<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No 033-64193
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JANUARY 31, 1996)
4,000,000 DEPOSITARY SHARES
J.P. MORGAN & CO. INCORPORATED
EACH REPRESENTING A ONE-TENTH INTEREST IN A SHARE OF
6 5/8% CUMULATIVE PREFERRED STOCK, SERIES H
($500 STATED VALUE)
---------------------------
Each of the depositary shares offered hereby (the "Depositary Shares")
represents a one-tenth interest in a share of J.P. Morgan & Co. Incorporated's
(the "Corporation") 6 5/8% Cumulative Preferred Stock, Series H ($500 Stated
Value) (the "Preferred Stock") deposited with Morgan Guaranty Trust Company of
New York, as depositary (the "Depositary"), and, through the Depositary, will
entitle the holder thereof to all proportional rights and preferences of the
Preferred Stock (including dividend, voting, redemption and liquidation rights).
The proportionate liquidation preference of each Depositary Share will be $50.
See "Certain Terms of the Depositary Shares" in the Prospectus Supplement and
"Depositary Shares" in the Prospectus accompanying this Prospectus Supplement.
Dividends on the Preferred Stock offered hereby will accrue at an annual
rate of 6 5/8% per share and be cumulative from the date of original issue and
will be payable quarterly on March 31, June 30, September 30 and December 31 of
each year, commencing March 31, 1996. All dividends payable on shares of the
Preferred Stock to the Depositary, as record holder of the Preferred Stock, will
be distributed to the record holders of the Depositary Shares representing such
Preferred Stock in accordance with the Deposit Agreement (as defined herein).
See "Depositary Shares -- Dividends and Other Distributions" in the Prospectus
accompanying this Prospectus Supplement.
The Preferred Stock will be redeemable, in whole or in part, at the option
of the Corporation on or after March 31, 2006 at $500 per share (which is
equivalent to $50 per Depositary Share) plus accrued but unpaid dividends to the
date fixed for redemption. See "Certain Terms of the Preferred
Stock -- Redemption."
Application has been made to list the Depositary Shares on the New York
Stock Exchange. The Preferred Stock will not be so listed and the Corporation
does not expect that there will be any trading market for the Preferred Stock
except as represented by the Depositary Shares. See "Underwriting."
---------------------------
NEITHER THE DEPOSITARY SHARES NOR THE PREFERRED STOCK ARE SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF
THE CORPORATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY
OR INSTRUMENTALITY.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Price to Underwriting Proceeds to the
Public (1) Discount (2) Corporation (1)(3)
- -----------------------------------------------------------------------------------------------------
Per Depositary Share......... $50.00 $1.00 $49.00
- -----------------------------------------------------------------------------------------------------
Total........................ $200,000,000 $4,000,000 $196,000,000
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued dividends, if any, from February 8, 1996.
(2) The Corporation has agreed to indemnify the Underwriters against certain
liabilities under the Securities Act of 1933. See "Underwriting."
(3) Before deducting expenses of the Corporation estimated to be $75,000.
---------------------------
The Depositary Shares offered by this Prospectus Supplement are offered by
the Underwriters subject to prior sale, withdrawal, cancellation or modification
of the offer, to delivery to and acceptance by the Underwriters and to certain
further conditions. It is expected that delivery of the Depositary Shares will
be made in New York, New York, on or about February 8, 1996.
---------------------------
LEHMAN BROTHERS J.P. MORGAN SECURITIES INC.
BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO.
SMITH BARNEY INC.
February 1, 1996
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEPOSITARY
SHARES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE,
IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.
---------------------
J.P. MORGAN & CO. INCORPORATED
J.P. Morgan, whose origins date to a merchant banking firm founded in
London in 1838, is the holding company for a group of global subsidiaries that
provide a wide range of financial services to corporations, governments,
financial institutions, institutional investors, professional firms, privately
held companies, nonprofit organizations, and financially sophisticated
individuals. J.P. Morgan's activities include: finance and advisory, sales and
trading, asset management and servicing, equity investments and asset and
liability management.
APPLICATION OF PROCEEDS
The net proceeds from the sale of the Depositary Shares, estimated to be
approximately $196,000,000 (less expenses incurred by the Corporation in
connection with the issue), will be used for general corporate purposes,
including investment in equity and debt securities and interest-bearing deposits
of subsidiaries. Pending such use, the Corporation may temporarily invest the
net proceeds or may use them to reduce short-term indebtedness.
S-2
<PAGE> 3
SUMMARY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990
----------- --------- --------- --------- --------- ---------
DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
(UNAUDITED) (AUDITED) (AUDITED) (AUDITED) (AUDITED) (AUDITED)
SELECTED FINANCIAL DATA
Total interest revenue............. $ 9,937 $ 8 379 $ 7,442 $ 7,281 $ 7,786 $ 8,445
Total noninterest revenue.......... 3,901 3,536 4,499 2,950 2,528 2,035
Total revenues..................... 13,838 11,915 11,941 10,231 10,314 10,480
Net interest revenue............... 2,003 1,981 1,772 1,708 1,484 1,148
Provision for credit losses........ -- -- -- 55 40 50
Total operating expenses........... 3,998 3,692 3,580 2,854 2,487 2,079
Net income......................... 1,296 1,215 1,586(a) 1,582(b) 1,146(c) 1,005(d)
At period-end:
Total assets..................... 184,879 154,917 133,888 103,197 103,468 93,103
Long-term debt(e)................ 9,327 6,802 5,276 5,443 5,395 4,723
Stockholders' equity............. 10,451 9,568 9,859 7,308 6,068 5,189
Common stockholders' equity...... 9,957 9,074 9,365 6,814 5,574 4,695
Per common share:
Net income(f).................... $ 6.42 $ 6.02 $ 7.80(a) $ 7.95(b) $ 5.80(c) $ 5.21(d)
Book value....................... 50.71(n) 46.73(g) 47.25(h) 35.56 29.41 25.29
Dividends declared............... 3.06 2.79 2.48 2.23 1/2 2.03 1.86
EARNINGS RATIOS
Net income as % of:
Average total assets............. 0.73% 0.70%(g) 1.08%(h)(i) 1.32%(j) 1.05%(k) 0.98%(l)
Average stockholders' equity..... 13.1 12.5(g) 19.8(h)(i) 22.5(j) 20.4(k) 20.3(l)
Average common stockholders'
equity......................... 13.6(n) 12.9(g) 20.9(h)(i) 23.9(j) 21.9(k) 21.9(l)
DIVIDEND PAYOUT RATIO
Dividends declared per common share
as % of net income per common
share............................ 47.7% 46.3% 31.8%(i) 28.1%(j) 35.0%(k) 35.7%(l)
CAPITAL RATIOS
Average stockholders' equity as %
of average total assets.......... 5.5% 5.7%(g) 5.5%(h) 5.8% 5.2% 4.8%
Common stockholders' equity as %
of:
Average total assets............. 5.6 5.3(g) 6.4(h) 5.7 5.1 4.6
Total year-end assets............ 5.4 5.9(g) 7.0(h) 6.6 5.4 5.0
Total stockholders' equity as % of:
Average total assets............. 5.9 5.5(g) 6.7(h) 6.1 5.6 5.1
Total year-end assets............ 5.7 6.2(g) 7.4(h) 7.1 5.9 5.6
Tier 1 risk-based capital
ratio(m)......................... 8.7 9.6 9.3 8.9 6.9 6.3
Total risk-based capital
ratio(m)......................... 12.9 14.2 13.0 13.0 10.7 10.0
Leverage ratio(m).................. 6.1 6.5 7.3 7.1 5.8 5.5
OTHER SELECTED DATA
Common shares outstanding at
period-end (in thousands)........ 187,116 187,701 193,087 191,610 189,529 185,654
Total employees at period-end...... 15,613 17,055 15,193 14,368 13,323 12,968
</TABLE>
- ---------------
(a) Net income in 1993 includes a $137 million ($0.68 per share) charge related
to the cumulative effect of a change in accounting for postretirement
benefits adopted January 1, 1993.
S-3
<PAGE> 4
(b) Net income in 1992 includes $452 million ($2.29 per share) related to the
cumulative effect of a change in accounting for income taxes adopted
retroactive to January 1, 1992. As a result of applying the new method of
accounting for income taxes, income before the cumulative effect of the
change for 1992 was reduced by $252 million, or $1.26 per share ($1.27 per
share assuming full dilution); net income was increased by $200 million, or
$1.03 per share ($1.02 per share assuming full dilution).
(c) Net income in 1991 includes $32 million ($0.17 per common share) related to
the extraordinary gain on early retirement of debt.
(d) Net income in 1990 includes $230 million ($1.22 per common share) related
to the cumulative effect of a change in accounting for trading swaps
adopted January 1, 1990. As a result of applying the new method of
accounting for trading swaps, income before the cumulative effect of the
change for 1990 was increased by approximately $150 million ($0.79 per
share).
(e) Includes $3,590 million, $3,197 million, $2,459 million, $2,300 million,
$2,080 million, and $1,883 million of long-term debt qualifying as
risk-based capital in 1995, 1994, 1993, 1992, 1991, and 1990 respectively.
(f) Earnings per share amounts for 1994 and 1993 represent both primary and
fully diluted earnings per share; earnings per share amounts for 1995,
1992, 1991, and 1990 represent primary earnings per share. For 1995 fully
diluted earnings per share were $6.36. For 1992 fully diluted earnings per
share before and after the cumulative effect of the change in accounting
were $5.63 and $7.92 respectively. For 1991 fully diluted earnings per
share before and after the extraordinary gain were $5.58 and $5.75
respectively. For 1990 fully diluted earnings per share before and after
the cumulative effect of the change in accounting were $3.97 and $5.19
respectively.
(g) Excluding the effect of SFAS No. 115, the book value per common share would
have been $44.39 for the twelve months ended December 31, 1994; net income
would have been 0.71% of average total assets, 13.6% of average
stockholders' equity, and 14.2% of average common stockholders' equity;
average stockholders' equity would have been 5.2% of average total assets;
common stockholders' equity would have been 5.0% of average total assets
and 5.6% of total year-end assets; total stockholders' equity would have
been 5.3% of average total assets and 5.9% of total year-end assets.
(h) Excluding the effect of adopting SFAS No. 115 at December 31, 1993, the
book value per common share would have been $41.37; net income would have
been 1.09% of average total assets, 19.8% of average stockholders' equity,
and 20.9% of average common stockholders' equity; average stockholders'
equity would have been 5.5% of average total assets; common stockholders'
equity would have been 5.6% of average total assets and 6.2% of total
year-end assets; total stockholders' equity would have been 6.0% of average
total assets and 6.6% of total year-end assets.
(i) Excluding the cumulative effect of the accounting change for
postretirement benefits, 1993 net income would have been 1.18% of average
total assets, 21.1% of average stockholders' equity, and 22.3% of average
common stockholders' equity; dividends declared per common share would
have been 29.3% of income per common share before the accounting change.
(j) Excluding the cumulative effect of the accounting change for income taxes,
1992 net income would have been 0.94% of average total assets, 17.2% of
average stockholders' equity, and 18.3% of average common stockholders'
equity; dividends declared per common share would have been 39.5% of
income per common share before the accounting change.
(k) Excluding the effect of the extraordinary gain on early retirement of debt,
1991 net income would have been 1.03% of average total assets, 19.8% of
average stockholders' equity, and 21.3% of average common stockholders'
equity; dividends declared per common share would have been 36.1% of income
per common share before the extraordinary gain.
(l) Excluding the cumulative effect of the accounting change for trading
swaps, 1990 net income would have been 0.76% of average total assets,
15.6% of average stockholders' equity, and 17.7% of average common
stockholders' equity; dividends declared per common share would have been
46.6% of income per common share before the accounting change.
S-4
<PAGE> 5
(m) In accordance with Federal Reserve Board guidelines, the effect of SFAS No.
115 and the equity, assets, and off-balance-sheet exposures of J.P. Morgan
Securities Inc. are excluded. Risk-based capital ratios for 1995 are
estimates.
(n) Excluding the effect of SFAS No. 115, the book value per common share would
have been $47.83 for the twelve months ended December 31, 1995 and net
income would have been 14.3% of average common stockholders' equity.
S-5
<PAGE> 6
CERTAIN TERMS OF THE DEPOSITARY SHARES
The following description of certain terms of the Depositary Shares
supplements, and to the extent inconsistent therewith, supersedes, the
description of the general terms and provisions of the Depositary Shares set
forth under the heading "Depositary Shares" in the Prospectus accompanying this
Prospectus Supplement, to which reference is hereby made. This description does
not purport to be complete and is qualified in its entirety by the provisions of
the Deposit Agreement (as defined below), a form of which has been filed as an
exhibit to the Registration Statement.
The shares of Preferred Stock represented by the Depositary Shares will be
deposited under the Deposit Agreement, dated as of February 8, 1996 (the
"Deposit Agreement"), between the Corporation, Morgan Guaranty Trust Company of
New York ("Morgan Guaranty"), as Depositary, and the holders from time to time
of depositary receipts issued by the Depositary thereunder ("Depositary
Receipts"). Depositary Receipts will be issuable only in definitive registered
form. Each Depositary Share will represent a one-tenth interest in a share of
the Preferred Stock. Subject to the terms of the Deposit Agreement, each owner
of a Depositary Share will be entitled, through the Depositary and in proportion
to the one-tenth interest in a share of the Preferred Stock represented by such
Depositary Share, to all rights and preferences of a share of the Preferred
Stock (including, dividend, voting, redemption and liquidation rights). See
"Certain Terms of Preferred Stock" below and "Description of Series Preferred
Stock" and "Depositary Shares" in the Prospectus accompanying this Prospectus
Supplement. Morgan Guaranty Trust Company of New York is a wholly-owned
subsidiary of the Corporation and its depositary operations are located at 60
Wall Street, New York, N.Y. 10260.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may issue temporary Depositary Receipts. Definitive Depositary
Receipts will be prepared and will be exchangeable for temporary Depositary
Receipts at the Corporation's expense.
First Chicago Trust Company will act as transfer agent, dividend disbursing
agent and registrar for the Depositary Shares and the Preferred Stock and acts
as the transfer agent, dividend disbursing agent and registrar to the
Corporation's common stock and certain series of the Corporation's preferred
stock.
S-6
<PAGE> 7
CERTAIN TERMS OF THE PREFERRED STOCK
The following description of certain terms of the Preferred Stock
supplements, and to the extent inconsistent therewith supersedes, the
description of the general terms and provisions of the preferred stock set forth
under the heading "Description of Series Preferred Stock" in the Prospectus
accompanying this Prospectus Supplement, to which reference is hereby made. This
description does not purport to be complete and is qualified in its entirety by
the Corporation's Restated Certificate of Incorporation (the "Charter"), which
has been filed as an exhibit to the Registration Statement, and the Articles
Supplementary creating the Preferred Stock, which will be filed as an exhibit to
the Registration Statement.
GENERAL
The Corporation's Charter currently authorizes the issuance of 10,000,000
shares of preferred stock without par value which may be issued from time to
time in one or more series with such terms as are determined by resolution of
the Board of Directors. All shares of preferred stock, irrespective of series,
constitute one and the same class.
At January 31, 1996, there were 187,833,370 shares outstanding of Common
Stock and 2,444,300 shares of Series A Adjustable Rate Cumulative Preferred
Stock, 50,000 shares each of Series B, C, D, E and F Variable Cumulative
Preferred Stock and 8,340 shares of Series G Preferred Stock (together, Series
A, B, C, D, E, F and G are referred to as "Other Preferred Stock"). All
outstanding shares of preferred stock are fully paid and nonassessable.
The Board of Directors has adopted resolutions authorizing the Securities
Committee of the Board of Directors to create the Preferred Stock. When issued
and sold as contemplated by the Prospectus and Prospectus Supplement, the
Preferred Stock will be fully paid and nonassessable. The Preferred Stock will
not be convertible into shares of Common Stock of the Corporation, will have no
preemptive rights, and will not be subject to any sinking fund or other
obligation of the Corporation to repurchase or retire the Preferred Stock. The
Preferred Stock will be without par value, will have a $500 stated value per
share and will rank, with respect to dividends and liquidation preference,
equally with the Other Preferred Stock.
DIVIDENDS
Holders of shares of the Preferred Stock will be entitled to receive, when,
and as declared by the Board of Directors of the Corporation, out of assets of
the Corporation legally available for payment, cash dividends at the rate of
6 5/8% per annum (equivalent to $3.31 per Depositary Share). Dividends on the
Preferred Stock will be payable quarterly on March 31, June 30, September 30 and
December 31 of each year, commencing March 31, 1996, at such annual rate. Each
such dividend will be payable to holders of record as they appear on the stock
books of the Corporation on such record dates, not exceeding 30 days preceding
the payment dates thereof, as shall be fixed by the Board of Directors of the
Corporation or the Securities Committee of the Board of Directors. Dividends on
the Preferred Stock will be cumulative from the date of original issue of the
Preferred Stock. Dividends payable on the Preferred Stock for any period greater
or less than a full dividend period shall be computed on the basis of a 360-day
year consisting of twelve 30-day months. Dividends payable on the Preferred
Stock for each full dividend period shall be computed by dividing the annual
dividend rate by four. The Preferred Stock and, accordingly, the Depositary
Shares, will be entitled to all of the other dividend rights and subject to
certain limitations on the payment of dividends as set forth in the accompanying
Prospectus. See "Description of Series Preferred Stock -- Dividend Rights" in
the accompanying Prospectus.
LIQUIDATION RIGHTS
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the holders of the Preferred Stock will be
entitled to receive out of the assets of the Corporation available for
distribution to shareholders, before any distribution of assets is made to
holders of Common Stock or any other class or series of shares ranking junior to
the Preferred Stock upon liquidation, liquidating distributions in the amount of
$500 per share, (which is the equivalent to $50 per Depositary Share) plus
accrued and unpaid
S-7
<PAGE> 8
dividends. A consolidation or merger of the Corporation with or into any other
corporation or corporations or a sale, whether for cash, shares of stock,
securities or properties, of all or substantially all or any part of the assets
of the Corporation shall not be deemed or construed to be a liquidation,
dissolution or winding up of the Corporation. See "Description of Series
Preferred Stock -- Liquidation Rights" in the accompanying Prospectus.
The Corporation is a legal entity separate and distinct from its
subsidiaries. Accordingly, the right of the Corporation, its stockholders and
its creditors to participate in any distribution of the assets or earnings of
its subsidiaries is necessarily subject to the prior claims of the respective
creditors of its subsidiaries, except to the extent that claims of the
Corporation in its capacity as a creditor of its subsidiaries may be recognized.
REDEMPTION
The Preferred Stock may be redeemed on or after March 31, 2006, at the
option of the Corporation, for cash, on at least 30 but not more than 60 days
notice at any time or from time to time, as a whole or in part, at $500 per
share (which is the equivalent to $50 per Depositary Share), plus, in each case,
dividends accrued and accumulated but unpaid to but excluding the date fixed for
redemption. The Preferred Stock will not be subject to any sinking fund or other
obligation of the Corporation to purchase or redeem the Preferred Stock. Any
such redemption may be effected only with prior approval of the appropriate bank
regulatory authorities (unless at such time it is determined that such approval
is not required). At the date of this Prospectus Supplement approval by the
Federal Reserve Board is required. See "Description of Series Preferred Stock --
Optional Redemption" in the accompanying Prospectus.
CONVERSION OR EXCHANGE RIGHTS
The Preferred Stock is not convertible into or exchangeable for shares of
any other class or series of capital stock of the Corporation.
VOTING RIGHTS
Except as indicated below or except as expressly required by applicable
law, the holders of the Preferred Stock will not be entitled to vote. Whenever
the holders of the Preferred Stock are entitled to vote upon a matter, each
share outstanding entitled to be voted on such matter will be entitled to one
vote (the equivalent of one-tenth of a vote per Depositary Share).
If the equivalent of six quarterly dividends payable on any series of the
Corporation's preferred stock are in default, the number of directors of the
Corporation will be increased by two and the holders of all outstanding series
of preferred stock, voting as a single class without regard to series, will be
entitled to elect such additional two directors until all dividends in default
have been paid or declared and set apart for payment.
The affirmative vote or consent of the holders of at least 66 2/3 percent
of the outstanding shares of Preferred Stock, voting as a class, will be
required for any amendment to the Corporation's Charter (or any Certificate of
Designation, Rights and Preferences or any similar document relating to any
series of preferred stock) that will adversely affect the powers, preferences,
privileges or rights of the Preferred Stock. The affirmative vote or consent of
the holders of at least 66 2/3 percent of the outstanding shares of Preferred
Stock and any other series of preferred shares of the Corporation ranking on a
parity with the Preferred Stock as to dividends or upon liquidation, voting as a
single class without regard to series, will be required to authorize, effect or
validate the creation, authorization or issue of any shares of any class of
stock of the Corporation ranking prior to the Preferred Stock as to dividends or
upon liquidation, or the reclassification of any authorized stock of the
Corporation into any such prior shares, or the creation, authorization or issue
of any obligation or security convertible into or evidencing the right to
purchase any such prior shares.
Under interpretations adopted by the Federal Reserve Board, if the holders
of Preferred Stock become entitled to vote for the election of directors because
dividends are in arrears as described herein, such Preferred Stock may then be
deemed a "class of voting securities" and a holder of 25% or more of such
Preferred Stock
S-8
<PAGE> 9
(or a holder of 5% or more if it otherwise exercises a "controlling influence"
over the Corporation) may then be subject to regulation as a bank holding
company in accordance with the Bank Holding Company Act of 1936, as amended (the
"BHCA"). In addition, at such time as such Preferred Stock is deemed a class of
voting securities, any other bank holding company may be required to obtain the
prior approval of the Federal Reserve Board to acquire 5% or more of such
Preferred Stock under the BHCA, and any person other than a bank holding company
may be required to obtain the prior approval of the Federal Reserve Board under
the Change in Bank Control Act to acquire 10% or more of such Preferred Stock.
TAXATION
Owners of the Depositary Shares will be treated for Federal income tax
purposes as if they were owners of the Preferred Stock represented by such
Depositary Shares and, accordingly, must take into account for Federal income
tax purposes the income and deductions to which they would be entitled if they
were holders of such Preferred Stock.
On December 7, 1995, the Clinton Administration released a budget plan that
includes certain tax proposals (the "Proposals") that may affect holders of the
Preferred Stock. The Proposals have not yet been introduced as legislation and
there can be no certainty that they will be enacted into law.
Under the Proposals, the Dividends Received Percentage that is currently
available to corporate shareholders for certain dividends received from another
corporation in which the shareholder owns less than 20% (by vote and value)
would be reduced from 70% to 50% for dividends paid after January 31, 1996.
Additionally, under current law, the dividends received deduction is allowed to
a corporate shareholder only if the shareholder satisfies a 46-day holding
period for the dividend-paying stock (or a 91-day period for certain dividends
on preferred stock). The Proposals provide that a taxpayer is not entitled to a
dividends received deduction if the taxpayer's holding period for the
dividend-paying stock is not satisfied over a period immediately before or
immediately after the taxpayer becomes entitled to receive the dividend. This
provision would be effective for dividends paid after January 31, 1996.
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<PAGE> 10
UNDERWRITING
The underwriters of the offering of Depositary Shares (the "Underwriters"),
for whom Lehman Brothers Inc., J.P. Morgan Securities Inc., Bear, Stearns & Co.
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Smith Barney Inc.
are acting as representatives (collectively, the "Representatives"), have
severally agreed, subject to the terms and conditions of the Underwriting
Agreement dated as of February 1, 1996, to purchase from the Corporation the
aggregate number of Depositary Shares set forth opposite their respective names
below:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER DEPOSITARY SHARES
- ----------------------------------------------------------------------------- -----------------
<S> <C>
Lehman Brothers Inc. ........................................................ 600,000
J.P. Morgan Securities Inc. ................................................. 600,000
Bear, Stearns & Co. Inc. .................................................... 600,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated........................... 600,000
Smith Barney Inc. ........................................................... 600,000
CS First Boston Corporation.................................................. 100,000
Dean Witter Reynolds Inc. ................................................... 100,000
Dillon, Read & Co. Inc. ..................................................... 100,000
Donaldson, Lufkin & Jenrette Securities Corporation.......................... 100,000
Goldman, Sachs & Co. ........................................................ 100,000
Morgan Stanley & Co. Incorporated............................................ 100,000
NationsBanc Capital Markets, Inc. ........................................... 100,000
PaineWebber Incorporated..................................................... 100,000
Prudential Securities Incorporated........................................... 100,000
Salomon Brothers Inc ........................................................ 100,000
---------
4,000,000
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that, if any of the
foregoing shares are purchased by the Underwriters pursuant to the Underwriting
Agreement, all such shares must be so purchased. The Corporation has agreed to
indemnify the Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, or to contribute to payments that the
Underwriters may be required to make in respect thereof.
The Underwriters have advised the Corporation that they propose to offer
all or part of the Depositary Shares directly to the public at the price to the
public set forth on the cover page of this Prospectus Supplement, and in part to
certain dealers, at such price less a concession not in excess of $.60 per
Depositary Share. The Underwriters may allow, and such dealers may reallow,
discounts not in excess of $.25 per Depositary Share to certain other dealers.
After the initial public offering, the price and concessions may be changed. The
Depositary Shares are offered subject to receipt and acceptance by the
Underwriters and to certain other conditions, including the right to reject
orders in whole or in part.
The Depositary Shares are a new issue of securities with no established
trading market. Application has been made to list the Depositary Shares on the
New York Stock Exchange. There can be no assurance that the Depositary Shares
will be so listed or will continue to be listed. Although the Corporation has
been advised by the Underwriters that they may from time to time purchase
Depositary Shares in the secondary market, they are not obligated to do so and
may discontinue market-making at any time without notice. Consequently, there
can be no assurance as to the liquidity of the trading market for the Depositary
Shares.
Underwriters and certain of their associates and affiliates may be
customers of (including borrowers from), engage in transactions with, and/or
perform services for the Corporation and its subsidiaries in the ordinary course
of business.
S-10
<PAGE> 11
LEGAL OPINIONS
The validity of the Depositary Shares offered hereby and the issuance of
the Preferred Stock in connection therewith will be passed upon for the
Corporation by Margaret M. Foran, Vice President, Assistant General Counsel and
Assistant Secretary of the Corporation, and for the Underwriters by Cravath,
Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New York 10019,
counsel to the Underwriters. Ms. Foran owns or has the right to acquire a number
of shares of common stock of the Corporation equal to or less than 0.01% of
outstanding common stock of the Corporation.
S-11
<PAGE> 12
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
CORPORATION OR ANY AGENT OR THE UNDERWRITERS. THIS PROSPECTUS AND THE
ACCOMPANYING PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE CORPORATION SINCE THE DATE HEREOF.
---------------------------
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
J.P. Morgan & Co. Incorporated.......... S-2
Application of Proceeds................. S-2
Summary Financial Information........... S-3
Certain Terms of the Depositary
Shares................................ S-6
Certain Terms of the Preferred Stock.... S-7
Taxation................................ S-9
Underwriting............................ S-10
Legal Opinions.......................... S-11
Prospectus
Available Information................... 2
Incorporation of Certain Documents by
Reference............................. 2
J.P. Morgan & Co. Incorporated.......... 2
Consolidated Ratio of Earnings to Fixed
Charges............................... 4
Consolidated Ratio of Earnings to
Combined Fixed Charges and Preferred
Stock Dividends....................... 5
Use of Proceeds......................... 5
Description of J.P. Morgan Debt
Securities............................ 5
Description of Debt Warrants............ 11
Description of Series Preferred Stock... 13
Depositary Shares....................... 16
Description of Preferred Stock
Warrants.............................. 18
Description of Currency Warrants........ 19
Risk Factors Relating to Currency
Warrants.............................. 20
Description of Capital Stock............ 21
Plan of Distribution.................... 22
Experts................................. 24
Legal Opinions.......................... 24
</TABLE>
===============================================================================
===============================================================================
4,000,000 DEPOSITARY SHARES
J.P. MORGAN & CO.
INCORPORATED
EACH REPRESENTING A ONE-TENTH
INTEREST IN A SHARE OF
6 5/8% CUMULATIVE
PREFERRED STOCK, SERIES H
($500 STATED VALUE)
---------------------------
PROSPECTUS SUPPLEMENT
February 1, 1996
---------------------------
LEHMAN BROTHERS
J.P. MORGAN SECURITIES INC.
BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO.
SMITH BARNEY INC.
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