EFTA01511596.pdf

07 2003 J.P. Morgan Securities Inc. 270 Park Avenue. New York. NY 10017 II3 JPMorgan Private Bank Account Number 166759021 Margin Account Portfolio Page 14 of 14 FINANCIAL TRUST COMPANY, INC. July 01, 2003 - July 31, 2003 IMPORTANT INFORMATION ABOUT FellVATE INVESTMENTS: FOOTNOTES I • 3 Continued Hedge fund redemptions se genereayon a monthly querterhcs annual basss but can sometimes be subject to a naafi see, be/we before a rederhoton is penntted Fos tectemptons there ia geneeaftya notitabon petstd awe can be intervalbefcern. actual reclamation date Redenebonpfoceeds are genereespad 3-3 business days aft, Me finalIVAV is issued but can be st4eCt b a holdback of* porton of the proceeds oat an annualeude oI the Fund has been conetted Pba el to the applcatthedge 'Ludt Operathedturnentatmn for forth&Mails Fee Wee funds one of Imo nielliOdS snit be used on Ina statement to report how meant ve foes tat may be owed to the GentalRatercs Manager are pad The fist method a celled Senn of Snares and Consoklabon Methxf *rid will &Steles nen series of the hedge fund ate pit vete(e g 1100 t 1000) for evesysubsa.bon penal donee the yew and a dneranINAV wet be backed for each toes AI Me end of the eatablencentneles resod (generttithe end of the year). any serves lag when an me:Oneself* a parade Ors. lee fund has a net poll or is overte opplicabierng/I vac* mark' and known as the "COnsoldefin, &Xi/337mill be meorporated nth and conscedated as part of tee eartestseses asued by the fund m when an invests nal subtated ler which an ocenthe fee .5 payebehhe lead Sams') Investoenolding shares vs a ConsoAdatiN SW*. wow have thee shams redeemedfrom each of the Consoklanng Sotas and senueaneously be issued addlonalshatos of the toad Sores (basedon the NAV of the Lead Series do toe convorsoon date) My WOOS kt which an mcentve roe is not payable(' 0 the fund;want toss <rano: Over In•OPPlablelnill ova* awn we rera.na5 a SeOivatnenes Lon, thee .(having (COONoit Menthe fee ind eoCIS teassethee Yeeet-eae), whoa d fl ee, e• evaluated m eonsoadated as part of the Lead Seines 'P. prevOustyaccruednee a net The second method a Cale:Inv Equatatenettned' "Faust*tools an accounbng malhortegy used to ensue that each masks in a hedge fund a paying helms 0OolaNeatiOcetwri a ,ncent,va 14 / . 3 Oath. the Sorosof SM'esmott4d shoes hen by he eteeeleee we sated a! the sane NAV The 'Equate&o Amount' reflects an amount deducted from the subscnpeon amount in order to "equalso-the incentne fees among investors "'etre to the Fund in the current yes, The reuatattnFactor used to detente. the Covet:eh:mans:on, may varyarreng she:rot end clepmds on both the defeat when an sweets subsets:as to the fund and the fund's currentInfo/ performance An investor who suet-sees to a fund to wag the neat cbsng dee mV ham an Equerceston Ardent electselysegregated from the subsentron amount utezed to patches° shares The EguateationAmount can change over time dependmg on any new sweatrs ("bong the fund as the amount is nen 'equated-to !MUMetch ma* , has an equeebbarbcaten of incentive tee Note Mat a changes, equatationdee, time can result in a negatv EquatabonAmount A negatheequatabenarrount atones apctentolredLeten n investor shares to pry =entree fees to the Manage, Therese tee EguatafenIttathods COnwnOnk used today RelemphOnMetiner Or TtepflOatOntiethOr Under both n # the fund a up in vale from its raceet' n date and from the date m whch an investor ha, inveZied fit the end of the apptabe penod (gener"yetvend)the EgualcatonAmount is used by the Fund to owe addeorel show to the :meta If the invests had invested n the fund when the fund a down m we'veitem ea "caption Ostend the hen d 9u0SeQuentrypOn up in rah* (at 0 beyond the epptahlenth water mesh) under the Rederhoton Method an Invests 'a shares an be redeem:410 pay usoenhve fees owed to the manager Under the OthectabonMethod. an amount e deducted (ran the SubSaiptOn amount and Ueda& as a deprecation *0034 whch a then used to pay meentne eel owed to the Ge es elfhater os Menage on an °noose base For addebonalmformelon meet the hedge fund's operehngdoevnents Confidential Treatment Requested by JPMorgan JPM-SDNY-00037426 Chase CONFIDENTIAL SDNY_GM_00306624 EFTA01511596