------------------ ---------------------------------------------- ------------- --------------
<S> <C> <C> <C>
Disciplined Equity Fund............. Baystate Health System Inc. 2,417,608 13.60%
Springfield, MA
The Queen's Health Systems 2,338,504 13.06%
Honolulu, HI
Baystate Health Systems Inc. 1,708,150 9.54%
Springfield, MA
Punahou School 1,343,183 7.50%
Honolulu, HI
Wachovia Bank NA Trustee U/A 7/1/97 936,556 5.23%
Master Builders Inc
Winston-Salem, NC
Diversified Fund.................... Celtic Insurance Company Ltd 2,794,842 11.87%
Cincinnati, OH 45202
Boston Foundation Inc. 2,240,519 9.51%
Boston, MA
JPMIM as Agent for Unifi Inc. 1,947,704 8.27%
Profit Sharing Plan Trust
New York, NY
CBS Corporation 1,449,695 6.16%
Investment Plan
Bankers Trust Co as Trustee
New York, NY
Boehringer Ingelheim Corporation & Its 1,249,875 5.31%
Affiliates Retirement Savings Plan
Ridgefield, CT
Emerging Markets Equity Fund........ JPMIM as Agent for 2,582,949 9.33%
Alfred P. Sloan Foundation
New York, NY
JPMIM as Agent for 2,488,970 8.99%
Carnegie Corp of New York
New York, NY
Lincoln National Life Insurance Co 1,679,731 6.07%
Fort Wayne, IN
JPMIM as Agent for Ameritech Union 1,510,010 5.45%
Werfare Benefit Tr-
New York, NY
</TABLE>
I-4
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER SHARES OWNED SHARES OF FUND
- ------------------------------------ ---------------------------------------------- ------------- --------------
<S> <C> <C> <C>
European Equity Fund................ Morgan Guaranty Trust Co of NY as 219,621 35.68%
Agent for CCF Trust
Newark, DE
Morgan Guaranty Trust Co of NY as Trustee 150,000 24.37%
Newark, DE
Morgan Guaranty Trust Co of NY 59,726 9.70%
As Agent for JG Clarke &
DS Clarke
Newark, DE
J.P. Morgan Florida FSB 51,226 8.32%
As Agent for JM Watkins
Newark, DE
Morgan Guaranty Trust Co of NY 48,924 7.95%
As Agent for B. Price
Newark, DE
Morgan Guaranty Trust Co of N.Y. as Agent for 41,276 6.71%
M. Palm
Newark, DE
Federal Money Market Fund........... JW Henry Trust 136,903,100 21.80%
Boca Raton, FL
Morgan Guaranty Trust Company of N.Y. as Agent 88,856,176 14.15%
for Robson Interest Limited
Newark, DE
Morgan Guaranty Trust Co of NY 42,117,718 6.71%
Agent for F Batten Jr. Trust
Newark, DE
Morgan Guaranty Trust Company of NY 41,022,651 6.53%
as Agent for R & L Schaps
Newark, DE
Morgan Guaranty Trust Co of NY As 37,343,512 5.95%
Agent for M. Bosses
Newark, DE
Global Strategic Income Fund........ Morgan Guaranty Trust Co. of NY 3,000,000 16.77%
as Agent for R. Lauder
Newark, DE
JPMIM as Agent for 2,192,953 12.26%
The Dyson Foundation
New York, NY
Morgan Guaranty Trust Co. of NY 1,960,817 10.96%
as Agent for Kenan Charitable Trust
Newark, DE
</TABLE>
I-5
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER SHARES OWNED SHARES OF FUND
- ------------------------------------ ---------------------------------------------- ------------- --------------
<S> <C> <C> <C>
International Bond Fund............. Morgan Guaranty Trust Co. of NY as 56,622 7.41%
Agent for Institute for International
Economics
Newark, DE
International Equity Fund........... Blue Cross Blue Shield of North Carolina 3,534,526 8.52%
Durham, NC
International Opportunities Fund.... JP Morgan Delaware as Agent for JMD 2,698,502 7.11%
Delaware Inc. Trustee for M Arison
Newark, DE
Morgan Guaranty Trust Co. of NY as 2,645,133 6.97%
Agent for SL Trust
Newark, DE
J P Morgan Delaware as Agent 2,527,305 6.66%
Diversified Growth Fund
Newark, DE
Japan Equity Fund................... Morgan Guaranty Trust Co. of NY as Agent for 212,224 81.85%
Fireside
Newark, DE
New York Total Return Bond
Fund.............................. Morgan Guaranty Trust Co. of New York 1,281,585 12.27%
as Agent for Trust u/w of L H P Klotz
Newark, DE
Morgan Guaranty Trust Co. of NY as 589,991 5.66%
Agent for Shubert Organization
Newark, DE
Prime Money Market Fund............. Citibank-Private Bank 324,994,052 14.07%
Long Island City, NY
BW Holdings LLC 266,000,000 11.51%
Wilmington, DE
Service Prime Money Market
Fund.............................. Harris Trust and Savings Bank 88,008,784 34.72%
Chicago, IL
Service Treasury Money Market
Fund.............................. The Chicago Trust Company 264,063,590 23.10%
Chicago, IL
</TABLE>
I-6
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER SHARES OWNED SHARES OF FUND
- ------------------------------------ ---------------------------------------------- ------------- --------------
<S> <C> <C> <C>
Short Term Bond Fund................ JPMIM as Agent for 1,116,762 15.29%
WITCO Corp & Medical & Ltd Trust
New York, NY
Interact Systems Inc. 1,021,046 13.98%
Norwalk, CT
Cooper Industries Foundation 880,625 12.05%
Houston, TX
Morgan Guaranty Trust Co of NY As 869,944 11.91%
Agent for Warner Lambert Benefits Trust
Newark, DE
The Fluor Foundation 574,910 7.87%
Irvine, CA
Morgan Guaranty Trust Co of NY As 445,598 6.10%
Agent for the Lemelson Medical Education &
Research Foundation
Newark, DE
Tax Exempt Bond Fund................ J.P. Morgan Florida FSB as Agent for 1,475,553 5.71%
Seagull Partners L P
Newark, DE
Tax Exempt Money Market Fund........ JPMIM as Agent for RE Kelly 40,889,851 6.68%
New York, NY
EH Skove 37,707,907 6.16%
Key Largo, FL
Morgan Guaranty Trust Co of NY As 33,917,844 5.54%
Agent for SM & LC Barney
Newark, DE
JP Morgan Delaware as Agent for DJ Alter 31,318,545 5.11%
Newark, DE
Treasury Money Market Fund.......... The First National Bank in Sioux Falls 25,936,026 16.10%
Sioux Falls, SD
Food Research Corp 13,194,171 8.19%
c/o SOCFIN US Inc
New York, NY
Onstream Inc. 12,471,836 7.74%
Longmont, CO
Phelps Dodge Corporation 10,267,725 6.37%
Phoenix, AZ
</TABLE>
I-7
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER SHARES OWNED SHARES OF FUND
- ------------------------------------ ---------------------------------------------- ------------- --------------
<S> <C> <C> <C>
U.S. Equity Fund.................... Morgan Guaranty Trust Co Trustee for 1,938,553 8.52%
Major League Baseball
Master Pension Trust
New York, NY
Morgan Guaranty Trust Co as Trustee for 1,753,914 7.71%
Degussa Defined Benefit Trust
Newark, DE
J P Morgan Delaware as Agent 1,597,944 7.03%
Diversified Growth Fund
Newark, DE
JPMIM as Agent for Wachovia Bank of 1,373,508 6.04%
North Carolina T/U/A dtd 1/1/98
Newmont Gold Co Master Pension Trust
New York, NY
Lin Television Corp Retirement Plan 1,305,167 5.74%
Providence, RI
Harris Trust and Savings Bank as Trustee 1,187,890 5.22%
of the CTS Corp Employee
Benefit Plans Master Trust
Chicago, IL
</TABLE>
J.P. MORGAN SERIES TRUST
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER CLASS SHARES OWNED SHARES OF FUND
- ------------------------- ----------------------------------- ------------------- ------------- --------------
<S> <C> <C> <C> <C>
California Bond Fund..... J P Morgan California Institutional 704,961 14.43%
as Agent for Shares
R Hastings or P Quillin
New York, NY
Morgan Guaranty Trust Co of NY as 566,701 11.60%
Agent for Dr. M Brones & E Brones
Newark, DE
J P Morgan California 484,264 9.91%
As Agent for G Kaufman
Marital Trust NY
Newark, DE
J P Morgan California as Agent for 397,133 8.13%
G Judis CRT
Newark, DE
J P Morgan California as Agent for 306,055 6.26%
Yeo Living Trust
Newark, DE
</TABLE>
I-8
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER CLASS SHARES OWNED SHARES OF FUND
- ------------------------- ----------------------------------- ------------------- ------------- --------------
<S> <C> <C> <C> <C>
California Bond Fund..... J P Morgan California Select Share 143,581 22.60%
As Agent for EM Feeney
Newark, DE
J P Morgan California as Agent for 125,538 19.76%
J Tuttleman
Newark, DE
Morgan Guaranty Trust Co of NY as 94,749 14.91%
Agent for P.S. Stamos
Newark, DE
J P Morgan California as Agent for 94,179 14.82%
W.J. Brady
Newark, DE
P Paddon 77,985 12.27%
Santa Ana, CA
Tax Aware Disciplined
Equity Fund............ American Risk Transfer Ins Co Ltd Institutional 1,131,225 30.11%
Hamilton HM CX Bermuda Shares
J P Morgan California as Agent for 346,260 9.22%
Clarendon Capital Mgmt Co
Newark, DE
Tax Aware U.S. Equity
Fund................... Morgan Guaranty Trust Co of NY Select Shares 273,001 7.72%
As Agent for A Kaufman
Newark, DE
</TABLE>
THE MANAGERS FUND
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER SHARES OWNED SHARES OF FUND
- --------------------------------------------- ------------------------------------- ------------- --------------
<S> <C> <C> <C>
The Managers Money Market Fund............... EAI 401 K 2,272,963 7.07%
Benefits Resource Inc.
Shelton, CT
The Managers Fund LP 2,265,591 7.05%
Norwalk, CT
</TABLE>
I-9
<PAGE>
THE BOARDS OF TRUSTEES RECOMMEND A VOTE FOR ITEMS 1,2,3,4,5, AND 6. Please mark
your votes as indicated in this example. / X /
ITEM 1-ELECTION OF TRUSTEES
Nominees:
Frederick S. Addy
William G. Burns
Arthur C. Eschenlauer
Matthew Healey
Michael P. Mallardi
/ / FOR ALL
/ / WITHHOLD FOR ALL
WITHHOLD FOR:(Write that nominee's name in the space provided below.)
- ----------------------------------------
ITEM 2 -APPROVAL OF FOR AGAINST ABSTAIN
STANDARDIZED INVESTMENT ALL ALL ALL
RESTRICTIONS AND THE ELIMINATION / / / / / /
OF RECLASSIFICATION AS
NONFUNDAMENTAL OF OTHERS
2A. Diversification of Investments
2B. Concentration of Assets in a Particular Industry
2C. Issuance of Senior Securities
2D. Borrowing
2E. Underwriting
2F. Investment in Real Estate
2G. Commodities
2H. Lending
2I. Reclassification of Other Fundamental Restrictions as Nonfundamental
To vote against or abstain with respect to a particular proposed change, write
the designation of the sub-proposal on the line below.
- ----------------------------------------
AGAINST
--------------------------------
ABSTAIN
--------------------------------
ITEM 3-APPROVAL OF THE RECLASSIFICATION FOR AGAINST ABSTAIN
OF THE INVESTMENT OBJECTIVE / / / / / /
FROM FUNDAMENTAL TO NON-FUNDAMENTAL
<PAGE>
ITEM 4-APPROVAL OF NEW FOR AGAINST ABSTAIN
INVESTMENT ADVISORY AGREEMENT / / / / / /
ITEM 5-AMENDMENT OF DECLARATION FOR AGAINST ABSTAIN
OF TRUST / / / / / /
ITEM 6-RATIFICATION OF SELECTION FOR AGAINST ABSTAIN
OF INDEPENDENT ACCOUNTANTS / / / / / /
J.P. MORGAN FAMILY FUNDS
SIGNATURE________________________ SIGNATURE___________________ DATE_______
NOTE: PLEASE SIGN AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN
SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE
FULL TITLE AS SUCH.
FOLD AND DETACH HERE
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARDS OF TRUSTEES
J.P. MORGAN FAMILY OF FUNDS
The undersigned hereby appoints Mary Jo Pace and Christine
Rotundo as proxies, with power to act without the other and with power
of substitution, and hereby authorizes them to represent and vote, as
designated on the other side, all the shares standing in the name of the
undersigned with all powers which the undersigned would possess if
present at the Joint Special Meeting of Shareholders to be held
June 25, 1998 or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREBY
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THE PROXIES WILL VOTE
SHARES REPRESENTED BY THIS PROXY FOR ALL TRUSTEES AND ALL OTHER PROPSALS LISTED
ON THE REVERSE SIDE AND WILL VOTE IN THEIR DISCRETION ON SUCH OTHER MATTERS THAT
MAY PROPERLY COME BEFORE THIS MEETING.
TO VOTE BY TELEPHONE, PLEASE CALL TOLL FREE 1-800-290-6429 BETWEEN 8:00 A.M.
AND 8:00 P.M. (ET).
TO VOTE BY MAIL, PLEASE DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
FOLD AND DETACH HERE
<PAGE>
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR ITEMS 1,2,3,4 AND 6. Please mark
your votes as indicated in this example. / X /
(For Portfolio)
ITEM 1-ELECTION OF TRUSTEES
Nominees:
Frederick S. Addy
William G. Burns
Arthur C. Eschenlauer
Matthew Healey
Michael P. Mallardi
/ / FOR ALL
/ / WITHHOLD FOR ALL
WITHHOLD FOR:(Write that nominees name in the space provided below.)
- ----------------------------------------
ITEM 2 -APPROVAL OF FOR AGAINST ABSTAIN
STANDARDIZED INVESTMENT ALL ALL ALL
RESTRICTIONS AND THE ELIMINATION / / / / / /
OF RECLASSIFICATION AS
NONFUNDAMENTAL OF OTHERS
2A. Diversification of Investments
2B. Concentration of Assets in a Particular Industry
2C. Issuance of Senior Securities
2D. Borrowing
2E. Underwriting
2F. Investment in Real Estate
2G. Commodities
2H. Lending
2I. Reclassification of Other Fundamental Restrictions as Nonfundamental
To vote against or abstain with respect to a particular proposed change, write
the designation of the sub-proposal on the line below.
AGAINST
--------------------------------
ABSTAIN
--------------------------------
ITEM 3-APPROVAL OF THE RECLASSIFICATION FOR AGAINST ABSTAIN
OF THE INVESTMENT OBJECTIVE / / / / / /
FROM FUNDAMENTAL TO NON-FUNDAMENTAL
<PAGE>
ITEM 4-APPROVAL OF NEW FOR AGAINST ABSTAIN
INVESTMENT ADVISORY AGREEMENT / / / / / /
ITEM 5-NOT APPLICABLE
(For Portfolio)
ITEM 6-RATIFICATION OF SELECTION FOR AGAINST ABSTAIN
ABSTAIN OF INDEPENDENT ACCOUNTANTS / / / / / /
THE MANAGERS MONEY MARKET FUND
SIGNATURE _______________________SIGNATURE _______________ DATE ______
NOTE: PLEASE SIGN AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN
SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE
FULL TITLE AS SUCH.
FOLD AND DETACH HERE
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
THE MANAGERS MONEY MARKET FUND
The undersigned hereby appoints Mary Jo Pace and Christine
Rotundo as proxies, with power to act without the other and with power
of substitution, and hereby authorizes them to represent and vote, as
designated on the other side, all the shares of The Managers Money Market
Fund standing in the name of the undersigned with all powers which the
undersigned would possess if present at the Joint Special Meeting of
Shareholders to be held June 25, 1998 or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREBY
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THE PROXIES WILL VOTE
SHARES REPRESENTED BY THIS PROXY FOR ALL TRUSTEES AND ALL OTHER PROPSALS LISTED
ON THE REVERSE SIDE AND WILL VOTE IN THEIR DISCRETION ON SUCH OTHER MATTERS THAT
MAY PROPERLY COME BEFORE THIS MEETING.
TO VOTE BY TELEPHONE, PLEASE CALL TOLL FREE 1-800-290-6429 BETWEEN 8:00 A.M.
AND 8:00 P.M. (ET).
TO VOTE BY MAIL, PLEASE DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
FOLD AND DETACH HERE