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As filed with the Securities and Exchange Commission on November 25, 1996
Registration Nos. 333-15079
15079-1
15079-2
15079-3
15079-4
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
<TABLE>
<S> <C> <C>
J.P.MORGAN & CO. INCORPORATED DELAWARE 13-2625764
JPM CAPITAL TRUST I DELAWARE To be applied for
JPM CAPITAL TRUST II DELAWARE To be applied for
JPM CAPITAL TRUST III DELAWARE To be applied for
JPM CAPITAL TRUST IV DELAWARE To be applied for
(Exact name of registrant as (State or other jurisdiction of (I.R.S. Employer
specified in its charter) incorporation or organization) Identification No.)
</TABLE>
60 Wall Street
New York, New York 10260-0060
(212) 483-2323
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Rachel F. Robbins, Esq.
General Counsel and Secretary
J.P. Morgan & Co. Incorporated
60 Wall Street
New York, New York 10260-0060
(212) 483-2323
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
Gene A. Capello, Esq. B. Robbins Kiessling, Esq.
Vice President and Assistant General Counsel Cravath, Swaine & Moore
J.P. Morgan & Co. Incorporated 825 Eighth Avenue
60 Wall Street New York, New York 10019
New York, New York 10260-0060 (212) 474-1500
(212) 648-3375
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2
Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. /X/
Calculation of Registration Fee
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3
<TABLE>
<CAPTION>
Title of each class of securities Proposed maximum Amount of registration fee (2)
to be registered aggregate offering price(1)
<S> <C> <C>
Senior debt securities, subordinated debt $1,000,000,000 (3)(4)(5) $303,031
securities and junior subordinated debt
securities (collectively, "Debt
Securities") of J.P. Morgan & Co.
Incorporated
Preferred Securities of JPM Capital
Trusts I, II, III, and IV severally
("Preferred Securities")
Guarantees (the "Guarantees") of
Preferred Securities of JPM Capital
Trusts I, II, III and IV by J.P. Morgan
& Co. Incorporated (6)
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee,
exclusive of accrued interest and dividends, if any.
(2) Calculated pursuant to Rule 457(o) and previously submitted.
(3) Such indeterminable number or amount of (i) Debt Securities of J.P.
Morgan & Co. Incorporated as may from time to time be issued at
indeterminate prices or upon conversion or exchange of securities so
issued and (ii) Preferred Securities of JPM Capital Trusts I, II, III
and IV, severally, as may from time to time be issued at indeterminate
prices. Junior Subordinated Debt Securities may be issued and sold to
JPM Capital Trusts I, II, III and IV, severally, in which event such
Junior Subordinated Debt Securities may later be distributed to the
holders of Preferred Securities upon a dissolution of JPM Capital Trust
I, II, III or IV and the distribution of the assets thereof.
(4) Such amount in U.S. dollars or the equivalent in foreign denominated
currency units, or if any Debt Securities are issued at original issue
discount, such greater amount as shall result in an aggregate initial
offering price of $1,000,000,000. The Prospectuses herein cover
$1,000,000,000 of securities.
(5) This Registration Statement also relates to offers and sales of Debt
Securities, Preferred Securities and Guarantees in connection with
market-making transactions by and through affiliates of the
registrants, including J.P. Morgan Securities Inc.
(6) In addition to the Preferred Securities Guarantees and the Junior
Subordinated Debt Securities, J.P. Morgan & Co.Incorporated is also
registering under this registration statement certain other back-up
obligations of J.P. Morgan & Co. Incorporated. Such back-up obligations
include its obligations under the Indenture (as defined) and under the
Amended and Restated Declaration of Trust of each Trust pursuant to
which J.P. Morgan & Co. Incorporated will agree, among other things, to
pay all debts and obligations (other than with respect to the Trust
Securities (as defined)) of the relevant Trust, and all costs or
expenses of the relevant Trust, including all fees, expenses and taxes
of such Trust. No separate consideration will be received by J.P.
Morgan & Co. Incorporated for the Preferred Securities Guarantees or
such other back-up obligations. See "Relationship between the
Preferred Securities, the Junior Subordinated Debentures and the
Preferred Securities Guarantee" in the form of Prospectus Supplement
included herein.
The registrants hereby amend this registration statement on such date
or dates as may be necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the securities act of 1933, or until the registration statement shall become
effective on such date as the commission, acting pursuant to said section 8(a),
may determine.
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EXPLANATORY NOTE
This Registration Statement contains one form of Prospectus Supplement
and two forms of Prospectuses to be used in connection with offerings of the
following securities: (1) preferred securities of JPM Capital Trusts I, II, III
and IV, severally, junior subordinated debt securities of J.P. Morgan & Co.
Incorporated and guarantees by J.P. Morgan & Co. Incorporated of preferred
securities issued severally by JPM Capital Trusts I, II, III and IV, and (2)
debt securities (both senior and subordinated) of J.P. Morgan & Co.
Incorporated. Each offering of securities made under this Registration Statement
will be made pursuant to one of these Prospectuses, with the specifications of
the securities offered thereby set forth in an accompanying Prospectus
Supplement.
The complete Prospectus Supplement and Prospectus for the offering of
the preferred securities of J.P. Morgan & Co. Incorporated Capital Trusts I, II,
III and IV, severally, the junior subordinated debt securities of J.P. Morgan &
Co. Incorporated and the guarantees by J.P. Morgan & Co. Incorporated of the
preferred securities issued severally by JPM Capital Trusts I, II, III and IV
follow immediately after this Explanatory Note, which is then immediately
followed by the complete Prospectus for the offering of debt securities (both
senior and subordinated) of J.P. Morgan & Co. Incorporated.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER 25, 1996
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1996)
[ ] Cumulative Preferred Securities
JPM Capital Trust I
[ ] % Cumulative Preferred Trust Securities
(Liquidation Amount $ per Preferred Security)
Fully and Unconditionally Guaranteed as Set Forth
Herein by J.P. Morgan & Co. Incorporated
The % Preferred Trust Securities (the "Preferred Securities")
offered hereby represent preferred undivided beneficial interests in the assets
of JPM Capital Trust I, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"). J.P. Morgan & Co. Incorporated, a Delaware
corporation (the "Company"), will directly or indirectly own all the common
securities (the "Common Securities" and, together with the Preferred Securities,
the "Trust Securities") representing common undivided beneficial interests in
the assets of the Trust. The Trust exists for the sole purpose of issuing the
Preferred Securities and Common Securities and investing the proceeds thereof in
an equivalent amount of % Junior Subordinated Debentures due of the Company
("Junior Subordinated Debentures"). (continued on next page)
Application will be made to list the Preferred Securities on the New
York Stock Exchange, Inc. (the "NYSE"). See "Underwriting."
SEE "RISK FACTORS" BEGINNING ON PAGE S-[ ] FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES.
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THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
FEDERAL AGENCY.
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 PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to
Public (1) Discounts JPM Capital
and Trust I
Commissions (2) (1)(3)(4)
<S> <C> <C> <C>
Per Preferred
Security $ (3) $
Total (5) (3)
</TABLE>
(1) Plus accrued distributions, if any, from , 1996, to date
of delivery.
(2) See "Underwriting."
(3) In view of the fact that the proceeds of the sale of the Preferred
Securities will be invested in Junior Subordinated Debentures, the
Company has agreed to pay to the Underwriters as compensation
("Underwriters' Compensation") for their arranging the investment
therein of such proceeds $ per Preferred Security (or
$ in the aggregate). See "Underwriting".
(4) Before deducting expenses payable by the Company estimated to
be $ .
(5) The Trust and the Company have granted to the Underwriters an option,
exercisable within 30 days of the date hereof, to purchase up to
[ ] additional Preferred Securities at the Price to
Public for the purpose of covering over-allotments, if any. If such
option is exercised in full, the total Price to Public, Underwriting
Discounts and Commissions and Proceeds to JPM Capital Trust I would
be $ , $ and $ , respectively.
The Preferred Securities are offered by the Underwriters, subject to
prior sale, when, as and if delivered to and accepted by the Underwriters, and
subject to their right to reject orders in whole or in part. It is expected that
delivery of the Preferred Securities will be made in book-entry form through the
facilities of The Depository Trust Company, on or about , 1996,
against payment therefor in immediately available funds.
This Prospectus Supplement and the accompanying Prospectus may be used
by the Company or certain affiliates of the Company in connection with offers
and sales related to secondary market transactions in the Preferred Securities
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at negotiated prices related to prevailing market prices at the time of sale or
otherwise. Such Company affiliates may act as principal or agent in such
transactions.
The date of this Prospectus Supplement is , 1996.
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(Continued from previous page)
The Preferred Securities and the Common Securities will rank pari passu
with each other and will have equivalent terms; provided that (i) if an Event of
Default (as defined herein) under the Declaration (as defined herein) occurs and
is continuing, the holders of Preferred Securities will have a priority over
holders of the Common Securities with respect to distributions and payments upon
liquidation, redemption or otherwise and (ii) holders of Common Securities have
the exclusive right (subject to the terms of the Declaration) to appoint,
replace or remove Trustees (as defined in the accompanying Prospectus) and to
increase or decrease the number of Trustees.
Holders of the Preferred Securities will be entitled to receive
cumulative cash distributions at an annual rate of % of the stated
liquidation amount of $ per Preferred Security, accruing from the
date of original issuance of the Preferred Securities and payable quarterly,
in arrears, on the last day of March, June, September and December of each
year, commencing on , 1997 ("distributions"). Cash
distributions in arrears for more than one quarter will bear interest thereon
at the annual rate of % (to the extent permitted by applicable law),
compounded quarterly. The term "distributions" as used herein includes such
cash distributions and any such interest payable unless otherwise stated.
The distribution rate and the distribution and other payment dates for
the Preferred Securities will correspond to the interest rate and the interest
and other payment dates on the Junior Subordinated Debentures deposited in the
Trust as trust assets. If principal or interest is not paid on the Junior
Subordinated Debentures, including as a result of the Company's election to
extend the interest payment period on the Junior Subordinated Debentures as
described below, the Trust will not make payments on the Trust Securities. The
Junior Subordinated Debentures provide that, so long as the Company shall not be
in default in the payment of interest on the Junior Subordinated Debentures, the
Company shall have the right to defer payments of interest on the Junior
Subordinated Debentures by extending the interest payment period from time to
time for a period not exceeding 20 consecutive quarterly interest periods (each,
a "Deferral Period"). No interest shall be due and payable during a Deferral
Period and, as a consequence, distributions on the Trust Securities will also be
deferred,
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but at the end of such Deferral Period the Company shall pay all interest then
accrued and unpaid on the Junior Subordinated Debentures, together with interest
thereon at the same rate specified for the Junior Subordinated Debentures to the
extent permitted by applicable law, compounded quarterly ("Compounded
Interest"). All references herein to interest shall include Compounded Interest
unless otherwise stated. There could be multiple Deferral Periods of varying
lengths throughout the term of the Junior Subordinated Debentures, each not to
exceed 20 consecutive quarters or to cause any extension beyond the maturity of
the Junior Subordinated Debentures. During any such Deferral Period, the Company
may not declare or pay dividends on, or redeem, purchase, acquire or make a
distribution or liquidation payment with respect to, any of its common stock or
preferred stock or make any guarantee payments with respect thereto; provided,
however, that the foregoing restrictions shall not apply to (i) dividends,
redemptions, purchases, acquisitions, distributions or payments made by the
Company by way of issuance of shares of its capital stock, (ii) payments of
accrued dividends by the Company upon the redemption, exchange or conversion of
any preferred stock of the Company as may be outstanding from time to time in
accordance with the terms of such preferred stock, (iii) cash payments made by
the Company in lieu of delivering fractional shares upon the redemption,
exchange or conversion of any preferred stock of the Company as may be
outstanding from time to time in accordance with the terms of such preferred
stock, (iv) repurchases, redemptions or other acquisitions of shares of capital
stock of the company in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of employees, officers,
directors or consultants, or (v) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of such
rights pursuant thereto. See "Risk Factors--Option to Extend Interest Payment
Period; Tax Impact of Extension;" "Description of the Junior Subordinated
Debentures--Interest" and "--Option to Extend Interest Payment Period."
The payment of distributions out of moneys held by the Property Trustee
(as defined in the accompanying Prospectus) and payments on liquidation of the
Trust and on redemption of Preferred Securities, as set forth below, are
guaranteed by the Company on a subordinated basis as and to the extent described
herein (the "Preferred Securities Guarantee").
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See "Description of the Preferred Securities Guarantees" in the accompanying
Prospectus. The Preferred Securities Guarantee covers payments of distributions
and other payments on the Preferred Securities only if and to the extent that
the Trust has funds available therefor which will not be the case unless the
Company has made a payment of interest or principal or other payments on the
Junior Subordinated Debentures held by the Trust as its sole asset. The
Preferred Securities Guarantee, when taken together with the Company's
obligations under the Junior Subordinated Debentures and the Indenture (as
defined herein) and its obligations under the Declaration, including its
obligation to pay all costs, expenses, debts and other obligations of the Trust
(other than with respect to the Trust Securities), provides a full and
unconditional guarantee of amounts due on the Preferred Securities. The
obligations of the Company under the Preferred Securities Guarantee are
subordinate and junior in right of payment to all other indebtedness,
liabilities and obligations of the Company and any guarantees, endorsements or
other contingent obligations of the Company in respect of such indebtedness,
liabilities or obligations, including Junior Subordinated Debt Securities (as
defined in the accompanying Prospectus) and senior to all capital stock now or
hereafter issued by the Company and to any guarantee now or hereafter entered
into by the Company in respect of its capital stock. The obligations of the
Company under the Junior Subordinated Debentures are subordinate and junior in
right of payment to all present and future Senior Indebtedness, Subordinated
Indebtedness and Derivative Obligations of the Company (as such terms are
defined in the accompanying Prospectus). Because the Company is a holding
company, the Junior Subordinated Debentures (and the Company's obligations under
the Preferred Securities Guarantee) are also effectively subordinated to all
existing and future liabilities of the Company's subsidiaries, except to the
extent that the Company is a creditor of the subsidiaries recognized as such.
The Preferred Securities are subject to mandatory redemption, in whole
or in part, upon repayment of the Junior Subordinated Debentures at maturity or
their earlier redemption. Subject to the Company having received prior approval
of the Federal Reserve to do so if then required under applicable capital
guidelines or policies of the Federal Reserve, the Junior Subordinated
Debentures may be redeemed by the Company (in whole or in part) from time to
time prior to maturity on or after [ ], or at any time in
certain circumstances upon the occurrence of a Tax Event or Capital Treatment
Event (each as defined herein). If the Company redeems Junior Subordinated
Debentures, the Trust must redeem Trust Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Junior
Subordinated Debentures so redeemed at $ per Trust Security
plus accrued and unpaid
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distributions thereon (the "Redemption Price") to the date fixed for redemption.
See "Description of the Preferred Securities--Mandatory Redemption." The
Preferred Securities will be redeemed upon maturity of the Junior Subordinated
Debentures. The Junior Subordinated Debentures mature on [ ,] which
date may be (i) shortened to a date not earlier than , 2001, if
the Company has received the prior approval of the Federal Reserve to do so if
then required under applicable capital guidelines or policies, or (ii) extended
to a date not later than [ ,] if certain conditions are met. In
addition, upon the occurrence of a Special Event (as defined herein) arising
from a change in law or a change in legal interpretation, unless the Junior
Subordinated Debentures are redeemed in the limited circumstances described
below and subject to the Company having received prior approval from the Federal
Reserve for such dissolution if then required under applicable capital
guidelines or policies of the Federal Reserve, the Trust shall be dissolved with
the result that the Junior Subordinated Debentures will be distributed to the
holders of the Preferred Securities, on a pro rata basis, in lieu of any cash
distribution. In the case of a Special Event that is a Tax Event, the Company
will have the right in certain circumstances, subject to the Company having
received prior approval of the Federal Reserve to do so if then required under
applicable capital guidelines or policies of the Federal Reserve, to redeem the
Junior Subordinated Debentures, which would result in the redemption by the
Trust of the Trust Securities in the same amount on a pro rata basis.
In the event of the voluntary or involuntary dissolution of the Trust,
the holders of the Preferred Securities will be entitled to receive, for each
Preferred Security, a liquidation amount of $ plus accrued and unpaid
distributions thereon (including interest thereon) to the date of payment,
unless in connection with such dissolution, the Junior Subordinated Debentures
are distributed to the holders of the Preferred Securities. See "Description of
the Preferred Securities--Liquidation Distribution Upon Dissolution."
If the Junior Subordinated Debentures are distributed to the holders of
the Preferred Securities, the Company will use its best efforts to have the
Junior Subordinated Debentures listed on the NYSE or on such other exchange as
the Preferred Securities are then listed. See "Description of the Preferred
Securities--Special Event Redemption or
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Distribution" and "Description of the Junior Subordinated Debentures."
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE, IN ANY OVER-THE-COUNTER MARKET OR OTHERWISE AND, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
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RISK FACTORS
Prospective purchasers of Preferred Securities should carefully review
the information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following matters:
RANKING OF SUBORDINATED OBLIGATIONS UNDER PREFERRED SECURITIES GUARANTEE AND
JUNIOR SUBORDINATED DEBENTURES; DEPENDENCE ON THE COMPANY
The obligations of the Company under the Junior Subordinated Debentures
are unsecured obligations of the Company and will be subordinate and junior in
right of payment to Senior Indebtedness, Subordinated Indebtedness and
Derivative Obligations of the Company (as such terms are defined herein) but
senior to its capital stock. The Company's obligations under the Preferred
Securities Guarantee are unsecured and will rank (i) subordinate and junior in
right of payment to all other indebtedness, liabilities and obligations of the
Company and any guarantees, endorsements or other contingent obligations of the
Company in respect of such indebtedness, liabilities or obligations, including
the Junior Subordinated Debentures and any other series of Junior Subordinated
Debt Securities, except those made pari passu or subordinate by their terms, and
(ii) senior to all capital stock now or hereafter issued by the Company and to
any guarantee now or hereafter entered into by the Company in respect of its
capital stock. Because the Company is a holding company, the Junior Subordinated
Debentures (and the Company's obligations under the Preferred Securities
Guarantee) are also effectively subordinated to all existing and future
liabilities of the Company's subsidiaries, except to the extent that the Company
is a creditor of the subsidiaries recognized as such. There are no terms in the
Preferred Securities, the Junior Subordinated Debentures or the Preferred
Securities Guarantee that limit the Company's ability to incur additional
indebtedness or other obligations, including indebtedness or obligations that
rank senior to or pari passu with the Junior Subordinated Debentures and the
Preferred Securities Guarantee, or the ability of its subsidiaries to incur
additional indebtedness. See "Description of the Preferred Securities
Guarantees--Status of the Preferred Securities Guarantees" and "Description of
the Junior Subordinated Debt Securities--Subordination" in the accompanying
Prospectus.
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The Trust's ability to make distributions and other payments on the
Preferred Securities is solely dependent upon the Company making interest and
other payments on the Junior Subordinated Debentures deposited as trust assets
as and when required. If the Company were not to make distributions or other
payments on the Junior Subordinated Debentures for any reason, including as a
result of the Company's election to defer the payment of interest on the Junior
Subordinated Debentures by extending the interest period on the Junior
Subordinated Debentures, the Trust will not make payments on the Trust
Securities. In such an event, holders of the Preferred Securities would not be
able to rely on the Preferred Securities Guarantee since distributions and other
payments on the Preferred Securities are subject to the Preferred Securities
Guarantee only if and to the extent that the Company has made a payment to the
Property Trustee of interest or principal on the Junior Subordinated Debentures
deposited in the Trust as trust assets. Instead, holders of Preferred Securities
would rely on the enforcement (i) by the Property Trustee of its rights as
registered holder of the Junior Subordinated Debentures against the Company
pursuant to the terms of the Indenture or (ii) by such holder of Preferred
Securities of its right against the Company to directly enforce payments of
principal and interest on the Junior Subordinated Debentures. However, if the
Trust's failure to make distributions on the Preferred Securities is a
consequence of the Company's exercise of its right to extend the interest
payment period for the Junior Subordinated Debentures, neither the Property
Trustee nor any holder of Preferred Securities will have any right to enforce
the payment of distributions on the Preferred Securities until an Event of
Default under the Declaration shall have occurred. The Company's obligations
under the Preferred Securities Guarantee are subordinate and junior in right of
payment to all other indebtedness, liabilities and obligations of the Company
and any guarantees, endorsements or other contingent obligations of the Company
in respect of such indebtedness, liabilities or obligations, including the
Junior Subordinated Debentures, and any other series of Junior Subordinated Debt
Securities except those made pari passu or subordinate by their terms to the
Preferred Securities Guarantee, and senior to its capital stock or to any
guarantee of the Company in respect of its capital stock. The Declaration
provides that each holder of Preferred Securities, by acceptance thereof, agrees
to the provisions of the Preferred Securities Guarantee, including the
subordination provisions thereof, and of the Indenture.
The Declaration provides that the Company shall pay for all debts and
obligations (other than with respect to the Trust Securities) and all costs and
expenses of the Trust, including any taxes and all costs and expenses with
respect thereto, to which the Trust may become subject, except for United States
withholding taxes. No assurance can be given that the Company will have
sufficient resources to enable it
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to pay such debts, obligations, costs and expenses on behalf of the Trust.
If an Event of Default (as defined herein) occurs and is continuing, then
the holders of Preferred Securities would rely on the enforcement by the
Property Trustee of its rights as a holder of the Junior Subordinated Debentures
against the Company. In addition, the holders of a majority in liquidation
amount of the Preferred Securities will have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Property Trustee or to direct the exercise of any trust or power conferred upon
the Property Trustee under the Declaration, including the right to direct the
Property Trustee to exercise the remedies available to it as a holder of the
Junior Subordinated Debentures. If the Property Trustee fails to enforce its
rights under the Junior Subordinated Debentures, any holder of Preferred
Securities may, to the extent permitted by applicable law, after a period of 30
days has elapsed from such holder's written request, directly institute a legal
proceeding against the Company to enforce the Property Trustee's rights under
the Junior Subordinated Debentures without first instituting any legal
proceeding against the Property Trustee or any other person or entity. If an
Event of Default occurs and is continuing and such event is attributable to the
failure of the Company to pay interest or principal on the Junior Subordinated
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then a holder of Preferred
Securities may also directly institute a proceeding for enforcement of payment
to such holder of the principal of or interest on Junior Subordinated Debentures
having a principal amount equal to the aggregate liquidation amount of the
Preferred Securities held by such holder (a "Direct Action") on or after the
respective due date specified in the Junior Subordinated Debentures without
first (i) directing the Property Trustee to enforce the terms of the Junior
Subordinated Debentures or (ii) instituting a legal proceeding against the
Company to enforce the Property Trustee's rights under the Junior Subordinated
Debentures. In connection with such Direct Action, the Company will be
subrogated to the rights of such holder of Preferred Securities under the
Declaration to the extent of any payment made by the Company to such holder of
Preferred Securities in such Direct Action. The holders of Preferred Securities
will not be able to exercise directly any other remedy available to the holders
of the Junior Subordinated Debentures unless the Property Trustee first fails to
do so.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX IMPACT OF EXTENSION
So long as the Company shall not be in default in the payment of interest
on the Junior Subordinated Debentures, the Company has the right under the
Indenture to defer payments of interest on the Junior Subordinated Debentures by
extending the interest payment period from time to time on the Junior
Subordinated Debentures for a Deferral Period not exceeding 20 consecutive
quarterly interest periods, during which no interest shall be due and payable.
Quarterly distributions on the Preferred Securities would not be made by the
Trust during any such Deferral Period (but would continue to accrue with
interest thereon at the rate of % per annum, compounded quarterly). If the
Company exercises the right to extend an interest payment period, the Company
may not during such Deferral Period declare or pay dividends on, or redeem,
purchase, acquire or make a distribution or liquidation payment with respect to,
any of its common stock or preferred stock or make any guarantee payments with
respect thereto; provided, however, that the foregoing restrictions shall not
apply to (i) dividends, redemptions, purchases, acquisitions, distributions or
payments made by the Company by way of issuance of shares of its capital stock,
(ii) payments of accrued dividends by the Company upon the redemption, exchange
or conversion of any preferred stock of the Company as may be outstanding from
time to time in accordance with the terms of such preferred stock, (iii) cash
payments made by the Company in lieu of delivering fractional shares upon the
redemption, exchange or conversion of any preferred stock of the Company as may
be outstanding from time to time in accordance with the terms of such preferred
stock, (iv) repurchases, redemptions or other acquisitions of shares of capital
stock of the Company in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of employees, officers,
directors or consultants, or (v) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of such
rights pursuant thereto. See "Description of the Junior Subordinated
Debentures--Option to Extend Interest Payment Period" for a description of
certain terms of the outstanding preferred stock of the Company.
S-11
<PAGE> 16
Prior to the termination of any Deferral Period, the Company may
further extend such Deferral Period; provided that such Deferral Period together
with all such previous and further extensions thereof may not exceed 20
consecutive quarterly interest periods. Upon the termination of any Deferral
Period and the payment of all amounts then due, the Company may commence a new
Deferral Period, subject to the above requirements. The Company may also prepay
at any time all or any portion of the interest accrued during a Deferral Period.
Consequently, there could be multiple Deferral Periods of varying lengths
throughout the term of the Junior Subordinated Debentures, each not to exceed 20
consecutive quarters or to cause any extension beyond the maturity of the Junior
Subordinated Debentures. See "Description of the Preferred
Securities--Distributions" and "Description of the Junior Subordinated
Debentures--Option to Extend Interest Payment Period."
If a Deferral Period occurs, the Junior Subordinated Debentures will be
treated as having "original issue discount" for United States Federal income tax
purposes at all times after the beginning of the first Deferral Period,
including after the termination of the Deferral Period. During such times,
holders of Preferred Securities will be required to include their pro rata share
of original issue discount in gross income as it accrues for United States
Federal income tax purposes in advance of the receipt of cash, even though no
cash distributions will be made during a Deferral Period. Even before the
beginning of the First Deferral Period, while the Company will take the position
that original issue discount does not arise, it is possible that all of a
holder's taxable interest income with respect to the Junior Subordinated
Debentures will be accounted for as original issue discount and actual
distributions of stated interest will not be separately reported as taxable
income. See "Taxation--Original Issue Discount". The Company has no current
intention of exercising its option to defer payments of interest.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence and during the continuation of a Tax Event or
Investment Company Event (each as defined herein), which may occur at any time,
the Trust shall, unless the Junior Subordinated Debentures are redeemed in the
limited circumstances described below and subject to the Company having received
prior approval of the Federal Reserve for such dissolution if then required
under applicable capital guidelines or policies of the Federal Reserve, be
dissolved with the result that, in the manner
S-12
<PAGE> 17
described in "Description of the Preferred Securities-Liquidation Distribution
Upon Dissolution", after satisfaction of liabilities to creditors of the Trust,
Junior Subordinated Debentures having an aggregate principal amount equal
to the aggregate stated liquidation amount of, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid distributions on,
the Preferred Securities and the Common Securities would be distributed
on a Pro Rata Basis (as defined under the caption "JPM Trusts" in the
accompanying Prospectus) to the holders of the Preferred Securities and the
Common Securities in liquidation of the Trust. In the case of a Tax Event or
Capital Treatment Event (as defined herein), in certain circumstances, the
Company shall have the right, subject to the Company having received prior
approval of the Federal Reserve to do so if then required under applicable
capital guidelines or policies of the Federal Reserve, to redeem the Junior
Subordinated Debentures, in whole or in part, in which event the Trust will
redeem Preferred Securities and Common Securities on a Pro Rata Basis to the
same extent as the Junior Subordinated Debentures are redeemed. There can be no
assurance as to the market prices for Preferred Securities or the Junior
Subordinated Debentures which may be distributed in exchange for Preferred
Securities if a dissolution and liquidation of the Trust were to occur.
Accordingly, the Preferred Securities that an investor may purchase, or the
Junior Subordinated Debentures that the investor may receive on dissolution and
liquidation of the Trust, may trade at a discount to the price that the investor
paid to purchase the Preferred Securities offered hereby. Because holders of
Preferred Securities may receive Junior Subordinated Debentures upon the
occurrence of a Special Event, prospective purchasers of Preferred Securities
are also making an investment decision with regard to the Junior Subordinated
Debentures and should carefully review all the information regarding the Junior
Subordinated Debentures contained herein and in the accompanying Prospectus. See
"Description of the Preferred Securities--Special Event Redemption or
Distribution" and "Description of the Junior Subordinated Debentures--General."
Recent Clinton Administration proposals would prevent the Company
from deducting interest on the Junior Subordinated Debentures. The proposals
would have applied to instruments issued on or after December 7, 1995.
However, the Chairmen of the Senate Finance and House Ways and Means
Committees have issued a joint statement stating their intention that the
proposals, if enacted, would not apply to instruments issued prior to the
date of appropriate Congressional action. No such Congressional action has
yet occurred. Nevertheless, there can be no assurance that future legislation
would not prevent the Company from deducting interest on the Junior
Subordinated Debentures. Such legislation would constitute a Tax Event and
could result in the distribution of the Junior Subordinated Debentures to
holders of the Preferred Securities or, in certain circumstances,
S-13
<PAGE> 18
the redemption of the Junior Subordinated Debentures by the Company and the
distribution of the resulting cash in redemption of the Preferred Securities.
See "Description of the Preferred Securities--Special Event Redemption or
Distribution."
Under current United States Federal income tax law, a distribution of
the Junior Subordinated Debentures upon a Tax Event or Investment Company Event
would not be a taxable event to holders of the Preferred Securities. See
"Taxation--Distribution of Junior Subordinated Debentures to Holders of
Preferred Securities."
SHORTENING OF STATED MATURITY OF JUNIOR SUBORDINATED DEBENTURES
The Company will have the right at any time to shorten the maturity of
the Junior Subordinated Debentures to a date not earlier than , 2001.
The Preferred Securities will be subject to mandatory redemption at the revised
maturity of the Junior Subordinated Debentures. The exercise of such right is
subject to the receipt of prior approval of the Federal Reserve if then required
under applicable capital guidelines or policies of the Federal Reserve.
EXTENSION OF STATED MATURITY OF JUNIOR SUBORDINATED DEBENTURES
The Company will also have the right to extend the maturity of the
Junior Subordinated Debentures, whether or not the Trust is terminated and the
Junior Subordinated Debentures are distributed to holders of the Preferred
Securities, to a date no later than the 49th anniversary of the initial issuance
of the Preferred Securities, provided that the Company can extend the maturity
only if at the time such election is made and at the time of such extension (i)
the Company is not in bankruptcy, otherwise insolvent or in liquidation, (ii)
the Company is not in default in the payment of any interest or principal on the
Junior Subordinated Debentures, (iii) the Trust is not in arrears on payments of
distributions on the Preferred Securities and no deferred distributions are
accumulated and (iv) at least one nationally recognized statistical rating
organization has rated the Junior Subordinated Debentures at a rating level of
BBB- or higher, in the case of Standard & Poor's Rating Services, Baa3 or
higher, in the case of Moody's Investors Services, Inc. or an equivalent rating
in the case
S-14
<PAGE> 19
of any other nationally recognized statistical rating organization.
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights, but
will not be able to appoint, remove or replace, or to increase or decrease the
number of, Trustees, which rights are vested exclusively in the Common
Securities.
LISTING OF PREFERRED SECURITIES; TRADING PRICES
The Preferred Securities constitute a new issue of securities with no
established trading market. While application will be made to list the Preferred
Securities on the NYSE, there can be no assurance that an active market for the
Preferred Securities will develop or be sustained in the future on the NYSE.
Although J.P. Morgan Securities Inc. has indicated to the Company and the Trust
that it intends to make a market in the Preferred Securities as permitted by
applicable laws and regulations, it is not obligated to do so and may
discontinue any such market-making at any time without notice. Accordingly, no
assurance can be given as to the liquidity of, or trading markets for, the
Preferred Securities.
The Preferred Securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A holder who disposes of his Preferred
Securities between record dates for payments of distributions thereon will be
required to include accrued but unpaid interest on the Junior Subordinated
Debentures through the date of disposition in income as ordinary income, and to
add such amount to his adjusted tax basis in his pro rata share of the
underlying Junior Subordinated Debentures deemed disposed of. Accordingly, such
a holder will recognize a capital loss to the extent the selling price (which
may not fully reflect the value of accrued but unpaid interest) is less than the
holder's adjusted tax basis (which will include accrued but unpaid interest).
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States Federal income tax purposes. See
"Taxation--Accrual of Original Issue Discount and Premium" and "--Disposition of
the Preferred Securities."
S-15
<PAGE> 20
POTENTIAL MARKET VOLATILITY DURING DEFERRAL PERIOD
As described above, the Company has the right to extend an interest
payment period on the Junior Subordinated Debentures from time to time for a
period not exceeding 20 consecutive quarterly interest periods. If the Company
determines to extend an interest payment period, or if the Company thereafter
extends a Deferral Period or prepays interest accrued during a Deferral Period
as described above, the market price of the Preferred Securities is likely to be
affected. In addition, as a result of such rights, the market price of the
Preferred Securities (which represent an undivided interest in Junior
Subordinated Debentures) may be more volatile than other securities on which
original issue discount accrues that do not have such rights. A holder that
disposes of its Preferred Securities during a Deferral Period, therefore, may
not receive the same return on its investment as a holder that continues to hold
its Preferred Securities. See "Description of the Junior Subordinated
Debentures--Option to Extend Interest Payment Period."
THE FOLLOWING INFORMATION CONCERNING THE COMPANY, JPM CAPITAL TRUST I, THE
PREFERRED SECURITIES, THE PREFERRED SECURITIES GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES IS IN ADDITION TO, AND SHOULD BE READ IN CONJUNCTION
WITH, THE INFORMATION CONTAINED IN THE ACCOMPANYING PROSPECTUS. CAPITALIZED
TERMS USED IN THIS PROSPECTUS SUPPLEMENT HAVE THE SAME MEANINGS AS IN THE
ACCOMPANYING PROSPECTUS.
SELECTED CONSOLIDATED FINANCIAL DATA OF
J.P. MORGAN & CO. INCORPORATED.
The following tables set forth certain condensed financial data with
respect to the Company selected from the unaudited consolidated financial
statements appearing in the Report on Form 10-Q for the quarter ended September
30, 1996, and from the audited consolidated financial statements appearing in
the Annual Report on Form 10-K for the year ended December 31, 1995, which are
incorporated herein by reference. This information should be read in conjunction
with the other details of financial information concerning the Company appearing
in the aforementioned documents.
S-16
<PAGE> 21
SUMMARY FINANCIAL INFORMATION
DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA
<TABLE>
<CAPTION>
Nine Months
Ended
September 30, Year ended December 31,
---------------- -----------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------ ------ ------ ------ ------ ------ ------
(UNAUDITED) (AUDITED) (AUDITED) (AUDITED) (AUDITED) (AUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED FINANCIAL DATA
Total interest revenue ........... $ 7,788 $ 7,328 $ 9,937 $ 8,379 $ 7,442 $ 7,281 $ 7,786
Total noninterest revenue ........ 3,832 2,871 3,901 3,536 4,499 2,950 2,528
Total revenues ................... 11,620 10,199 13,838 11,915 11,941 10,231 10,314
Net interest revenue ............. 1,218 1,515 2,003 1,981 1,772 1,708 1,484
Provision for credit losses ...... -- -- -- -- -- 55 40
Total operating expenses ......... 3,326 3,008 3,998 3,692 3,580 2,854 2,487
Net income ....................... 1,155 930 1,296 1,215 1,586(a) 1,582(b) 1,146(c)
At period-end:
Total assets .................... 211,648 178,331 184,879 154,917 133,888 103,197 103,468
Long-term debt(d) ............... 11,916 9,450 9,327 6,802 5,276 5,443 5,395
Stockholders' equity ............ 11,078 10,113 10,451 9,568 9,859 7,308 6,068
Common stockholders' equity ..... 10,384 9,619 9,957 9,074 9,365 6,814 5,574
Per common share:
Net income(e) ................... $ 5.60 $ 4.62 $ 6.42 $ 6.02 $ 7.80(a) $ 7.95(b) $ 5.80(c)
Book value ...................... 50.71(f) 46.73(g) 47.25(h) 35.56 29.41
Dividends declared .............. 2.43 2.25 3.06 2.79 2.48 2.23 1/2 2.03
EARNINGS RATIOS
Net income as % of:
Average total assets ............ 0.55% 0.53% 0.73%(f) 0.70%(g) 1.08%(h)(i) 1.32%(j) 1.05%(k)
Average stockholders' equity .... 10.6 9.5 13.2(f) 12.5(g) 19.8(h)(i) 22.5(j) 20.4(k)
Average common stockholders'
equity ....................... 11.3(m) 10.0%(m) 13.6(f) 12.9(g) 20.9(h)(i) 23.9(j) 21.9(k)
DIVIDEND PAYOUT RATIO
Dividends declared per common
share as % of net income per
common share .................... 43.4% 48.7% 47.7% 46.3% 31.8%(i) 28.1%(j) 35.0%(k)
CAPITAL RATIOS
Average stockholders' equity as % of
average total assets ............. 5.2% 5.6% 5.5%(f) 5.7%(g) 5.5%(h) 5.8% 5.2%
Common stockholders' equity as % of:
Average total assets ............. 5.0 5.5 5.6(f) 5.3(g) 6.4(h) 5.7 5.1
Total year-end assets ............ 4.9 5.4 5.4(f) 5.9(g) 7.0(h) 6.6 5.4
Total stockholders' equity as % of:
Average total assets ............. 5.3 5.8 5.9(f) 5.5(g) 6.7(h) 6.1 5.6
Total year-end assets ............ 5.2 5.7 5.7(f) 6.2(g) 7.4(h) 7.1 5.9
Tier 1 risk-based capital ratio(l) . 8.1 8.5 8.8 9.6 9.3 8.9 6.9
Total risk-based capital ratio(l) .. 11.7 12.5 13.0 14.2 13.0 13.0 10.7
Leverage ratio(l) .................. 6.2 6.3 6.1 6.5 7.3 7.1 5.8
OTHER SELECTED DATA
Common shares outstanding at period-
end (in thousands) ............... 185,917 187,570 187,116 187,701 193,087 191,610 189,529
Total employees at period-end .... 15,188 16,394 15,613 17,055 15,193 14,368 13,323
</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-17
<PAGE> 22
(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 share) related to
the extraordinary gain on early retirement of debt.
(d) Includes $3,590 million, $3,197 million, $2,459 million, $2,300 million
and $2,080 million of long-term debt qualifying as risk-based capital
in 1995, 1994, 1993, 1992 and 1991 respectively. Also incudes $3,740
million and $3,422 million for the periods ended September 30, 1996 and
1995 respectively.
(e) Earnings per share amounts for 1994 and 1993 represent both primary and
fully diluted earnings per share; earnings per share amounts for 1995,
1992 and 1991 represent primary earnings per share. For the period
ended September 30, 1996 fully diluted earnings per share were $5.57.
For 1995 fully diluted earnings per share were $6.36. For the period
ended September 30, 1995 fully diluted earnings per share were $4.57.
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.
(f) 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;
net income would have been 0.73% of average total assets, 13.78% of
average stockholders' equity, and 14.3% of average common stockholders'
equity; average stockholders' equity would have been 5.3% of average
total assets; common stockholders' equity would have been 5.29% of
average total assets and 5.11% of total year-end assets; and total
stockholders' equity would have been 5.57% of average total assets and
5.37% of total year-end assets.
(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) 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.
(m) Excluding the effect of SFAS No. 115, the annualized rate of return on
average common stockholders' equity would have been 15.5% and 13.8% for
the nine months ended September 30, 1996 and 1995, respectively.
S-18
<PAGE> 23
CAPITALIZATION OF J.P. MORGAN & CO. INCORPORATED
The consolidated capitalization of the Company and its consolidated
subsidiaries at September 30, 1996, and as adjusted for the issuance of the
Company-Obligated Mandatorily Redeemable Preferred Securities of Subsidiary
Grantor Trusts Holding Solely Junior Subordinated Debentures of the Company,
follows:
<TABLE>
<CAPTION>
(US$ IN MILLIONS)
----------------------------
(UNAUDITED)
OUTSTANDING AS ADJUSTED
----------- -----------
<S> <C> <C>
Long-term debt qualifying as risk-based capital:
J.P. Morgan (parent)
Zero-coupon subordinated notes due 1998 ........................ $ 352 $ 352
4 3/4% convertible debentures due 1998 ......................... 2 2
7 5/8% subordinated notes due 1998-2004 ........................ 747 747
Floating-rate subordinated notes due 2000-2005 ................. 940 940
5 3/4%-7 1/4% subordinated notes due 2002-2011 ................. 824 824
8% subordinated Italian lire notes due 2003(1) ................. 85 85
6 1/4%-8 1/2% subordinated notes due 2003-2010 ................. 749 749
6 7/8% subordinated Canadian dollar notes due
2004(1) ...................................................... 185 185
4.78% subordinated Japanese yen loan due
2005(1) ...................................................... 90 90
7.69% Medium-Term notes due 2011 ............................... 75 75
Floating-rate, Medium-Term notes due 2026 ...................... 5 5
Morgan Guaranty
7 3/8% subordinated notes due 2002 ............................. 199 199
------ -----
4,253 4,253
Less: amortization for risk-based capital
purposes ..................................................... 513 513
------ -----
Total long-term debt qualifying as risk-based
capital ...................................................... 3,740 3,740
------ -----
Long-term debt not qualifying as risk-based capital:
J.P. Morgan (parent)
6 1/2%-8% notes due 1997 ....................................... 801 801
14 1/2% South African rand notes due 1997(1) ................... 55 55
Floating-rate notes due 1997 ................................... 500 500
Floating-rate Medium-Term notes due 1997-2006 .................. 370 370
4 5/8%-7 1/4% Deutsche mark notes due 1998-2000(1) ............. 366 366
4 1/2% Mandatorily Exchangeable notes due 1998 ................. 13 13
6%-6.36% Medium-Term notes due 1998-2001 ....................... 81 81
3 3/4%-5 1/2% Swiss franc notes due 1999-2003(1) ............... 569 569
6% Netherlands guilder notes due 2000(1) ....................... 147 147
8.95% Italian lire notes due 2001(1) ........................... 167 167
6 5/8% French franc notes due 2008(1) .......................... 185 185
7.7% notes, Series B-E due 2008-2009 ........................... 425 425
7 1/2% convertible mortgage loan due 2018 ...................... 406 406
Morgan Guaranty
Zero-coupon notes due 1996-1997 ................................ 6 6
Zero-coupon notes due 1996-1997 ................................ 15 15
7%-8.11% notes due 1996-1998 ................................... 422 422
Floating-rate Deutsche mark notes issued by
J.P. Morgan Holding Deutschland GmbH due
1996-1997(1)(2) .............................................. 7 7
</TABLE>
S-19
<PAGE> 24
<TABLE>
<CAPTION>
(US$ IN MILLIONS)
-----------------
(UNAUDITED)
OUTSTANDING AS ADJUSTED
----------- -----------
<S> <C> <C>
11 3/8% Italian lire notes due 1997(1) ...................... 115 115
Floating-rate Portuguese escudo notes due 1998-
2006(1) ................................................... 148 148
Floating-rate notes due 1998 ................................ 800 800
Floating-rate notes due 1998-2011 ........................... 703 703
5.78%-10% notes due 1999-2004 ............................... 927 927
6.06% notes due 2001 ........................................ 40 40
8.0% Australian dollar notes due 2001(1) .................... 106 106
British pound financing obligation(1) ....................... 289 289
-------- --------
7,663 7,663
Add: amortization for risk-based capital
purposes .................................................. 513 513
-------- --------
Total long-term debt not qualifying as risk-
based capital ............................................. 8,176 8,176
-------- --------
Total long-term debt(3) ................................... 11,916 11,916
-------- --------
Company-Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary Grantor Trusts Holding
Solely Junior Subordinated Debentures of the Company (4) ..... --
Stockholders' equity: -------- --------
Preferred stock (authorized: 10,400,000 shares;
issued and outstanding: 2,444,300 shares of
adjustable rate cumulative preferred stock;
250,000 shares of variable cumulative preferred
stock; 400,000 shares of fixed cumulative
preferred stock) ............................................ 694 694
Common stock, $2.50 par value (authorized:
500,000,000 shares; issued: 200,684,623
shares) ..................................................... 502 502
Capital surplus ................................................ 1,442 1,442
Retained earnings .............................................. 8,392 8,392
Net unrealized gains on investment securities,
net of taxes ................................................ 317 317
Other .......................................................... 754 754
Less: Treasury stock (14,767,312 shares) at
cost ...................................................... (1,023) (1,023)
-------- --------
Total stockholders' equity ................................ 11,078 11,078
-------- --------
Total long-term debt, Company-Obligated Manditorily
Redeemable Preferred Securities of Subsidiary
Grantor Trusts Holding Solely Junior Subordinated
Debentures of the Company and stockholders' equity .. $22,994
======== ========
</TABLE>
- ---------------
Notes:
(1) The following exchange rates were utilized to convert non-U.S. dollar
notes outstanding at September 30, 1996:
<TABLE>
<S> <C> <C> <C>
British pound..................... 0.639 Italian lire.................... 1,526.33
Canadian dollar................... 1.362 Japanese yen.................... 111.00
Swiss franc....................... 1.254 Portuguese escudo .............. 155.20
Netherlands guilder............... 1.712 South African rand.............. 4.535
Deutsche mark..................... 1.527 Australian dollar............... 1.280
French Franc.................... 5.171
</TABLE>
(2) Payment of principal and interest unconditionally guaranteed by J.P.
Morgan & Co. Incorporated.
(3) The capitalization table does not include significant amounts of
deposit liabilities, including deposit notes, and short-term
obligations incurred by J.P. Morgan & Co. Incorporated and its
consolidated subsidiaries in
S-20
<PAGE> 25
the ordinary course of business, including federal funds purchased,
securities sold under repurchase agreements and commercial paper.
(4) The assets of the Subsidiary Grantor Trust consist solely of $
aggregate principal amount of the % Junior Subordinated Debentures
due of the Company.
Events subsequent to September 30, 1996:
New Issues:
$2 billion Floating-rate notes due 1997,
$300 million 6% notes due 1998, $150 million Floating-rate notes due 1998,
$197 million Italian lire Floating-rate notes due 1998, $315 million British
pound 7.75% notes due 2003, $13.5 million Floating-rate notes due 2006, $5
million Floating-rate Subordinated Medium-Term notes due 2026
Maturities:
$20 million 7.137% notes due 1998
Except as noted above there has been no material change to the consolidation
capitalization of J.P. Morgan and its consolidated subsidiaries, as adjusted,
since September 30, 1996
JPM CAPITAL TRUST I
JPM Capital Trust I is a statutory business trust formed on
October 29, 1996, under the Delaware Business Trust Act (the "Business
Trust Act") pursuant to a declaration of trust among the Trustees and
the Company and the filing of a certificate of trust with the Secretary
of State of the State of Delaware. Such declaration will be amended and
restated in its entirety (as so amended and restated, the
"Declaration") substantially in the form filed as an exhibit to the
Registration Statement of which this Prospectus Supplement and the
accompanying Prospectus form a part, as of the date the Preferred
Securities are initially issued. The Declaration is qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
Upon issuance of the Preferred Securities, the holders thereof will own
all the issued and outstanding Preferred Securities. The Company will
acquire Common Securities in an amount equal to at least 3% of the
total capital of the Trust and will own, directly or indirectly, all
the issued and outstanding Common Securities. The Trust exists for the
purpose of (a) issuing its Trust Securities for cash and investing the
gross proceeds thereof in an equivalent amount of Junior Subordinated
Debentures and (b) engaging in such other activities as are necessary,
convenient or incidental thereto. The rights of the holders of the
Trust Securities, including economic rights, rights to information and
voting rights, are as set forth in the Declaration, the Business Trust
Act and the Trust Indenture Act. The Declaration does not permit the
incurrence by the Trust of any indebtedness for borrowed money or the
making of any investment other than in the Junior Subordinated
Debentures. In the Declaration, the Company has agreed to pay for all
debts and obligations (other than with respect to the Trust Securities)
and all costs and expenses of the Trust, including the fees and
expenses of the Trustees and any taxes and all costs and expenses with
respect thereto, to which the Trust may become subject, except for
United States withholding taxes.
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ACCOUNTING TREATMENT
The financial statements of the Trust will be consolidated with the
Company's financial statements, with the Preferred Securities shown as
"Company-Obligated Mandatorily Redeemable Preferred Securities of Subsidiary
Grantor Trusts Holding Solely Junior Subordinated Debentures of the Company".
The assets of the Grantor Trust consist solely of $ aggregate principal
amount of the % Junior Subordinated Debentures due of the Company.
The Company has agreed that future financial reports of the Company
will: (i) present the Preferred Securities issued by other JPM Trusts on the
Company's balance sheet as a separate line item entitled "Company -- Obligated
Mandatorily Redeemable Preferred Securities of Subsidiary Grantor Trusts
Holding Solely Junior Subordinated Debentures of the Company"; (ii) include in
a footnote to the financial statements disclosure that the sole assets of the
trusts are the Junior Subordinated Debentures (specifying as to each trust the
principal amount, interest rate and maturity date of Junior Subordinated
Debentures held) and whether Staff Accounting Bulletin 53 treatment is sought;
(iii) include, in an audited footnote to the financial statements, disclosure
that (a) the JPM Trusts are wholly owned, (b) the sole assets of the JPM
Trusts are the Junior Subordinated Debentures (specifying as to each trust the
principal amount,interest rate and maturity date of the Junior Subordinated
Debentures held), and (c) the obligations of the Company under the documents,
in the aggregate, constitute a full and unconditional guarantee by the Company
of the JPM Trusts' obligations under the Preferred Securities issued by each
JPM Trust.
USE OF PROCEEDS
The Trust will use the proceeds from the sale of the Preferred
Securities to purchase the Junior Subordinated Debentures from the Company. The
net proceeds from the sale of the Junior Subordinated Debentures will be used by
the Company for general corporate purposes, including investment in equity and
debt securities and interest-bearing deposits of subsidiaries, the repurchase of
issued and outstanding preferred and/or common shares of the Company and other
general corporate purposes as may be determined by management.
The Company is required by the Federal Reserve to maintain certain
levels of capital for bank regulatory purposes. On October 21, 1996, the
Federal Reserve announced that cumulative preferred securities having the
characteristics of the Preferred Securities could be included as Tier 1 capital
for bank holding companies. Such Tier 1 capital treatment, together with the
Company's ability to deduct, for income tax purposes, interest payable on the
Junior Subordinated Debentures, will provide the Company with a more
cost-effective means of obtaining capital for regulatory purposes than if the
Company were to issue preferred stock.
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration which is qualified under the Trust Indenture Act. The Property
Trustee, First Trust of New York, National Association, but not the other
Trustees of the Trust, will act as the indenture trustee for purposes of the
Trust Indenture Act. The terms of the Preferred Securities and the Declaration
include those stated in the Declaration and those made part of the Declaration
by the Trust Indenture Act and the Business Trust Act. The following summarizes
the material terms and provisions of the Preferred Securities and is qualified
in its entirety by reference to, the Declaration, which has been filed as an
exhibit to the Registration Statement of which this Prospectus Supplement forms
a part, the Business Trust Act and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Trust to issue the Preferred Securities,
which represent preferred undivided beneficial interests in the assets of the
Trust, and the Common Securities, which represent common undivided beneficial
interests in the assets of the Trust. All the Common Securities will be owned,
directly or indirectly, by the
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Company. The Common Securities and the Preferred Securities rank pari passu with
each other and will have equivalent terms except that (i) if an Event of Default
under the Declaration occurs and is continuing, the holders of Preferred
Securities will have a priority over holders of the Common Securities with
respect to distributions and payments upon liquidation, redemption or otherwise
and (ii) holders of Common Securities have the exclusive right (subject to the
terms of the Declaration) to appoint, remove or replace Trustees and to increase
or decrease the number of Trustees. The Declaration does not permit the issuance
by the Trust of any securities or other evidences of beneficial ownership of, or
beneficial interests in, the Trust other than the Preferred Securities and the
Common Securities, and does not permit the incurrence of any indebtedness for
borrowed money by the Trust or the making of any investment other than in the
Junior Subordinated Debentures. Pursuant to the Declaration, the Property
Trustee will have legal title to, and will hold, the Junior Subordinated
Debentures as trust assets for the benefit of the holders of the Preferred
Securities and the Common Securities. The payment of distributions out of moneys
held by the Property Trustee and payments on redemption of the Preferred
Securities or liquidation of the Trust are guaranteed by the Company on a
subordinated basis as and to the extent described under "Description of the
Preferred Securities Guarantees" in the accompanying Prospectus. The Property
Trustee will hold the Preferred Securities Guarantee for the benefit of holders
of the Preferred Securities. The Preferred Securities Guarantee, when taken
together with the Company's obligations under the Junior Subordinated Debentures
and the Indenture and its obligations under the Declaration, provides a full and
unconditional guarantee from the time of issuance of the Preferred Securities of
amounts due on the Preferred Securities. The Preferred Securities Guarantee
itself, however, covers distributions and other payments on the Preferred
Securities only if and to the extent that the Company has made a payment to the
Property Trustee of interest or principal on the Junior Subordinated Debentures
deposited in the Trust as trust assets.
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per
annum of % of the stated liquidation amount of $ per Preferred
Security. Distributions in arrears for more than one quarter will bear interest
thereon at the rate per annum of % (to the extent permitted by law),
compounded quarterly. The term "distributions" as used herein includes any such
interest payable unless otherwise stated. The amount of distributions payable
for any period will be
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computed on the basis of a 360-day year of twelve 30-day months.
Distributions on the Preferred Securities will be cumulative, will
accrue from the original date of issuance and, except as otherwise described
below, will be payable quarterly in arrears on the last day of March, June,
September and December of each year, commencing on
, 1997, but only if, and to the extent that, interest payments
are made in respect of Junior Subordinated Debentures held by the Property
Trustee.
So long as the Company shall not be in default in the payment of
interest on the Junior Subordinated Debentures, the Company has the right under
the Indenture to defer payments of interest on the Junior Subordinated
Debentures by extending the interest payment period from time to time on the
Junior Subordinated Debentures for a period not exceeding 20 consecutive
quarterly interest periods and, as a consequence, the Trust would defer
quarterly distributions on the Preferred Securities (though such distributions
would continue to accrue with interest thereon at the rate of % per annum,
compounded quarterly) during any such Deferral Period. If the Company exercises
the right to extend an interest payment period, the Company may not declare or
pay dividends on, or redeem, purchase, acquire or make a distribution or
liquidation payment with respect to, any of its common stock or preferred stock
during such Deferral Period or make any guarantee payments with respect thereto;
provided, however, that the foregoing restrictions shall not apply to (i)
dividends, redemptions, purchases, acquisitions, distributions or payments made
by the Company by way of issuance of shares of its capital stock , (ii) payments
of accrued dividends by the Company upon the redemption, exchange or conversion
of any preferred stock of the Company as may be outstanding from time to time in
accordance with the terms of such preferred stock, (iii) cash payments made by
the Company in lieu of delivering fractional shares upon the redemption,
exchange or conversion of any preferred stock of the Company as may be
outstanding from time to time in accordance with the terms of such preferred
stock, (iv) repurchases, redemptions or other acquisitions of shares of capital
stock of the Company in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of employees, officers,
directors or consultants, or (v) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the
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issuance of stock under any such plan in the future, or the redemption or
repurchase of such rights pursuant thereto. Prior to the termination of any such
Deferral Period, the Company may further extend such Deferral Period; provided
that such Deferral Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarterly interest periods and may not
extend beyond the maturity of the Junior Subordinated Debentures. Upon the
termination of any Deferral Period and the payment of all amounts then due, the
Company may commence a new Deferral Period, subject to the above requirements.
The Company may also prepay at any time all or any portion of the interest
accrued during a Deferral Period. Consequently, there could be multiple Deferral
Periods of varying lengths throughout the term of the Junior Subordinated
Debentures, each not to exceed 20 consecutive quarters or to cause any extension
beyond the maturity of the Junior Subordinated Debentures. See "Risk
Factors--Option to Extend Interest Payment Period; Tax Impact of Extension;"
"Description of the Junior Subordinated Debentures--Interest" and "--Option to
Extend Interest Payment Period." Subject to prepayments as described above,
payments of accrued distributions will be payable to holders of Preferred
Securities as they appear on the books and records of the Trust on the first
record date after the end of a Deferral Period.
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Junior
Subordinated Debentures.
Distributions on the Preferred Securities must be paid on the dates
payable to the extent that the Property Trustee has cash on hand in the Property
Account to permit such payment. The funds available for distribution to the
holders of the Preferred Securities will be limited to payments received by the
Property Trustee in respect of the Junior Subordinated Debentures that are
deposited in the Trust as trust assets. See "Description of the Junior
Subordinated Debentures." If the Company does not make interest payments on the
Junior Subordinated Debentures, the Property Trustee will not make distributions
on the Preferred Securities. Under the Declaration, if and to the extent the
Company does make interest payments on the Junior Subordinated Debentures
deposited in the Trust as trust assets, the Property Trustee is obligated to
make distributions on the Trust Securities on a Pro Rata Basis. The payment of
distributions on the Preferred Securities is guaranteed by the Company on a
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subordinated basis as and to the extent set forth under "Description of the
Preferred Securities Guarantees" in the accompanying Prospectus. The Preferred
Securities Guarantee, when taken together with the Company's obligations under
the Junior Subordinated Debentures and the Indenture and its obligations under
the Declaration, provides a full and unconditional guarantee from the time of
issuance of the Preferred Securities of amounts due on the Preferred Securities.
The Preferred Securities Guarantee itself, however covers distributions and
other payments on the Preferred Securities only if and to the extent that the
Company has made a payment to the Property Trustee of interest or principal on
the Junior Subordinated Debentures deposited in the Trust as trust assets.
Distributions on the Preferred Securities will be made to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. As long as the Preferred Securities remain in book-entry form, the
relevant record dates will be one Business Day (as defined herein) prior to the
relevant distribution payment date. Distributions payable on any Preferred
Securities that are not punctually paid on any distribution payment date as a
result of the Company having failed to make the corresponding interest payment
on the Junior Subordinated Debentures will forthwith cease to be payable to the
person in whose name such Preferred Security is registered on the relevant
record date, and such defaulted distribution will instead be payable to the
person in whose name such Preferred Security is registered on the special record
date established by the Regular Trustees, which record date shall correspond to
the special record date or other specified date determined in accordance with
the Indenture; provided, however, that distributions shall not be considered
payable on any distribution payment date falling within a Deferral Period unless
the Company has elected to make a full or partial payment of interest accrued on
the Junior Subordinated Debentures on such distribution payment date.
Distributions on the Preferred Securities will be paid through the Property
Trustee who will hold amounts received in respect of the Junior Subordinated
Debentures in the Property Account for the benefit of the holders of the
Preferred Securities and the Common Securities. Subject to any applicable laws
and regulations and the provisions of the Declaration, each such payment will be
made as described under "Book-Entry Only Issuance--The Depository Trust Company"
below. In the event that the Preferred Securities do not continue to remain in
book-entry form, the Regular Trustees shall have the right to select relevant
record dates which shall be more than one Business Day prior to the relevant
payment dates. The Declaration provides that the payment dates or record dates
for the Preferred Securities
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<PAGE> 31
shall be the same as the payment dates and record dates for the Junior
Subordinated Debentures. All distributions paid with respect to the Trust
Securities shall be paid on a Pro Rata Basis to the holders thereof entitled
thereto. If any date on which distributions are to be made on the Preferred
Securities is not a Business Day, then payment of the distribution to be made on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except that,
if such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date. "Business Day" shall mean any day
other than Saturday, Sunday or any other day on which banking institutions in
the City of New York in the State of New York are permitted or required by any
applicable law to close.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
If, at any time, a Tax Event or an Investment Company Event (each as
hereinafter defined, and each, along with a Capital Treatment Event, a "Special
Event") shall occur and be continuing, the Trust shall, unless the Junior
Subordinated Debentures are redeemed in the limited circumstances described
below and subject to the Company having received prior approval of the Federal
Reserve for such dissolution if then required under applicable capital
guidelines or policies of the Federal Reserve, be dissolved with the result
that, after satisfaction of liabilities to creditors of the Trust, Junior
Subordinated Debentures with an aggregate principal amount equal to the
aggregate stated liquidation amount of the Preferred Securities and the Common
Securities would be distributed on a Pro Rata Basis to the holders of the
Preferred Securities and the Common Securities in liquidation of such holders'
interests in the Trust, within 90 days following the occurrence of such Special
Event; provided, however, that in the case of the occurrence of a Tax Event, as
a condition of such dissolution and distribution, the Regular Trustees shall
have received an opinion of nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may rely
on any then applicable published revenue rulings of the Internal Revenue
Service, to the effect that the holders of the Preferred Securities will not
recognize any gain or loss for United States Federal income tax purposes as a
result of such dissolution and distribution of Junior Subordinated
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<PAGE> 32
Debentures; and, provided further, that, if at the time there is available to
the Trust the opportunity to eliminate, within such 90 day period, the Special
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure, which has no
adverse effect on the Trust or the Company or the holders of the Preferred
Securities, the Trust will pursue such measure in lieu of dissolution. The
Company may also elect, in its sole discretion, to shorten the maturity of the
Junior Subordinated Debentures as described under "Description of the Junior
Subordinated Debentures--General" in lieu of dissolving the Trust, if doing so
would eliminate the Tax Event. Furthermore, if in the case of the occurrence of
a Tax Event, (i) the Regular Trustees have received an opinion (a "Redemption
Tax Opinion") of nationally recognized independent tax counsel experienced in
such matters that, as a result of a Tax Event, there is more than an
insubstantial risk that the Company would be precluded from deducting the
interest on the Junior Subordinated Debentures for United States Federal income
tax purposes even if the Junior Subordinated Debentures were distributed to the
holders of Trust Securities in liquidation of such holders' interests in the
Trust as described above or (ii) the Regular Trustees shall have been informed
by such tax counsel that a No Recognition Opinion cannot be delivered to the
Trust, the Company shall have the right, subject to the Company having received
prior approval of the Federal Reserve to do so if then required under applicable
capital guidelines or policies of the Federal Reserve, upon not less than 30 nor
more than 60 days notice, to redeem the Junior Subordinated Debentures in whole
or in part for cash within 90 days following the occurrence of such Tax Event,
and promptly following such redemption Preferred Securities and Common
Securities with an aggregate liquidation amount equal to the aggregate principal
amount of the Junior Subordinated Debentures so redeemed will be redeemed by the
Trust at the Redemption Price on a Pro Rata Basis; provided, however, that if at
the time there is available to the Company or the Regular Trustees (as defined
in the accompanying Prospectus) the opportunity to eliminate, within such 90 day
period, the Tax Event by taking some ministerial action, such as filing a form
or making an election, or pursuing some other similar reasonable measure, which
has no adverse effect on the Trust, the Company or the holders of the Preferred
Securities, the Company will pursue such measure in lieu of redemption and
provided further that the foregoing provisions shall not require the Company to
shorten the
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maturity of the Junior Subordinated Debentures and the Company shall have no
right to redeem the Junior Subordinated Debentures while the Regular Trustees on
behalf of the Trust are pursuing any such ministerial action. The Common
Securities will be redeemed on a Pro Rata Basis with the Preferred Securities,
except that if an Event of Default under the Declaration has occurred and is
continuing, the Preferred Securities will have a priority over the Common
Securities with respect to payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have obtained an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect that on or after the date of
this Prospectus Supplement as a result of (a) any amendment to, or change in,
the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the theretofore generally accepted position or (d) any action taken
by any governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or effective or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after the date of this Prospectus Supplement, there is more than an
insubstantial risk that (assuming in each case that the Stated Maturity will not
be shortened) (i) the Trust is, or will be within 90 days of the date thereof,
subject to United States Federal income tax with respect to income accrued or
received on the Junior Subordinated Debentures, (ii) the Trust is, or will be
within 90 days of the date thereof, subject to more than a de minimis amount of
other taxes, duties or other governmental charges or (iii) interest payable by
the Company to the Trust on the Junior Subordinated Debentures is not, or within
90 days of the date thereof will not be, deductible by the Company for United
States Federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced in
practice under the Investment Company Act of 1940, as amended (the "1940
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Act"), that as a result of the occurrence of a change in law or regulation or a
change in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a "Change in 1940 Act
Law"), there is more than an insubstantial risk that the Trust is or will be
considered an "investment company" which is required to be registered under the
1940 Act, which Change in 1940 Act Law becomes effective on or after the date of
this Prospectus Supplement.
"Capital Treatment Event" means that the Company has reasonably
determined that, as the result of the occurrence of a change in law or
regulation or a change in the interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority,
there is more than an insubstantial risk that the Company will not be able to
treat the minority interest in the Trust as "Tier 1 capital" (or the equivalent)
for purposes of the capital adequacy guidelines of the Federal Reserve, as then
in effect and applicable to the Company.
On the date fixed for any distribution of Junior Subordinated
Debentures, upon dissolution of the Trust, (i) the Preferred Securities and the
Common Securities will no longer be deemed to be outstanding, (ii) the
depositary or its nominee, as the record holder of the Preferred Securities,
will receive a registered global certificate or certificates representing the
Junior Subordinated Debentures to be delivered upon such distribution and (iii)
any certificates representing Preferred Securities not held by the depositary or
its nominee will be deemed to represent Junior Subordinated Debentures having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the distribution rate of, and accrued and
unpaid interest equal to accrued and unpaid distributions on, such Preferred
Securities, until such certificates are presented to the Company or its agent
for transfer or reissuance.
There can be no assurance as to the market price for the Junior
Subordinated Debentures which may be distributed in exchange for Preferred
Securities if a dissolution and liquidation of the Trust were to occur.
Accordingly, the Junior Subordinated Debentures which a holder of Preferred
Securities may subsequently receive upon the dissolution of the Trust may trade
at a discount to the price of the Preferred Securities exchanged. If the Junior
Subordinated Debentures are distributed to the holders of Preferred
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Securities upon the dissolution of the Trust, the Company will use its best
efforts to list the Junior Subordinated Debentures on the NYSE or on such other
exchange on which the Preferred Securities are then listed.
MANDATORY REDEMPTION
Upon the repayment of the Junior Subordinated Debentures, whether at
maturity, upon redemption or otherwise, the proceeds from such repayment will be
promptly applied to redeem Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the Junior Subordinated Debentures so
repaid, upon not less than 30 nor more than 60 days' notice, at the Redemption
Price. The Common Securities will be entitled to be redeemed on a Pro Rata Basis
with the Preferred Securities, except that if an Event of Default under the
Declaration has occurred and is continuing, the Preferred Securities will have a
priority over the Common Securities with respect to payment of the Redemption
Price. Subject to the foregoing, if fewer than all outstanding Preferred
Securities and Common Securities are to be redeemed, the Preferred Securities
and Common Securities will be redeemed on a Pro Rata Basis. In the event fewer
than all outstanding Preferred Securities are to be redeemed, Preferred
Securities registered in the name of and held by DTC or its nominee will be
redeemed as described under "Description of Preferred
Securities--Book-Entry-Only Issuance; The Depository Trust Company" below.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Preferred
Securities (which notice will be irrevocable) then, by 12:00 noon, New York City
time, on the redemption date and provided that the Company has paid to the
Property Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Junior Subordinated Debentures, the Trust will
irrevocably deposit with the Depositary funds sufficient to pay the applicable
Redemption Price and will give the Depositary irrevocable instructions and
authority to pay the Redemption Price to the holders of
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<PAGE> 36
the Preferred Securities. See "Book-Entry Only Issuance-The Depository Trust
Company." If notice of redemption shall have been given and funds deposited as
required, then, immediately prior to the close of business on the redemption
date, distributions will cease to accrue on the Preferred Securities called for
redemption, such Preferred Securities shall no longer be deemed to be
outstanding and all rights of holders of such Preferred Securities so called for
redemption will cease, except the right of the holders of such Preferred
Securities to receive the Redemption Price, but without interest on such
Redemption Price. Neither the Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Preferred Securities
which have been so called for redemption. If any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay)
except that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date fixed for redemption. If the
Company fails to repay Junior Subordinated Debentures on maturity or on the date
fixed for redemption or if payment of the Redemption Price in respect of
Preferred Securities is improperly withheld or refused and not paid by the
Property Trustee or by the Company pursuant to the Preferred Securities
Guarantee described under "Description of the Preferred Securities Guarantees"
in the accompanying Prospectus, distributions on the Preferred Securities will
continue to accrue, from the original redemption date of the Preferred
Securities to the date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
Redemption Price.
In the event that fewer than all the outstanding Preferred Securities
are to be redeemed, the Preferred Securities will be redeemed pro rata as
described below under "Book Entry Only Issuance--The Depository Trust Company."
If a partial redemption of the Preferred Securities would result in the
delisting of the Preferred Securities by any national securities exchange or
other organization on which the Preferred Securities are then listed, the
Company pursuant to the Indenture will only redeem Junior
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Subordinated Debentures in whole and, as a result, the Trust may only redeem the
Preferred Securities in whole.
Subject to the foregoing and applicable law (including, without
limitation, United States Federal securities laws), the Company or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to the Declaration, the Trust shall dissolve: (i) on
[ ]; (ii) when all the Trust Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been paid
to the holders of Trust Securities in accordance with the terms of the Trust
Securities; or (iii) when all the Junior Subordinated Debentures shall have been
distributed to the holders of Trust Securities in exchange for all the Trust
Securities in accordance with the terms of the Trust Securities.
In the event of any voluntary or involuntary dissolution of the Trust,
the holders of the Preferred Securities and Common Securities at the date of
dissolution of the Trust will be entitled to receive on a Pro Rata Basis solely
out of the assets of the Trust, after satisfaction of liabilities to creditors
(to the extent not satisfied by the Company as provided in the Declaration), an
amount equal to the aggregate of the stated liquidation amount of $ per Trust
Security plus accrued and unpaid distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such dissolution, Junior Subordinated Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of such Trust Securities
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid distributions on such Trust Securities shall be distributed on a Pro Rata
Basis to the holders of the Preferred Securities and the Common Securities in
exchange therefor.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Preferred Securities and the Common Securities shall, subject to
the following sentence, be paid on a Pro Rata Basis. The holders of the Common
Securities will be entitled to receive dis-
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tributions upon any such dissolution on a Pro Rata Basis with the holders of the
Preferred Securities, except that if an Event of Default under the Declaration
has occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities with respect to payment of the Liquidation
Distribution.
NO MERGER, CONSOLIDATION OR SALE OF ASSETS OF THE TRUST
The Trust may not merge or consolidate with or into, or be replaced by,
or sell, transfer or lease all or substantially all its properties and assets
to, any corporation or other entity or, except as expressly permitted hereby,
sell or transfer any junior subordinated debentures to any corporation or other
entity.
DECLARATION EVENTS OF DEFAULT
An Indenture Event of Default (as defined in the accompanying
Prospectus) will constitute an event of default under the Declaration with
respect to the Trust Securities (an "Event of Default"); provided that pursuant
to the Declaration, the holder of the Common Securities will be deemed to have
waived any such Event of Default with respect to the Common Securities until all
Events of Default with respect to the Preferred Securities have been cured or
waived. Until all such Events of Default with respect to the Preferred
Securities have been so cured or waived, the Property Trustee will be deemed to
be acting solely on behalf of the holders of the Preferred Securities, and only
the holders of the Preferred Securities will have the right to direct the
Property Trustee with respect to certain matters under the Declaration and
consequently under the Indenture. In the event that any Event of Default with
respect to the Preferred Securities is waived by the holders of the Preferred
Securities as provided in the Declaration, the holders of Common Securities
pursuant to the Declaration have agreed that such waiver also constitutes a
waiver of such Event of Default with respect to the Common Securities for all
purposes under the Declaration without any further act, vote or consent of the
holders of the Common Securities. See "Voting Rights."
Upon the occurrence of an Event of Default, the Property Trustee as the
holder of all the Junior Subordinated Debentures will have the right under the
Indenture to declare the principal of, and interest on, the Junior Subordinated
Debentures to be immediately due and
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payable. In addition, the Property Trustee will have the power to exercise all
rights, powers and privileges under the Indenture. If the Property Trustee fails
to enforce its rights under the Indenture, any holder of Preferred Securities
may, to the extent permitted by applicable law, after a period of 30 days has
elapsed from such holder's written request to the Property Trustee to enforce
such rights, institute a legal proceeding against the Company to enforce the
Property Trustee's rights. Notwithstanding the foregoing, if an Event of Default
has occurred and is continuing and such event is attributable to the failure of
the Company to pay interest or principal on the Junior Subordinated Debentures
on the date such interest or principal is otherwise payable (or in the case of
redemption, the redemption date), then a holder of Preferred Securities may
directly institute suit against the Company for enforcement of payment to such
holder of the principal of or interest on Junior Subordinated Debentures having
a principal amount equal to the aggregate liquidation amount of the Preferred
Securities held by such holder on or after the respective due date specified in
the Junior Subordinated Debentures. The holders of Preferred Securities will not
be able to exercise directly against the Company any other remedy available to
the holders of the Junior Subordinated Debentures unless the Property Trustee
first fails to do so. See "Description of the Junior Subordinated Debentures."
VOTING RIGHTS
Except as provided below, under "Modification and Amendment of the
Declaration" and "Description of the Preferred Securities Guarantees--Amendments
and Assignment" in the accompanying Prospectus and as otherwise required by the
Business Trust Act, the Trust Indenture Act or the Declaration, the holders of
the Preferred Securities will have no voting rights.
Subject to the requirements of the second to last sentence of this
paragraph, the holders of a majority in aggregate liquidation amount of the
Preferred Securities have the right (i) on behalf of all holders of Preferred
Securities, to waive any past default that is waivable under the Declaration and
(ii) to direct the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under the Declaration, including the right
to direct the Property Trustee, as the holder of the Junior Subordinated
Debentures, to (A) direct the time, method and place of conducting any
proceeding for any remedy available to the Indenture Trustee (as defined
herein), or executing any trust or power conferred on the Indenture Trustee with
respect to the Junior Subordinated Debentures, (B) waive any past default that
is waivable under Section [ ] of the Indenture, or (C) exercise any right to
rescind or annul a declaration that the principal of all the Junior Subordinated
Debentures shall be due and payable; provided, however, that where a consent
under the Indenture would require the consent of (a) holders of Junior
Subordinated Debentures representing a specified percentage greater than a
majority in principal amount of the Junior Subordinated Debentures or (b) each
holder of Junior Subordinated Debentures affected thereby, no such consent shall
be given by the Property Trustee without the prior consent of, in the case of
clause (a) above, holders of Preferred Securities representing such specified
percentage of the aggregate liquidation amount of the Preferred Securities or,
in the case of clause (b) above, each holder of Preferred Securities affected
thereby. The Property Trustee shall not revoke any action previously authorized
or approved by a vote of the holders of Preferred Securities.
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The Property Trustee shall notify all holders of record of Preferred Securities
of any notice of default received from the Indenture Trustee with respect to the
Junior Subordinated Debentures. Other than with respect to directing the time,
method and place of conducting any proceeding for any remedy available to the
Property Trustee or the Indenture Trustee as set forth above, the Property
Trustee shall be under no obligation to take any of the foregoing actions at the
direction of the holders of the Preferred Securities unless the Property Trustee
shall have obtained an opinion of nationally recognized independent tax counsel
recognized as expert in such matters to the effect that the Trust will not be
classified for United States Federal income tax purposes as an association
taxable as a corporation or a partnership on account of such action and will be
treated as a grantor trust for United States Federal income tax purposes
following such action. If the Property Trustee fails to enforce its rights under
the Declaration (including, without limitation, its rights, powers and
privileges as a holder of the Junior Subordinated Debentures under the
Indenture), any holder of Preferred Securities may, to the extent permitted by
applicable law, after a period of 30 days has elapsed from such holder's written
request to the Property Trustee to enforce such rights, institute a legal
proceeding directly against the Company to enforce the Property Trustee's rights
under the Declaration, without first instituting a legal proceeding against the
Property Trustee or any other person.
A waiver of an Indenture Event of Default by the Property Trustee at
the direction of holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the Trust
Securities.
In the event the consent of the Property Trustee as the holder of the
Junior Subordinated Debentures is required under the Indenture with respect to
any amendment, modification or termination of the Indenture or the Junior
Subordinated Debentures, the Property Trustee shall request the direction of the
holders of the Trust Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a majority in liquidation amount of the Trust
Securities voting together as a single class; provided, however, that where any
such amendment, modification or termination under the Indenture would require
the consent or vote of (1) holders of Junior Subordinated Debentures repre-
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senting a specified percentage greater than a majority in principal amount of
the Junior Subordinated Debentures or (2) each holder of Junior Subordinated
Debentures, the Property Trustee may only give such consent or vote, in the case
of clause (1), at the direction of the holders of Trust Securities representing
such specified percentage of the aggregate liquidation amount of the Trust
Securities or, in the case of clause (2), as directed by each holder of Trust
Securities; and, provided further, however, that the Property Trustee shall be
under no obligation to take any such action in accordance with the directions of
the holders of the Trust Securities unless the Property Trustee has obtained an
opinion of nationally recognized independent tax counsel recognized as expert in
such matters to the effect that the Trust will not be classified for United
States Federal income tax purposes as an association taxable as a corporation or
a partnership on account of such action and will be treated as a grantor trust
for United States Federal income tax purposes following such action.
Any required approval or direction of holders of Preferred Securities
may be given at a separate meeting of holders of Preferred Securities convened
for such purpose, at a meeting of all the holders of Trust Securities or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such holders is to be taken, to
be mailed to each holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken; (ii) a description of any resolution
proposed for adoption at such meeting on which such holders are entitled to vote
or of such matter upon which written consent is sought; and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the holders of Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or distribute
Junior Subordinated Debentures in accordance with the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities at such time that are owned by the Company or by any entity
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall not be entitled to vote or consent and
shall, for purposes of such vote or consent, be treated as if they were not
outstanding.
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The procedures by which persons owning Preferred Securities registered
in the name of and held by DTC or its nominee may exercise their voting rights
are described under "Description of Preferred Securities--Book-Entry Only
Issuance; The Depository Trust Company" below.
Holders of the Preferred Securities will have no rights to increase or
decrease the number of Trustees or to appoint, remove or replace a Trustee,
which rights are vested exclusively in the holders of the Common Securities.
MODIFICATION AND AMENDMENT OF THE DECLARATION
The Declaration may be modified and amended with the approval of a
majority of the Regular Trustees, provided that, if any proposed modification or
amendment provides for, or the Regular Trustees otherwise propose to effect, (a)
any action that would adversely affect the powers, preferences or special rights
of the Trust Securities, whether by way of amendment to the Declaration or
otherwise, or (b) the dissolution, liquidation, winding-up or termination of the
Trust other than pursuant to the terms of the Declaration, then the holders of
the outstanding Trust Securities as a class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of at least 66 2/3% in liquidation amount of the Trust
Securities, provided that if any amendment or proposal referred to above would
adversely affect only the Preferred Securities or the Common Securities, then
only the affected class will be entitled to vote on such amendment or proposal
and such amendment or proposal shall not be effective except with the approval
of 66 2/3% in liquidation amount of such class of Trust Securities.
Notwithstanding the foregoing, (i) no amendment or modification may be
made to the Declaration unless the Regular Trustees shall have obtained (a)
either a ruling from the Internal Revenue Service or a written unqualified
opinion of nationally recognized independent tax counsel experienced in such
matters to the effect that such amendment will not cause the Trust to be
classified for United States Federal income tax purposes as an association
taxable as a corporation or a partnership and to the effect that the Trust will
continue to be treated as a grantor trust for purposes of United States Federal
income taxation and (b) a written unqualified opinion of nationally recognized
independent counsel experienced in such matters to the effect
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that such amendment will not cause the Trust to be an "investment company" which
is required to be registered under the 1940 Act; (ii) certain specified
provisions of the Declaration may not be amended without the consent of all the
holders of the Trust Securities; (iii) no amendment which adversely affects the
rights, powers and privileges of the Property Trustee or the Delaware Trustee
shall be made without the consent of the Property Trustee or the Delaware
Trustee, as applicable; (iv) Article IV of the Declaration relating to the
obligation of the Company to purchase the Common Securities and to pay certain
obligations and expenses of the Trust as described under "The JPM Trusts" in the
accompanying Prospectus may not be amended without the consent of the Company;
and (v) the rights of holders of Common Securities under Article V of the
Declaration to increase or decrease the number of, and to appoint, replace or
remove, Trustees shall not be amended without the consent of each holder of
Common Securities.
The Declaration further provides that it may be amended without the
consent of the holders of the Trust Securities to (i) cure any ambiguity; (ii)
correct or supplement any provision in the Declaration that may be defective or
inconsistent with any other provision of the Declaration; (iii) to add to the
covenants, restrictions or obligations of the Company; and (iv) to conform to
changes in, or a change in interpretation or application of, certain 1940 Act
requirements by the Securities and Exchange Commission (the "Commission"), which
amendment does not adversely affect the rights, preferences or privileges of the
holders.
BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depositary
for the Preferred Securities. The Preferred Securities will be issued only as
fully registered securities registered in the name of DTC or its nominee. One or
more fully-registered global Preferred Securities certificates (each a
"Preferred Securities Global Certificate"), representing the total aggregate
number of Preferred Securities, will be issued and will be deposited with DTC.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in a global Preferred
Security.
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DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations ("Direct Participants").
DTC is owned by a number of its Direct Participants and by the NYSE, the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Commission.
Upon issuance of a Preferred Securities Global Certificate, DTC will
credit on its book-entry registration and transfer system the number of
Preferred Securities represented by such Preferred Securities Global Certificate
to the accounts of institutions that have accounts with DTC. Ownership of
beneficial interests in a Preferred Securities Global Certificate will be
limited to Participants or persons that may hold interests through Participants.
The ownership interest of each actual purchaser of each Preferred Security
("Beneficial Owner") is in turn to be recorded on the Direct Participants' and
the Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchases, but Beneficial Owners are expected to
receive written confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Direct Participants or the
Indirect Participants through which the Beneficial Owners purchased Preferred
Securities. Transfers of ownership interests in the Preferred Securities are to
be accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners.
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DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers. So long as DTC, or its
nominee, is the owner of a Preferred Securities Global Certificate, DTC or such
nominee, as the case may be, will be considered the sole owner and holder of
record of the Preferred Securities represented by such Preferred Securities
Global Certificate for all purposes.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all the
Preferred Securities are being redeemed, DTC will reduce pro rata (subject to
adjustment to eliminate fractional Preferred Securities) the amount of interest
of each Direct Participant in the Preferred Securities to be redeemed.
Although voting with respect to the Preferred Securities is limited, in
those instances in which a vote is required, neither DTC nor Cede & Co. itself
will consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an omnibus proxy to the Trust as soon as possible
after the record date. The omnibus proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the Preferred
Securities are credited on the record date (identified in a listing attached to
the omnibus proxy).
Distribution payments on the Preferred Securities represented by a
Preferred Securities Global Certificate will be made by the Property Trustee to
DTC. DTC's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payments on such
payment date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices and will be
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the responsibility of such Participants and not of DTC, the Trust or the
Company, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of distributions to DTC is the responsibility of the
Trust, disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Direct Participants and Indirect Participants.
Except as provided herein, a Beneficial Owner in a Preferred Securities
Global Certificate will not be entitled to receive physical delivery of
Preferred Securities. Accordingly, each Beneficial Owner must rely on the
procedures of DTC to exercise any rights under the Preferred Securities.
DTC may discontinue providing its services as securities depositary
with respect to the Preferred Securities at any time by giving reasonable notice
to the Trust and the Property Trustee. Under such circumstances, if a successor
securities depositary is not obtained, Preferred Security certificates will be
required to be printed and delivered. Additionally, the Trust may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor depositary). In that event, certificates for the Preferred Securities
will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Trust and the Company believe to
be reliable, but the Trust and the Company take no responsibility for the
accuracy thereof.
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
In the event the Preferred Securities do not remain in book-entry only
form, the following provisions will apply:
Payment of distributions and payments on redemption of the Preferred
Securities will be payable, the transfer of the Preferred Securities will be
registrable and Preferred Securities will be exchangeable for Preferred
Securities of other denominations of a like aggregate liquidation amount at the
principal corporate trust office of the Property Trustee in The City of New
York; provided that payment of distributions may be made at the option of the
Regular Trustees on behalf of the Trust by check mailed to the address of the
persons entitled thereto and that the payment
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on redemption of any Preferred Security will be made only upon surrender of such
Preferred Security to the Property Trustee.
[ ] or one of its affiliates will act as registrar and
transfer agent for the Preferred Securities. [ ] will also act as
paying agent and, with the consent of the Regular Trustees, may designate
additional paying agents.
Registration of transfers of Preferred Securities will be effected
without charge by or on behalf of the Trust, but upon payment (with the giving
of such indemnity as the Trust or the Company may require) in respect of any tax
or other governmental charges that may be imposed in relation to it.
The Trust will not be required to register or cause to be registered
the transfer of Preferred Securities after such Preferred Securities have been
called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to a default with respect to the Trust
Securities, undertakes to perform only such duties as are specifically set forth
in the Declaration and, after default, shall exercise the same degree of care as
a prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provision, the Property Trustee is under no obligation to
exercise any of the powers vested in it by the Declaration at the request of any
holder of Preferred Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The Property Trustee is not required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties if
the Property Trustee reasonably believes that repayment or adequate indemnity is
not reasonably assured to it.
The Property Trustee is a depositary for funds and performs other
services for, and transacts other banking business with, the Company in the
normal course of business.
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GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the laws of the State of Delaware, without regard
to principles of conflicts of laws.
MISCELLANEOUS
The Regular Trustees are authorized and directed to take such action as
they deem reasonable in order that the Trust will not be deemed to be an
"investment company" required to be registered under the 1940 Act or that the
Trust will not be classified for United States Federal income tax purposes as an
association taxable as a corporation or a partnership and will be treated as a
grantor trust for United States Federal income tax purposes. In this connection,
the Regular Trustees are authorized to take any action, not inconsistent with
applicable law, the certificate of trust of the Trust or the Declaration, that
the Regular Trustees determine in their discretion to be reasonable and
necessary or desirable for such purposes, as long as such action does not
adversely affect the interests of holders of the Trust Securities.
The Company and the Regular Trustees on behalf of the Trust will be
required to provide to the Property Trustee annually a certificate as to whether
or not the Company and the Trust, respectively, is in compliance with all the
conditions and covenants under the Declaration.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Preferred
Securities Guarantee that will be executed and delivered by the Company for the
benefit of the holders from time to time of the Preferred Securities. The
Preferred Securities Guarantee will be qualified under the Trust Indenture Act
and will be held by First Trust of New York, National Association, acting in its
capacity as indenture trustee with respect thereto, for the benefit of holders
of the Preferred Securities of the Trust. The terms of the Preferred Securities
Guarantee will be those set forth in the Preferred Securities Guarantee and
those made part of the Preferred Securities Guarantee by the Trust Indenture
Act. This description summarizes the material terms of the Preferred Securities
Guarantee and is qualified in its entirety by reference to the Preferred
Securities Guarantee, and the Trust Indenture Act. Section references
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used herein are references to the provisions of the Preferred Securities
Guarantee.
General
Pursuant to the Preferred Securities Guarantee, the Company will
irrevocably and unconditionally agree, to the extent set forth therein, to pay
in full, to the holders of the Preferred Securities, the Guarantee Payments (as
defined herein), to the extent not paid by the Trust, regardless of any defense,
right of set-off or counterclaim that the Trust may have or assert. The
following payments or distributions with respect to Preferred Securities to the
extent not paid or made by the Trust (the "Guarantee Payments"), will be subject
to the Preferred Securities Guarantee (without duplication): (i) any accrued and
unpaid distributions on Preferred Securities, and the redemption price,
including all accrued and unpaid distributions to the date of redemption, with
respect to any Preferred Securities called for redemption by the Trust, but if
and only to the extent that in each case the Company has made a payment to the
Property Trustee of interest or principal on the Junior Subordinated Debt
Securities deposited in the Trust as trust assets, and (ii) upon a voluntary or
involuntary liquidation, dissolution, winding-up or termination of the Trust
(other than in connection with the distribution of such Junior Subordinated Debt
Securities to the holders of the Preferred Securities or the redemption of all
the Preferred Securities upon the maturity or redemption of such Junior
Subordinated Debt Securities) the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid distributions on the Preferred Securities to
the date of payment, to the extent the Trust has funds available therefor, or
(b) the amount of assets of the Trust remaining available for distribution to
holders of the Preferred Securities upon liquidation of the Trust. The Company's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Company to the holders of the Preferred Securities or by
causing the Trust to pay such amounts to such holders.
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The Company's obligations under the Declaration, the Preferred
Securities Guarantee, the Junior Subordinated Debt Securities purchased by the
Trust and the Indenture in the aggregate will provide a full and unconditional
guarantee on a subordinated basis by the Company of payments due on the
Preferred Securities. However, the Preferred Securities Guarantee covers
distributions and other payments on the Preferred Securities only if and to
the extent that the Company has made a payment to the Property Trustee of
interest or principal on the Junior Subordinated Debt Securities deposited in
the Trust as trust assets. If the Company does not make interest or principal
payments on the Junior Subordinated Debt Securities deposited in the Trust as
trust assets, the Property Trustee will not make distributions on the
Preferred Securities of the Trust and the Trust will not have funds available
therefor.
Certain Covenants of the Company
In the Preferred Securities Guarantee, the Company will covenant that,
so long as any Preferred Securities remain outstanding, the Company will not
declare or pay any dividends on, or redeem, purchase, acquire or make a
distribution or liquidation payment with respect to, any of its common stock or
preferred stock or make any guarantee payment with respect thereto, if at such
time (i) the Company shall be in default with respect to its Guarantee Payments
or other payment obligations under such Preferred Securities Guarantee, (ii)
there shall have occurred any Declaration Event of Default or (iii) in the event
that Junior Subordinated Debt Securities are issued to the Trust in connection
with the issuance of Trust Securities by the Trust, the Company shall have given
notice of its election to defer payments of interest on such Junior Subordinated
Debt Securities by extending the interest payment period as provided in the
terms of the Junior Subordinated Debt Securities and such period, or any
extension thereof, is continuing; provided, however, that the foregoing
restrictions shall not apply to (i) dividends, redemptions, purchases,
acquisitions, distributions or payments made by the Company by way of issuance
of shares of its capital
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stock, (ii) payments of accrued dividends by the Company upon the redemption,
exchange or conversion of any preferred stock of the Company as may be
outstanding from time to time in accordance with the terms of such preferred
stock, (iii) cash payments made by the Company in lieu of delivering fractional
shares upon the redemption, exchange or conversion of any preferred stock of the
Company as may be outstanding from time to time in accordance with the terms of
such preferred stock, (iv) repurchase, redemptions or other acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
employees, officers, directors or consultants, or (v) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption
or repurchase of such rights pursuant thereto. In addition, so long as any
Preferred Securities remain outstanding, the Company has agreed (i) to remain
the sole direct or indirect owner of all the outstanding Common Securities and
not to cause or permit such Common Securities to be transferred except to the
extent permitted by the Declaration, provided that any permitted successor of
the Company under the Indenture may succeed to the Company's ownership of such
Common Securities, and (ii) to use reasonable efforts to cause the Trust to
continue to be treated as a grantor trust for United States Federal income tax
purposes, except in connection with a distribution of Junior Subordinated Debt
Securities. (Section 6.01)
Amendments and Assignment
Except with respect to any changes that do not adversely affect the
rights of holders of the applicable Preferred Securities (in which case no
consent will be required), the Preferred Securities Guarantee may be amended
only with the prior approval of the holders of not less than 66-2/3% in
liquidation amount of the outstanding Preferred Securities. (Section 9.02) All
guarantees and agreements contained in the Preferred Securities Guarantee shall
bind the successors, assignees, receivers, trustees and representatives of the
Company and shall inure to the benefit of the holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Company that is permitted under the Indenture, the Company
may not assign its obligations under the Preferred Securities Guarantee.
(Section 9.01)
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Termination of the Preferred Securities Guarantee
The Preferred Securities Guarantee will terminate and be of no further
force and effect upon full payment of the redemption price of all Preferred
Securities, or upon distribution of the Junior Subordinated Debt Securities to
the holders of the Preferred Securities in exchange for all the Preferred
Securities, or upon full payment of the amounts payable upon liquidation of the
Trust. Notwithstanding the foregoing, the Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of Preferred Securities must restore payment of any sums paid
under such Preferred Securities or such Preferred Securities Guarantee. (Section
7.01)
Status of the Preferred Securities Guarantee
The Company's obligations under the Preferred Securities Guarantee to
make the Guarantee Payments will constitute an unsecured obligation of the
Company and will rank (i) subordinate and junior in right of payment to all
other indebtedness, liabilities and obligations of the Company and any
guarantees, endorsements or other contingent obligations of the Company in
respect of such indebtedness, liabilities or obligations, including the Junior
Subordinated Debt Securities, except those made pari passu or subordinate by
their terms, and (ii) senior to all capital stock now or hereafter issued by the
Company and to any guarantee now or hereafter entered into by the Company in
respect of any of its capital stock. The Company's obligations under the
Preferred Securities Guarantee will rank pari passu with any other Preferred
Securities Guarantee. (Section 6.02) Because the Company is a holding company,
the Company's obligations under the Preferred Securities Guarantee are also
effectively subordinated to all existing and future liabilities of the Company's
subsidiaries, except to the extent that the Company is a creditor of the
subsidiaries recognized as such. The Declaration provides that each holder of
Preferred Securities, by acceptance thereof, agrees to the subordination
provisions and other terms of the Preferred Securities Guarantee.
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28
The Preferred Securities Guarantee will constitute a guarantee of
payment and not of collection (that is, the guaranteed party may institute a
legal proceeding directly against the Company to enforce its rights under the
Preferred Securities Guarantee without first instituting a legal proceeding
against any other person or entity). The Preferred Securities Guarantee will be
deposited with First Trust of New York, National Association, as indenture
trustee, to be held for the benefit of the holders of the Preferred Securities.
First Trust of New York, National Association shall enforce such Preferred
Securities Guarantee on behalf of the holders of the Preferred Securities. The
holders of not less than a majority in aggregate liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available in respect of the Preferred
Securities Guarantee, including the giving of directions to First Trust of New
York, National Association. If First Trust of New York, National Association
fails to enforce the Preferred Securities Guarantee as above provided, any
holder of Preferred Securities may institute a legal proceeding directly against
the Company to enforce its rights under such Preferred Securities Guarantee,
without first instituting a legal proceeding against the Trust or any other
person or entity.
Miscellaneous
The Company will be required to provide annually to First Trust of New
York, National Association a statement as to the performance by the Company of
certain of its obligations under the Preferred Securities Guarantee and as to
any default in such performance. The Company is required to file annually with
First Trust of New York, National Association an officer's certificate as to the
Company's compliance with all conditions to be complied with by it under the
Preferred Securities Guarantee. (Section 2.04)
First Trust of New York, National Association, prior to the occurrence
of a default, undertakes to perform only such duties as are specifically set
forth in the Preferred Securities Guarantee and, after default with
respect to the Preferred Securities Guarantee, shall exercise the same degree of
care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provision, First Trust of New York, National
Association is under no obligation to exercise any of the powers vested in it by
the Preferred Securities Guarantee at the request of any holder of Preferred
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. (Section 3.02)
Governing Law
The Preferred Securities Guarantee will be governed
by, and construed in accordance with, the laws of the State of New York.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
Set forth below is a description of the Junior Subordinated Debentures
in which the Trust will invest the proceeds from the issuance and sale of the
Trust Securities and which will be deposited in the Trust as trust assets. The
terms of the Junior Subordinated Debentures include those stated in the
Indenture dated as of , 1996, between the Company and First
Trust of New York, National Association, as trustee (the "Indenture Trustee"),
as supplemented by the First Supplemental Indenture dated as of , 1996,
between the Company and the Indenture Trustee (as so supplemented, the
"Indenture"), forms of which have been filed as exhibits to the Registration
Statement of which this Prospectus Supplement forms a part, and those made part
of the Indenture by the Trust Indenture
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Act. This description supplements the description of the general terms and
provisions of the Subordinated Debt Securities set forth in the accompanying
Prospectus under the caption "Description of the Junior Subordinated Debt
Securities." The following description does not purport to be complete and is
qualified in its entirety by reference to the Indenture and the Trust Indenture
Act. Whenever particular provisions or defined terms in the Indenture are
referred to herein, such provisions or defined terms are incorporated by
reference herein. Section references used herein are references to provisions of
the Indenture.
The Indenture does not limit the aggregate principal amount of
indebtedness which may be issued thereunder and provides that junior
subordinated debentures may be issued thereunder from time to time in one or
more series (collectively, together with the Junior Subordinated Debentures, the
"Subordinated Debentures"). The Junior Subordinated Debentures constitute a
separate series under the Indenture.
Under certain circumstances involving the dissolution of the Trust
following the occurrence of a Special Event, Junior Subordinated Debentures may
be distributed to the holders of the Trust Securities upon dissolution of the
Trust. See "Description of the Preferred Securities-- Special Event Redemption
or Distribution."
GENERAL
The Junior Subordinated Debentures are unsecured, subordinated
obligations of the Company, limited in aggregate principal amount to an amount
equal to the sum of (i) the stated liquidation amount of the Preferred
Securities issued by the Trust and (ii) the proceeds received by the Trust upon
issuance of the Common Securities to the Company (which proceeds will be used to
purchase an equal principal amount of Junior Subordinated Debentures).
The entire principal amount of the Junior Subordinated Debentures will
become due and payable, together with any accrued and unpaid interest thereon,
on [ , ] (such date, as it may be shortened or extended
as hereinafter described, the "Stated Maturity"). Such date may be shortened
at any time by the Company to any date not earlier than , 2001,
subject to receipt of prior approval of the Federal Reserve if then required
under applicable capital guidelines or policies of the Federal Reserve.
Such date may also be extended at any time at the
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election of the Company for one or more periods, but in no event to a date later
than [ , ], provided that at the time such election is made
and at the time of extension (i) the Company is not in bankruptcy, otherwise
insolvent or in liquidation, (ii) the Company is not in default in the payment
of any interest or principal on the Junior Subordinated Debentures, (iii) the
Trust is not in arrears on payments of distributions on the Preferred Securities
and no deferred distributions are accumulated, (iv) at least one nationally
recognized statistical rating organization has rated the Junior Subordinated
Debentures at a rating level of BBB- or higher, in the case of Standard & Poor's
Ratings Services, Baa3 or higher, in the case of Moody's Investors Services,
Inc. or an equivalent rating, in the case of other nationally recognized
statistical rating organization and (v) the extended Stated Maturity is not
later than the 49th anniversary of the initial issuance of the Preferred
Securities; provided, however, that, if the Company exercises its right to
liquidate the Trust and distribute the Junior Subordinated Debentures, effective
upon such exercise the Stated Maturity of the Junior Subordinated Debentures may
be changed to any date elected by the Company that is (i) no earlier than the
date five years after the initial issuance of the Preferred Securities and (ii)
no later than the date 30 years (plus an extended term of up to an additional 19
years if the above-referenced conditions are satisfied) after the date of the
initial issuance of the Preferred Securities. The Junior Subordinated Debentures
are not subject to any sinking fund.
The Junior Subordinated Debentures are subordinate in right of payment
to Senior Indebtedness, Subordinated Indebtedness and Derivative Obligations (as
such terms are defined in the accompanying Prospectus) of the Company. At ,
1996, the amount of Senior Indebtedness, Subordinated Indebtedness and
Derivative Obligations was approximately $ billion. See
"Description of the Junior Subordinated Debt Securities--Subordination"
in the Prospectus.
If Junior Subordinated Debentures are distributed to holders of
Preferred Securities upon dissolution of the Trust, such Junior Subordinated
Debentures will initially be issued as a Global Security (as defined below). As
described herein, under certain limited circumstances, Junior Subordinated
Debentures may be issued in certificated form in exchange for a Global Security.
See "Book-Entry and Settlement" below. In the event that Junior Subordinated
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Debentures are issued in certificated form, such Junior Subordinated Debentures
will be in denominations of $ and integral multiples thereof and may
be transferred or exchanged at the offices described below. Payments on Junior
Subordinated Debentures issued as a Global Security will be made to DTC, a
successor depositary or, in the event that no depositary is used, to a paying
agent for the Junior Subordinated Debentures.
In the event that Junior Subordinated Debentures are issued in
certificated form, payments of principal and interest will be payable, the
transfer of the Junior Subordinated Debentures will be registrable and Junior
Subordinated Debentures will be exchangeable for Junior Subordinated Debentures
of other denominations of a like aggregate principal amount at the corporate
trust office of the Indenture Trustee in The City of New York; provided that
payment of interest may be made at the option of the Company by check mailed to
the address of the persons entitled thereto and that the payment of principal
with respect to any Junior Subordinated Debenture will be made only upon
surrender of such Junior Subordinated Debenture to the Indenture Trustee.
If the Junior Subordinated Debentures are distributed to the holders of
Preferred Securities upon dissolution of the Trust, the Company will use its
best efforts to list the Junior Subordinated Debentures on the NYSE or on such
other exchange on which the Preferred Securities are then listed.
OPTIONAL REDEMPTION
Except as provided below, the Junior Subordinated Debentures may not be
redeemed prior to [ ]. Subject to the Company having received prior
approval of the Federal Reserve to do so if then required under applicable
capital guidelines or policies of the Federal Reserve, the Company shall have
the right to redeem the Junior Subordinated Debentures, in whole or in part,
from time to time, on or after [ ], upon not less than 30 nor more
than 60 days notice, at a redemption price equal to 100% of the principal amount
to be redeemed, plus any accrued and unpaid interest to the redemption date,
including interest accrued during a Deferral Period. The Company will also have
the right to redeem the Junior Subordinated Debentures at any time upon the
occurrence of a Capital Treatment Event or upon the occurrence of a Tax Event if
certain conditions are met as described under "Description
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of the Preferred Securities--Special Event Redemption or Distribution", subject
in each case to the Company having received prior approval of the Federal
Reserve for such redemption if then required under applicable capital guidelines
or policies of the Federal Reserve.
If the Company gives a notice of redemption in respect of Junior
Subordinated Debentures (which notice will be irrevocable) then, by 12:00 noon,
New York City time, on the redemption date, the Company will deposit irrevocably
with the Indenture Trustee funds sufficient to pay the applicable redemption
price and will give irrevocable instructions and authority to pay such
redemption price to the holders of the Junior Subordinated Debentures. If notice
of redemption shall have been given and funds deposited as required, then, upon
the date of such deposit, interest will cease to accrue on the Junior
Subordinated Debentures called for redemption, such Junior Subordinated
Debentures will no longer be deemed to be outstanding and all rights of holders
of such Junior Subordinated Debentures so called for redemption will cease,
except the right of the holders of such Junior Subordinated Debentures to
receive the applicable redemption price, but without interest on such redemption
price. If any date fixed for redemption of Junior Subordinated Debentures is not
a Business Day, then payment of the redemption price payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the redemption price
in respect of Junior Subordinated Debentures is improperly withheld or refused
and not paid by the Company, interest on such Junior Subordinated Debentures
will continue to accrue, from the original redemption date to the date of
payment, in which case the actual payment date will be considered the date fixed
for redemption for purposes of calculating the applicable redemption price. If
fewer than all the Junior Subordinated Debentures are to be redeemed, the Junior
Subordinated Debentures to be redeemed shall be selected by lot or pro rata or
in some other equitable manner determined by the Indenture Trustee.
In the event of any redemption in part, the Company shall not be
required to (i) issue, register the transfer of or exchange any Junior
Subordinated Debentures during a period beginning at the opening of business 15
days before
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any selection for redemption of Junior Subordinated Debentures and ending at the
close of business on the earliest date on which the relevant notice of
redemption is deemed to have been given to all holders of Junior Subordinated
Debentures to be redeemed and (ii) register the transfer of or exchange any
Junior Subordinated Debentures so selected for redemption, in whole or in part,
except the unredeemed portion of any Junior Subordinated Debentures being
redeemed in part. (Section [ ])
INTEREST
The Junior Subordinated Debentures will bear interest at the rate of %
per annum from the original date of issuance. Interest will be payable quarterly
in arrears on the last day of March, June, September and December of each year
(each, an "Interest Payment Date"), commencing on , 1997, to the
person in whose name such Junior Subordinated Debenture is registered,
subject to certain exceptions, at the close of business on the Business Day
next preceding such Interest Payment Date. In the event (i) the Preferred
Securities shall not continue to remain in book-entry only form or (ii) if,
following distribution of the Junior Subordinated Debentures to holders
of Trust Securities upon dissolution of the Trust as described under
"Description of the Preferred Securities," the Junior Subordinated Debentures
shall not continue to remain in book-entry only form, the relevant record date
will be the fifteenth day of the month immediately preceding the month in which
the relevant Interest Payment Date. Interest payable on any Junior Subordinated
Debenture that is not punctually paid or duly provided for on any interest
payment date will forthwith cease to be payable to the person in whose name
such Junior Subordinated Debenture is registered on the relevant record date,
and such defaulted interest will instead be payable to the person in whose name
such Junior Subordinated Debenture is registered on the special record date or
other specified date determined in accordance with the Indenture; provided,
however, that interest,shall not be considered payable by the Company on any
Interest Payment Date falling within a Deferral Period unless the Company has
elected to make a full or partial payment of interest accrued on the Junior
Subordinated Debentures on such Interest Payment Date.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months and for any period shorter than
a full quarterly period for which interest is computed, the amount of
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interest payable will be computed on the basis of the actual number of days
elapsed per 30-day month. If any date on which interest is payable on the Junior
Subordinated Debentures is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as the Company shall not be in default in the payment of interest
on the Junior Subordinated Debentures, the Company shall have the right to
extend the interest payment period from time to time for a period not exceeding
20 consecutive quarterly interest periods. The Company has no current intention
of exercising its right to extend an interest payment period. No interest shall
be due and payable during a Deferral Period, except at the end thereof. During
any Deferral Period, the Company shall not declare or pay any dividends on, or
redeem, purchase, acquire or make a distribution or liquidation payment with
respect to, any of its common stock or preferred stock or make any guarantee
payments with respect thereto; provided, however, that the foregoing
restrictions shall not apply to (i) dividends, redemptions, purchases,
acquisitions, distributions or payments made by the Company by way of issuance
of shares of its capital stock, (ii) payments of accrued dividends by the
Company upon the redemption, exchange or conversion of any preferred stock of
the Company as may be outstanding from time to time in accordance with the terms
of such preferred stock, (iii) cash payments made by the Company in lieu of
delivering fractional shares upon the redemption, exchange or conversion of any
preferred stock of the Company as may be outstanding from time to time in
accordance with the terms of such preferred stock, (iv) repurchases, redemptions
or other acquisitions of shares of capital stock of the Company in connection
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers, directors or consultants, or (v) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of such rights pursuant thereto.
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Prior to the termination of any such Deferral Period, the Company may
further extend the interest payment period; provided that such Deferral Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarterly interest periods and may not extend beyond the maturity of
the Junior Subordinated Debentures. On the first Interest Payment Date occurring
at or after the end of each Deferral Period, the Company shall pay to the
holders of Junior Subordinated Debentures of record on the record date for such
Interest Payment Date (regardless of who the holders of record may have been on
other dates during the Deferral Period) all accrued and unpaid interest on the
Junior Subordinated Debentures, together with interest thereon at the rate
specified for the Junior Subordinated Debentures to the extent permitted by
applicable law, compounded quarterly ("Compounded Interest"). Upon the
termination of any Deferral Period and the payment of all amounts then due, the
Company may commence a new Deferral Period, subject to the above requirements.
The Company may also prepay at any time all or any portion of the interest
accrued during a Deferral Period. Consequently, there could be multiple Deferral
Periods of varying lengths throughout the term of the Junior Subordinated
Debentures, each not to exceed 20 consecutive quarterly interest periods or to
cause any extension beyond maturity of the Junior Subordinated Debentures. The
failure by the Company to make interest payments during a Deferral Period would
not constitute a Default or an Event of Default under the Indenture or the
Company's currently outstanding indebtedness.
If the Property Trustee shall be the sole holder of the Junior Subordinated
Debentures, the Company shall give the Property Trustee notice of its selection
of such Deferral Period one Business Day prior to the earlier of (i) the next
succeeding date on which the distributions on the Preferred Securities are
payable or (ii) the date the Trust is required to give notice to the NYSE (if
the Preferred Securities are then listed thereon) or other applicable
self-regulatory organization or to holders of the Preferred Securities of the
record date or the payment date for such distribution. The Trust shall give
notice of the Company's selection of such Deferral Period to the holders of
the Preferred Securities.
If Junior Subordinated Debentures have been distributed to holders of
Trust Securities, the Company shall give the holders of the Junior Subordinated
Debentures notice of its selection of such Deferral Period ten Business Days
prior to the earlier of (i) the next succeeding Interest Payment Date
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or (ii) the date the Company is required to give notice to the NYSE (if the
Junior Subordinated Debentures are then listed thereon) or other applicable
self-regulatory organization or to holders of the Junior Subordinated Debentures
of the record or payment date for such related interest payment.
COMPOUNDED INTEREST
Payments of Compounded Interest on the Junior Subordinated Debentures
held by the Trust will make funds available to pay any interest on distributions
in arrears in respect of the Preferred Securities pursuant to the terms thereof.
INDENTURE EVENTS OF DEFAULT
If any Indenture Event of Default shall occur and be continuing, the
Property Trustee, as the holder of the Junior Subordinated Debt Securities, will
have the right to declare the principal of and the interest on the Junior
Subordinated Debt Securities (including any Compound Interest) and any other
amounts payable under the Indenture to be forthwith due and payable and to
enforce its other rights as a creditor with respect to the Junior Subordinated
Debt Securities. See "Description of Junior Subordinated Debt Securities--Events
of Default" in the accompanying Prospectus for a description of the Indenture
Events of Default. An Indenture Event of Default also constitutes a Declaration
Event of Default. The holders of Preferred Securities in certain circumstances
have the right to direct the Property Trustee to exercise its rights as the
holder of the Junior Subordinated Debt Securities. See "Description of Preferred
Securities--Declaration Events of Default" and "--Voting Rights".
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BOOK-ENTRY AND SETTLEMENT
If any Junior Subordinated Debentures are distributed to holders of
Preferred Securities (see "Description of the Preferred Securities"), such
Junior Subordinated Debentures will be issued in the form of one or more global
certificates (each a "Global Security") registered in the name of the depositary
or its nominee. Except under the limited circumstances described below, Junior
Subordinated Debentures represented by the Global Security will not be
exchangeable for, and will not otherwise be issuable as, Junior Subordinated
Debentures in definitive form. The Global Securities described above may not be
transferred except by the depositary to a nominee of the depositary or by a
nominee of the depositary to the depositary or another nominee of the depositary
or to a successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in such a Global
Security.
Except as provided below, owners of beneficial interests in such a
Global Security will not be entitled to receive physical delivery of Junior
Subordinated Debentures in definitive form and will not be considered the
holders (as defined in the Indenture) thereof for any purpose under the
Indenture, and no Global Security representing Junior Subordinated Debentures
shall be exchangeable, except for another Global Security of like denomination
and tenor to be registered in the name of the depositary or its nominee or to a
successor depositary or its nominee. Accordingly, each Beneficial owner must
rely on the procedures of the depositary or if such person is not a Participant,
on the procedures of the Participant through which such person owns
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its interest to exercise any rights of a holder under the Indenture. If Junior
Subordinated Debentures are distributed to holders of Preferred Securities, DTC
will act as securities depositary for the Junior Subordinated Debentures.
For a description of DTC and DTC's book-entry system, see "Description
of Preferred Securities--Book-Entry Only Issuance--The Depository Trust
Company." As of the date of this Prospectus Supplement, the description herein
of DTC's book-entry system and DTC's practices as they relate to purchases,
transfers, notices and payments with respect to the Preferred Securities apply
in all material respects to any debt obligations represented by one or more
Global Securities held by DTC. The Company may appoint a successor to DTC or any
successor depositary in the event DTC or such successor depositary is unable or
unwilling to continue as a depositary for the Global Securities.
None of the Company, the Indenture Trustee, any paying agent and any
other agent of the Company or the Indenture Trustee will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in a Global Security for such Junior
Subordinated Debentures or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
A Global Security shall be exchangeable for Junior Subordinated
Debentures registered in the names of persons other than the depositary or its
nominee only if (i) the depositary notifies the Company that it is unwilling or
unable to continue as a depositary for such Global Security and no successor
depositary shall have been appointed; (ii) the depositary, at any time, ceases
to be a clearing agency registered under the Exchange Act at which time the
depositary is required to be so registered to act as such depositary and no
successor depositary shall have been appointed; (iii) the Company, in its sole
discretion, determines that such Global Security shall be so exchangeable; or
(iv) there shall have occurred an Indenture Event of Default with respect to
such Junior Subordinated Debentures. Any Global Security that is exchangeable
pursuant to the preceding sentence shall be exchangeable for Junior Subordinated
Debentures registered in such names as the depositary shall direct. It is
expected that such instructions will be based upon directions received by the
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depositary from its Participants with respect to ownership of beneficial
interests in such Global Security.
RELATIONSHIP BETWEEN THE PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED DEBENTURES AND
THE PREFERRED SECURITIES GUARANTEE
As set forth in the Declaration, the Trust exists for the sole purpose
of (a) issuing and selling the Trust Securities evidencing undivided beneficial
interests in the assets of the Trust and investing the proceeds from such
issuance and sale in the Junior Subordinated Debentures and (b) engaging in such
other activities as are necessary, convenient or incidental thereto.
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debentures, such payments will be sufficient to cover
distributions and other payments due on the Preferred Securities primarily
because (i) the aggregate principal amount of Junior Subordinated Debentures
held as trust assets will be equal to the sum of the aggregate stated
liquidation amount of the Trust Securities; (ii) the interest rate and interest
and other payment dates on the Junior Subordinated Debentures will match the
distribution rate and distribution and other payment dates for the Preferred
Securities; (iii) the Declaration provides that the Company shall pay for all
debts and obligations (other than with respect to the Trust Securities) and all
costs and expenses of the Trust, including any taxes and all costs and expenses
with respect thereto, to which the Trust may become subject, except for United
States withholding taxes; and (iv) the Declaration further provides that the
Trustees shall not cause or permit the Trust, among other things, to engage in
any activity that is not consistent with the limited purposes of the Trust. With
respect to clause (iii) above, however, no assurance can be given that the
Company will have sufficient resources to enable it to pay such debts,
obligations, costs and expenses on behalf of the Trust.
Payments of distributions and other payments due on the Preferred
Securities are guaranteed by the Company on a subordinated basis as and to the
extent set forth under "Description of the Preferred Securities Guarantees", in
the accompanying Prospectus. If the Company does not make
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interest or other payments on the Junior Subordinated Debentures, the Trust will
not make distributions or other payments on the Preferred Securities. Under the
Declaration, if and to the extent the Company does make interest or other
payments on the Junior Subordinated Debentures, the Property Trustee is
obligated to make distributions or other payments on the Preferred Securities.
The Preferred Securities Guarantee is a full and unconditional guarantee from
the time of issuance of the Preferred Securities, but the Preferred Securities
Guarantee covers distributions and other payments on the Preferred Securities
only if and to the extent that the Company has made a payment to the Property
Trustee of interest or principal on the Junior Subordinated Debentures deposited
in the Trust as trust assets.
The Property Trustee will have the Power to exercise all rights, powers
and privileges under the Indenture with respect to the Junior Subordinated
Debentures, including its rights as the holder of the Junior Subordinated
Debentures to enforce the Company's obligations under the Junior Subordinated
Debentures upon the occurrence of an Indenture Event of Default, and will also
have the right to enforce the Preferred Securities Guarantee on behalf of the
holders of the Preferred Securities. In addition, the holders of at least a
majority in liquidation amount of the Preferred Securities will have the right
to direct the Property Trustee with respect to certain matters under the
Declaration and the Preferred Securities Guarantee. If the Property Trustee
fails to enforce its rights under the Indenture, any holder of Preferred
Securities may, to the extent permitted by applicable law, after a period of 30
days has elapsed from such holder's written request to the Property Trustee to
enforce such rights, institute a legal proceeding against the Company to
enforce the Property Trustee's rights under the Junior Subordinated Debentures
without first instituting any legal proceeding against the Property Trustee or
any other person or entity. Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest or principal on the Junior Subordinated
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, the redemption date), then a holder of Preferred
Securities may directly institute suit against the Company for enforcement of
payment to such holder of the principal of or interest on Junior Subordinated
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities held by such holder on or after the respective due
date specified in the Junior Subordinated Debentures. The holders of Preferred
Securities will not be able to exercise directly against the Company any other
remedy available to the holders of the Junior Subordinated Debentures unless
the Property Trustee first fails to do so. If the Property Trustee fails to
enforce the Preferred Securities Guarantee, to the extent permitted by
applicable law, any holder of Preferred Securities may institute a legal
proceeding directly against the Company to enforce the Property Trustee's
rights under the Preferred Securities Guarantee without first instituting a
legal proceeding against the Trust, the Property Trustee or any other person
or entity. Notwithstanding the foregoing, if the Company has failed to make a
Guarantee Payment, a holder of Preferred Securities may directly institute a
proceeding against the Company for enforcement of such holder's right to
receive payment under the Guarantee. The Company waives any right or remedy to
require that any action be brought first against the Trust or any other person
or entity before proceeding directly against the Company. See "Description of
the Preferred Securities" and "Description of the Preferred Securities
Guarantees" in the accompanying Prospectus.
The above mechanisms and obligations, taken together, provide a full
and unconditional guarantee by the Company of payments due on the Preferred
Securities.
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TAXATION
In the opinion of Cravath, Swaine & Moore, counsel to the Company and the
Trust ("Tax Counsel"), the following are the material United States Federal
income tax consequences of the ownership and disposition of Preferred
Securities. Unless otherwise stated, this summary deals only with Preferred
Securities held as capital assets by holders who acquire the Preferred
Securities upon original issuance ("Initial Holders"). It does not deal with
special classes of holders, such as dealers in securities or currencies, life
insurance companies, persons holding Preferred Securities as part of a straddle
or as part of a hedging or conversion transaction, or persons whose functional
currency is not the United States dollar. This summary is based on the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury Regulations thereunder
and administrative and judicial interpretations thereof are of the date hereof,
all of which are subject to change (possibly on a retroactive basis).
INVESTORS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO THE UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF
PREFERRED SECURITIES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE
EFFECT OF ANY STATE, LOCAL OR OTHER TAX LAWS.
CLASSIFICATION OF THE TRUST
In the opinion of Tax Counsel, under current law and assuming full
compliance with the terms of the Declaration, the Trust will be classified for
United States Federal income tax purposes as a grantor trust and not as a
partnership or an association taxable as a corporation. Accordingly, each holder
of Preferred Securities (a "Securityholder") will be considered the owner of a
pro rata portion of the Junior Subordinated Debentures held by the Trust and
will be required to include in gross income the pro rata share of income accrued
on the Junior Subordinated Debentures.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
In the opinion of Tax Counsel, under current law and assuming full
compliance with the Indenture, the Junior Subordinated Notes will be classified
for United
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States Federal income tax purposes as indebtedness of the Company.
INTEREST AND ORIGINAL ISSUE DISCOUNT
If a Deferral Period occurs, the Junior Subordinated Debentures would be
considered to have original issue discount at all times after the beginning of
the first Deferral Period, including after the termination of the Deferral
Period. In addition, the Company's option to defer the payment of interest on
the Junior Subordinated Debentures during a Deferral Period might cause the
Junior Subordinated Debentures to be considered initially to be issued with
original issue discount. The Company believes, and will take the position, that
this latter result will not arise because of an exception in the Treasury
Regulations that applies when there is only a "remote" likelihood that a
Deferral Period will occur. Assuming that the likelihood of a Deferral Period is
in fact remote, Tax Counsel believes that this position is correct although
there is no authority directly on point and the Internal Revenue Service could
take a contrary position.
If the original issue discount rules apply to the Junior Subordinated
Debentures (either following the occurrence of a Deferral Period or initially),
each Securityholder, whether on the cash or accrual method of accounting, will
be required to accrue its pro rata share of original issue discount into income
in accordance with a constant yield method based on the compounding of interest.
As a result, income will be required to be reported by Securityholders before
the receipt of cash attributable to such income, and, in particular, income will
be reported during a Deferral Period even though no cash distributions are being
made. If the original issue discount rules apply for a period during which cash
distributions are currently being made, the sum of the daily accruals of income
for a quarterly period for a Securityholder that purchased the Preferred
Securities for their liquidation value will equal the cash distribution received
by the Securityholder for such quarter, assuming no disposition prior to the
record date for such distribution.
If the original issue discount rules apply, actual distributions of
stated interest will not be separately reported as income. A Securityholder's
tax basis for the Junior Subordinated Debentures will be increased by original
issue discount accrued into income, and decreased by cash distributions of
interest. If the original issue discount
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rules do not apply, stated interest will be includable in a holder's gross
income as ordinary interest income in accordance with such holder's regular
method of tax accounting.
Whether or not the original issue discount rules apply, no portion of
the amounts received on the Preferred Securities will be eligible for the
corporate dividends received deduction.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF PREFERRED
SECURITIES
Under current law, a distribution by the Trust of the Junior
Subordinated Debentures as described under the caption "Description of the
Preferred Securities--Special Event Redemption or Distribution" will be
non-taxable and will result in the Securityholder receiving directly such
Securityholder's pro rata share of the Junior Subordinated Debentures previously
held indirectly through the Trust, with a holding period and tax basis equal to
the holding period and adjusted tax basis such Securityholder was considered to
have had in such Securityholder's pro rata share of the underlying Junior
Subordinated Debentures immediately prior to such distribution. If, however, the
special event giving rise to the distribution is a Tax Event which results in
the Trust being treated as an association taxable as a corporation, the
distribution would constitute a taxable event to holders of the Preferred
Securities.
MARKET DISCOUNT AND BOND PREMIUM
Securityholders other than Initial Holders may be considered to have
acquired their pro rata interest in the Junior Subordinated Debentures with
market discount, acquisition premium or amortizable bond premium. Such holders
are advised to consult their tax advisors as to the income tax consequences of
the acquisition, ownership and disposition of the Preferred Securities.
DISPOSITION OF THE PREFERRED SECURITIES
Upon a sale, exchange or other disposition of the Preferred Securities
(including a distribution of cash in redemption of a Securityholder's Preferred
Securities upon redemption or repayment of the underlying Junior Subordinated
Debentures, but excluding the distribution of Junior Subordinated Debentures), a
Securityholder will be
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considered to have disposed of all or part of such Securityholder's pro rata
share of the Junior Subordinated Debentures, and will recognize gain or loss
equal to the difference between the amount realized (other than amounts
attributable to accrued but unpaid stated interest that is not treated as
original issue discount) and the Securityholder's adjusted tax basis in such
Securityholder's pro rata share of the underlying Junior Subordinated Debentures
deemed disposed of. A holder's adjusted tax basis in the Preferred Securities
generally will be its initial purchase price increased by original issue
discount previously includable in such holder's gross income to the date of
disposition and decreased by payments (other than payments of stated interest
that are not treated as original issue discount) received on the Preferred
Securities. Gain or loss will be capital gain or loss (except to the extent of
any accrued interest or market discount not previously included in income). See
"Market Discount and Bond Premium" above. Such gain or loss will be long-term
capital gain or loss if the Preferred Securities have been held for more than
one year.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
individual, corporation, partnership, estate or trust that is, as to the United
States, a non-resident alien individual or a foreign corporation, partnership,
estate or trust.
Under present United States Federal income tax law:
(i) payments by the Trust or any of its paying agents to any
holder of a Preferred Security who or which is a United States Alien
Holder will not be subject to United States Federal income or
withholding tax, provided that (a) the beneficial owner of the
Preferred Security does not actually or constructively own 10% or more
of the total combined voting power of all classes of stock of the
Company entitled to vote; (b) the beneficial owner of the Preferred
Security is not a controlled foreign corporation that is related to the
Company through stock ownership; and (c) either (A) the beneficial
owner of the Preferred Security certifies to the Trust or its agent,
under penalties of perjury, generally on IRS Form W-8, that it is not a
United States holder and provides its name and address or (B) a
securities clearing organization, bank or other financial institution
that holds customers'
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securities in the ordinary course of its trade or business (a
"Financial Institution") and holds the Preferred Security certifies to
the Trust or its agent under penalties of perjury that such statement
has been received from the beneficial owner by it or by a Financial
Institution between it and the beneficial owner and furnishes the Trust
or its agent with a copy thereof; and
(ii) A United States Alien Holder of a Preferred Security will
not be subject to United States Federal income or withholding tax on
any gain realized upon the sale or other disposition of a Preferred
Security unless (a) the United States Alien Holder is an individual who
is present in the United States for 183 days or more in the taxable
year of disposition, and certain other conditions apply or (b) the
gain is effectively connected with the conduct by the United States
Alien Holder of a trade or business in the United States.
INFORMATION REPORTING TO HOLDERS
The Trust will report the interest paid or the original issue discount
that accrued during the year with respect to the Junior Subordinated Debentures,
and any gross proceeds received by the Trust from the retirement or redemption
of the Junior Subordinated Debentures, annually to the holders of record of the
Preferred Securities and the Internal Revenue Service. The Trust currently
intends to deliver such reports to holders of record prior to January 31
following each calendar year.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, Preferred Securities
may be subject to a "backup" withholding tax of 31% unless the holder complies
with certain identification requirements. Any withheld amounts will generally be
allowed as a credit against the holder's Federal income tax, provided the
required information is timely filed with the Internal Revenue Service.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Clinton Administration proposed legislation (the
"Proposed Legislation") which would, among other things, generally deny
corporate issuers a deduction for interest in respect of certain debt
obligations, such as the Junior Subordinated Debentures, issued on or after
December 7, 1995 if such debt obligations have a maximum term in excess of 20
years and are not shown as indebtedness on the issuer's applicable consolidated
balance sheet. On March 29, 1996, Senate Finance Committee Chairman William V.
Roth, Jr. and House Ways and Means Committee Chairman Bill Archer issued a joint
statement (the "Joint Statement") indicating their intent that the Proposed
Legislation, if adopted by either of the tax-writing committees of Congress,
would have an effective date that is no earlier than the date of "appropriate
Congressional action." In addition, subsequent to the publication of the Joint
Statement, Senator Daniel Patrick Moynihan and Representatives Sam M. Gibbons
and Charles B. Rangel wrote letters to the Treasury Department (the "Democrat
Letters"), which concurred with the view expressed in the Joint Statement. No
such Congressional action has yet occurred. If the principles contained in the
Joint Statement and the Democrat Letters were followed and if the Proposed
Legislation were enacted, such legislation would not apply to the Junior
Subordinated Debentures. There can be no assurance, however, that the effective
date guidance contained in the Joint Statement and the Democrat Letters will be
incorporated into the Proposed Legislation, if enacted, or that other
legislation enacted after the date hereof will not otherwise adversely affect
the ability of the Company to deduct the interest payable on the Junior
Subordinated Debentures. Such a change could give rise to a Tax Event. See
"Description of the Preferred Securities--Special Event Redemption or
Distribution."
66
<PAGE> 72
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting
agreement dated the date hereof (the "Underwriting Agreement"), the Company and
the Trust have agreed that the Trust will sell to each of the Underwriters named
below, and each of the Underwriters, for whom [ ] is acting as
representative (the "Representative"), has severally agreed to purchase from
the Trust, the number of Preferred Securities set forth opposite its name below.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER PREFERRED SECURITIES
- ----------------------------------------------------- --------------------
<S> <C>
Total.......................................
</TABLE>
In the Underwriting Agreement, the several Underwriters have agreed,
subject to the terms and conditions set forth therein, to purchase all the
Preferred Securities offered hereby if any Preferred Securities are purchased by
the Underwriters. In the event of default by an Underwriter, the Underwriting
Agreement provides that, in certain circumstances, the purchase commitment of
the nondefaulting Underwriters may be increased or the Underwriting Agreement
may be terminated.
The Company has been advised by the Representative that the
Underwriters propose initially to offer the Preferred Securities to the public
at the public offering price set forth on the cover page of this Prospectus
Supplement, and to certain dealers at such price less a concession not in excess
of $ per Preferred Security. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $ per Preferred Security to certain
brokers and dealers. After the initial public offering, the public offering
price and such concessions may be changed.
In view of the fact that the proceeds of the sale of the Preferred Securities
will be used to purchase the Junior Subordinated Debentures of the Company, the
Underwriting Agreement provides that the Company will pay as compensation
("Underwriters' Compensation") for the Underwriters' arranging the investment
therein of such proceeds $ per Preferred Security or $ in
the aggregate ($ in the aggregate if the Underwriters' overallotment
option is
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<PAGE> 73
exercised in full) for the accounts of the several Underwriters.
Pursuant to the Underwriting Agreement, the Trust has granted to the
Underwriters an option, exercisable for 30 days from the date hereof, to
purchase up to additional Preferred Securities at the price to
public set forth on the cover page hereof. The Underwriters may exercise such
option to purchase solely for the purpose of covering over-allotments, if any,
made in connection with the offering. The Company will pay Underwriters'
Compensation in the amount per Preferred Security set forth above with respect
to such additional Preferred Securities. To the extent such option is exercised,
each Underwriter will become obligated, subject to certain conditions, to
purchase approximately the same percentage of such additional Preferred
Securities as the number set forth next to such Underwriter's name in the
preceding table bears to the total number of Preferred Securities offered by the
Underwriters hereby.
During a period of days from the date of this Prospectus Supplement,
neither the Trust nor the Company will, without the prior written consent of the
Representative, directly or indirectly, sell, offer to sell, grant any option
for the sale of, or otherwise dispose of, any Preferred Securities, any security
convertible into or exchangeable into or exercisable for Preferred Securities or
Junior Subordinated Debentures or any debt securities substantially similar to
the Junior Subordinated Debentures or equity securities substantially similar to
the Preferred Securities (except for the Junior Subordinated Debentures and the
Preferred Securities offered hereby).
Application will be made to list the Preferred Securities on the NYSE.
[ ] has advised the Trust that it intends to make a market in the Preferred
Securities. [ ] will have no obligation to make a market in the Preferred
Securities, however, and may cease market making activities, if commenced, at
any time.
Prior to this offering, there has been no public market for the
Preferred Securities. In order to meet one of the requirements for listing the
Preferred Securities on the NYSE, the Underwriters will undertake to sell lots
of 100 or more Preferred Securities to a minimum of 400 beneficial holders.
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<PAGE> 74
The Representative is a wholly-owned subsidiary of the Company. The
underwriting of the Preferred Securities offered hereby is being conducted in
accordance with Rule 2720 of the NASD Conduct Rules.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, or
contribute to payments which the Underwriters may be required to make in respect
thereof.
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<PAGE> 75
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL, PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER , 1996
PROSPECTUS
J. P. Morgan & Co. Incorporated
Junior Subordinated Debt Securities
JPM Capital Trust I
JPM Capital Trust II
JPM Capital Trust III
JPM Capital Trust IV
Preferred Securities Fully and Unconditionally
Guaranteed as Set Forth Herein by
J. P. Morgan & Co. Incorporated
J. P. Morgan & Co. Incorporated ("J. P. Morgan" or the "Company") may
offer, from time to time, junior subordinated debt securities (the "Junior
Subordinated Debt Securities") consisting of debentures, notes or other
evidences of indebtedness in one or more series and in amounts, at prices and on
terms to be determined at or prior to the time of any such offering. The Junior
Subordinated Debt Securities when issued will be unsecured obligations of the
Company. The Company's obligations under the Junior Subordinated Debt Securities
will be subordinate and junior in right of payment to all Senior Indebtedness,
Subordinated Indebtedness and Derivative Obligations of the Company (as such
terms are defined herein) of the Company.
JPM Capital Trust I, JPM Capital Trust II, JPM Capital Trust III and
JPM Capital Trust IV (the "JPM Trusts"), each a statutory business trust formed
under the laws of the State of Delaware, may offer and sell, from time to time,
preferred securities ("Preferred Securities") representing undivided beneficial
interests in the assets of
<PAGE> 76
2
the respective JPM Trust. The payment of periodic cash distributions
("distributions") with respect to Preferred Securities of a JPM Trust out of
moneys held by the Property Trustee (as defined herein) and payments on
liquidation of such JPM Trust and on redemption of Preferred Securities of such
JPM Trust will be guaranteed by the Company on a subordinated basis to the
extent described herein (each such guarantee, a "Preferred Securities
Guarantee"). See "Description of the Preferred Securities Guarantees". The
Preferred Securities Guarantee covers payments of distributions and other
payments on the Preferred Securities only if and to the extent that the
applicable JPM Trust has funds available therefor which will not be the case
unless the Company has made a payment of interest or principal or other payments
on the Junior Subordinated Debt Securities held by such JPM Trust as its sole
asset. The Preferred Securities Guarantees, when taken together with the
Company's obligations under the Junior Subordinated Debt Securities held by a
JPM Trust and the Indenture (as defined herein) and its obligations under the
Amended and Restated Declaration of such JPM Trust, including its obligation to
pay all costs, expenses, debts and other obligations of such JPM Trust (other
than with respect to the Trust Securities (as defined herein)), will provide a
full and unconditional guarantee of amounts due on the Preferred Securities of
such JPM Trust. Junior Subordinated Debt Securities may be issued and sold, from
time to time, in one or more series by the Company to a JPM Trust, or a trustee
of such JPM Trust, in connection with the investment of the proceeds from the
offering of Preferred Securities and Common Securities (as defined herein) of
such JPM Trust. The Junior Subordinated Debt Securities purchased by a JPM Trust
may be subsequently distributed pro rata to holders of Preferred Securities and
Common Securities of such JPM Trust in connection with the dissolution of such
JPM Trust upon the occurrence of certain events as may be described in an
accompanying Prospectus Supplement.
Specific terms of the Junior Subordinated Debt Securities of any series
or the Preferred Securities of any JPM Trust in respect of which this Prospectus
is being delivered (the "Offered Securities") will be set forth in a Prospectus
Supplement with respect to such Offered Securities, which will describe, without
limitation and where applicable, the following: (i) in the case of Junior
Subordinated Debt Securities, the specific designation, aggregate principal
amount, authorized denomination, maturity, premium, if any, redemption or
sinking fund provisions, if any, interest rate (which may be fixed or variable),
if any, time and method of calculating interest payments, if any, dates on which
premium, if any, and interest, if any, will be payable, right of the Company, if
any, to defer payment of interest on the Junior Subordinated
<PAGE> 77
3
Debt Securities and the maximum length of such deferral period, the initial
public offering price, and any listing on a securities exchange and other
specific terms of the offering; and (ii) in the case of Preferred Securities,
the specific designation, number of securities, liquidation amount per security,
initial public offering price, and any listing on a securities exchange,
distribution rate (or method of calculation thereof), dates on which
distributions shall be payable and dates from which distributions shall accrue,
voting rights (if any), terms for any conversion or exchange into other
securities, any redemption or sinking fund provisions, any other rights,
preferences, privileges, limitations or restrictions relating to the Preferred
Securities and the terms upon which the proceeds of the sale of the Preferred
Securities shall be used to purchase a specific series of Junior Subordinated
Debt Securities of the Company. Unless otherwise indicated in an accompanying
Prospectus Supplement, the Company does not intend to list any of the Offered
Securities on a national securities exchange.
The Offered Securities may be offered in amounts, at prices and on
terms to be determined at the time of offering. Any Prospectus Supplement
relating to any series of Offered Securities will contain information concerning
certain United States Federal income tax considerations, if applicable, to the
Offered Securities. By separate prospectus, the form of which is included in the
Registration Statement of which this Prospectus is a part, the Company may offer
from time to time senior debt securities and/or subordinated debt securities
each of which will be direct, unsecured obligations of the Company. The
aggregate initial public offering price of the securities to be offered by this
Prospectus and such other prospectus shall not exceed $1,000,000,000.
The Offered Securities may be sold (i) directly to purchasers, (ii)
through agents designated from time to time, (iii) to dealers or (iv) through
underwriters or a group of underwriters. If agents of the Company and/or any JPM
Trust or underwriters are involved in the sale of the Offered Securities, their
names will be set forth in the applicable Prospectus Supplement. If agents of
the Company and/or any JPM Trust, or underwriters or dealers are involved in the
sale of the Offered Securities, descriptions of their compensation and
indemnification arrangements and the net proceeds to the Company and/or any JPM
Trust will be set forth in the applicable Prospectus Supplement.
<PAGE> 78
4
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 COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF OFFERED
SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
--------------------
This Prospectus and the related Prospectus Supplement may be used by
direct or indirect wholly-owned subsidiaries of the Company in connection with
offers and sales related to secondary market transactions in the Offered
Securities. Such subsidiaries may act as principal or agent in such
transactions. Such sales will be made at prices related to prevailing market
prices at the time of sale.
--------------------
The date of this Prospectus is , 1996.
<PAGE> 79
5
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus and the Prospectus Supplement in connection with the offering made
hereby, and if given or made such information or representation must not be
relied upon as having been authorized by J. P. Morgan or by another person.
AVAILABLE INFORMATION
J. P. Morgan is subject to the information requirements of the
Securities Exchange Act of 1934 (the "1934 Act") and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549; Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and Seven World
Trade Center, 13th floor, New York, New York 10048. Copies of such material can
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such material may also
be accessed electronically by means of the Commission's home page on the
Internet at http://www.sec.gov. Such reports, proxy statements and other
information concerning J. P. Morgan may also be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. This
Prospectus does not contain all information set forth in the Registration
Statement and exhibits thereto which J. P. Morgan has filed with the Commission
under the Securities Act of 1933 and to which reference is hereby made.
No separate financial statements of any of the JPM Trusts have been
included or incorporated by reference herein. The Company and the JPM Trusts do
not consider that such financial statements would be material to holders of the
Preferred Securities because (i) all the voting securities of each JPM Trust
will be owned, directly or indirectly, by the Company, a reporting company
under the 1934 Act, (ii) each JPM Trust is a newly formed special purpose
entity, has no operating history, has no independent operations and is not
engaged in, and does not propose to engage in, any activity other than issuing
Trust Securities (as defined herein) representing undivided beneficial interests
in the assets of such JPM Trust and investing the proceeds thereof in Junior
Subordinated Debt Securities issued by the Company and (iii) the obligations of
each JPM Trust under the Preferred Securities of such JPM Trust will be fully
and unconditionally guaranteed by the Company as described herein. See "The
JPM Trusts", "Description of the Preferred Securities", "Description of the
Preferred Securities Guarantees" and "Description of the Junior Subordinated
Debt Securities". The JPM Trusts are business trusts formed under the laws of
the State of Delaware. The Company, as of the date of this Prospectus,
beneficially owns all the beneficial interests in each JPM Trust.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
J. P. Morgan hereby incorporates by reference in this Prospectus J. P.
Morgan's Annual Report on Form 10-K for the year ended December 31, 1995
(included in its Annual Report to Stockholders), J. P. Morgan's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1996, June 30, 1996 and
September 30, 1996 and J. P. Morgan's Reports on Form 8-K dated January 11,
1996, February 6, 1996, February 20, 1996,
<PAGE> 80
6
February 23, 1996, April 11, 1996, May 13, 1996, July 11, 1996, August 13, 1996
and October 10, 1996 heretofore filed pursuant to Section 13 of the 1934 Act.
In addition, all reports and definitive proxy or information statements
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent
to the date of this Prospectus and prior to the termination of the offering of
the Securities shall be deemed to be incorporated by reference into this
Prospectus and to be a apart hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein or in the accompanying Prospectus Supplement
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
J. P. Morgan will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of any such person, a copy of any or all of the foregoing documents
incorporated herein by reference (other than exhibits to such documents).
Written requests should be directed to the Office of the Secretary, J. P. Morgan
& Co. Incorporated, 60 Wall Street, New York, New York 10260-0060. Telephone
requests may be directed to (212) 648-3380.
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 subsidiaries engaged globally in
providing 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 are summarized as follows:
<PAGE> 81
7
Finance and Advisory
Finance and Advisory encompasses the sophisticated advisory, capital
raising, and financing work that J.P. Morgan does for its broad base of clients
around the world. These clients include corporations, governments,
municipalities, and financial institutions, and the expertise J.P. Morgan offers
them is based on in-depth knowledge of their needs and the industries and
financial markets in which they operate. Linking clients to the full range of
J.P. Morgan's financial capabilities is a global network of senior client
managers.
In partnership with clients, J.P. Morgan's advisory professionals
explore the risks and rewards of such strategic alternatives as mergers and
acquisitions, divestitures, privatizations, and recapitalizations. J.P. Morgan
also advises clients on their capital structures, looking for ways to unlock
value and seize opportunities.
J.P. Morgan's debt underwriting, equities, and credit businesses
provide the capabilities to raise the necessary capital and execute the
appropriate strategies.
In J.P. Morgan's equities business, underwriting is complemented by its
ability to provide clients with liquidity in the secondary markets through its
global sales and trading network. J.P. Morgan also applies its expertise in the
equities markets to structuring equity derivatives as a means of helping clients
manage market volatility. High-quality equity research is integral to all
aspects of its business.
J.P. Morgan's credit capabilities include meeting clients' financing
needs by issuing and syndicating loans and other credit facilities.
Sales and Trading
Sales and Trading provides clients with around-the-clock access to
global markets. J.P. Morgan makes markets in fixed income, foreign exchange, and
commodity instruments; it serves as a counterparty to help clients manage risks;
and it provides financial and economic research to help clients assess
opportunities and track performance. To function effectively in its role as a
market-maker, it also takes positions. J.P. Morgan's clients include
corporations, central banks, governments and
<PAGE> 82
8
their agencies, financial institutions, pension funds, mutual funds, and
leveraged funds.
J.P. Morgan's fixed income activities encompass acting as a primary
dealer in U.S. and foreign government securities; making markets in options,
money market instruments, U.S. government agency securities, and corporate debt
securities; and helping clients manage their exposure to fluctuating interest
and foreign exchange rates by structuring, executing, and making markets in risk
management instruments.
J.P. Morgan's foreign exchange capabilities include executing spot
transactions and structuring transactions to help clients manage their foreign
currency exposures. In commodities, J.P. Morgan makes markets in precious
metals, base metals, and energy products and develops hedging and financial
strategies for clients.
J.P. Morgan's emerging markets activities, while principally related to
fixed income activities, cross all markets, and J.P. Morgan's worldwide network
enables it to fulfill its role as a market-maker and provide clients with a
steady flow of market information.
In addition to J.P. Morgan's client-focused businesses, it has a
separate proprietary unit that engages in transactions for its own account
across all markets.
Asset Management and Servicing
Asset Management and Servicing activities encompass designing and
executing investment strategies and providing administrative and brokerage
services. J.P. Morgan's clients include corporations, financial and governmental
institutions, and high net worth individuals.
J.P. Morgan tailors its asset management capabilities for both
institutional and private clients. For institutional clients, it offers such
services as the management of employee-benefit-plan assets, executing investment
strategies across the spectrum of asset classes in all major markets.
J.P. Morgan's private banking group helps high net worth individuals
plan and execute their investment strategies with a broad range of capabilities,
which include managed investment and trust portfolios, Morgan-advised
<PAGE> 83
9
mutual funds, and a full-service brokerage unit. Credit, deposit, trust, and
estate services are also provided to private clients.
J.P. Morgan's exchange traded products professionals provide
institutional clients with worldwide access to major exchanges by acting as
futures and options brokers in executing and clearing contracts.
J.P. Morgan provides such operational services as the administration of
depositary receipt programs and global trust and agency services. It operates
the Euroclear System, the world's largest clearance and settlement system for
internationally traded securities, and offers credit and deposit services to
Euroclear participants.
Equity Investments
J.P. Morgan invests its capital in the private equity of rapidly
growing companies, management buyouts, privatizations, and recapitalizations.
These investments are made and managed with the objective of maximizing total
return--both long-term appreciation and net realized gains. While each
opportunity for investment is evaluated to achieve the firm's desired balance
between risk and return, many of these opportunities arise from its client
relationships.
J.P. Morgan's equity investment portfolio consists of approximately 95
investments diversified by industry, geography, and year of investment. J.P.
Morgan's goal is to maintain a diversified portfolio capable of generating
significant returns over time. This is a high-risk, high-reward business, and
the firm operates under a variety of legal and regulatory restrictions in
managing the portfolio.
Investments are generally held for three to seven years, depending on
J.P. Morgan's view of when a sale will produce optimal returns. Typically,
investments are harvested through a public offering of securities or the sale of
the investment. While realization of gains in the portfolio accelerates during
periods of strong equity and merger markets, the process of assessing and
managing the risks and rewards of new opportunities and existing investments
continues throughout market cycles.
Asset and Liability Management
<PAGE> 84
10
Asset and Liability Management activities include managing the firm's
interest rate risk as it relates to nontrading-related assets, liabilities, and
off-balance-sheet activities and managing the firm's overall liquidity risk.
J.P. Morgan's objective when it comes to interest rate risk management
is to create longer-term value, which is realized over time primarily as net
interest revenue and net investment securities gains. J.P. Morgan's primary
focus is on achieving a desired overall interest rate profile, which may change
over time, based on management's longer-term view of global interest rate trends
and economic conditions. A variety of instruments -- in numerous currencies both
on- and off-balance-sheet -- are used in an integrated manner to achieve this
objective.
J.P. Morgan manages the maturity and repricing imbalances between its
assets and liabilities through the use of investments in the more liquid fixed
income markets worldwide and derivatives. Asset and liability management swaps
are used to hedge exposures; to modify the interest rate characteristics of
specified assets or liabilities; and, in the case of risk-adjusting swaps, to
adjust Morgan's overall interest rate risk profile.
The firm's liquidity risk profile is managed to ensure that even under
adverse conditions, it has the ability to access funds at a reasonable cost. A
strong capital position is therefore an integral part of our liquidity
management because it enables us to raise funds as inexpensively as possible in
a variety of international markets.
Regulation
J. P. Morgan is subject to regulation under the Bank Holding Company
Act of 1956 (the "Act"). Under the Act, J. P. Morgan is required to file certain
reports with the Board of Governors of the Federal Reserve System (the "Board")
and is subject to examination by the Board. The Act generally precludes J. P.
Morgan and its subsidiaries from engaging in nonbanking activities, or from
acquiring more than 5% of any class of voting securities of any company engaging
in such activities, unless the Board has determined, by order or regulation,
that such proposed activities are closely related to banking. Federal law and
<PAGE> 85
11
Board interpretations limit the extent to which J. P. Morgan and its
subsidiaries can engage in certain aspects of the securities business. Under
Board policy, J. P. Morgan is expected to act as a source of financial strength
to each subsidiary bank and to commit resources to support such subsidiary bank,
even in circumstances where J. P. Morgan might not be in a financial position to
do so.
The Glass-Steagall Act prohibits affiliates of banks that are members
of the Federal Reserve System, including J. P. Morgan Securities Inc. ("JPMSI"),
from being "engaged principally" in bank-ineligible underwriting and dealing
activities (mainly corporate debt and equity securities). As interpreted by the
Board, this prohibition currently restricts JPMSI's gross revenues from such
activities to a maximum of 10% of its total gross revenues. The Board has
proposed a modification to its interpretation which would increase such limit to
25% of total gross revenues, but there can be no assurance that such
modification will be adopted. J. P. Morgan will continue to seek ways to expand
the limits on such activities and to achieve the reform of the Glass-Steagall
Act necessary to achieve its long-term objectives.
Morgan Guaranty Trust Company of New York ("Morgan Guaranty"), J. P.
Morgan's largest subsidiary, is a member of the Federal Reserve System and a
member of the Federal Deposit Insurance Corporation ("FDIC"). Its business is
subject to both U.S. federal and state law and to examination and regulation by
U.S. federal and state banking authorities. J. P. Morgan and its nonbank
subsidiaries are affiliates of Morgan Guaranty within the meaning of the
applicable federal statutes. Morgan Guaranty is subject to restrictions on loans
and extensions of credit to J. P. Morgan and certain other affiliates and on
certain other types of transactions with them or involving their securities.
Among other wholly owned subsidiaries:
JPMSI is a broker-dealer registered with the Securities and
Exchange Commission and is a member of the National Association of
Securities Dealers, the New York Stock Exchange, and other
exchanges.
J. P. Morgan Futures Inc. is subject to regulation by the
Commodity Futures Trading
<PAGE> 86
12
Commission, the National Futures Association, and the commodity
exchanges and clearinghouses of which it is a member.
J. P. Morgan Investment Management Inc. is registered with the
Securities and Exchange Commission as an investment adviser under
the Investment Advisers Act of 1940, as amended.
J. P. Morgan subsidiaries conducting business in other countries are
also subject to regulations and restrictions imposed by those jurisdictions,
including capital requirements.
The principal executive office of J. P. Morgan is located at 60 Wall
Street, New York, New York 10260-0060, and its telephone number of (212)
483-2323.
J.P. MORGAN CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Nine Months
Ended Years Ended December 31,
September 30, ----------------------------------------------
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Excluding Interest on
Deposits .......... 1.36 1.35 1.40 1.70(a) 1.53(b) 1.42(c)
Including Interest on
Deposits .......... 1.26 1.24 1.28 1.46(a) 1.31(b) 1.23(c)
</TABLE>
- -----------
(a) For the year ended December 31, 1993, the ratio of earnings to fixed
charges, including the cumulative effect of a change in the method of
accounting for postretirement benefits other than pensions, was 1.64
excluding interest on deposits and 1.43 including interest on deposits.
(b) For the year ended December 31, 1992, the ratio of earnings to fixed
charges, including the cumulative effect of a change in the method of
accounting for income taxes, was 1.67 excluding interest on deposits
and 1.39 including interest on deposits.
(c) For the year ended December 31, 1991, the ratio of earnings to fixed
charges, including the extraordinary gain on early retirement of debt,
was 1.43 excluding interest on deposits and 1.24 including interest on
deposits.
<PAGE> 87
13
J.P. MORGAN CONSOLIDATED RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
Nine Months
Ended Years Ended December 31,
September 30, ----------------------------------------------
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Excluding Interest on
Deposits .......... 1.35 1.34 1.39 1.69(a) 1.52(b) 1.40(c)
Including Interest on
Deposits .......... 1.25 1.23 1.27 1.46(a) 1.31(b) 1.22(c)
</TABLE>
- -----------
(a) For the year ended December 31, 1993, the ratio of earnings to combined
fixed charges and preferred stock dividends, including the cumulative
effect of a change in the method of accounting for postretirement
benefits other than pensions, was 1.63 excluding interest on deposits
and 1.42 including interest on deposits.
(b) For the year ended December 31, 1992, the ratio of earnings to combined
fixed charges and preferred stock dividends, including the cumulative
effect of a change in the method of accounting for income taxes, was
1.65 excluding interest on deposits and 1.39 including interest on
deposits.
(c) For the year ended December 31, 1991, the ratio of earnings to combined
fixed charges and preferred stock dividends, including the
extraordinary gain on early retirement of debt, was 1.41 excluding
interest on deposits and 1.23 including interest on deposits.
USE OF PROCEEDS
Each JPM Trust will use the proceeds from the sale of the Preferred
Securities to purchase Junior Subordinated Debt Securities from J.P. Morgan.
Unless otherwise indicated in the applicable Prospectus Supplement, the net
proceeds from the sale of the Junior Subordinated Debt Securities will be used
by J.P. Morgan for general corporate purposes, including investment in equity
and debt securities and interest-bearing deposits of subsidiaries, the
repurchase of issued and outstanding preferred and or common shares of J.P.
Morgan and other general corporate purposes as may be determined by management.
Pending such use, J. P. Morgan may temporarily invest the net proceeds or may
use them to reduce short-term indebtedness.
THE JPM TRUSTS
Each of JPM Capital Trust I, JPM Capital Trust II, JPM Capital Trust
III and JPM Capital Trust IV is a business trust formed on October 29,
1996 under the Delaware Business Trust Act (the "Business Trust Act") pursuant
to a separate declaration of trust among the Trustees (as defined herein) of
such JPM Trust and the Company and the filing of a certificate of trust with the
Secretary of State of the State of Delaware. Such declaration will be amended
and restated in its entirety (as so amended and restated, the "Declaration")
substantially in the form filed as an exhibit to the Registration Statement
<PAGE> 88
14
of which this Prospectus forms a part, as of the date the Preferred Securities
of such JPM Trust are initially issued. Each Declaration will be qualified under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
This description summarizes the material terms of the Declarations and
is qualified in its entirety by reference to the form of Declaration, which has
been filed as an exhibit to the Registration Statement of which this Prospectus
is a part, and the Trust Indenture Act.
Trust Securities
Upon issuance of any Preferred Securities by a JPM Trust, the holders
thereof will own all the issued and outstanding Preferred Securities of such JPM
Trust. The Company will acquire securities representing common undivided
beneficial interests in the assets of each JPM Trust (the "Common Securities"
and, together with the Preferred Securities, the "Trust Securities") in an
amount equal to at least 3% of the total capital of such JPM Trust and will own,
directly or indirectly, all the issued and outstanding Common Securities of each
JPM Trust. The Preferred Securities and the Common Securities will rank pari
passu with each other and will have equivalent terms; provided that (i) if a
Declaration Event of Default (as defined herein) under the Declaration of a JPM
Trust occurs and is continuing, the holders of Preferred Securities of such JPM
Trust will have a priority over holders of the Common Securities of such JPM
Trust with respect to payments in respect of distributions and payments upon
liquidation, redemption and maturity and (ii) holders of Common Securities have
the exclusive right (subject to the terms of the Declaration) to appoint, remove
or replace the Trustees and to increase or decrease the number of Trustees. Each
JPM Trust exists for the purpose of (a) issuing its Preferred Securities, (b)
issuing its Common Securities to the Company, (c) investing the gross proceeds
from the sale of the Trust Securities in Junior Subordinated Debt Securities of
the Company and (d) engaging in only such other activities as are necessary,
convenient or incidental thereto. The rights of the holders of the Preferred
Securities, including economic rights, rights to information and voting rights,
are set forth in the applicable Declaration, the Business Trust Act and the
Trust Indenture Act.
<PAGE> 89
15
Powers and Duties of Trustees
The number of trustees (the "Trustees") of each JPM Trust shall
initially be five. Three of such Trustees (the "Regular Trustees") are
individuals who are employees or officers of the Company. The fourth such
trustee will be First Trust of New York, National Association, which is
unaffiliated with the Company and which will serve as the property trustee (the
"Property Trustee") and act as the indenture trustee for purposes of the Trust
Indenture Act. The fifth such trustee is Wilmington Trust Company, which has its
principal place of business in the State of Delaware (the "Delaware Trustee").
Pursuant to each Declaration, legal title to the Junior Subordinated Debt
Securities purchased by a JPM Trust will be held by the Property Trustee for the
benefit of the holders of the Trust Securities of such JPM Trust, and the
Property Trustee will have the power to exercise all rights, powers and
privileges under the Indenture (as defined under "Description of the Junior
Subordinated Debt Securities") with respect to such Junior Subordinated Debt
Securities. In addition, the Property Trustee will maintain exclusive control of
a segregated non-interest-bearing bank account (the "Property Account") to hold
all payments in respect of the Junior Subordinated Debt Securities purchased by
a JPM Trust for the benefit of the holders of Trust Securities. The Property
Trustee will promptly make distributions to the holders of the Trust Securities
of a JPM Trust out of funds from the Property Account of such JPM Trust. The
Preferred Securities Guarantees are separately qualified under the Trust
Indenture Act and will be held by First Trust of New York, National Association,
acting in its capacity as indenture trustee with respect thereto, for the
benefit of the holders of the applicable Preferred Securities. As used in this
Prospectus and any accompanying Prospectus Supplement, the term "Property
Trustee" with respect to a JPM Trust refers to First Trust of New York, National
Association acting either in its capacity as a Trustee under the relevant
Declaration and the holder of legal title to the Junior Subordinated Debt
Securities purchased by such Trust or in its capacity as indenture trustee
under, and the holder of, the applicable Preferred Securities Guarantee, as the
context may require. The Company, as the direct or indirect owner of all the
Common Securities of each JPM Trust, will have the exclusive right (subject to
the terms of the related Declaration) to appoint, remove or replace Trustees and
to increase or decrease the number of Trustees, provided that the number of
Trustees shall be at least five and the majority of Trustees shall be Regular
Trustees. The term of a JPM Trust will be set forth in the applicable
<PAGE> 90
16
Prospectus Supplement, but may terminate earlier as provided in the Declaration
of such JPM Trust.
The duties and obligations of the Trustees of a JPM Trust shall be
governed by the Declaration of such JPM Trust. Under its Declaration, each JPM
Trust shall not, and the Trustees of such JPM Trust shall cause such JPM Trust
not to, engage in any activity other than in connection with the purposes of
such JPM Trust or other than as required or authorized by such Declaration. In
particular, each JPM Trust shall not, and the Trustees of such JPM Trust shall
cause such JPM Trust not to, (a) invest any proceeds received by such JPM Trust
from holding the Junior Subordinated Debt Securities purchased by such JPM
Trust, but shall promptly distribute from the Property Account of such JPM Trust
all such proceeds to holders of its Trust Securities pursuant to the terms of
the Declaration of such JPM Trust and of such Trust Securities; (b) acquire any
assets other than as expressly provided in such Declaration; (c) possess Trust
property for other than a Trust purpose; (d) make any loans, other than loans
represented by such Junior Subordinated Debt Securities; (e) possess any power
or otherwise act in such a way as to vary the assets of such JPM Trust or the
terms of its Trust Securities in any way whatsoever; (f) issue any securities or
other evidences of beneficial ownership of, or beneficial interests in, such JPM
Trust other than its Trust Securities; (g) incur any indebtedness for borrowed
money or (h)(i) direct the time, method and place of exercising any trust or
power conferred upon the Indenture Trustee (as defined under "Description of the
Junior Subordinated Debt Securities") with respect to the Junior Subordinated
Debt Securities deposited in such JPM Trust as trust assets or upon the Property
Trustee of such JPM Trust with respect to its Preferred Securities, (ii) waive
any past default that is waivable under the applicable Indenture or such
Declaration, (iii) exercise any right to rescind or annul any declaration that
the principal of all of the Junior Subordinated Debt Securities deposited in
such JPM Trust as trust assets shall be due and payable or (iv) consent to any
amendment, modification or termination of such Indenture or such Junior
Subordinated Debt Securities or such Declaration, in each case where such
consent shall be required, unless in the case of this clause (h) the Property
Trustee shall have received an unqualified opinion of nationally recognized
independent tax counsel recognized as expert in such matters to the effect that
such action will not cause such JPM Trust to be classified for United States
Federal income tax purposes as
<PAGE> 91
17
an association taxable as a corporation or a partnership and that such JPM Trust
will continue to be classified as a grantor trust for United States Federal
income tax purposes.
Books and Records
The books and records of each JPM Trust will be maintained at the
principal office of such JPM Trust and will be open for inspection by a holder
of Preferred Securities of such JPM Trust or such holder's representative for
any purpose reasonably related to such holder's interest in such JPM Trust
during normal business hours. Each holder of Preferred Securities will be
furnished annually with unaudited financial statements of the applicable JPM
Trust as soon as available after the end of such JPM Trust's fiscal year.
Voting
Except as set forth below or as provided under the Business Trust Act,
the applicable Declaration and the Trust Indenture Act, holders of Preferred
Securities will have no voting rights.
If any proposed amendment to the Declaration of a JPM Trust provides
for, or the Regular Trustees otherwise propose to effect, (i) any action that
would adversely affect the powers, preferences or special rights of the Trust
Securities, whether by way of amendment to such Declaration or otherwise, or
(ii) the dissolution, winding-up or termination of the Trust, other than in
connection with the distribution of Junior Subordinated Debentures held by the
Property Trustee, upon the occurrence of a Special Event or in connection with
the redemption of Preferred Securities as a consequence of a redemption of such
Junior Subordinated Debentures, then the holders of outstanding Trust Securities
will be entitled to vote on such amendment or proposal as a class and such
amendment or proposal shall not be effective except with the approval of the
holders of Trust Securities representing 66-2/3% in liquidation amount of such
Trust Securities; provided, however, that if any amendment or proposal referred
to in clause (i) above would adversely affect only the Preferred Trust
Securities or the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of 66-2/3% in liquidation amount
of such class of Trust Securities.
The Property Trustee
The Property Trustee, for the benefit of the holders of the Trust
Securities of a JPM Trust, is authorized under each Declaration to exercise all
rights under the Indenture with respect to the Junior Subordinated Debt
Securities deposited in such JPM Trust as trust assets, including its rights as
the holder of such Junior Subordinated Debt Securities to enforce the Company's
obligations under such Junior Subordinated Debt Securities upon the occurrence
of an Indenture Event of Default. The Property Trustee is also authorized to
enforce the rights of holders of Preferred Securities of a JPM Trust under the
related Preferred Securities Guarantee. If any JPM Trust's failure to make
distributions on the Preferred Securities of such JPM Trust is a consequence of
the Company's exercise of any right under the terms of the Junior Subordinated
Debt Securities deposited in such JPM Trust as trust assets to extend the
interest payment period for such Junior Subordinated Debt Securities, the
Property Trustee will have no right to enforce the payment of distributions on
such Preferred Securities until a Declaration Event of Default
<PAGE> 92
18
shall have occurred. Holders of at least a majority in liquidation amount of the
Preferred Securities of a JPM Trust will have the right to direct the Property
Trustee for such JPM Trust with respect to certain matters under the Declaration
for such JPM Trust and the related Preferred Securities Guarantee. If the
Property Trustee fails to enforce its rights under the Indenture or fails to
enforce the applicable Preferred Securities Guarantee, to the extent permitted
by applicable law, any holder of Preferred Securities of a JPM Trust may
institute a legal proceeding against the Company to enforce such rights or such
Preferred Securities Guarantee, as the case may be.
Distributions
Pursuant to each Declaration, distributions on the Preferred Securities
of a JPM Trust must be paid on the dates payable to the extent that the Property
Trustee has cash on hand in the Property Account of such JPM Trust to permit
such payment. The funds available for distribution to the holders of the
Preferred Securities of a JPM Trust will be limited to payments received by the
Property Trustee in respect of the Junior Subordinated Debt Securities that are
deposited in such JPM Trust as trust assets. If the Company does not make
interest payments on the Junior Subordinated Debt Securities deposited in a JPM
Trust as trust assets, the Property Trustee will not make distributions on the
Preferred Securities of such JPM Trust. Under the Declaration, if and to the
extent the Company does make interest payments on the Junior Subordinated Debt
Securities deposited in a JPM Trust as trust assets, the Property Trustee is
obligated to make distributions on the Trust Securities of such JPM Trust on a
Pro Rata Basis (as defined below). The payment of distributions on the Preferred
Securities of a JPM Trust is guaranteed by the Company on a subordinated basis
as and to the extent set forth under "Description of the Preferred Securities
Guarantees." A Preferred Securities Guarantee, when taken together with the
Company's obligations under the Junior Subordinated Debentures and the Indenture
and its obligations under the Declaration, provides a full and unconditional
guarantee from the time of issuance of the Preferred Securities of a JPM Trust
of amounts due on such Preferred Securities. Such Preferred Securities Guarantee
itself, however, covers distributions and other payments on such Preferred
Securities only if and to the extent that the Company has made a payment to the
Property Trustee of interest or principal on the Junior Subordinated Debt
Securities deposited in such JPM Trust as trust assets. As used in this
Prospectus, the term "Pro Rata Basis" shall mean pro rata to each holder of
Trust Securities of a JPM
<PAGE> 93
19
Trust according to the aggregate liquidation amount of the Trust Securities of
such JPM Trust held by the relevant holder in relation to the aggregate
liquidation amount of all Trust Securities of such JPM Trust outstanding unless,
in relation to a payment, a Declaration Event of Default under the Declaration
has occurred and is continuing, in which case any funds available to make such
payment shall be paid first to each holder of the Preferred Securities of such
JPM Trust pro rata according to the aggregate liquidation amount of the
Preferred Securities held by the relevant holder in relation to the aggregate
liquidation amount of all the Preferred Securities of such JPM Trust
outstanding, and only after satisfaction of all amounts owed to the holders of
such Preferred Securities, to each holder of Common Securities of such JPM Trust
pro rata according to the aggregate liquidation amount of such Common Securities
held by the relevant holder in relation to the aggregate liquidation amount of
all Common Securities of such JPM Trust outstanding.
Events of Default
If an Indenture Event of Default occurs and is continuing with respect
to Junior Subordinated Debt Securities deposited in a JPM Trust as trust assets,
an Event of Default under the Declaration (a "Declaration Event of Default") of
such JPM Trust will occur and be continuing with respect to any outstanding
Trust Securities of such JPM Trust. In such event, each Declaration provides
that the holders of Common Securities of the applicable JPM Trust will be deemed
to have waived any such Declaration Event of Default with respect to such Common
Securities until all Declaration Events of Default with respect to the Preferred
Securities of such JPM Trust have been cured or waived. Until all such
Declaration Events of Default with respect to the Preferred Securities of such
JPM Trust have been so cured or waived, the Property Trustee will be deemed to
be acting solely on behalf of the holders of the Preferred Securities of such
JPM Trust and only the holders of such Preferred Securities will have the right
to direct the Property Trustee with respect to certain matters under such
Declaration and consequently under the Indenture. In the event that any
Declaration Event of Default with respect to the Preferred Securities of a JPM
Trust is waived by the holders of the Preferred Securities of such JPM Trust as
provided in the Declaration of such JPM Trust, the holders of Common Securities
of such JPM Trust pursuant to such
<PAGE> 94
20
Declaration have agreed that such waiver also constitutes a waiver of such
Declaration Event of Default with respect to such Common Securities for all
purposes under such Declaration without any further act, vote or consent of the
holders of such Common Securities.
Record Holders
Each Declaration provides that the Trustees of the applicable JPM Trust
may treat the person in whose name a certificate representing Preferred
Securities of such JPM Trust is registered on the books and records of such JPM
Trust as the sole holder thereof and of the Preferred Securities represented
thereby for purposes of receiving distributions and for all other purposes and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such certificate or in the Preferred Securities represented thereby
on the part of any person, whether or not such JPM Trust shall have actual or
other notice thereof. Preferred Securities will be issued in fully registered
form. Unless otherwise specified in a Prospectus Supplement, Preferred
Securities will be represented by a global certificate registered on the books
and records of such JPM Trust in the name of a depositary (the "Depositary")
named in an accompanying Prospectus Supplement or its nominee. Under each
Declaration:
(i) the applicable JPM Trust and the Trustees thereof shall be
entitled to deal with the Depositary (or any successor depositary) for
all purposes, including the payment of distributions and receiving
approvals, votes or consents under such Declaration and, except as set
forth in such Declaration with respect to the Property Trustee, shall
have no obligation to persons owning a beneficial interest in Preferred
Securities of such JPM Trust ("Preferred Security Beneficial Owners")
registered in the name of and held by the Depositary or its nominee;
and
(ii) the rights of Preferred Security Beneficial Owners shall be
exercised only through the Depositary (or any successor depositary) and
shall be limited to those established by law and agreements between
such Preferred Security Beneficial Owners and the Depositary and/or its
participants. With respect to Preferred Securities registered in the
name of and held by the Depositary or its nominee, all notices and
other
<PAGE> 95
21
communications required under such Declaration shall be given to, and
all distributions on such Preferred Securities shall be given or made
to, the Depositary (or its successor).
The specific terms of the depositary arrangement with respect to the Preferred
Securities of a JPM Trust will be disclosed in the applicable Prospectus
Supplement.
Debts and Obligations
In each Declaration, the Company has agreed to pay for all debts and
obligations (other than with respect to the Trust Securities of the applicable
JPM Trust) and all costs and expenses of such JPM Trust, including the fees and
expenses of its Trustees and any taxes and all costs and expenses with respect
thereto, to which such JPM Trust may become subject, except for United States
withholding taxes. The foregoing obligations of the Company under each
Declaration are for the benefit of, and shall be enforceable by, any person to
whom any such debts, obligations, costs, expenses and taxes are owed (a
"Creditor") whether or not such Creditor has received notice thereof. Any such
Creditor may enforce such obligations of the Company directly against the
Company and the Company has irrevocably waived any right or remedy to require
that any such Creditor take any action against any JPM Trust or any other person
before proceeding against the Company. The Company has agreed in each
Declaration to execute such additional agreements as may be necessary or
desirable in order to give full effect to the foregoing.
The business address of each JPM Trust is c/o J. P. Morgan & Co.
Incorporated, 60 Wall Street, New York, NY 10260-0060, telephone number (212)
483-2323.
DESCRIPTION OF THE PREFERRED SECURITIES
Each JPM Trust may issue, from time to time, only one series of
Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each JPM Trust authorizes the Regular
Trustees of such JPM Trust to issue on behalf of such JPM Trust one series of
Preferred Securities. Each Declaration will be qualified as an indenture under
the Trust Indenture Act. The Preferred Securities will have such terms,
including distributions,
<PAGE> 96
22
redemption, voting, liquidation rights and such other preferred, deferred or
other special rights or such restrictions as shall be set forth in the related
Declaration or made part of such Declaration by the Trust Indenture Act.
Reference is made to the Prospectus Supplement relating to the Preferred
Securities of a JPM Trust for specific terms, including (i) the specific
designation of such Preferred Securities, (ii) the number of Preferred
Securities issued by such JPM Trust, (iii) the annual distribution rate (or
method of calculation thereof) for Preferred Securities issued by such JPM
Trust, the date or dates upon which such distributions shall be payable and the
record date or dates for the payment of such distributions, (iv) whether
distributions on Preferred Securities issued by such JPM Trust shall be
cumulative, and, in the case of Preferred Securities having such cumulative
distribution rights, the date or dates or method of determining the date or
dates from which distributions on Preferred Securities issued by such JPM Trust
shall be cumulative, (v) the amount or amounts which shall be paid out of the
assets of such JPM Trust to the holders of Preferred Securities of such JPM
Trust upon voluntary or involuntary liquidation, dissolution, winding-up or
termination of such JPM Trust, (vi) the obligation or right, if any, of such JPM
Trust to purchase or redeem Preferred Securities issued by such JPM Trust
(including with the proceeds of any redemption of Subordinated Debt Securities
held by such JPM Trust) and the price or prices at which, the period or periods
within which and the terms and conditions upon which Preferred Securities issued
by such JPM Trust shall or may be purchased or redeemed, in whole or in part,
pursuant to such obligation or right, (vii) the voting rights, if any, of
Preferred Securities issued by such JPM Trust in addition to those required by
law, including the number of votes per Preferred Security and any requirement
for the approval by the holders of Preferred Securities, or of Preferred
Securities issued by one or more JPM Trusts, or of both, as a condition to
specified actions or amendments to the Declaration of such JPM Trust, (viii)
terms for any conversion or exchange into other securities and (ix) any other
relevant rights, preferences, privileges, limitations or restrictions of
Preferred Securities issued by such JPM Trust consistent with the Declaration of
such JPM Trust or with applicable law. All Preferred Securities offered hereby
will be fully and unconditionally guaranteed by the Company as set forth below
under "Description of the Preferred Securities Guarantees." Certain United
States Federal income tax considerations applicable to any offering of Preferred
<PAGE> 97
23
Securities will be described in the Prospectus Supplement relating thereto.
In connection with the issuance of Preferred Securities, each JPM Trust
will issue one series of Common Securities. The Declaration of each JPM Trust
authorizes the Regular Trustees of such JPM Trust to issue on behalf of such JPM
Trust one series of Common Securities having such terms including distributions,
redemption, voting, liquidation rights or such restrictions as shall be set
forth therein. The terms of the Common Securities issued by a JPM Trust will be
substantially identical to the terms of the Preferred Securities issued by such
JPM Trust and the Common Securities will rank pari passu and payments will be
made thereon on a Pro Rata Basis with the Preferred Securities except that, if a
Declaration Event of Default occurs and is continuing, the rights of the holders
of such Common Securities to payment in respect of distributions and payments
upon liquidation, redemption and maturity will be subordinated to the rights of
the holders of such Preferred Securities. Except in certain limited
circumstances, the Common Securities issued by a JPM Trust will also carry the
right to vote and to appoint, remove or replace any of the Trustees of such JPM
Trust. All the Common Securities of a JPM Trust will be directly or indirectly
owned by the Company.
If an Event of Default with respect to the Declaration of any JPM
Trust occurs and is continuing, then the holders of Preferred Securities of
such JPM Trust would rely on the enforcement by the Property Trustee of its
rights as a holder of the Junior Subordinated Debt Securities deposited in such
JPM Trust against the Company. In addition, the holders of a majority in
liquidation amount of such Preferred Securities will have the right to direct
the time, method, and place of conducting any proceeding for any remedy
available to the Property Trustee or to direct the exercise of any trust or
power conferred upon the Property Trustee under such Declaration, including the
right to direct the Property Trustee to exercise the remedies available to it
as a holder of such Junior Subordinated Debt Securities. If the Property
Trustee fails to enforce its rights under such Junior Subordinated Debt
Securities deposited in such JPM Trust, any holder of such Preferred Securities
may, to the extent permitted by applicable law, after a period of 30 days has
elapsed from such holder's written request, institute a legal proceeding
against the Company to enforce the Property Trustee's rights under such Junior
Subordinated Debt Securities without first instituting any legal proceeding
against the Property Trustee or any other person or entity. If an Event of
Default with respect to the Declaration of any JPM Trust occurs and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal on the Junior Subordinated Debt Securities on the date
such interest or principal is otherwise payable (or in the case of redemption,
on the redemption date), then a holder of Preferred Securities of such JPM
Trust may also directly institute a proceeding for enforcement of payment to
such holder of the principal of or interest on such Junior Subordinated Debt
Securities having a principal amount equal to the aggregate liquidation amount
of such Preferred Securities held by such holder (a "Direct Action") on or
after the respective due date specified in such Junior Subordinated Debt
Securities without first (i) directing the Property Trustee to enforce the
terms of such Junior Subordinated Debt Securities or (ii) instituting a legal
proceeding against the Company to enforce the Property Trustee's rights under
such Junior Subordinated Debt Securities. In connection with such Direct
Action, the Company will be subrogated to the rights of such holder of such
Preferred Securities under such Declaration to the extent of any payment made
by the Company to such holder of such Preferred Securities in such Direct
Action. The Holders of Preferred Securities of a JPM Trust will not be able to
exercise directly any other remedy available to the holders of the Junior
Subordinated Debt Securities unless the Property Trustee first fails to do so.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
Set forth below is a summary of information concerning the Preferred
Securities Guarantees that will be executed and delivered by the Company for the
benefit of the holders from time to time of Preferred Securities of a JPM Trust.
Each Preferred Security Guarantee will be separately qualified under the Trust
Indenture Act and will be held by First Trust of New York, National Association,
acting in its capacity as indenture trustee with respect thereto, for the
benefit of holders of the Preferred Securities of the applicable JPM Trust. The
terms of each Preferred Securities Guarantee will be those set forth in such
Preferred Securities Guarantee and those made part of such Preferred Securities
Guarantee by the Trust Indenture Act. This description summarizes the material
terms of the Preferred Securities Guarantees and is qualified in its entirety by
reference to the form of Preferred Securities Guarantee, which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part, and
the Trust Indenture Act. Section references
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24
used herein are references to the provisions of the form of Preferred Securities
Guarantee.
General
Pursuant to each Preferred Securities Guarantee, the Company will
irrevocably and unconditionally agree, to the extent set forth therein, to pay
in full, to the holders of the Preferred Securities issued by the applicable JPM
Trust, the Guarantee Payments (as defined herein), to the extent not paid by
such JPM Trust, regardless of any defense, right of set-off or counterclaim that
such JPM Trust may have or assert. The following payments or distributions with
respect to Preferred Securities issued by a JPM Trust to the extent not paid or
made by such JPM Trust (the "Guarantee Payments"), will be subject to the
Preferred Securities Guarantee (without duplication): (i) any accrued and unpaid
distributions on such Preferred Securities, but only if and to the extent that
in each case the Company has made a payment to the Property Trustee of interest
on the Junior Subordinated Debt Securities, (ii) the redemption price, including
all accrued and unpaid distributions to the date of redemption, with respect to
any Preferred Securities called for redemption by such JPM Trust, but if and
only to the extent that in each case the Company has made a payment to the
Property Trustee of interest or principal on the Junior Subordinated Debt
Securities deposited in such JPM Trust as trust assets, and (iii) upon a
voluntary or involuntary liquidation, dissolution, winding-up or termination of
such JPM Trust (other than in connection with the distribution of such Junior
Subordinated Debt Securities to the holders of such Preferred Securities or the
redemption of all such Preferred Securities upon the maturity or redemption of
such Junior Subordinated Debt Securities) the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on such Preferred
Securities to the date of payment, to the extent such JPM Trust has funds
available therefor, and (b) the amount of assets of such JPM Trust remaining
available for distribution to holders of such Preferred Securities upon
liquidation of such JPM Trust. The Company's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Company to the holders of the applicable Preferred Securities or by causing the
applicable JPM Trust to pay such amounts to such holders.
The Company's obligations under the Declaration for each JPM Trust, the
Preferred Securities Guarantee issued with respect to Preferred Securities
issued by such JPM Trust, the Junior Subordinated Debt Securities purchased by
such JPM Trust and the Indenture in the aggregate will provide a full and
unconditional guarantee on a subordinated basis by the Company of payments due
on the Preferred Securities issued by such JPM Trust. However, the Preferred
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25
Securities Guarantees cover distributions and other payments on such Preferred
Securities only if and to the extent that the Company has made a payment to the
Property Trustee of interest or principal on the Junior Subordinated Debt
Securities deposited in the applicable JPM Trust as trust assets. If the Company
does not make interest or principal payments on the Junior Subordinated Debt
Securities deposited in the applicable JPM Trust as trust assets, the Property
Trust will not make distributions on the Preferred Securities of such JPM Trust
and the JPM Trust will not have funds available therefor.
Certain Covenants of the Company
In each Preferred Securities Guarantee, the Company will covenant that,
so long as any Preferred Securities issued by the applicable JPM Trust remain
outstanding, the Company will not declare or pay any dividends on, or redeem,
purchase, acquire or make a distribution or liquidation payment with respect to,
any of its common stock or preferred stock or make any guarantee payment with
respect thereto, if at such time (i) the Company shall be in default with
respect to its Guarantee Payments or other payment obligations under such
Preferred Securities Guarantee, (ii) there shall have occurred any
Event of Default under the related Declaration or (iii) in the event that Junior
Subordinated Debt Securities are issued to the applicable JPM Trust in
connection with the issuance of Trust Securities by such JPM Trust, the Company
shall have given notice of its election to defer payments of interest on such
Junior Subordinated Debt Securities by extending the interest payment period as
provided in the terms of the Junior Subordinated Debt Securities and such
period, or any extension thereof, is continuing; provided, however, that the
foregoing restrictions shall not apply to (i) dividends, redemptions, purchases,
acquisitions, distributions or payments made by the Company by way of issuance
of shares of its capital
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26
stock, (ii) payments of accrued dividends by the Company upon the redemption,
exchange or conversion of any preferred stock of the Company as may be
outstanding from time to time in accordance with the terms of such preferred
stock, (iii) cash payments made by the Company in lieu of delivering fractional
shares upon the redemption, exchange or conversion of any preferred stock of the
Company as may be outstanding from time to time in accordance with the terms of
such preferred stock, (iv) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
employees, officers, directors or consultants, or (v) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of such rights pursuant thereto. In addition, so long as any
Preferred Securities of a JPM Trust remain outstanding, the Company has agreed
(i) to remain the sole direct or indirect owner of all the outstanding Common
Securities issued by such JPM Trust and not to cause or permit such Common
Securities to be transferred except to the extent permitted by the Declaration
of such JPM Trust, provided that any permitted successor of the Company under
the Indenture may succeed to the Company's ownership of such Common Securities,
and (ii) to use reasonable efforts to cause such JPM Trust to continue to be
treated as a grantor trust for United States Federal income tax purposes, except
in connection with a distribution of Junior Subordinated Debt Securities.
(Section 6.01)
Amendments and Assignment
Except with respect to any changes that do not adversely affect the
rights of holders of the applicable Preferred Securities (in which case no
consent will be required), each Preferred Securities Guarantee may be amended
only with the prior approval of the holders of not less than 66-2/3% in
liquidation amount of the outstanding Preferred Securities issued by the
applicable JPM Trust. The manner of obtaining any such approval of holders of
such Preferred Securities will be set forth in an accompanying Prospectus
Supplement. (Section 9.02) All guarantees and agreements contained in a
Preferred Securities Guarantee shall bind the successors, assignees, receivers,
trustees and representatives of the Company and shall inure to the benefit of
the holders of the Preferred Securities of the applicable JPM Trust then
outstanding. Except in connection with a consolidation, merger or sale involving
the Company that is permitted under the Indenture, the Company may not assign
its obligations under any Preferred Securities Guarantee. (Section 9.01)
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27
Termination of the Preferred Securities Guarantees
Each Preferred Securities Guarantee will terminate and be of no further
force and effect as to the Preferred Securities issued by the applicable JPM
Trust upon full payment of the redemption price of all Preferred Securities of
such JPM Trust, or upon distribution of the Junior Subordinated Debt Securities
to the holders of the Preferred Securities of such JPM Trust in exchange for all
the Preferred Securities issued by such JPM Trust, or upon full payment of the
amounts payable upon liquidation of such JPM Trust. Notwithstanding the
foregoing, each Preferred Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of Preferred
Securities issued by the applicable JPM Trust must restore payment of any sums
paid under such Preferred Securities or such Preferred Securities Guarantee.
(Section 7.01)
Status of the Preferred Securities Guarantees
The Company's obligations under each Preferred Securities Guarantee to
make the Guarantee Payments will constitute an unsecured obligation of the
Company and will rank (i) subordinate and junior in right of payment to all
other indebtedness, liabilities and obligations of the Company and any
guarantees, endorsements or other contingent obligations of the Company in
respect of such indebtedness, liabilities or obligations, including the Junior
Subordinated Debt Securities, except those made pari passu or subordinate by
their terms, and (ii) senior to all capital stock now or hereafter issued by the
Company and to any guarantee now or hereafter entered into by the Company in
respect of any of its capital stock. The Company's obligations under each
Preferred Securities Guarantee will rank pari passu with each other Preferred
Securities Guarantee. (Section 6.02) Because the Company is a holding company,
the Company's obligations under each Preferred Securities Guarantee are also
effectively subordinated to all existing and future liabilities of the Company's
subsidiaries, except to the extent that the Company is a creditor of the
subsidiaries recognized as such. Each Declaration provides that each holder of
Preferred Securities issued by the applicable JPM Trust, by acceptance thereof,
agrees to the subordination provisions and other terms of the related Preferred
Securities Guarantee.
<PAGE> 102
28
Each Preferred Securities Guarantee will constitute a guarantee of
payment and not of collection (that is, the guaranteed party may institute a
legal proceeding directly against the Company to enforce its rights under such
Preferred Securities Guarantee without first instituting a legal proceeding
against any other person or entity). Each Preferred Securities Guarantee will be
deposited with First Trust of New York, National Association, as indenture
trustee, to be held for the benefit of the holders of the Preferred Securities
issued by the applicable JPM Trust. First Trust of New York, National
Association shall enforce such Preferred Securities Guarantee on behalf of the
holders of such Preferred Securities. The holders of not less than a majority in
aggregate liquidation amount of the Preferred Securities issued by the
applicable JPM Trust have the right to direct the time, method and place of
conducting any proceeding for any remedy available in respect of the related
Preferred Securities Guarantee, including the giving of directions to First
Trust of New York, National Association. If First Trust of New York, National
Association fails to enforce a Preferred Securities Guarantee as above provided,
any holder of Preferred Securities issued by the applicable JPM Trust may
institute a legal proceeding directly against the Company to enforce its rights
under such Preferred Securities Guarantee, without first instituting a legal
proceeding against the applicable JPM Trust or any other person or
entity. Notwithstanding the foregoing, if the Company has failed to make a
Guarantee Payment, a holder of Preferred Securities may directly institute a
proceeding against the Company for enforcement of such holder's right to
receive payment under the Preferred Securities Guarantee. The Company waives
any right or remedy to require that any action be brought first against a JPM
Trust or any other person or entity before proceeding directly against
the Company.
Miscellaneous
The Company will be required to provide annually to First Trust of New
York, National Association a statement as to the performance by the Company of
certain of its obligations under each Preferred Securities Guarantee and as to
any default in such performance. The Company is required to file annually with
First Trust of New York, National Association an officer's certificate as to the
Company's compliance with all conditions to be complied with by it under each
Preferred Securities Guarantee. (Section 2.04)
First Trust of New York, National Association, prior to the occurrence
of a default, undertakes to perform only such duties as are specifically set
forth in the applicable Preferred Securities Guarantee and, after default with
respect to a Preferred Securities Guarantee, shall exercise the same degree of
care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provision, First Trust of New York, National
Association is under no obligation to exercise any of the powers vested in it by
a Preferred Securities Guarantee at the request of any holder of Preferred
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29
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. (Section 3.02)
Governing Law
The Preferred Securities Guarantees will be governed by, and construed
in accordance with, the laws of the State of New York.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
Junior Subordinated Debt Securities may be issued from time to time in
one or more series under an Indenture, which term includes all supplements
thereto, (the "Indenture") between the Company and First Trust of New York,
National Association, as trustee (the "Indenture Trustee"). The Indenture has
been filed as an exhibit to the Registration Statement of which this Prospectus
forms a part. The following description summarizes the material terms of the
Indenture, and is qualified in its entirety by reference to the Indenture and
the Trust Indenture Act. Whenever particular provisions or defined terms in the
Indenture are referred to herein, such provisions or defined terms are
incorporated by reference herein. Section references used herein are references
to provisions of the Indenture.
General
The Junior Subordinated Debt Securities will be unsecured, junior
subordinated obligations of the Company. The Indenture does not limit the amount
of additional indebtedness the Company or any of its subsidiaries may incur.
Since the Company is a holding company, the Company's rights and the rights of
its creditors, including the holders of Junior Subordinated Debt Securities, to
participate in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of the subsidiary's
creditors, except to the extent that the Company may itself be a creditor with
recognized claims against the subsidiary.
The Indenture does not limit the aggregate principal amount of
indebtedness which may be issued thereunder and provides that Junior
Subordinated Debt Securities may be issued thereunder from time to time in one
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30
or more series. The Junior Subordinated Debt Securities are issuable in one or
more series pursuant to an indenture supplemental to the Indenture.
In the event Junior Subordinated Debt Securities are issued to a JPM
Trust or a Trustee of such JPM Trust in connection with the issuance of Trust
Securities by such JPM Trust, such Junior Subordinated Debt Securities
subsequently may be distributed pro rata to the holders of such Trust Securities
in connection with the dissolution of such JPM Trust upon the occurrence of
certain events described in the applicable Prospectus Supplement. Only one
series of Junior Subordinated Debt Securities will be issued to a JPM Trust or a
Trustee of such JPM Trust in connection with the issuance of Trust Securities by
such JPM Trust.
Reference is made to the Prospectus Supplement which will accompany
this Prospectus for the following terms of the series of Junior Subordinated
Debt Securities being offered thereby (to the extent such terms are applicable
to the Junior Subordinated Debt Securities): (i) the specific designation of
such Junior Subordinated Debt Securities, aggregate principal amount and
purchase price; (ii) any limit on the aggregate principal amount of such Junior
Subordinated Debt Securities; (iii) the date or dates on which the principal of
such Junior Subordinated Debt Securities is payable and the right, if any, to
extend such date or dates; (iv) the rate or rates at which such Junior
Subordinated Debt Securities will bear interest or the method of calculating
such rate or rates, if any; (v) the date or dates from which such interest shall
accrue, the interest payment dates on which such interest will be payable or the
manner of determination of such interest payment dates and the record dates for
the determination of holders to whom interest is payable on any such interest
payment dates; (vi) the right, if any, to extend the interest payment periods
and the duration of such extension; (vii) the period or periods within which,
the price or prices at which, and the terms and conditions upon which, such
Junior Subordinated Debt Securities may be redeemed, in whole or in part, at the
option of the Company; (viii) the obligation, if any, of the Company to redeem
or purchase such Junior Subordinated Debt Securities pursuant to any sinking
fund or analogous provisions or at the option of the holder thereof and the
period or periods for which, the price or prices at which, and the terms and
conditions upon which, such Junior Subordinated Debt Securities shall be
redeemed or purchased, in whole or part, pursuant to such
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31
obligation; (ix) any applicable United States Federal income tax consequences,
including whether and under what circumstances the Company will pay additional
amounts on the Junior Subordinated Debt Securities held by a person who is not a
U.S. person in respect of any tax, assessment or governmental charge withheld or
deducted and, if so, whether the Company will have the option to redeem such
Junior Subordinated Debt Securities rather than pay such additional amounts; (x)
the form of such Junior Subordinated Debt Securities; (xi) if other than
denominations of $25 or any integral multiple thereof, the denominations in
which such Junior Subordinated Debt Securities shall be issuable; (xii) any and
all other terms with respect to such series, including any modification of or
additions to the events of default or covenants provided for with respect to the
Junior Subordinated Debt Securities, and any terms which may be required by or
advisable under applicable laws or regulations not inconsistent with the
Indenture; and (xiii) whether such Junior Subordinated Debt Securities are
issuable as a global security, and in such case, the identity of the depositary.
(Section 2.3)
Unless otherwise indicated in the applicable Prospectus Supplement, the
Junior Subordinated Debentures will be issued in United States dollars in fully
registered form without coupons in denominations of $25 or integral multiples
thereof. Junior Subordinated Debt Securities may be presented for exchange and
transfer in the manner, at the places and subject to the restrictions set forth
in the Indenture. Such services will be provided without charge, other than any
tax or other governmental charge payable in connection therewith, but subject to
the limitations provided in the Indenture. (Section 2.8)
Junior Subordinated Debt Securities may bear interest at a fixed rate
or a floating rate. Junior Subordinated Debt Securities bearing no interest or
interest at a rate that at the time of issuance is below the prevailing market
rate will be sold at a discount below their stated principal amount. Special
United States Federal income tax considerations applicable to any such
discounted Junior Subordinated Debt Securities or to certain Junior Subordinated
Debt Securities issued at par which are treated as having been issued at a
discount for United
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32
States Federal income tax purposes will be described in the applicable
Prospectus Supplement.
Certain Covenants of the Company Applicable to the Junior Subordinated Debt
Securities
If Junior Subordinated Debt Securities are issued to a JPM Trust in
connection with the issuance of Trust Securities by such JPM Trust, the Company
will covenant in the Indenture that, so long as the Preferred Securities of such
JPM Trust remain outstanding, the Company will not declare or pay any dividends
on, or redeem, purchase, acquire or make a distribution or liquidation payment
with respect to, any of its common stock or preferred stock or make any
guarantee payments with respect thereto if at such time (i) the Company shall be
in default with respect to its Guarantee Payments or other payment obligations
under the related Preferred Securities Guarantee, (ii) there shall have occurred
any Indenture Event of Default with respect to such Junior Subordinated Debt
Securities or (iii) in the event that Junior Subordinated Debt Securities are
issued to a JPM Trust in connection with the issuance of Trust Securities by
such JPM Trust, the Company shall have given notice of its election to defer
payments of interest on such Junior Subordinated Debt Securities by extending
the interest payment period as provided in the terms of such Junior Subordinated
Debt Securities and such period, or any extension thereof, is continuing;
provided, however, that the foregoing restrictions shall not apply to (i)
dividends, redemptions, purchases, acquisitions, distributions or payments made
by the Company by way of issuance of shares of its capital stock, (ii) payments
of accrued dividends by the Company upon the redemption, exchange or conversion
of any preferred stock of the Company as may be outstanding from time to time in
accordance with the terms of such preferred stock or (iii) cash payments made by
the Company in lieu of delivering fractional shares upon the redemption,
exchange or conversion of any preferred stock of the Company as may be
outstanding from time to time in accordance with the terms of such preferred
stock. In addition, if Junior Subordinated Debt Securities are issued to a JPM
Trust in connection with the issuance of Trust Securities by such JPM Trust, for
so long as the Preferred Securities of such JPM Trust remain outstanding, the
Company has agreed (i) to remain the sole direct or indirect owner of all the
outstanding Common Securities issued by such JPM Trust and not to cause or
permit such Common Securities to be
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33
transferred except to the extent permitted by the Declaration of such JPM Trust;
provided that any permitted successor of the Company under the Indenture may
succeed to the Company's ownership of such Common Securities, (ii) to comply
fully with all its obligations and agreements contained in such Declaration and
(iii) not to take any action which would cause such JPM Trust to cease to be
treated as a grantor trust for United States Federal income tax purposes, except
in connection with a distribution of Junior Subordinated Debt Securities.
Subordination
The Junior Subordinated Debt Securities will be unsecured and will be
subordinate in right of payment to all Senior Indebtedness, Subordinated
Indebtedness and to Derivative Obligations (as such terms are defined below) of
J. P. Morgan, whether outstanding as of this date or hereafter incurred. In
addition, since J. P. Morgan is a holding company, the right of J. P. Morgan to
participate as a shareholder in any distribution of assets of any subsidiary
upon its liquidation or reorganization or otherwise (and thus the ability of
holders of the Junior Subordinated Debt Securities to benefit as creditors of J.
P. Morgan from such distribution) is subject to the prior claims of creditors of
any such subsidiary. J. P. Morgan and its subsidiaries are subject to claims by
creditors for long-term and short-term debt obligations, including substantial
obligations for federal funds purchased and securities sold under repurchase
agreement, as well as deposit liabilities. There are also various legal
limitations on the extent to which subsidiaries of J. P. Morgan may pay
dividends or otherwise supply funds to J. P. Morgan.
The Junior Subordinated Debt Securities will be subordinate in right of
payment as provided in the Indenture to all Senior Indebtedness, Subordinated
Indebtedness and Derivative Obligations of J. P. Morgan. No payment pursuant to
the Junior Subordinated Debt Securities may be made and no holder of the Junior
Subordinated Debt Securities or any coupon appertaining thereto shall be
entitled to demand or receive any such payment (i) unless all amounts of
principal, premium, if any, and interest then due on all Senior Indebtedness,
Subordinated Indebtedness and Derivative Obligations of J. P. Morgan shall have
been paid in full or duly provided for or (ii) if, at the time of such
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34
payment or immediately after giving effect thereto, there shall exist with
respect to any given Senior Indebtedness, Subordinated Indebtedness or
Derivative Obligations of J.P. Morgan any event of default permitting the
holders thereof to accelerate the maturity or payment thereof or any event
which, with notice or lapse of time, or both, will become such an event of
default. (Section 10.2)
In the event of the acceleration of the maturity of any Junior
Subordinated Debt Securities, the holders of all Senior Indebtedness,
Subordinated Indebtedness and Derivative Obligations outstanding at the time of
such acceleration will first be entitled to receive payment in full of all
amounts due thereon (including any amounts due upon acceleration) before the
holders of Junior Subordinated Debt Securities will be entitled to receive or
retain any payment on the Junior Subordinated Debt Securities; provided,
however, that holders of Subordinated Debt shall not be entitled to receive
payment of any such amounts in preference to the Junior Subordinated Debt
Securities to the extent that such Subordinated Debt is by its terms
subordinated to trade creditors.
Upon any distribution of the assets of J. P. Morgan upon dissolution,
winding up, liquidation or reorganization, the holders of Senior Indebtedness,
Subordinated Indebtedness and Derivative Obligations of J. P. Morgan will be
entitled to receive payment in full of principal, premium, if any, and interest
before any payment may be made on the Junior Subordinated Debt Securities. By
reason of such subordination, in the event of a bankruptcy or insolvency of J.
P. Morgan, holders of Senior Indebtedness, Subordinated Indebtedness and
Derivative Obligations of J. P. Morgan may receive more, ratably, and holders of
the Junior Subordinated Debt Securities may receive less, ratably, than the
other creditors of J. P. Morgan. Such subordination will not prevent the
occurrence of any Event of Default in respect of the Junior Subordinated Debt
Securities. The Indenture does not limit the amount of Senior Indebtedness,
Subordinated Indebtedness or Derivative Obligations J. P. Morgan may incur.
Senior Indebtedness of J. P. Morgan is defined as the principal of,
premium, if any, and interest on (a) all Debt of J. P. Morgan, whether
outstanding on the date of execution of the Indenture or thereafter created,
assumed or incurred, except such Debt as is by its terms expressly
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35
stated to be not superior in right of payment to the Junior Subordinated Debt
Securities or to rank pari passu with the Junior Subordinated Debt Securities
and (b) any deferrals, renewals or extensions of any such Senior Indebtedness;
provided, however, that Senior Indebtedness shall not be deemed to include (i)
Debt which by its terms is subordinated to trade accounts payable or accrued
liabilities arising in the ordinary course of business to the extent that
payments made to the holders of such Debt by the holders of the Junior
Subordinated Debt Securities as a result of the subordination provisions of the
Indenture would be greater than they otherwise would have been as a result of
any obligation of such holders to pay amounts over to the obligees on such trade
accounts payable or accrued liabilities arising in the ordinary course of
business as a result of subordination provisions to which such Debt is subject;
(ii) Debt which constitutes Subordinated Indebtedness and (iii) any other debt
securities issued pursuant to the Indenture.
"Subordinated Indebtedness" is defined as the principal of, premium, if
any, and interest, on Debt, whether outstanding on the date of the execution of
the Indenture or thereafter incurred, which is by its terms expressly provided
to be junior and subordinate to other Debt of J.P. Morgan (other than the Junior
Subordinated Debt Securities).
The term "Debt" as used in the foregoing definitions shall mean any
obligation of, or any obligation guaranteed by, J. P. Morgan for the repayment
of borrowed money, whether or not evidenced by bonds, debentures, notes or other
written instruments, and any deferred obligation for the payment of the purchase
price of property or assets (but shall not include trade accounts payable or
accrued liabilities arising in the ordinary course of business). The term "pari
passu" as used herein shall mean ranking equally in right of payment in the
event of J. P. Morgan's bankruptcy. (Section 1.1)
"Derivative Obligations" of J. P. Morgan are defined in the Indenture
as obligations of J. P. Morgan to make payments on claims in respect of
derivative products such as interest and foreign exchange rate contracts,
commodity contracts and similar arrangements; provided, however, that Derivative
Obligations do not include claims in respect of Senior Indebtedness,
Subordinated Indebtedness or obligations which, by their terms, are expressly
stated not to be superior in right of payment to the Junior Subordinated Debt
Securities or to rank pari passu with the
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36
Junior Subordinated Debt Securities. For purposes of this definition, "claim"
has the meaning assigned thereto in Section 101(4) of the United States
Bankruptcy code of 1978, as amended and in effect on the date of the Indenture.
(Section 1.1)
The Prospectus Supplement will set forth the aggregate amount of
outstanding indebtedness as of the most recent practicable date that by the
terms of such debt securities would be senior to the Junior Subordinated Debt
Securities and any limitation on the issuance of such additional senior
indebtedness.
Notwithstanding anything to the contrary in the Indenture or the Junior
Subordinated Debt Securities, Senior Indebtedness and Subordinated Indebtedness
shall not include (i) any indebtedness of the Company which, by its terms or the
terms of the instrument creating or evidencing it, is subordinate in right of
payment to, or pari passu with, the Junior Subordinated Debt Securities, as the
case may be, and in particular, the Junior Subordinated Debt Securities shall
rank pari passu with respect to all other debt securities and guarantees in
respect thereof issued to any other trusts, partnerships or other entity
affiliated with the Company which is a financing vehicle of the Company in
connection with the issuance of preferred securities by such financing vehicle,
or (ii) any indebtedness of the Company to a subsidiary of the Company.
Events of Default, Waiver, Notice
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Indenture Event of
Default" with respect to each series of Junior Subordinated Debt Securities:
(a) failure for 30 days to pay interest on the Junior Subordinated Debt
Securities of such series when due; provided that a valid extension of the
interest payment period by the Company shall not constitute a default in
the payment of interest for this purpose;
(b) failure to pay principal of or premium, if any, on the Junior
Subordinated Debt Securities of such series when due whether at maturity,
upon redemption, by declaration or otherwise;
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37
(c) failure to observe or perform any other covenant contained in the
Indenture with respect to such series for 90 days after written notice to
the Company from the Indenture Trustee or the holders of at least 25% in
principal amount of the outstanding Junior Subordinated Debt Securities of
such series; or
(d) certain events in bankruptcy, insolvency or reorganization of the
Company.
In each and every such case, unless the principal of all the Junior Subordinated
Debt Securities of such series shall have already become due and payable, either
the Indenture Trustee or the holders of not less than 25% in aggregate principal
amount of the Junior Subordinated Debt Securities of such series then
outstanding, by notice in writing to the Company (and to the Indenture Trustee
if given by such holders), may declare the principal of all the Junior
Subordinated Debt Securities of such series to be due and payable immediately,
and upon any such declaration the same shall become and shall be immediately due
and payable. (Section [ ])
The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debt Securities of the applicable series have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee. (Section [ ]) The Indenture Trustee or the
holders of not less than 25% in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities of such series may declare the principal due
and payable immediately upon an Indenture Event of Default with respect to such
series, but the holders of a majority in aggregate outstanding principal amount
of Junior Subordinated Debt Securities of such series may annul such declaration
and waive the default if the default has been cured and a sum sufficient to pay
all matured installments of interest and principal otherwise than by
acceleration and any premium has been deposited with the Indenture Trustee.
(Sections [ ] and [ ])
The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debt Securities of a series may, on behalf of the
holders of all the Junior Subordinated Debt Securities of such series, waive any
past default, except a default in the payment of principal, premium, if any, or
interest on Junior Subordinated Securities of such series (unless such default
has been
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38
cured and a sum sufficient to pay all matured installments of interest and
principal otherwise than by acceleration and any premium has been deposited with
the Indenture Trustee) or a call for redemption of Junior Subordinated Debt
Securities of such series. (Section [ ]) The Company is required to file
annually with the Indenture Trustee a certificate as to whether or not the
Company is in compliance with all the conditions and covenants under the
Indenture. (Section [ ])
If a series of Junior Subordinated Debt Securities is issued to a JPM
Trust in connection with the issuance of Trust Securities of such JPM Trust,
then, under the applicable Declaration, an Indenture Event of Default with
respect to such series of Junior Subordinated Debt Securities will constitute a
Declaration Event of Default.
Modification of the Indentures; Waiver of Compliance
The Indenture contains provisions permitting J. P. Morgan and the
Trustee, with the consent of the holders of not less than a majority in
principal amount of the respective Junior Subordinated Debt Securities of all
series affected by such modification or waiver at the time outstanding (voting
as one class), to modify the Indenture or any supplemental indenture or the
rights of the holders of the respective Junior Subordinated Debt Securities, or
waive compliance by J. P. Morgan with any of its obligations thereunder,
provided that no such modification or waiver shall (i) extend the final maturity
of any respective Junior Subordinated Debt Security, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or change the currency or currency unit of payment thereof, or change
the method in which amounts of payments of principal or interest thereon are
determined, or reduce the portion of the principal amount of an original issue
discount Junior Subordinated Debt Security due and payable upon acceleration of
the maturity thereof or the portion of the principal amount thereof provable in
bankruptcy, or reduce any amount payable upon redemption of any Junior
Subordinated Debt Security, or impair or affect the right of a holder to
institute suit for the payment thereof or, if the Junior Subordinated Debt
Securities provide therefor, any right of repayment at the option of the holder
of a Junior Subordinated Debt Security, without the consent of the holder of
each respective Junior Subordinated Debt Security so affected or (ii) reduce the
aforesaid percentage of Junior Subordinated Debt Securities
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39
of any series, the consent of the holders of which is required for any such
modification, without the consent of the holder of each Junior Subordinated Debt
Security so affected. (Sections 8.2 and 8.6)
In the event the consent of the Property Trustee as the holder of the
Junior Subordinated Debentures is required under the Indenture with respect to
any amendment, modification or termination of the Indenture or the Junior
Subordinated Debentures, the Property Trustee shall request the direction of the
holders of the Trust Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a majority in liquidation amount of the Trust
Securities voting together as a single class; provided, however, that where any
such amendment, modification or termination under the Indenture would require
the consent or vote of (1) holders of Junior Subordinated Debentures repre-
senting a specified percentage greater than a majority in principal amount of
the Junior Subordinated Debentures or (2) each holder of Junior Subordinated
Debentures, the Property Trustee may only give such consent or vote, in the case
of clause (1), at the direction of the holders of Trust Securities representing
such specified percentage of the aggregate liquidation amount of the Trust
Securities or, in the case of clause (2), as directed by each holder of Trust
Securities; and, provided further, however, that the Property Trustee shall be
under no obligation to take any such action in accordance with the directions of
the holders of the Trust Securities unless the Property Trustee has obtained an
opinion of nationally recognized independent tax counsel recognized as expert in
such matters to the effect that the Trust will not be classified for United
States Federal income tax purposes as an association taxable as a corporation or
a partnership on account of such action and will be treated as a grantor trust
for United States Federal income tax purposes following such action.
The Indenture also permits J. P. Morgan and the Trustee to amend such
Indenture in certain circumstances without the consent of the holders of Junior
Subordinated Debt Securities to evidence the merger of J. P. Morgan, the
replacement of the Trustee, to effect modifications which do not affect any
series of Junior Subordinated Debt Security already outstanding, and for certain
other purposes. (Section 8.1)
Consolidations, Mergers and Sales of Assets
J. P. Morgan may not merge or consolidate with any other corporation or
sell or convey all or substantially all of its assets to any Person, unless
either J. P. Morgan shall be the continuing corporation or the successor
corporation shall be a corporation organized under the laws of the United States
or any state thereof and shall expressly assume the payment of the principal of
and interest on the Junior Subordinated Debt Securities and the performance and
observance of all the covenants and conditions of the Indenture binding upon J.
P. Morgan, and J. P. Morgan or such successor corporation shall not, immediately
after such merger or consolidation, or such sale or conveyance, be in default in
the performance of any such covenant or condition. (Article Nine)
Book Entry and Settlement
If any Junior Subordinated Debt Securities of a series are represented
by one or more global securities (each, a "Global Security"), the applicable
Prospectus Supplement will describe the circumstances, if any, under which
beneficial owners of interests in any such Global Security may exchange such
interests for Junior Subordinated Debt Securities of such series and of like
tenor and principal amount in any authorized form and denomination. Principal
of, and any premium and interest on, a Global Security will be payable in the
manner described in the applicable Prospectus Supplement.
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40
The specific terms of the depositary arrangement with respect to any
portion of a series of Junior Subordinated Debt Securities to be represented by
a Global Security will be described in the applicable Prospectus Supplement.
Governing Law
The Indenture and the Junior Subordinated Debt Securities will be
governed by, and construed in accordance with, the laws of the State of New
York. (Section 12.8)
Information Concerning the Indenture Trustee
The Indenture Trustee, prior to default, undertakes to perform only
such duties as are specifically set forth in the Indenture and, after default,
shall exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. (Section 7.01) Subject to such provision,
the Indenture Trustee is under no obligation to exercise any of the powers
vested in it by the Indenture at the request of any holder of Junior
Subordinated Debt Securities, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities that might be incurred thereby.
(Section 7.02) The Indenture Trustee is not required to expend or risk its own
funds or otherwise incur personal financial liability in the performance of its
duties if the Indenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it. (Section 7.01)
First Trust of New York, National Association is a depositary for
funds and performs other services for, and transacts other banking business
with, the Company in the normal course of business.
ERISA MATTERS
The Company and certain affiliates of the Company may each be
considered a "party in interest" (within the meaning of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) or a "disqualified person"
(within the meaning of Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code")) with respect to many employee benefit plans ("Plans") that
are subject to ERISA.
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41
The purchase of Offered Securities by a Plan that is subject to the fiduciary
responsibility provisions of ERISA or the prohibited transaction provisions of
Section 4975 of the Code (including individual retirement arrangements and other
plans described in Section 4975(e)(1) of the Code) and with respect to which the
Company, or any affiliate of the Company is a service provider (or otherwise is
a party in interest or a disqualified person) may constitute or result in a
prohibited transaction under ERISA or Section 4975 of the Code, unless such
Offered Securities are acquired pursuant to and in accordance with an applicable
exemption. Any pension or other employee benefit plan proposing to acquire any
Offered Securities should consult with its counsel.
PLAN OF DISTRIBUTION
The Company may sell any series of Junior Subordinated Debt Securities
and the JPM Trusts may sell the Preferred Securities being offered hereby (i)
through agents, (ii) through underwriters, (iii) through dealers and (iv)
directly to purchasers. Any such persons may be customers of, engage in
transactions with, or perform services for, J. P. Morgan in the ordinary course
of business.
Offered Securities may be offered and sold through agents designated by
J. P. Morgan from time to time. Any such agent involved in the offer or sale of
the Securities in respect of which this Prospectus is delivered will be named,
and any commissions payable by J. P. Morgan to such agent will be set forth, in
the Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the period
of its appointment (ordinarily five business days or less). Any such agent may
be deemed to be an underwriter, as that term is defined in the Securities Act of
1933, as amended, of the Offered Securities so offered and sold. Agents may be
entitled under agreements which may be entered into with J. P. Morgan to
indemnification by J. P. Morgan against certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
If an underwriter or underwriters are utilized in the sale of the
Offered Securities, J. P. Morgan will execute an underwriting agreement with
such underwriter or underwriters at the time an agreement for such sale is
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42
reached, and the names of the specific managing underwriter or underwriters, as
well as any other underwriters, and the terms of the transaction, including
compensation of the underwriters and dealers, if any, will be set forth in the
Prospectus Supplement which will be used by the underwriters to make resales of
the Offered Securities in respect of which this Prospectus is delivered to the
public. Underwriters will acquire Offered Securities for their own account and
may resell such Offered Securities from time to time in one or more
transactions, including negotiated transactions, at fixed public offering prices
or at varying prices determined at the time of sale. Offered Securities may be
offered to the public either through underwriting syndicates represented by
managing underwriters, or directly by the managing underwriters. The
underwriters may be entitled, under the relevant underwriting agreement, to
indemnification by J. P. Morgan against certain liabilities, including
liabilities under the Securities Act of 1933, as amended. Only underwriters
named in the Prospectus Supplement are deemed to be underwriters in connection
with the Offered Securities offered thereby. If any underwriter or underwriters
are utilized in the sale of the Offered Securities, the underwriting agreement
provides that the obligations of the underwriters are subject to certain
conditions precedent and that the underwriters with respect to a sale of Offered
Securities will be obligated to purchase all such Offered Securities if any are
purchased.
If a dealer is utilized in the sale of the Offered Securities in
respect of which this Prospectus is delivered, J. P. Morgan will sell such
Offered Securities to the dealer, as principal. The dealer may then resell such
Securities to the public at varying prices to be determined by such dealer at
the time of resale. Any such dealer may be deemed to be an underwriter, as such
term is defined in the Securities Act f 1933, as amended, of the Offered
Securities so offered and sold. Dealers may be entitled, under agreements which
may be entered into with J. P. Morgan, to indemnification by J. P. Morgan
against certain liabilities, including liabilities under the Securities Act of
1933, as amended. The name of the dealer and the terms of the transaction will
be set forth in the Prospectus Supplement relating thereto.
Offers to purchase Offered Securities may be solicited directly by J.
P. Morgan and sales thereof may be made by J. P. Morgan directly to
institutional investors or others, who may be deemed to be underwriters within
the
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43
meaning of the Securities Act of 1933, as amended, with respect to any sale
thereof. The terms of any such sales will be described in the Prospectus
Supplement relating thereto.
If so indicated in the Prospectus Supplement, J. P. Morgan will
authorize agents and underwriters to solicit offers by certain institutions to
purchase Offered Securities from J. P. Morgan at the public offering price set
forth in the Prospectus Supplement pursuant to Delayed Delivery Contracts
("Contracts") providing for payment and delivery on the date stated in the
Prospectus Supplement. Each Contract will be for an amount no less than, and,
unless J. P. Morgan otherwise agrees, the aggregate principal amount of
Securities sold pursuant to Contracts shall be not less nor more than, the
respective amounts stated in the Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions but shall in all cases be subject
to the approval of J. P. Morgan.
Contracts will not be subject to any conditions except that any related
sale of Offered Securities to underwriters shall have occurred and the purchase
by an institution of the Offered Securities covered by its Contract shall not at
the time of delivery be prohibited under the laws of any jurisdiction in the
United States to which such institution is subject. A commission indicated in
the Prospectus Supplement will be paid to underwriters and agents soliciting
purchases of Offered Securities pursuant to Contracts accepted by J. P. Morgan.
The place and time of delivery of the Offered Securities in respect of
which this Prospectus is delivered are set forth in the accompanying Prospectus
Supplement.
This Prospectus and related Prospectus Supplement may be used by direct
or indirect wholly-owned subsidiaries of J. P. Morgan in connection with offers
and sales related to secondary market transactions in the Offered Securities.
Such subsidiaries may act as principal or agent in such transactions. Such sales
will be made at prices related to prevailing market prices at the time of a
sale.
The offer and sale of the Offered Securities by an affiliate of J. P.
Morgan will comply with the requirements
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44
of Rule 2720 of the Conduct Rules of the National Association of Securities
Dealers, Inc. (the "NASD") regarding underwriting of securities of an affiliate.
Accordingly, an affiliate of J. P. Morgan that is a member of the NASD may
participate in a public offering and sale of Offered Securities if the offering
is of a class of securities rated investment grade by a nationally recognized
statistical rating organization. In addition, an affiliate of J. P. Morgan that
is a member of the NASD may participate in any public offering and sale of the
Offered Securities if the price at which an equity issue is distributed to the
public is no higher or the yield at which a debt issue is distributed to the
public is no lower than that recommended by a "qualified independent
underwriter" (determined to be so qualified by the NASD prior to commencement of
such offering), in each case in compliance with the provisions of Rule 2720 of
the Conduct Rules.
Each NASD member participating in offers and sales of the Offered
Securities will not execute a transaction in the Offered Securities in a
discretionary account without the prior written specific approval of the
member's customer.
Certain of the underwrites or agents and their associates may be
customers of, engage in transactions with, and perform services for, J. P.
Morgan in the ordinary course of business. Agents and underwriters may be
customers of, engage in transactions with, or perform services for, the Company
in the ordinary course of business.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement,
certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon by Morris, Nichols, Arsht & Tunnell, Wilmington,
Delaware. The validity of the Preferred Securities Guarantees and the Junior
Subordinated Debt Securities and certain other matters will be passed upon for
the Company by Gene A. Capello, Vice President and Assistant General Counsel
of J. P. Morgan, and for the agents or underwriters, if any, by Cravath,
Swaine & Moore, New York, New York.
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45
EXPERTS
The audited financial statements contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995 (included in J. P.
Morgan's Annual Report to Stockholders) are incorporated by reference in this
Prospectus in reliance upon the report of Price Waterhouse LLP, independent
accountants, given upon the authority of said firm as experts in auditing and
accounting.
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PROSPECTUS
J.P. Morgan & Co. Incorporated
Debt Securities
J.P. Morgan & Co. Incorporated ("J.P. Morgan") may from time to time offer
its senior debt securities (the "Debt Securities") and subordinated debt
securities (the "Subordinated Debt Securities") (the Debt Securities and the
Subordinated Debt Securities are collectively known as the "Securities") for
issuance and sale, at an aggregate initial public offering price not to exceed
$1,000,000,000, on terms determined by market conditions at the time of sale.
Securities may be denominated in U.S. dollars or, at the option of J.P. Morgan
if so specified in the applicable Prospectus Supplement, in any other freely
transferable currency or units based on or relating to currencies, including
European Currency Units (ECU). With respect to the J.P. Morgan Debt Securities
as to which this Prospectus is being delivered (the "Offered Securities"), the
specific designation, aggregate principal amount, maturity, rate and time of
payment of any interest, coin or currency or currency units in which principal
and interest will be paid, purchase price and any terms for mandatory or
optional redemption (including any sinking fund) of any J.P. Morgan Debt
Securities and any other specific terms of the Securities are set forth in the
accompanying Prospectus Supplement ("Prospectus Supplement").
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
---------------
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The Offered Securities may be offered directly, through agents designated
from time to time, through dealers or through one or more managing underwriters,
acting alone or with other underwriters. See "Plan of Distribution". Any such
agents or dealers, and any underwriters, are set forth in the Prospectus
Supplement. If an agent of J.P. Morgan or a dealer or underwriter is involved in
the offering of the Offered Securities in connection with which this Prospectus
is being delivered, the agent's commission, dealer's purchase price or
underwriter's discount is set forth in, or may be calculated from, the
Prospectus Supplement and the net proceeds to J.P. Morgan from such sale will be
the purchase price of such Offered Securities less such commission in the case
of an agent, the purchase price of such Offered Securities in the case of a
dealer, and the public offering price less such discount in the case of an
underwriter and less, in each case, the other expenses of J.P. Morgan associated
with such issuance and distribution.
The aggregate proceeds to J.P. Morgan from all the Offered Securities sold
will be the purchase price of such Offered Securities excluding any agents'
commissions, any underwriters' discounts and the other expenses of issuance and
distribution. See "Plan of Distribution" for possible indemnification
arrangements for agents, dealers and underwriters.
This Prospectus and related Prospectus Supplement may be used by direct or
indirect wholly-owned subsidiaries of J.P. Morgan in connection with offers and
sales related to secondary market transactions in the Offered Securities. Such
subsidiaries may act as principal or agent in such transactions. Such sales will
be made at prices related to prevailing market prices at the time of sale.
November __, 1996
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus and the Prospectus Supplement in connection with the offering made
hereby, and if given or made such information or representation must not be
relied upon as having been authorized by J.P. Morgan or by another person.
AVAILABLE INFORMATION
J.P. Morgan is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "1934 Act") and in accordance therewith files reports
and other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information can be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549; Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and Seven World Trade
Center, 13th floor, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such material may also
be accessed electronically by means of the Commission's homepage on the Internet
at http://www.sec.gov. Such reports, proxy statements and other information
concerning J.P. Morgan may also be inspected at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. This Prospectus
does not contain all information set forth in the Registration Statement and
exhibits thereto which J.P. Morgan has filed with the Commission under the
Securities Act of 1933 and to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
J.P. Morgan hereby incorporates by reference in this Prospectus J.P.
Morgan's Annual Report on Form 10-K for the year ended December 31, 1995
(included in its Annual Report to Stockholders), J.P. Morgan's Quarterly Reports
on Form 10-Q for
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the quarters ended March 31, 1996, June 30, 1996 and September 30, 1996 and
J.P. Morgan's Reports on Form 8-K dated January 11, 1996, February 6, 1996,
February 20, 1996, February 23, 1996, April 11, 1996, May 13, 1996, July 11,
1996, August 13, 1996 and October 10, 1996 heretofore filed pursuant to Section
13 of the 1934 Act.
In addition, all reports and definitive proxy or information statements
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent
to the date of this Prospectus and prior to the termination of the offering of
the Securities shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein or in the accompanying Prospectus Supplement
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
J.P. Morgan will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of any such person, a copy of any or all of the foregoing documents
incorporated herein by reference (other than exhibits to such documents).
Written requests should be directed to the Office of the Secretary, J.P. Morgan
& Co. Incorporated, 60 Wall Street, New York, New York 10260-0060. Telephone
requests may be directed to (212) 648-3380.
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 subsidiaries engaged globally in
providing 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 are summarized as follows:
Finance and Advisory
Finance and Advisory encompasses the sophisticated advisory, capital
raising, and financing work that J.P. Morgan does for its broad base of clients
around the world. These clients include corporations, governments,
municipalities, and financial institutions, and the expertise J.P. Morgan offers
them is based on in-depth knowledge of their needs and the industries and
financial markets in which they operate. Linking clients to the full range of
J.P. Morgan's financial capabilities is a global network of senior client
managers.
In partnership with clients, J.P. Morgan's advisory professionals
explore the risks and rewards of such strategic alternatives as mergers and
acquisitions, divestitures, privatizations, and recapitalizations. J.P. Morgan
also advises clients on their capital structures, looking for ways to unlock
value and seize opportunities.
J.P. Morgan's debt underwriting, equities, and credit businesses
provide the capabilities to raise the necessary capital and execute the
appropriate strategies.
In J.P. Morgan's equities business, underwriting is complemented by
its ability to provide clients with liquidity in the secondary markets through
its global sales and trading network. J.P. Morgan also applies its expertise in
the equities markets to structuring equity derivatives as a means of helping
clients manage market volatility. High-quality equity research is integral to
all aspects of its business.
J.P. Morgan's credit capabilities include meeting clients' financing
needs by issuing and syndicating loans and other credit facilities.
Sales and Trading
Sales and Trading provides clients with around-the-clock access to
global markets. J.P. Morgan makes markets in fixed income, foreign exchange, and
commodity instruments; it serves as a counterparty to help clients
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manage risks; and it provides financial and economic research to help clients
assess opportunities and track performance. To function effectively in its role
as a market-maker, it also takes positions. J.P. Morgan's clients include
corporations, central banks, governments and their agencies, financial
institutions, pension funds, mutual funds, and leveraged funds.
J.P. Morgan's fixed income activities encompass acting as a primary
dealer in U.S. and foreign government securities; making markets in options,
money market instruments, U.S. government agency securities, and corporate debt
securities; and helping clients manage their exposure to fluctuating interest
and foreign exchange rates by structuring, executing, and making markets in risk
management instruments.
J.P. Morgan's foreign exchange capabilities include executing spot
transactions and structuring transactions to help clients manage their foreign
currency exposures. In commodities, J.P. Morgan makes markets in precious
metals, base metals, and energy products and develops hedging and financial
strategies for clients.
J.P. Morgan's emerging markets activities, while principally related
to fixed income activities, cross all markets, and J.P. Morgan's worldwide
network enables it to fulfill its role as a market-maker and provide clients
with a steady flow of market information.
In addition to J.P. Morgan's client-focused businesses, it has a
separate proprietary unit that engages in transactions for its own account
across all markets.
Asset Management and Servicing
Asset Management and Servicing activities encompass designing and
executing investment strategies and providing administrative and brokerage
services. J.P. Morgan's clients include corporations, financial and governmental
institutions, and high net worth individuals.
J.P. Morgan tailors its asset management capabilities for both
institutional and private clients. For institutional clients, it offers such
services as the management of employee-benefit-plan assets, executing investment
strategies across the spectrum of asset classes in all major markets.
<PAGE> 124
J.P. Morgan's private banking group helps high net worth individuals
plan and execute their investment strategies with a broad range of capabilities,
which include managed investment and trust portfolios, Morgan-advised mutual
funds, and a full-service brokerage unit. Credit, deposit, trust, and estate
services are also provided to private clients.
J.P. Morgan's exchange traded products professionals provide
institutional clients with worldwide access to major exchanges by acting as
futures and options brokers in executing and clearing contracts.
J.P. Morgan provides such operational services as the administration
of depositary receipt programs and global trust and agency services. It operates
the Euroclear System, the world's largest clearance and settlement system for
internationally traded securities, and offers credit and deposit services to
Euroclear participants.
Equity Investments
J.P. Morgan invests its capital in the private equity of rapidly
growing companies, management buyouts, privatizations, and recapitalizations.
These investments are made and managed with the objective of maximizing total
return--both long-term appreciation and net realized gains. While each
opportunity for investment is evaluated to achieve the firm's desired balance
between risk and return, many of these opportunities arise from its client
relationships.
J.P. Morgan's equity investment portfolio consists of approximately
95 investments diversified by industry, geography, and year of investment. J.P.
Morgan's goal is to maintain a diversified portfolio capable of generating
significant returns over time. This is a high-risk, high-reward business, and
the firm operates under a variety of legal and regulatory restrictions in
managing the portfolio.
Investments are generally held for three to seven years, depending
on J.P. Morgan's view of when a sale will produce optimal returns. Typically,
investments are harvested through a public offering of securities or the sale of
the investment. While realization of gains in the portfolio accelerates during
periods of strong equity and merger markets, the process of assessing and
managing the
<PAGE> 125
risks and rewards of new opportunities and existing investments continues
throughout market cycles.
Asset and Liability Management
Asset and Liability Management activities include managing the
firm's interest rate risk as it relates to nontrading-related assets,
liabilities, and off-balance-sheet activities and managing the firm's overall
liquidity risk.
J.P. Morgan's objective when it comes to interest rate risk
management is to create longer-term value, which is realized over time primarily
as net interest revenue and net investment securities gains. J.P. Morgan's
primary focus is on achieving a desired overall interest rate profile, which may
change over time, based on management's longer-term view of global interest rate
trends and economic conditions. A variety of instruments -- in numerous
currencies both on- and off-balance-sheet -- are used in an integrated manner to
achieve this objective.
J.P. Morgan manages the maturity and repricing imbalances between
its assets and liabilities through the use of investments in the more liquid
fixed income markets worldwide and derivatives. Asset and liability management
swaps are used to hedge exposures; to modify the interest rate characteristics
of specified assets or liabilities; and, in the case of risk-adjusting swaps, to
adjust Morgan's overall interest rate risk profile.
The firm's liquidity risk profile is managed to ensure that even
under adverse conditions, it has the ability to access funds at a reasonable
cost. A strong capital position is therefore an integral part of our liquidity
management because it enables us to raise funds as inexpensively as possible in
a variety of international markets.
Regulation
J.P. Morgan is subject to regulation under the Bank Holding Company
Act of 1956 (the "Act"). Under the Act, J.P. Morgan is required to file certain
reports with the Board of Governors of the Federal Reserve System (the "Board")
and is subject to examination by the Board. The Act generally precludes J.P.
Morgan and its subsidiaries from engaging in nonbanking activities, or from
acquiring
<PAGE> 126
more than 5% of any class of voting securities of any company engaging in such
activities, unless the Board has determined, by order or regulation, that such
proposed activities are closely related to banking. Federal law and Board
interpretations limit the extent to which J.P. Morgan and its subsidiaries can
engage in certain aspects of the securities business. Under Board policy, J.P.
Morgan is expected to act as a source of financial strength to each subsidiary
bank and to commit resources to support such subsidiary bank, even in
circumstances where J.P. Morgan might not be in a financial position to do so.
The Glass-Steagall Act prohibits affiliates of banks that are
members of the Federal Reserve System, including J.P. Morgan Securities Inc.
("JPMSI"), from being "engaged principally" in bank-ineligible underwriting and
dealing activities (mainly corporate debt and equity securities). As interpreted
by the Board, this prohibition currently restricts JPMSI's gross revenues from
such activities to a maximum of 10% of its total gross revenues. The Board has
proposed a modification to its interpretation which would increase such limit
to 25% of total gross revenues, but there can be no assurance that such
modification will be adopted. J.P. Morgan will continue to seek ways to expand
the limits on such activities and to achieve the reform of the Glass-Steagall
Act necessary to achieve its long-term objectives.
Morgan Guaranty Trust Company of New York ("Morgan Guaranty"), J.P.
Morgan's largest subsidiary, is a member of the Federal Reserve System and a
member of the Federal Deposit Insurance Corporation ("FDIC"). Its business is
subject to both U.S. federal and state law and to examination and regulation by
U.S. federal and state banking authorities. J.P. Morgan and its nonbank
subsidiaries are affiliates of Morgan Guaranty within the meaning of the
applicable federal statutes. Morgan Guaranty is subject to restrictions on loans
and extensions of credit to J.P. Morgan and certain other affiliates and on
certain other types of transactions with them or involving their securities.
Among other wholly owned subsidiaries:
JPMSI is a broker-dealer registered with the Securities and
Exchange Commission and is a member of the National
Association of Securities Dealers, the New York Stock
Exchange, and other exchanges.
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J.P. Morgan Futures Inc. is subject to
regulation by the Commodity Futures Trading
Commission, the National Futures Association,
and the commodity exchanges and
clearinghouses of which it is a member.
J.P. Morgan Investment Management Inc. is
registered with the Securities and Exchange
Commission as an investment adviser under the
Investment Advisers Act of 1940, as amended.
J.P. Morgan subsidiaries conducting business in other countries are
also subject to regulations and restrictions imposed by those jurisdictions,
including capital requirements.
The principal executive office of J.P. Morgan is located at 60 Wall
Street, New York, New York 10260-0060, and its telephone number of (212)
483-2323.
J.P. MORGAN CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Nine Months Ended Years Ended December 31,
September 30, -----------------------------------------
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Excluding Interest on
Deposits .......... 1.36 1.35 1.40 1.70(a) 1.53(b) 1.42(c)
Including Interest on
Deposits........... 1.26 1.24 1.28 1.46(a) 1.31(b) 1.23(c)
</TABLE>
- -----------
(a) For the year ended December 31, 1993, the ratio of earnings to fixed
charges, including the cumulative effect of a change in the method of
accounting for postretirement benefits other than pensions, was 1.64
excluding interest on deposits and 1.43 including interest on deposits.
(b) For the year ended December 31, 1992, the ratio of earnings to fixed
charges, including the cumulative effect of a change in the method of
accounting for income taxes, was 1.67 excluding interest on deposits and
1.39 including interest on deposits.
(c) For the year ended December 31, 1991, the ratio of earnings to fixed
charges, including the extraordinary gain on early retirement of debt, was
1.43 excluding interest on deposits and 1.24 including interest on deposits.
<PAGE> 128
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the net
proceeds from the sale of the Offered Securities will be used for general
corporate purposes, including investment in equity and debt securities and
interest-bearing deposits of subsidiaries. Pending such use, J.P. Morgan may
temporarily invest the net proceeds or may use them to reduce short-term
indebtedness.
DESCRIPTION OF J.P. MORGAN DEBT SECURITIES
The Debt Securities offered hereby will be issuable in one or more series under
an Indenture dated as of August 15, 1982 and all indentures supplemental
thereto, including the First Supplemental Indenture dated as of May 5, 1986
(collectively referred to as the "Debt Indenture"), between J.P. Morgan and
First Trust of New York, National Association, successor to Chemical Bank
(formerly Manufacturers Hanover Trust Company), as Trustee (the "Debt Trustee").
The Subordinated Debt Securities offered hereby will be issuable in one or more
series under an Indenture dated as of March 1, 1993, and any indentures
supplemental thereto, (the "Subordinated Indenture"), between J.P. Morgan and
First Trust of New York, National Association, successor to Citibank, N.A., as
Trustee (the "Subordinated Trustee"). The Debt Indenture and the Subordinated
Indenture are sometimes referred to collectively as the "Indentures" and the
Debt Trustee and the Subordinated Trustee are sometimes referred to collectively
as the "Trustees." The following statements are subject to the detailed
provisions of the Indentures, copies of which are filed as exhibits to the
Registration Statement, and to the provisions of the Trust Indenture Act of
1939, as amended. Wherever references are made to particular provisions of the
Indentures, such provisions are incorporated by reference as a part of the
statements made and such statements are qualified in their entirety by such
reference. Certain capitalized terms used herein are defined in the Indentures.
References in italics are to sections or articles of the Indentures.
General
Each Indenture does not limit the amount of J.P. Morgan Debt Securities that
may be issued thereunder and provides that J.P. Morgan Debt Securities may be
issued in series thereunder up to the aggregate principal amount that may be
authorized from time to time by J.P. Morgan. Reference is made to the Prospectus
Supplement for the following terms of each series of J.P. Morgan Debt Securities
in respect of which this Prospectus is being delivered: (1) whether the J.P.
Morgan Debt Securities are Debt Securities or Subordinated Debt Securities; (2)
the designation, aggregate principal amount and authorized denominations of such
J.P. Morgan Debt Securities; (3) the purchase price of such J.P. Morgan Debt
Securities (expressed as a percentage of the principal amount thereof); (4) the
date on which such J.P. Morgan Debt Securities will mature; (5) the rate or
rates per annum at which such J.P. Morgan Debt Securities will bear interest, if
any, or the method by which such interest will be determined; (6) the coin or
currency or units based on or relating to currency units (including ECU) for
which J.P. Morgan Debt Securities may be purchased and in which payment of
principal and interest will be made; (7) the dates on which such interest, if
any, will be payable; (8) the terms of any mandatory or optional redemption
(including any sinking fund); (9) whether the J.P. Morgan Debt Securities will
be issued in fully registered form without coupons attached or in bearer form
with coupons; (10) the restrictions, if any, applicable to the exchange of J.P.
Morgan Debt Securities of one form for another and to the offer, sale and
delivery of the J.P. Morgan Debt Securities; (11) whether and under what
circumstances J.P. Morgan will pay additional amounts on J.P. Morgan Debt
Securities in the event of certain developments with respect to United States
withholding tax or information reporting laws; (12) whether J.P. Morgan may
redeem the J.P. Morgan Debt
<PAGE> 129
Securities in the event of such developments; and (13) any other specific terms.
If a Prospectus Supplement specifies that J.P. Morgan Debt Securities are
denominated in a currency other than U.S. dollars or in a currency unit, such
Prospectus Supplement shall also specify the coin or currency or currency unit
in which the principal, premium, if any, and interest, if any, on such J.P.
Morgan Debt Securities will be payable, which may be U.S. dollars based upon the
exchange rate for such other currency or currency unit existing on or about the
time a payment is due. Unless otherwise specified, principal and interest, and
additional amounts, if any, will be payable at the office of First Trust of New
York, National Association in New York City, provided that payment of interest
on any J.P. Morgan Debt Securities in registered form may be made at the option
of J.P. Morgan by check mailed to the registered holders.
Some of the J.P. Morgan Debt Securities may be issued as original issue
discount J.P. Morgan Debt Securities (bearing no interest or interest at a rate
which at the time of issuance is below market rates), to be sold at a
substantial discount below their stated principal amount. Federal income tax,
accounting and other special considerations applicable to any such original
issue discount J.P. Morgan Debt Securities will be described in the Prospectus
Supplement relating thereto.
J.P. Morgan Debt Securities may be presented for exchange, and registered J.P.
Morgan Debt Securities may be presented for transfer, in the manner, at the
places and subject to the restrictions set forth in the applicable Indenture,
the J.P. Morgan Debt Securities and the Prospectus Supplement. J.P. Morgan Debt
Securities in bearer form and the coupons, if any, appertaining thereto will be
transferable by delivery. No service charge will be made for any exchange of the
J.P. Morgan Debt Securities or transfer of J.P. Morgan Debt Securities in
registered form, but J.P. Morgan may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
(Sections 2.8 of the Indentures)
The Indentures and Debt Securities will not contain any provision that would
require J.P. Morgan to repurchase or redeem or otherwise modify the terms of the
Debt Securities upon a change in control or other events involving J.P. Morgan
that may adversely affect the credit quality of J.P. Morgan.
Subordinated Debt Securities
Subordination
The Subordinated Debt Securities will be unsecured and will be subordinate in
right of payment to all Senior Indebtedness (as defined below) of J.P. Morgan
and, in certain circumstances relating to the bankruptcy or insolvency of J.P.
Morgan, the Derivative Obligations (as defined below), whether outstanding as of
this date or hereafter incurred. In addition, since J.P. Morgan is a holding
company, the right of J.P. Morgan to participate as a shareholder in any
distribution of assets of any subsidiary upon its liquidation or reorganization
or otherwise (and thus the ability of holders of the Subordinated Debt
Securities to benefit as creditors of J.P. Morgan from such distribution) is
subject to the prior claims of creditors of any such subsidiary. J.P. Morgan and
its subsidiaries are subject to claims by creditors for long-term and short-term
debt obligations, including substantial obligations for federal funds purchased
and securities sold under repurchase agreements, as well as deposit liabilities.
There are also various legal limitations on the extent to which subsidiaries of
J.P. Morgan may pay dividends or otherwise supply funds to J.P. Morgan.
The Subordinated Debt Securities will be subordinate in right of payment as
provided in the Indenture to all Senior Indebtedness of J.P. Morgan. In certain
events of bankruptcy or
<PAGE> 130
insolvency of J.P. Morgan, the Subordinated Debt Securities will also be
subordinate in right of payment to the extent set forth in the Subordinated
Indenture to the prior payment in full of Derivative Obligations (as defined
below). No payment pursuant to the Subordinated Debt Securities may be made and
no holder of the Subordinated Debt Securities or any coupon appertaining thereto
shall be entitled to demand or receive any such payment (i) unless all amounts
of principal, premium, if any, and interest then due on all Senior Indebtedness
of J.P. Morgan shall have been paid in full or duly provided for or (ii) if, at
the time of such payment or immediately after giving effect thereto, there shall
exist with respect to any given Senior Indebtedness of J.P. Morgan any event of
default permitting the holders thereof to accelerate the maturity thereof or any
event which, with notice or lapse of time, or both, will become such an event of
default. (Section 10.2. of the Subordinated Indenture)
Upon any distribution of the assets of J.P. Morgan upon dissolution, winding
up, liquidation or reorganization, (i) the holders of Senior Indebtedness of
J.P. Morgan will be entitled to receive payment in full of principal, premium,
if any, and interest before any payment may be made on the Subordinated Debt
Securities and (ii) if, after giving effect to the operation of clause (i)
above, amounts remain available for payment or distribution in respect of the
Subordinated Debt Securities (any such remaining amount being defined as the
"Excess Proceeds") and creditors in respect of Derivative Obligations have not
received payment in full of amounts due or to become due thereon, then such
Excess Proceeds shall first be applied to pay or provide for the payment in full
of all such Derivative Obligations before any payment may be made on the
Subordinated Debt Securities. (Sections 10.3 and 10.12 of the Subordinated
Indenture.) By reason of such subordination, in the event of a bankruptcy or
insolvency of J.P. Morgan, holders of Senior Indebtedness and Derivative
Obligations of J.P. Morgan may receive more, ratably, and holders of the
Subordinated Debt Securities or coupons appertaining thereto may receive less,
ratably, than the other creditors of J.P. Morgan. No series of subordinated debt
is subordinated to any other series of subordinated debt. However, by reason of
the obligation of the holders of the Subordinated Debt Securities to pay over
any Excess Proceeds to creditors in respect of Derivative Obligations, in the
event of a bankruptcy or insolvency of J.P. Morgan, the holders of the
Subordinated Debt Securities may receive less, ratably, than holders of
Antecedent Subordinated Indebtedness (as defined below). Such subordination will
not prevent the occurrence of any Event of Default in respect of the
Subordinated Debt Securities. The Subordinated Indenture does not limit the
amount of Senior Indebtedness J.P. Morgan may incur.
Senior Indebtedness of J.P. Morgan is defined as the principal of, premium, if
any, and interest on (a) all indebtedness of J.P. Morgan for money borrowed,
whether outstanding on the date of execution of the Indenture or thereafter
created, assumed or incurred, except (i) the DM400,000,000 aggregate principal
amount of Floating Rate Subordinated Notes of 1985/1995 of J.P. Morgan; (ii) the
U.S. $400,000,000 aggregate principal amount of Zero Coupon Subordinated Notes
Due 1998 of J.P. Morgan; (iii) the U.S. $250,000,000 aggregate principal amount
of 7% Subordinated Notes Due 1998 of J.P. Morgan; (iv) the U.S. $150,000,000
aggregate principal amount of 8 1/2% Subordinated Notes Due 2003 of J.P. Morgan;
(v) the U.S. $500,000,000 aggregate principal amount of 7 5/8% Subordinated
Notes Due 2004 of J.P. Morgan; (vi) the CAN. $250,000,000 aggregate principal
amount of 6 7/8% Subordinated Notes Due 2004 of J.P. Morgan; (vii) the U.S.
$200,000,000 aggregate principal amount of 7 1/4% Subordinated Notes Due 2002 of
J.P. Morgan; (viii) the U.S. $200,000,000 aggregate principal amount of Floating
Rate Subordinated Notes Due 2002 of J.P. Morgan; (ix) the U.S. $250,000,000
aggregate principal amount of Floating Rate Subordinated Notes Due 2002; (x) the
U.S.
<PAGE> 131
$200,000,000 aggregate principal amount of Floating Rate Subordinated Constant
Maturity Treasury Notes Due 2000 of J.P. Morgan; (xi) the U.S. $300,000,000
aggregate principal amount of Floating Rate Subordinated Notes Due 2005; (xii)
the U.S. $150,000,000 aggregate principal amount of 5% Subordinated Notes Due
2008 of J.P. Morgan; (xiii) the U.S. $300,000,000 aggregate principal amount of
6 1/4% Subordinated Notes Due 2009 of J.P. Morgan; (xiv) the ITL.
150,000,000,000 aggregate principal amount of 8% Subordinated Notes Due 2003 of
J.P. Morgan; (xv) the U.S.$100,000,000 aggregate principal amount of 8%
Subordinated Notes due 2005 of J.P. Morgan; (xvi) the U.S.$100,000,000 aggregate
principal amount of 7 1/4% Subordinated Notes due 2010 of J.P. Morgan; and
(xvii) such indebtedness as is by its terms expressly stated to be not superior
in right of payment to the Subordinated Debt Securities or to rank pari passu
with the Subordinated Debt Securities and (b) any deferrals, renewals or
extensions of any such Senior Indebtedness. The term "Indebtedness of J.P.
Morgan for money borrowed" as used in the foregoing sentence shall mean any
obligation of, or any obligation guaranteed by, J.P. Morgan for the repayment of
borrowed money, whether or not evidenced by bonds, debentures, notes or other
written instruments, and any deferred obligation for the payment of the purchase
price of property or assets. The Subordinated Debt Securities shall rank pari
passu with the Subordinated Notes referred to in (a)(i) through (a)(xv),
although, as noted above, the Subordinated Debt Securities, as opposed to the
Antecedent Subordinated Indebtedness, will be subordinated in the event of a
bankruptcy or insolvency of J.P. Morgan to Derivative Obligations. The term
"pari passu" as used herein shall mean ranking equally in right of payment in
the event of J.P. Morgan's bankruptcy. (Section 1.1. of the Subordinated
Indenture)
Derivative Obligations of J.P. Morgan are defined in the Subordinated Indenture
as obligations of J.P. Morgan to make payments on claims in respect of
derivative products such as interest and foreign exchange rate contracts,
commodity contracts and similar arrangements; provided, however, that Derivative
Obligations do not include claims in respect of Senior Indebtedness or
obligations which, by their terms, are expressly stated not to be superior in
right of payment to the Subordinated Debt Securities or to rank pari passu with
the Subordinated Debt Securities. For purposes of this definition, "claim" has
the meaning assigned thereto in Section 101(4) of the United States Bankruptcy
Code of 1978, as amended and in effect on the date of the Subordinated
Indenture. (Section 1.1. of the Subordinated Indenture)
Antecedent Subordinated Indebtedness of J.P. Morgan is defined in the
Subordinated Indenture as all indebtedness and other obligations outstanding on
the date of the Subordinated Indenture and enumerated in clauses (a)(i) through
(a)(ix) of the definition of "Senior Indebtedness" (Section 1.1. of the
Subordinated Indenture)
The Prospectus Supplement will set forth the aggregate amount of outstanding
indebtedness as of the most recent practicable date that by the terms of such
debt securities would be senior to the subordinated debt and any limitation on
the issuance of such additional senior indebtedness.
Limited Right of Acceleration. Unless otherwise specified in the Prospectus
Supplement relating to any series of Subordinated Debt Securities, payment of
principal of the Subordinated Debt Securities may be accelerated only in the
case of the bankruptcy or reorganization of J.P. Morgan. There is no right of
acceleration in the case of a default in the payment of principal of, premium,
if any, or interest on the Subordinated Debt Securities or the performance of
any other covenant of J.P. Morgan contained in the Indenture. In the event of a
default in the payment of principal of, premium, if any, or interest, or the
<PAGE> 132
performance of any other covenant in the Subordinated Debt Securities or the
Indenture, the Trustee may, subject to certain limitations and conditions, seek
to enforce payment of such principal, premium, or interest or the performance of
such covenant. (Sections 5.2 and 5.4 of the Subordinated Indenture.)
Senior Debt Securities
The Debt Securities will be unsecured and will rank on a parity with all other
unsecured and unsubordinated indebtedness of J.P. Morgan. Since J.P. Morgan is a
holding company, however, the right of J.P. Morgan to participate as a
shareholder in any distribution of assets of any subsidiary upon its liquidation
or reorganization or otherwise (and thus the ability of holders of the Debt
Securities to benefit as creditors of J.P. Morgan from such distribution) is
subject to the prior claims of creditors of any such subsidiary. J.P. Morgan and
its subsidiaries are subject to claims by creditors for long-term and short-term
debt obligations, including substantial obligations for federal funds purchased
and securities sold under repurchase agreements, as well as deposit liabilities.
There are also various legal limitations on the extent to which subsidiaries of
J.P. Morgan may pay dividends or otherwise supply funds to J.P. Morgan.
Events of Default, Waiver, Notice, J.P. Morgan Debt Securities in Foreign
Currencies
As to any series of J.P. Morgan Debt Securities, an Event of Default is defined
in the Indentures as (a) default for 30 days in payment of any interest on the
J.P. Morgan Debt Securities of such series; (b) default in payment of principal
of or premium, if any, on the J.P. Morgan Debt Securities of such series when
due either at maturity, upon redemption, by declaration or otherwise; (c)
default in the payment of a sinking fund installment, if any, on the J.P. Morgan
Debt Securities of such series; (d) default by J.P. Morgan in the performance of
any other covenant or warranty contained in the respective Indenture for the
benefit of such series which shall not have been remedied for a period of 90
days after notice given as specified in the Indenture; and (e) certain events of
bankruptcy or reorganization of J.P. Morgan. (Sections 5.1. of the Indentures)
An Event of Default with respect to a particular series of J.P. Morgan Debt
Securities issued under the respective Indenture does not necessarily constitute
an Event of Default with respect to any other series of J.P. Morgan Debt
Securities issued thereunder. Each Indenture provides that the Trustee may
withhold notice to the holders of the respective J.P. Morgan Debt Securities of
any series of any default (except in payment of principal of or interest or
premium, if any, on such J.P. Morgan Debt Securities or in the making of any
sinking fund payment with respect to such J.P. Morgan Debt Securities) if the
Trustee considers it in the interest of the holders of J.P. Morgan Debt
Securities of such series to do so. (Sections 5.11. of the Indentures)
The Subordinated Indenture provides that if an Event of Default described in
clause (e) above shall have occurred and be continuing, either the Subordinated
Trustee or the holders of at least 25% in principal amount of all Subordinated
Debt Securities then outstanding (voting as one class) may declare the principal
(or, in the case of original issue discount Subordinated Debt Securities, the
portion thereof specified in the terms thereof) of all Subordinated Debt
Securities then outstanding and the interest accrued thereon, if any, to be due
and payable immediately, but upon certain conditions such declarations may be
annulled and past defaults (except for defaults in the payment of principal of
or premium, or interest, if any, on such Subordinated Debt Securities) may be
waived by the holders of a majority in principal amount of the Subordinated Debt
Securities of all series then outstanding. (Sections 5.1 and 5.10. of the
<PAGE> 133
Subordinated Indenture)
The Debt Indenture provides that (1) if an Event of Default described in clause
(a), (b), (c) or (d) above (if the Event of Default under clause (d) is with
respect to less than all series of Debt Securities then outstanding) shall have
occurred and be continuing with respect to one or more series, either the
Trustee or the holders of at least 25% in principal amount of the Debt
Securities of such series then outstanding (each such series voting as a
separate class in the case of an Event of Default under clause (a), (b) or (c)
and all such series voting as one class in the case of an Event of Default under
clause (d)) may declare the principal (or, in the case of original issue
discount Debt Securities, the portion thereof specified in the terms thereof) of
all outstanding Debt Securities of such series and the interest accrued thereon,
if any, to be due and payable immediately and (2) if an Event of Default
described in clause (d) or (e) above (if the Event of Default under clause (d)
is with respect to all series of Debt Securities then outstanding) shall have
occurred and be continuing, either the Debt Trustee or the holders of at least
25% in principal amount of all Debt Securities then outstanding (voting as one
class) may declare the principal (or, in the case of original issue discount
Debt Securities, the portion thereof specified in the terms thereof) of all Debt
Securities then outstanding and the interest accrued thereon, if any, to be due
and payable immediately, but upon certain conditions such declarations may be
annulled and past defaults (except for defaults in the payment of principal of,
or premium or interest, if any, on such Debt Securities) may be waived by the
holders of a majority in principal amount of the Debt Securities of such series
(or of all series as the case may be) then outstanding. (Sections 5.1 and 5.10.
of the Debt Indenture)
The holders of a majority in principal amount of the outstanding J.P. Morgan
Debt Securities of each series affected (with each series voting as a separate
class) shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee under the applicable
Indenture, subject to certain limitations specified in the applicable Indenture,
provided that the holders of J.P. Morgan Debt Securities shall have offered to
the Trustee reasonable indemnity against expenses and liabilities. (Sections 5.9
and 6.2(d) of the Indentures.) The Indentures require the annual delivery by
J.P. Morgan to the Trustee of a written statement as to the absence of certain
defaults under the applicable Indenture. (Sections 3.5 of the Indentures.)
Whenever either Indenture provides for an action by, or the determination of any
of the rights of, or any distribution to, holders of J.P. Morgan Debt
Securities, in the absence of any provision to the contrary in the form of J.P.
Morgan Debt Security, any amount in respect of any J.P. Morgan Debt Security
denominated in a currency other than U.S. dollars or in any currency unit shall
be treated as that amount of U.S. dollars that could be obtained for such amount
on such reasonable basis of exchange and as of such date as J.P. Morgan
specifies to the Trustee or in the absence of such notice, as the Trustee may
determine. (Section 12.11 of the Subordinated Indenture and Section 11.11 of the
Debt Indenture.)
Modification of the Indentures; Waiver of Compliance
Each Indenture contains provisions permitting J.P. Morgan and the Trustee, with
the consent of the holders of not less than a majority in principal amount of
the respective J.P. Morgan Debt Securities of all series affected by such
modification or waiver at the time outstanding (voting as one class), to modify
the Indenture or any supplemental indenture or the rights of the holders of the
respective J.P. Morgan Debt Securities, or waive compliance by J.P. Morgan with
any of its obligations thereunder, provided that no such modification or waiver
shall
<PAGE> 134
(i) extend the final maturity of any respective J.P. Morgan Debt Security, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or change the currency or currency unit of payment
thereof, or change the method in which amounts of payments of principal or
interest thereon are determined, or reduce the portion of the principal amount
of an original issue discount J.P. Morgan Debt Security due and payable upon
acceleration of the maturity thereof or the portion of the principal amount
thereof provable in bankruptcy, or reduce any amount payable upon redemption of
any J.P. Morgan Debt Security, or impair or affect the right of a holder to
institute suit for the payment thereof or, if the J.P. Morgan Debt Securities
provide therefor, any right of repayment at the option of the holder of a J.P.
Morgan Debt Security, without the consent of the holder of each respective J.P.
Morgan Debt Security so affected or (ii) reduce the aforesaid percentage of J.P.
Morgan Debt Securities of any series, the consent of the holders of which is
required for any such modification, without the consent of the holder of each
J.P. Morgan Debt Security so affected. (Sections 8.2 and 8.6. of the Indentures)
The Indentures also permit J.P. Morgan and the Trustee to amend such Indenture
in certain circumstances without the consent of the holders of J.P. Morgan Debt
Securities to evidence the merger of J.P. Morgan, the replacement of the
Trustee, to effect modifications which do not affect any series of J.P. Morgan
Debt Security already outstanding, and for certain other purposes. (Sections
8.1. of the Indentures)
Consolidations, Mergers and Sales of Assets
J.P. Morgan may not merge or consolidate with any other corporation or sell or
convey all or substantially all of its assets to any Person, unless either J.P.
Morgan shall be the continuing corporation or the successor corporation shall be
a corporation organized under the laws of the United States or any state thereof
and shall expressly assume the payment of the principal of and interest on the
J.P. Morgan Debt Securities and the performance and observance of all the
covenants and conditions of the Indenture binding upon J.P. Morgan, and J.P.
Morgan or such successor corporation shall not, immediately after such merger or
consolidation, or such sale or conveyance, be in default in the performance of
any such covenant or condition. (Articles Nine of the Indentures.)
Concerning the Trustee, Paying Agent, Registrar and Transfer Agent
J.P. Morgan and its subsidiaries have normal banking relationships with the
Trustee, First Trust of New York, National Association. First Trust of New York,
National Association, 100 Wall Street, Suite 1600, New York, New York 10005,
will also be the paying agent, registrar and transfer agent for any series of
J.P. Morgan Debt Securities.
Global J.P. Morgan Debt Securities
Any series of J.P. Morgan Debt Securities may be issued in the form of one or
more global certificates (the "Global Debt Security") registered in the name of
a depository or a nominee of a depository (the "Depository"). Unless otherwise
specified in an applicable Prospectus Supplement, the Depository will be the
Depository Trust Company ("DTC"). The Corporation has been informed by DTC that
its nominee will be CEDE & CO. ("CEDE"). Accordingly, CEDE is expected to be the
initial registered holder of any series of J.P. Morgan Debt Securities. No
person acquiring an interest in such series of J.P. Morgan Debt Securities (a
"Holder") will be entitled to receive a certificate representing such person's
interest in the J.P. Morgan Debt Securities except as set forth herein. Unless
and until definitive J.P. Morgan Debt Securities are issued under the
<PAGE> 135
limited circumstances described herein, all references to actions by Holders
shall refer to actions taken by DTC upon instructions from its Participants (as
defined below), and all references herein to payments and notices to Holders
shall refer to payments and notices to DTC or CEDE, as the registered holder of
the J.P. Morgan Debt Securities, as the case may be, for distribution to Holders
in accordance with the DTC procedures.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to Section 17A of the 1934 Act. DTC was created to hold
securities for its participating organizations ("Participants") and to
facilitate the clearance and settlement of securities transactions between
Participants through electronic book-entry, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations, and may include
certain other organizations. Indirect access to the DTC system also is available
to others such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants").
Holders that are not Participants or Indirect Participants but desire to
purchase, sell or otherwise transfer ownership of, or other interests in, J.P.
Morgan Debt Securities may do so only through Participants and Indirect
Participants. Under a book-entry format, Holders may experience some delay in
their receipt of payments, since such payments will be forwarded by the agent
designated by J.P. Morgan to CEDE, as nominee for DTC. DTC will forward such
payments to its Participants, which thereafter will forward them to Indirect
Participants or Holders. It is anticipated that CEDE, as nominee of DTC, will be
the registered holder of all of the J.P. Morgan Debt Securities. Holders will
not be recognized by either of the Trustees as registered holders of the J.P.
Morgan Debt Securities entitled to the benefits of the relevant Indenture.
Holders that are not Participants will be permitted to exercise their rights as
such only indirectly through Participants.
Under the rules, regulations and procedures creating and affecting DTC and its
operations (the "Rules"), DTC will be required to make book-entry transfers of
J.P. Morgan Debt Securities among Participants and to receive and transmit
payments to Participants. Participants and Indirect Participants with which
Holders have accounts with respect to the J.P. Morgan Debt Securities similarly
are required to make book-entry transfers and receive and transmit such payments
on behalf of their respective Holders.
Because DTC can only act on behalf of Participants, who in turn act on behalf
of Indirect Participants, and on behalf of certain banks, trust companies and
other persons approved by it, the ability of a Holder to pledge J.P. Morgan Debt
Securities to persons or entities that do not participate in the DTC system, or
to otherwise act with respect to such J.P. Morgan Debt Securities, may be
limited due to the absence of physical certificates for such J.P. Morgan Debt
Securities.
DTC has advised J.P. Morgan that it will take any action permitted to be taken
by a Holder under the relevant Indenture only at the direction of one or more
Participants to whose accounts with DTC the J.P. Morgan Debt Securities are
credited.
The Global Debt Security shall be exchangeable for J.P. Morgan Debt Securities
registered in the names of persons other than DTC or its nominee only if (i) DTC
notifies J.P. Morgan that it is unwilling or unable to continue as depository
for such
<PAGE> 136
Global Debt Security or if at any time DTC ceases to be a clearing agency
registered under the 1934 Act at a time when DTC is required to be so registered
to act as such depository or (ii) J.P. Morgan executes and delivers to the
Trustee a Company Order that such Global Debt Security shall be so exchangeable.
Any Global Debt Security that is exchangeable pursuant to the preceding sentence
shall be exchangeable for J.P. Morgan Debt Securities registered in such names
as DTC shall direct.
Upon the occurrence of any event described in the immediately preceding
paragraph, DTC is generally required to notify all Participants of the
availability through DTC of definitive J.P. Morgan Debt Securities. Upon
surrender by DTC of the Global Debt Security representing the J.P. Morgan Debt
Securities and instructions for registration, the Trustee will reissue the J.P.
Morgan Debt Securities as definitive J.P. Morgan Debt Securities, and thereafter
the Trustee will recognize the holders of such definitive J.P. Morgan Debt
Securities as registered holders of J.P. Morgan Debt Securities entitled to the
benefits of the applicable Indenture.
The Global Debt Security may not be transferred except as a whole by DTC with
respect to such Global Debt Security to a nominee of DTC or by a nominee of DTC
to DTC or another nominee of DTC or to a successor Depository appointed by the
Corporation. DTC may not sell, assign, transfer or otherwise convey any
beneficial interest in a Global Debt Security evidencing all or part of the J.P.
Morgan Debt Securities unless such beneficial interest is an amount equal to an
authorized denomination for the J.P. Morgan Debt Securities.
<PAGE> 137
PLAN OF DISTRIBUTION
J.P. Morgan may sell the Offered Securities being offered hereby (i) through
agents, (ii) through underwriters, (iii) through dealers and (iv) directly to
purchasers. Any such persons may be customers of, engage in transactions with,
or perform services for, J.P. Morgan in the ordinary course of business.
Securities may be offered and sold through agents designated by J.P. Morgan
from time to time. Any such agent involved in the offer or sale of the
Securities in respect of which this Prospectus is delivered will be named, and
any commissions payable by J.P. Morgan to such agent will be set forth, in the
Prospectus Supplement. Unless otherwise indicated in the Prospectus Supplement,
any such agent will be acting on a best efforts basis for the period of its
appointment (ordinarily five business days or less). Any such agent may be
deemed to be an underwriter, as that term is defined in the Securities Act of
1933, as amended, of the Securities so offered and sold. Agents may be entitled
under agreements which may be entered into with J.P. Morgan to indemnification
by J.P. Morgan against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
If an underwriter or underwriters are utilized in the sale of the Offered
Securities, J.P. Morgan will execute an underwriting agreement with such
underwriter or underwriters at the time an agreement for such sale is reached,
and the names of the specific managing underwriter or underwriters, as well as
any other underwriters, and the terms of the transaction, including compensation
of the underwriters and dealers, if any, will be set forth in the Prospectus
Supplement which will be used by the underwriters to make resales of the Offered
Securities in respect of which this Prospectus is delivered to the public.
Underwriters will acquire Offered Securities for their own account and may
resell such Offered Securities from time to time in one or more transactions,
including negotiated transactions, at fixed public offering prices or at varying
prices determined at the time of sale. Offered Securities may be offered to the
public either through underwriting syndicates represented by managing
underwriters, or directly by the managing underwriters. The underwriters may be
entitled, under the relevant underwriting agreement, to indemnification by J.P.
Morgan against certain liabilities, including liabilities under the Securities
Act of 1933, as amended. Only underwriters named in the Prospectus Supplement
are deemed to be underwriters in connection with the Offered Securities offered
thereby. If any underwriter or underwriters are utilized in the sale of the
Offered Securities, the underwriting agreement provides that the obligations of
the underwriters are subject to certain conditions precedent and that the
underwriters with respect to a sale of Offered Securities will be obligated to
purchase all such Offered Securities if any are purchased.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, J.P. Morgan will sell such Offered
Securities to the dealer, as principal. The dealer may then resell such
Offered Securities to the public at varying prices to be determined by such
dealer at the time of resale. Any such dealer may be deemed to be an
underwriter, as such term is defined in the Securities Act of 1933, as amended,
of the Offered Securities so offered and sold. Dealers may be entitled, under
agreements which may be entered into with J.P. Morgan, to indemnification by
J.P. Morgan against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. The name of the dealer and the terms of the
transaction will be set
<PAGE> 138
forth in the Prospectus Supplement relating thereto.
Offers to purchase Offered Securities may be solicited directly by J.P. Morgan
and sales thereof may be made by J.P. Morgan directly to institutional investors
or others, who may be deemed to be underwriters within the meaning of the
Securities Act of 1933, as amended, with respect to any sale thereof. The terms
of any such sales will be described in the Prospectus Supplement relating
thereto.
If so indicated in the Prospectus Supplement, J.P. Morgan will authorize agents
and underwriters to solicit offers by certain institutions to purchase Offered
Securities from J.P. Morgan at the public offering price set forth in the
Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts")
providing for payment and delivery on the date stated in the Prospectus
Supplement. Each Contract will be for an amount not less than, and, unless J.P.
Morgan otherwise agrees, the aggregate principal amount of Securities sold
pursuant to Contracts shall be not less nor more than, the respective amounts
stated in the Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions but shall in all cases be subject to the
approval of J.P. Morgan.
Contracts will not be subject to any conditions except that any related sale of
Offered Securities to underwriters shall have occurred and the purchase by an
institution of the Offered Securities covered by its Contract shall not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject. A commission indicated in the
Prospectus Supplement will be paid to underwriters and agents soliciting
purchases of Offered Securities pursuant to Contracts accepted by J.P. Morgan.
The place and time of delivery of the Offered Securities in respect of which
this Prospectus is delivered are set forth in the accompanying Prospectus
Supplement.
This Prospectus and related Prospectus Supplement may be used by direct or
indirect wholly-owned subsidiaries of J.P. Morgan in connection with offers and
sales related to secondary market transactions in the Offered Securities. Such
subsidiaries may act as principal or agent in such transactions. Such sales will
be made at prices related to prevailing market prices at the time of a sale.
The offer and sale of the Offered Securities by an affiliate of J.P. Morgan
will comply with the requirements of Rule 2720 of the Conduct Rules of the
National Association of Securities Dealers, Inc. (the "NASD") regarding
underwriting of securities of an affiliate. Accordingly, an affiliate of J.P.
Morgan that is a member of the NASD may participate in a public offering and
sale of J.P. Morgan Debt Securities if the offering is of a class of securities
rated investment grade by a nationally recognized statistical rating
organization or the yield at which such debt issue is distributed to the public
is no lower than that recommended by a "qualified independent underwriter"
(determined to be so qualified by the NASD prior to commencement of such
offering), in compliance with the provisions of Rule 2720 of the Conduct Rules.
Each NASD member participating in offers and sales of the
<PAGE> 139
Offered Securities will not execute a transaction in the Offered Securities in a
discretionary account without the prior written specific approval of the
member's customer.
Certain of the underwriters or agents and their associates may be customers of,
engage in transactions with, and perform services for, J.P. Morgan in the
ordinary course of business.
EXPERTS
The audited financial statements contained in J.P. Morgan's Annual Report on
Form 10-K for the year ended December 31, 1995, (included in J.P. Morgan's
Annual Report to Stockholders) are incorporated by reference in this Prospectus
in reliance on the report of Price Waterhouse LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
LEGAL OPINIONS
The validity of the Securities offered hereby will be passed upon by Gene A.
Capello, Vice President and Assistant General Counsel of J.P. Morgan, and by
Cravath, Swaine & Moore, New York, New York, counsel for any underwriters,
selling agents and certain other purchasers.
<PAGE> 140
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses in connection with the issuance and distribution of
securities being registered, other than underwriting compensation and related
hedging costs, are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee $303,031
Legal Fees and Expenses............................................. 250,000
NYSE Listing Fees .................................................. 60,000
Accounting Fees and Expenses ....................................... 85,000
Trustee's Fees and Expenses (including counsel fees)
Blue Sky Fees and Expenses ......................................... 45,000
Rating Agency Fees ................................................. 2,500
Printing and Engraving Fees ........................................ 125,000
Miscellaneous ...................................................... 150,000
6,500
----------
Total ...................................... $1,027,031
==========
</TABLE>
- ----------------------------
* Estimated
Item 15. Indemnification of Officers and Directors.
Article Seventh of the Restated Certificate of Incorporation of J.P.
Morgan & Co. Incorporated (the "Registrant") provides, in effect, that, to the
extent and under the circumstances permitted by Section 145 of the General
Corporation Law of Delaware, the Registrant shall indemnify directors, officers,
employees and agents of the Registrant, or persons serving at the written
request of the Registrant as directors, officers, employees or agents of another
corporation or enterprise, including Morgan Guaranty, against loss and expenses.
Subsection (a) of Section 145 of the General Corporation Law of
Delaware empowers a corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or
<PAGE> 141
2
in the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Delaware Court of Chancery or the court in which such action or suit was brought
shall determine that despite the adjudication of liability such person is fairly
and reasonably entitled to indemnity for such expenses which the court shall
deem proper.
Section 145 further provides that to the extent a director, officer,
employee or agent of a corporation has been successful in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) or in the
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees)
<PAGE> 142
3
actually and reasonably incurred by him in connection therewith. It also
provides that indemnification provided for by Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled
under any by-law, agreement, vote of shareholders or disinterested directors or
otherwise, and it empowers the corporation to purchase and maintain insurance in
such amounts as the Board of Directors deems appropriate on behalf of a
director, officer, employee or agent of the corporation against any liability
asserted against him or incurred by him in any such capacity or arising out of
his status as such whether or not the corporation would have the power to
indemnify him against such liabilities under Section 145.
The indemnification permitted by Article Seventh of the Restated
Certificate of Incorporation of the Registrant has been extended to all officers
and directors of the Registrant's wholly owned direct and indirect subsidiaries,
and to such officers and directors in their respective capacities as directors
and officers of other corporations 25% or more of the voting securities of which
is owned, directly or indirectly, by the Registrant. The Registrant has purchase
liability insurance of the type referred to in Section 145. Subject to a
$250,000 deductible for each loss, the policy covers the Registrant with respect
to its obligation to indemnify directors and officers of the Registrant and its
wholly owned direct and indirect subsidiaries. In addition, the policy covers
directors and officers of the Registrant and its wholly owned direct and
indirect subsidiaries with respect to certain liabilities which are not
reimbursable by the Registrant. Subject to certain exclusions from the coverage,
the insurance provides for payment of loss in excess of the applicable
deductible to an aggregate limit of $90,000,000 for each policy year. Insurance
coverage does not extend to certain claims, including claims based upon or
attributable to the insured's gaining personal profit or advantage in which he
is not legally entitled, claims brought about or contributed to by the
dishonesty of the insured, and claims under Section 16(b) of the Securities
Exchange Act of 1934 for an accounting of profits resulting from the purchase or
sale by the insured of the Registrant's securities.
Item 16. Exhibits.
1(a)(l)* Form of Underwriting Agreement (including form of Delayed Delivery
Contract) for Subordinated Debt.
<PAGE> 143
4
l(a)(2)** Form of Underwriting Agreement (including form of Delayed
Delivery Contract) for Debt.
1(a)(3)+ Form of Underwriting Agreement for Series Preferred Stock,
Depositary Shares and Preferred Stock Warrants.
3(a)+++ Restated Certificate of Incorporation of J.P. Morgan & Co.
Incorporated, as amended.
3(b)+ By-Laws of J.P. Morgan & Co. Incorporated as amended through
December 11, 1991.
4(a)(1) Form of Junior Subordinated Debt Indenture to be entered into
between J.P. Morgan & Co. Incorporated and First Trust of
New York, National Association, as Trustee.
4(a)(2)* Indenture dated as of March 1, 1993, between J.P. Morgan & Co.
Incorporated and Citibank, N.A., as Trustee (now First Trust of
New York, National Association, as Successor Trustee).
4(a)(3) Indenture dated as of August 15, 1982, between J.P. Morgan & Co.
Incorporated and Chemical Bank (formerly Manufacturers Hanover
Trust Company), as Trustee (now First Trust of New York, National
Association, as Successor Trustee), (incorporated herein by
reference to J.P. Morgan's Current Report on Form 8-K, dated
February 7, 1986, filed pursuant to Section 13 of the Securities
and Exchange Act of 1934 (the "Act")).
4(a)(4) Form of First Supplemental Indenture dated as of May 5, 1986
between J.P. Morgan & Co. Incorporated and Chemical Bank
(formerly Manufacturers Hanover Trust Company), as Trustee, (now
First Trust of New York, National Association, as Successor
Trustee) (incorporated herein by reference to J.P. Morgan's
Current Report on Form 8-K, dated August 13, 1986, filed pursuant
to Section 13 of the Act).
4(a)(5) Form of Second Supplemental Indenture dated as of February 27,
1996 between J.P. Morgan & Co. Incorporated and First Trust of
New York, National Association, as Trustee (incorporated herein
by reference to J.P. Morgan's Current Report on Form 8-K, dated
February 23, 1996, filed pursuant to Section 13 of the Act).
4(b)(1)* Form of Security (Subordinated Note).
4(b)(2)** Form of Security (Note).
4(c)(1)* Form of Security (Subordinated Debenture).
4(c)(2)** Form of Security (Debenture).
4(d)(1)* Form of Security (Discount Subordinated Security).
4(d)(2)** Form of Security (Discount Security).
<PAGE> 144
5
4(e)(1)* Form of Security (Zero Coupon Subordinated Security).
4(e)(2)** Form of Security (Zero Coupon Security).
4(f)(1)* Form of Security (Extendible Subordinated Note).
4(f)(2)** Form of Security (Extendible Note).
4(g)(1) Declaration of Trust of JPM Capital Trust I.
4(g)(2) Certificate of Trust of JPM Capital Trust I.
4(g)(3) Declaration of Trust of JPM Capital Trust II.
4(g)(4) Certificate of Trust of JPM Capital Trust II.
4(g)(5) Declaration of Trust of JPM Capital Trust III.
4(g)(6) Certificate of Trust of JPM Capital Trust III.
4(g)(7) Declaration of Trust of JPM Capital Trust IV.
4(g)(8) Certificate of Trust of JPM Capital Trust IV.
4(h) Form of Amended and Restated Declaration of Trust for each of JPM
Capital Trust I, II, III and IV.
4(i) Form of Preferred Security (included in Exhibit 4(h)).
4(j) Form of Supplemental Indenture to be used in connection with
issuance of Junior Subordinated Debt Securities and Preferred
Securities.
4(k) Form of Junior Subordinated Debt Security (included in Exhibit
4(j)).
4(l)(1) Form of Guarantee with respect to Preferred Securities of JPM
Capital Trust I.
4(l)(2) Form of Guarantee with respect to Preferred Securities of JPM
Capital Trust II.
4(l)(3) Form of Guarantee with respect to Preferred Securities of JPM
Capital Trust III.
4(l)(4) Form of Guarantee with respect to Preferred Securities of JPM
Capital Trust IV.
5.1 Opinion of Gene A. Capello.
5.2 Opinion of Morris, Nichols, Arsht & Tunnell, Delaware counsel.
5.3 Opinion of Cravath, Swaine & Moore.
12.3 Computation of Consolidated Ratio of Earnings to Fixed Charges
and Consolidated Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends. (Incorporated by reference to J. P.
Morgan's Annual Report on Form 10-K for the year ended December
31, 1995 and J. P. Morgan's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1996.)
23(a) Consent of Price Waterhouse LLP.
(b) Consent of Gene A. Capello (included in Exhibit 5.1).
(c) Consent of Morris, Nichols, Arsht & Tunnell (included in Exhibit
5.2).
23(d) Consent of Cravath, Swaine & Moore (included in Exhibit 5.3).
24## Powers of Attorney.
25.1 Statement of Eligibility of Debt Trustee on Form T-1.
25.2# Statement of Eligibility of Subordinated Trustee on Form T-1.
25.3# Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of First Trust of New York, National Association,
as Trustee, under the Junior Subordinated Indenture.
25.4# Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of First Trust of New York, National Association,
as Trustee, with respect to the Amended and Restated
Declaration of Trust of JPM Capital Trust I.
<PAGE> 145
6
25.5# Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of First Trust of New York, National
Association, as Trustee, with respect to the Amended and Restated
Declaration of Trust of JPM Capital Trust II.
25.6# Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of First Trust of New York, National
Association, as Trustee, with respect to the Amended and Restated
Declaration of Trust of JPM Capital Trust III.
25.7# Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of First Trust of New York, National
Association, as Trustee, with respect to the Amended and
Restated Declaration of Trust of JPM Capital Trust IV.
25.8# Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of First Trust of New York, National Association,
as Trustee, under the Preferred Securities Guarantee of
the Company with respect to the Preferred Securities of JPM
Capital Trust I.
25.9# Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of First Trust of New York, National
Association, as Trustee, under the Preferred Securities Guarantee
of the Company with respect to the Preferred Securities of JPM
Capital Trust II.
25.10# Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of First Trust of New York, National
Association, as Trustee, under the Preferred Securities Guarantee
of the Company with respect to the Preferred Securities of JPM
Capital Trust III.
25.11# Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of First Trust of New York, National
Association, as Trustee, under the Preferred Securities Guarantee
of the Company with respect to the Preferred Securities of JPM
Capital Trust IV.
* Previously filed as an exhibit to Registration Statement No. 33-45651
and incorporated by reference herein.
** Previously filed as an exhibit to Registration Statement No. 33-49049
and incorporated by reference herein.
+ Previously filed as an exhibit to Registration Statement No. 33-49775
and incorporated by reference herein.
++ Previously filed as an exhibit to Registration Statement No. 33-64193
and incorporated by reference herein.
+++ Previously filed as an exhibit to Registration Statement No. 33-55851
and incorporated by reference herein.
<PAGE> 146
7
# Incorporated by reference to Exhibit 25.1.
## Previously filed as an exhibit to Registration Statement No. 333-01121
and incorporated by reference herein.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended;
(ii) To reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in the
Registration Statement.
provided, however, that subparagraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment shall be
deemed to be a new registration statement relating to the Securities offered
herein, and the offering of such Securities at that time shall be deemed to be
the initial bona fide offering thereof.
<PAGE> 147
8
(3) To remove from registration by means of a post-effective amendment
any of the Securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby further undertakes that, for purposes
of determining any liability under the Securities Act of 1933, as amended, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities and Exchange Act of 1934 that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the Securities offered herein, and the
offering of such Securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described under Item 15 of
this Registration Statement, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person, in connection with the Securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in such Act and
will be governed by the final adjudication of such issue.
<PAGE> 148
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in The City of New York and State of New York, on this 25th
day of November, 1996.
J.P. MORGAN & CO. INCORPORATED
By: /s/ Michael E. Patterson
--------------------------
Michael E. Patterson
Vice Chairman of the
Board and Director
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
DOUGLAS A. WARNER III* Chairman of the Board, November 25, 1996
- ------------------------- President and Director
(Douglas A. Warner III) (Principal Executive Officer)
RILEY P. BECHTEL* Director November 25, 1996
- -------------------------
(Riley P. Bechtel)
MARTIN FELDSTEIN* Director November 25, 1996
- -------------------------
(Martin Feldstein)
HANNA H. GRAY* Director November 25, 1996
- -------------------------
(Hanna H. Gray)
JAMES R. HOUGHTON* Director November 25, 1996
- -------------------------
(James R. Houghton)
JAMES L. KETELSEN* Director November 25, 1996
- -------------------------
(James L. Ketelsen)
WILLIAM S. LEE* Director November 25, 1996
- -------------------------
(William S. Lee)
ROBERTO G. MENDOZA* Vice Chairman of the Board November 25, 1996
- ------------------------- and Director
(Roberto G. Mendoza)
MICHAEL E. PATTERSON Vice Chairman of the Board November 25, 1996
- ------------------------- and Director
(Michael E. Patterson)
LEE R. RAYMOND* Director November 25, 1996
- -------------------------
(Lee R. Raymond)
RICHARD D. SIMMONS Director November 25, 1996
- -------------------------
(Richard D. Simmons)
KURT F. VIERMETZ* Vice Chairman of the Board November 25, 1996
- ------------------------- and Director
(Kurt F. Viermetz)
DENNIS WEATHERSTONE* Director November 25, 1996
- -------------------------
(Dennis Weatherstone)
DOUGLAS C. YEARLEY* Director November 25, 1996
- -------------------------
(Douglas C. Yearley)
JOHN A. MAYER, JR.* Chief Financial Officer November 25, 1996
- ------------------------- (Principal Financial Officer)
(John A. Mayer, Jr.)
DAVID H. SIDWELL* Managing Director and Controller November 25, 1996
- ------------------------- (Principal Accounting Officer)
(David H. Sidwell)
*By: /s/ Michael E. Patterson
--------------------------
Michael E. Patterson
Vice Chairman of the Board
and Director
<PAGE> 149
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
JPM Capital Trust I, JPM Capital Trust II, JPM Capital Trust III and JPM Capital
Trust IV each certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York on November 25,
1996.
JPM CAPITAL TRUST I,
by J.P. Morgan & Co. Incorporated,
as Sponsor
by /s/ Gene A. Capello
--------------------------------
Name: Gene A. Capello
Title: Vice President and
Assistant General Counsel
JPM CAPITAL TRUST II,
by J.P. Morgan & Co. Incorporated,
as Sponsor
by /s/ Gene A. Capello
--------------------------------
Name: Gene A. Capello
Title: Vice President and
Assistant General Counsel
JPM CAPITAL TRUST III,
by J.P. Morgan & Co. Incorporated,
as Sponsor
by /s/ Gene A. Capello
--------------------------------
Name: Gene A. Capello
Title: Vice President and
Assistant General Counsel
JPM CAPITAL TRUST IV,
by J.P. Morgan & Co. Incorporated,
as Sponsor
by /s/ Gene A. Capello
--------------------------------
Name: Gene A. Capello
Title: Vice President and
Assistant General Counsel
<PAGE> 150
Exhibit Index
1(a)(l)* Form of Underwriting Agreement (including form of Delayed
Delivery Contract) for Subordinated Debt.
l(a)(2)** Form of Underwriting Agreement (including form of Delayed
Delivery Contract) for Debt.
1(a)(3)+ Form of Underwriting Agreement for Series Preferred Stock,
Depositary Shares and Preferred Stock Warrants.
3(a)+++ Restated Certificate of Incorporation of J.P. Morgan & Co.
Incorporated, as amended.
3(b)+ By-Laws of J.P. Morgan & Co. Incorporated as amended through
December 11, 1991.
4(a)(1) Form of Junior Subordinated Debt Indenture to be entered into
between J.P. Morgan & Co. Incorporated and First Trust of
New York, National Association, as Trustee.
4(a)(2)* Indenture dated as of March 1, 1993, between J.P. Morgan & Co.
Incorporated and Citibank, N.A., as Trustee (now First Trust of
New York, National Association, as Successor Trustee).
4(a)(3) Indenture dated as of August 15, 1982, between J.P. Morgan & Co.
Incorporated and Chemical Bank (formerly Manufacturers Hanover
Trust Company), as Trustee (now First Trust of New York, National
Association, as Successor Trustee), (incorporated herein by
reference to J.P. Morgan's Current Report on Form 8-K, dated
February 7, 1986, filed pursuant to Section 13 of the Securities
and Exchange Act of 1934 (the "Act")).
4(a)(4) Form of First Supplemental Indenture dated as of May 5, 1986
between J.P. Morgan & Co. Incorporated and Chemical Bank
(formerly Manufacturers Hanover Trust Company), as Trustee, (now
First Trust of New York, National Association, as Successor
Trustee) (incorporated herein by reference to J.P. Morgan's
Current Report on Form 8-K, dated August 13, 1986, filed pursuant
to Section 13 of the Act).
4(a)(5) Form of Second Supplemental Indenture dated as of February 27,
1996 between J.P. Morgan & Co. Incorporated and First Trust of
New York, National Association, as Trustee (incorporated herein
by reference to J.P. Morgan's Current Report on Form 8-K, dated
February 23, 1996, filed pursuant to Section 13 of the Act).
4(b)(1)* Form of Security (Subordinated Note).
4(b)(2)** Form of Security (Note).
4(c)(1)* Form of Security (Subordinated Debenture).
4(c)(2)** Form of Security (Debenture).
4(d)(1)* Form of Security (Discount Subordinated Security).
4(d)(2)** Form of Security (Discount Security).
<PAGE> 151
4(e)(1)* Form of Security (Zero Coupon Subordinated Security).
4(e)(2)** Form of Security (Zero Coupon Security).
4(f)(1)* Form of Security (Extendible Subordinated Note).
4(f)(2)** Form of Security (Extendible Note).
4(g)(1) Declaration of Trust of JPM Capital Trust I.
4(g)(2) Certificate of Trust of JPM Capital Trust I.
4(g)(3) Declaration of Trust of JPM Capital Trust II.
4(g)(4) Certificate of Trust of JPM Capital Trust II.
4(g)(5) Declaration of Trust of JPM Capital Trust III.
4(g)(6) Certificate of Trust of JPM Capital Trust III.
4(g)(7) Declaration of Trust of JPM Capital Trust IV.
4(g)(8) Certificate of Trust of JPM Capital Trust IV.
4(h) Form of Amended and Restated Declaration of Trust for each of JPM
Capital Trust I, II, III and IV.
4(i) Form of Preferred Security (included in Exhibit 4(h)).
4(j) Form of Supplemental Indenture to be used in connection with
issuance of Junior Subordinated Debt Securities and Preferred
Securities.
4(k) Form of Junior Subordinated Debt Security (included in Exhibit
4(j)).
4(l)(1) Form of Guarantee with respect to Preferred Securities of JPM
Capital Trust I.
4(l)(2) Form of Guarantee with respect to Preferred Securities of JPM
Capital Trust II.
4(l)(3) Form of Guarantee with respect to Preferred Securities of JPM
Capital Trust III.
4(l)(4) Form of Guarantee with respect to Preferred Securities of JPM
Capital Trust IV.
5.1 Opinion of Gene A. Capello.
5.2 Opinion of Morris, Nichols, Arsht & Tunnell, Delaware counsel.
5.3 Opinion of Cravath, Swaine & Moore.
12.3 Computation of Consolidated Ratio of Earnings to Fixed Charges
and Consolidated Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends. (Incorporated by reference to J. P.
Morgan's Annual Report on Form 10-K for the year ended December
31, 1995 and J. P. Morgan's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1996.)
23(a) Consent of Price Waterhouse LLP.
(b) Consent of Gene A. Capello (included in Exhibit 5.1).
(c) Consent of Morris, Nichols, Arsht & Tunnell (included in Exhibit
5.2).
23(d) Consent of Cravath, Swaine & Moore (included in Exhibit 5.3).
24## Powers of Attorney.
25.1 Statement of Eligibility of Debt Trustee on Form T-1.
25.2# Statement of Eligibility of Subordinated Trustee on Form T-1.
25.3# Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of First Trust of New York, National Association,
as Trustee, under the Junior Subordinated Indenture.
25.4# Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of First Trust of New York, National Association,
as Trustee, with respect to the Amended and Restated
Declaration of Trust of JPM Capital Trust I.
<PAGE> 152
25.5# Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of First Trust of New York, National
Association, as Trustee, with respect to the Amended and Restated
Declaration of Trust of JPM Capital Trust II.
25.6# Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of First Trust of New York, National
Association, as Trustee, with respect to the Amended and Restated
Declaration of Trust of JPM Capital Trust III.
25.7# Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of First Trust of New York, National
Association, as Trustee, with respect to the Amended and
Restated Declaration of Trust of JPM Capital Trust IV.
25.8# Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of First Trust of New York, National Association,
as Trustee, under the Preferred Securities Guarantee of
the Company with respect to the Preferred Securities of JPM
Capital Trust I.
25.9# Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of First Trust of New York, National
Association, as Trustee, under the Preferred Securities Guarantee
of the Company with respect to the Preferred Securities of JPM
Capital Trust II.
25.10# Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of First Trust of New York, National
Association, as Trustee, under the Preferred Securities Guarantee
of the Company with respect to the Preferred Securities of JPM
Capital Trust III.
25.11# Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of First Trust of New York, National
Association, as Trustee, under the Preferred Securities Guarantee
of the Company with respect to the Preferred Securities of JPM
Capital Trust IV.
* Previously filed as an exhibit to Registration Statement No. 33-45651
and incorporated by reference herein.
** Previously filed as an exhibit to Registration Statement No. 33-49049
and incorporated by reference herein.
+ Previously filed as an exhibit to Registration Statement No. 33-49775
and incorporated by reference herein.
++ Previously filed as an exhibit to Registration Statement No. 33-64193
and incorporated by reference herein.
+++ Previously filed as an exhibit to Registration Statement No. 33-55851
and incorporated by reference herein.
# Incorporated by reference to Exhibit 25.1.
## Previously filed as an exhibit to Registration Statement No. 333-01121
and incorporated by reference herein.
<PAGE> 1
EXHIBIT 4(a)(1)
================================================================================
INDENTURE
between
J.P. MORGAN & CO. INCORPORATED
and
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION
as Trustee
Dated as of November , 1996
Junior Subordinated Debt Securities
================================================================================
<PAGE> 2
TABLE OF CONTENTS 1/
<TABLE>
<CAPTION>
Page
<S> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS
Purpose of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Compliance with legal requirements . . . . . . . . . . . . . . . . . . . . . . . . 1
Purpose of and consideration for Indenture . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
Definitions
-----------
SECTION 1.01 Certain terms defined in the Trust Indenture Act of 1939,
as amended, or by reference therein in the Securities
Act of 1933, as amended, to have the meanings assigned
therein . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . 3
Board Resolution . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . 3
Certificate . . . . . . . . . . . . . . . . . . . . . . . 3
Common Securities . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . 3
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Declaration of Trust . . . . . . . . . . . . . . . . . . 3
Default . . . . . . . . . . . . . . . . . . . . . . . . . 4
Depositary . . . . . . . . . . . . . . . . . . . . . . . 4
Derivative Obligations . . . . . . . . . . . . . . . . . 4
ECU . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
European Communities . . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . . . . . . . 4
</TABLE>
- ---------------------------
1/ This Table of Contents does not constitute part of the
Indenture and should not have any bearing upon the interpretation of
any of its terms or provisions.
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Global Security . . . . . . . . . . . . . . . . . . . . . 4
Governmental Obligations . . . . . . . . . . . . . . . . 5
Guarantee . . . . . . . . . . . . . . . . . . . . . . . . 5
Indenture . . . . . . . . . . . . . . . . . . . . . . . . 5
Interest Payment Date . . . . . . . . . . . . . . . . . . 5
JPM Capital Trust . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . 6
Opinion of Counsel . . . . . . . . . . . . . . . . . . . 6
Outstanding . . . . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . . . . 7
Preferred Securities . . . . . . . . . . . . . . . . . . 7
Property Trustee . . . . . . . . . . . . . . . . . . . . 7
Responsible Officer . . . . . . . . . . . . . . . . . . . 7
Security or Securities . . . . . . . . . . . . . . . . . 7
Security Exchange . . . . . . . . . . . . . . . . . . . . 7
Securityholder . . . . . . . . . . . . . . . . . . . . . 7
Senior Indebtedness . . . . . . . . . . . . . . . . . . . 8
Stated Maturity . . . . . . . . . . . . . . . . . . . . . 8
Subordinated Indebtedness . . . . . . . . . . . . . . . . 8
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . 8
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 9
Trust Indenture Act . . . . . . . . . . . . . . . . . . . 9
ARTICLE II
Issue, Description, Terms, Execution
------------------------------------
Registration and Exchange of Securities
---------------------------------------
SECTION 2.01 Designation, terms, amount, authentication and delivery of
Securities . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.02 Form of Securities and Trustee's certificate . . . . . . 11
SECTION 2.03 Date and denominations of Securities and provisions for
payment of principal, premium and interest . . . . . 11
SECTION 2.04 Execution of Securities . . . . . . . . . . . . . . . . . 14
SECTION 2.05 Exchange of Securities . . . . . . . . . . . . . . . . . 15
(a) Registration and transfer of Securities . . . . . . . 15
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
(b) Securities to be accompanied by proper instruments of
transfer . . . . . . . . . . . . . . . . . . . . 15
(c) Charges upon exchange, transfer or regulations of
Security . . . . . . . . . . . . . . . . . . . . 16
(d) Restrictions on transfer or exchange at time of
redemption . . . . . . . . . . . . . . . . . . . 16
SECTION 2.06 Temporary Securities . . . . . . . . . . . . . . . . . . 17
SECTION 2.07 Mutilated, destroyed, lost or stolen Securities . . . . . 17
SECTION 2.08 Cancelation of surrendered Securities . . . . . . . . . .
18
SECTION 2.09 Provisions of Indenture and Securities for sole benefit of
parties and Securityholders . . . . . . . . . . . . . 19
SECTION 2.10 Appointment of Authenticating Agent . . . . . . . . . . . 19
SECTION 2.11 Global Security . . . . . . . . . . . . . . . . . . . . . 20
(a) Authentication and Delivery; Legend . . . . . . . . . 20
(b) Transfer of Global Security . . . . . . . . . . . . . 20
(c) Issuance of Securities in definitive form . . . . . . 20
SECTION 2.12 CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE III
Redemption of Securities and
-----------------------------
Sinking Fund Provisions
-----------------------
SECTION 3.01 Redemption of Securities . . . . . . . . . . . . . . . . 22
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 3.02 (a) Notice of redemption . . . . . . . . . . . . . . . . 22
(b) Selection of Securities in case less than all
Securities to be redeemed . . . . . . . . . . . . 23
SECTION 3.03 (a) When Securities called for redemption become due and
payable . . . . . . . . . . . . . . . . . . . . . 23
(b) Receipt of new Security upon partial payment . . . . 24
SECTION 3.04 Sinking Fund for Securities . . . . . . . . . . . . . . . 24
SECTION 3.05 Satisfaction of Sinking Fund Payments with Securities . . 24
SECTION 3.06 Redemption of Securities for Sinking Fund . . . . . . . . 25
ARTICLE IV
Particular Covenants of the Company
-----------------------------------
SECTION 4.01 Payment of principal of (and premium, if any) and interest
on Securities . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.02 Maintenance of office or agency for payment of Securities,
designation of office or agency for payment,
registration, transfer and exchange of Securities . . 26
SECTION 4.03 (a) Duties of payment agent . . . . . . . . . . . . . . . 26
(b) Company as payment agent . . . . . . . . . . . . . . 27
(c) Holding sums of trust . . . . . . . . . . . . . . . . 27
SECTION 4.04 Appointment to fill vacancy in office of Trustee . . . . 27
</TABLE>
iv
<PAGE> 6
ARTICLE V
Securityholders' Lists and Reports
by the Company and the Trustee
<TABLE>
<S> <C> <C>
SECTION 5.01 Company to furnish Trustee information as to names and
addresses of Securityholders . . . . . . . . . . . . 28
SECTION 5.02 Trustee's Treatment of Securityholders' List
(a) Trustee to preserve information as to names and
addresses of Securityholders received by it in
capacity of payment agent . . . . . . . . . . . . 28
(b) Trustee may destroy list of Securityholders on certain
conditions . . . . . . . . . . . . . . . . . . . 28
(c) Trustee to make information as to names and addresses
of Securityholders available to "applicants" or
mail communications to Securityholders in certain
circumstances . . . . . . . . . . . . . . . . . . 28
(d) Procedure if Trustee elects not to make information
available to applicants . . . . . . . . . . . . . 29
(e) Company and Trustee not accountable for disclosure of
information . . . . . . . . . . . . . . . . . . . 30
SECTION 5.03 Reports filed by Company
(a) Annual and other reports to be filed by Company with
Trustee . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
v
<PAGE> 7
<TABLE>
<S> <C> <C>
(b) Additional information and reports to be filed with
Trustee and Securities and Exchange Commission . 30
(c) Summaries of information and reports to be transmitted
by Company to Securityholders . . . . . . . . . . 31
(d) Annual Certificate to be furnished to Trustee . . . . 31
SECTION 5.04 Reports Transmitted by Trustee
(a) Trustee to transmit annual report to Securityholders 31
(b) Trustee to transmit certain further reports to
Securityholders . . . . . . . . . . . . . . . . . 32
(c) Copies of reports to be filed with stock exchanges and
Securities and Exchange Commission . . . . . . . 33
ARTICLE VI
Remedies of the Trustee and Securityholders
-------------------------------------------
on Event of Default
-------------------
SECTION 6.01 (a) Events of Default defined . . . . . . . . . . . . . . 33
(b) Acceleration of maturity upon Event of Default . . . 35
(c) Waiver of default and rescission of declaration of
maturity . . . . . . . . . . . . . . . . . . . . 35
(d) Restoration of former position and rights upon curing
default . . . . . . . . . . . . . . . . . . . . . 36
(e) Certain rights of holders of Preferred Securities . . 36
</TABLE>
vi
<PAGE> 8
<TABLE>
<S> <C> <C>
SECTION 6.02 (a) Covenant of Company to pay to Trustee whole amount due
on Securities on Default in payment of interest or
principal (and premiums, if any) . . . . . . . . 37
(b) Trustee may recover judgment for whole amount due on
Securities on failure of Company to pay . . . . . 37
(c) Filing of proof of claim by Trustee in bankruptcy,
reorganization or receivership proceeding . . . . 37
(d) Rights of action and of asserting claims may be
enforced by Trustee without possession of
Securities . . . . . . . . . . . . . . . . . . . 38
SECTION 6.03 Application of moneys collected by Trustee . . . . . . . 39
SECTION 6.04 Limitation on suits by holders of Securities . . . . . . 39
SECTION 6.05 (a) Remedies cumulative . . . . . . . . . . . . . . . . . 40
(b) Delay or omission in exercise of rights not waiver of
default . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.06 Rights of holders of majority in principal amount of
Securities to direct Trustee and to waive defaults . 41
SECTION 6.07 Trustee to give notice of defaults known to it, but may
withhold in certain circumstances . . . . . . . . . . 42
SECTION 6.08 Requirements of an undertaking to pay costs in certain
suits under Indenture or against Trustee . . . . . . 43
</TABLE>
vii
<PAGE> 9
ARTICLE VII
Concerning the Trustee
<TABLE>
<S> <C>
SECTION 7.01 Trustee Conduct:
(a) Upon Event of Default occurring and continuing,
Trustee shall exercise powers vested in it, and
use same degree of care and skill in their
exercise, as prudent individual would use . . . . 43
(b) Trustee not relieved from liability for negligence or
wilful misconduct except as provided in this
Section . . . . . . . . . . . . . . . . . . . . . 44
(1) Prior to Event of Default and after the curing of
all Events of Default which may have occurred . . 44
(i) Trustee not liable except for performance of
duties specifically set forth . . . . . . . . . . 44
(ii) In absence of bad faith, Trustee may conclusively
rely on certificates or opinions furnished it
hereunder, subject to duty to examine the same if
specifically required to be furnished to it . . . 44
(2) Trustee not liable for error . . . . . . . . . . 44
(3) Trustee not liable for actions taken at the
direction of holders . . . . . . . . . . . . . . 44
</TABLE>
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(4) Trustee not required to expend funds in certain
circumstances without indemnity . . . . . . . . . 45
(5) Liability provisions are subject to Article VII . 45
SECTION 7.02 Subject to provisions of Section 7.01:
(a) Trustee may rely on documents believed genuine and
properly signed or presented . . . . . . . . . . 45
(b) Sufficient evidence by certain instruments provided
for . . . . . . . . . . . . . . . . . . . . . . . 45
(c) Trustee may consult with counsel and act on advice or
Opinion of Counsel . . . . . . . . . . . . . . . 46
(d) Trustee may require indemnity from Securityholders . 46
(e) Trustee not liable for actions in good faith believed
to be authorized . . . . . . . . . . . . . . . . 46
(f) Prior to Event of Default, Trustee not bound to
investigate facts or matters stated in
certificates, etc. unless requested in writing by
Securityholders . . . . . . . . . . . . . . . . . 46
(g) Trustee may act through agents . . . . . . . . . . . 47
SECTION 7.03 (a) Trustee not liable for recitals in Indenture or in
Security . . . . . . . . . . . . . . . . . . . . 47
</TABLE>
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<PAGE> 11
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(b) No representations by Trustee as to validity of
Indenture or of Securities . . . . . . . . . . . 47
(c) Trustee not accountable for use of Securities or
proceeds . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.04 Trustee, paying agent or Security Registrar may own
Securities . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.05 Moneys received by Trustee to be held in trust without
interest . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.06 (a) Trustee entitled to compensation, reimbursement and
indemnity . . . . . . . . . . . . . . . . . . . . 47
(b) Obligations to Trustee to be secured by lien prior to
Securities . . . . . . . . . . . . . . . . . . . 48
SECTION 7.07 Right of Trustee to rely on certificate of officers of
Company where other evidence specifically prescribed 48
SECTION 7.08 (a) Trustee acquiring conflicting interest to eliminate
conflict or resign . . . . . . . . . . . . . . . 49
(b) Notice to Securityholders in case of failure to comply
with subsection (a) . . . . . . . . . . . . . . . 49
(c) Definition of certain interest . . . . . . . . . . . 49
(d) Definitions of certain terms . . . . . . . . . . . . 54
(e) Calculation of percentages of Securities . . . . . . 55
</TABLE>
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(f) Trustee resignation not required under certain
circumstances . . . . . . . . . . . . . . . . . . 56
SECTION 7.09 Requirements for eligibility of Trustee . . . . . . . . . 57
SECTION 7.10 (a) Resignation of Trustee and appointment of
successor . . . . . . . . . . . . . . . . . . . . 57
(b) Removal of Trustee by Company or by court on
Securityholders' application . . . . . . . . . . 58
(c) Removal of Trustee by holders of majority in principal
amount of Securities . . . . . . . . . . . . . . 59
(d) Time when resignation or removal of Trustee effective 59
(e) One Trustee for each
series . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.11 (a) Acceptance by successor to Trustee . . . . . . . . . 59
(b) Trustee with respect to less than all series . . . . 59
(c) Company to confirm Trustee's rights . . . . . . . . . 60
(d) Successor Trustee to be qualified . . . . . . . . . . 61
(e) Notice of succession . . . . . . . . . . . . . . . . 61
SECTION 7.12 Successor to Trustee by merger, consolidation or succession
to business . . . . . . . . . . . . . . . . . . . . . 61
SECTION 7.13 (a) Limitations on rights of Trustee as a creditor to
obtain payment of certain
</TABLE>
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claims within four months prior to default
or during default, or to realize on property
as such creditor thereafter . . . . . . . . . . . . . 61
(b) Certain creditor relationships excluded . . . . . . . 65
(c) Definition of certain terms . . . . . . . . . . . . . 65
ARTICLE VIII
Concerning the Securityholders
------------------------------
SECTION 8.01 Evidence of action by Securityholders . . . . . . . . . . 66
SECTION 8.02 Proof of execution of instruments and of holding of
Securities . . . . . . . . . . . . . . . . . . . . . 67
SECTION 8.03 Who may be deemed owners of Securities . . . . . . . . . 68
SECTION 8.04 Securities owned by Company or controlled or controlling
companies disregarded for certain purposes . . . . . 68
SECTION 8.05 Instruments executed by Securityholders bind future holders 69
ARTICLE IX
Supplemental Indentures
------------------------
SECTION 9.01 Purposes for which supplemental indenture may be entered
into without consent of Securityholders . . . . . . . 69
SECTION 9.02 Modification of Indenture with consent of Securityholders 71
</TABLE>
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SECTION 9.03 Effect of supplemental indentures . . . . . . . . . . . . 73
SECTION 9.04 Securities may bear notation of changes by supplemental
indentures . . . . . . . . . . . . . . . . . . . . . 74
SECTION 9.05 Opinion of Counsel . . . . . . . . . . . . . . . . . . . 74
SECTION 9.06 Waiver of Compliance by holders of Securities . . . . . . 74
SECTION 9.07 Fixing of record dates . . . . . . . . . . . . . . . . . 74
ARTICLE X
Consolidation, Merger, Sale or Conveyance
-----------------------------------------
SECTION 10.01 Company may consolidate, etc. only on certain terms . . . 75
SECTION 10.02 Successor corporation substituted . . . . . . . . . . . . 75
SECTION 10.03 Opinion of Counsel . . . . . . . . . . . . . . . . . . . 76
ARTICLE XI
Satisfaction and Discharge of Indenture;
----------------------------------------
Unclaimed Moneys
----------------
SECTION 11.01 Satisfaction and discharge of Indenture . . . . . . . . . 76
SECTION 11.02 Application by Trustee of funds deposited for payments of
Securities . . . . . . . . . . . . . . . . . . . . . 79
SECTION 11.03 Application by Trustee of funds deposited for payment of
Securities . . . . . . . . . . . . . . . . . . . . . 80
SECTION 11.04 Repayment of moneys held by paying agent . . . . . . . . 80
</TABLE>
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<PAGE> 15
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SECTION 11.05 Repayment of moneys held by Trustee . . . . . . . . . . . 80
ARTICLE XII
Immunity of Incorporators, Stockholders,
----------------------------------------
Officers and Directors
----------------------
SECTION 12.01 Incorporators, stockholders, officers and directors of
Company exempt from individual liability . . . . . . 81
ARTICLE XIII
Miscellaneous Provisions
------------------------
SECTION 13.01 Successors and assigns of Company bound by Indenture . . 81
SECTION 13.02 Acts of board, committee or officer of successor company
valid . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 13.03 Surrender of powers of Company . . . . . . . . . . . . . 82
SECTION 13.04 Required notices or demands may be served by mail . . . . 82
SECTION 13.05 Indenture and Securities to be construed in accordance with
laws of the State of New York . . . . . . . . . . . . 82
SECTION 13.06 (a) Officers' Certificate and Opinion of Counsel to be
furnished upon applications or demands by Company 82
(b) Statements to be included in each certificate or
opinion with respect to compliance with condition
or covenant . . . . . . . . . . . . . . . . . . . 83
SECTION 13.07 Payments due on Sundays or holidays . . . . . . . . . . . 83
</TABLE>
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SECTION 13.08 Provisions required by Trust Indenture Act of 1939 to
control . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 13.09 Execution of Indenture in Counterparts . . . . . . . . . 83
SECTION 13.10 Separability of Indenture provisions . . . . . . . . . . 83
SECTION 13.11 Assignment by Company to subsidiary . . . . . . . . . . . 84
SECTION 13.12 Holders of Preferred Securities as third party
beneficiaries of this Indenture; holders of Preferred
Securities may institute legal proceedings against the
Company in certain cases . . . . . . . . . . . . . . 84
ARTICLE XIV
Subordination of Securities
----------------------------
SECTION 14.01 Agreement to Subordinate . . . . . . . . . . . . . . . . 84
SECTION 14.02 Payment over of proceeds upon dissolution, etc. . . . . . 85
SECTION 14.03 Trustee to effectuate subordination . . . . . . . . . . . 85
SECTION 14.04 Trustee not charged with knowledge of prohibition . . . . 88
SECTION 14.05 Rights of Trustee as Holder of Senior Indebtedness . . . 90
SECTION 14.06 Trustee not fiduciary for Holders of Senior Indebtedness 91
SECTION 14.07 Article applicable to Paying Agents . . . . . . . . . . . 91
SECTION 14.08 Application by Trustee of moneys deposited with it . . . 92
</TABLE>
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SECTION 14.09 Subordination rights not impaired by acts or omissions by
the Company, holders of Senior Indebtedness and
Subordinated Indebtedness or creditors in respect of
Derivative
Obligations . . . . . . . . . . . . . . . . . . . . . 92
SECTION 14.10 Authorization of Trustee to effectivate subordination of
the Securities . . . . . . . . . . . . . . . . . . . 92
SECTION 14.11 Right of Trustee to hold Senior Indebtedness, Subordinated
Indebtedness or Derivative Obligations of the Company 93
SECTION 14.12 Article XIV not to prevent events of default . . . . . . 93
ACCEPTANCE OF TRUST BY TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
</TABLE>
xvi
<PAGE> 18
INDENTURE dated as of the day of November
, 1996, between J.P. MORGAN & CO. INCORPORATED, a
corporation duly organized and existing under the
laws of the State of Delaware (hereinafter sometimes
referred to as the "Company"), and FIRST TRUST OF NEW
YORK, NATIONAL ASSOCIATION, a national banking
association duly incorporated and existing under the
laws of the United States, as Trustee (hereinafter
sometimes referred to as the "Trustee").
WHEREAS, for its lawful corporate purposes, the Company has
fully authorized the execution and delivery of this Indenture to provide for
the issuance of unsecured debentures (hereinafter referred to as the
"Securities"), in an unlimited aggregate principal amount to be issued from
time to time in one or more series in accordance with the terms of this
Indenture, as registered Securities without coupons, to be authenticated by the
certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the
Securities are to be authenticated, issued and delivered, the Company has duly
authorized the execution of this Indenture;
WHEREAS the Securities and the certificate of authentication
to be borne by the Securities (the "Certificate of Authentication") are to be
substantially in such forms as may be approved by the Board of Directors (as
defined below) or set forth in any indenture supplemental to this Indenture;
and
WHEREAS all acts and things necessary to make the Securities
issued pursuant hereto, when executed by the Company and authenticated and
delivered by the Trustee in accordance with the terms of this Indenture, the
legal, valid and binding obligations of the Company, and to make this Indenture
a valid indenture and agreement of the Company in accordance with its terms,
have been done and performed or will be done and performed prior to the
issuance of such Securities, and the execution of this Indenture has been and
the issuance hereunder of the
<PAGE> 19
2
Securities has been, or will be prior to issuance, in all respects duly
authorized, and the Company, in the exercise of the legal right and power in it
vested, executes this Indenture and proposes to make, execute, issue and
deliver the Securities.
NOW, THEREFORE, in order to declare the terms and conditions
upon which the Securities are, and are to be, authenticated, issued and
delivered, and in consideration of the premises, and of the acquisition and
acceptance of the Securities by the holders thereof, the Company covenants and
agrees with the Trustee, for the equal and proportionate benefit (subject to
the provisions of this Indenture) of the respective holders from time to time
of the Securities, without any discrimination, preference or priority of any
one Security over any other by reason of priority in the time of issue, sale or
negotiation thereof, or otherwise, except as provided herein, as follows:
ARTICLE I
Definitions
SECTION 1.01. The terms defined in this Section (except as in
this Indenture otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture, any resolution of the Board of
Directors of the Company and of any indenture supplemental hereof shall have
the respective meanings specified in this Section. All other terms used in
this Indenture which are defined in the Trust Indenture Act of 1939, as
amended, or which are by reference in such Act defined in the Securities Act of
1933, as amended (except as herein otherwise expressly provided or unless the
context otherwise requires), shall have the meanings assigned to such terms in
said Trust Indenture Act and in said Securities Act as in force at the date of
this instrument.
"Authenticating Agent" means an authenticating agent with
respect to all or any of the series of Securities, as the case may be,
appointed with respect to all or any series of the Securities, as the case may
be, by the Trustee pursuant to Section 2.10.
<PAGE> 20
3
"Board of Directors" means the Board of Directors of the
Company, or any committee of such Board duly authorized to act on behalf of
such Board.
"Board Resolution" means a copy of one or more resolutions,
certified by the secretary or an assistant secretary of the Company to have
been adopted or consented to by the Board of Directors and to be in full force
and effect, and delivered to the Trustee.
"Business Day", with respect to any series of Securities,
means any day other than a day on which banking institutions in the Borough of
Manhattan, the City and State of New York, are authorized or obligated by law
or executive order to close.
"Certificate" means a certificate signed by the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company. The Certificate need not comply with the provisions of
Section 13.06.
"Common Securities" means the common undivided beneficial
interests in the assets of the applicable JPM Capital Trust.
"Company" means J.P. Morgan & Co. Incorporated, a corporation
duly organized and existing under the laws of the State of Delaware, and,
subject to the provisions of Article X, shall also include its successors and
assigns.
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of the execution of this Indenture is
located at Attention of .
"Debt" of the Company means any obligation of, or any
obligation guaranteed by, the Company for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments, and any deferred obligation for the payment of the purchase price
of property or assets.
"Declaration of Trust" means the Declaration of the JPM
Capital Trust, if any, specified in the applicable Board Resolution or
supplemental indenture establishing a particular series of Securities pursuant
to Section 2.01.
<PAGE> 21
4
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Depositary" means, with respect to Securities of any series
for which the Company shall determine that such Securities will be issued as a
Global Security, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other
applicable statute or regulation, which, in each case, shall be designated by
the Company pursuant to either Section 2.01 or 2.11.
"Derivative Obligations" means obligations of the Company to
make payments on claims in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts and similar arrangements;
provided, however, that Derivative Obligations shall not include claims in
respect of Senior Indebtedness, Subordinated Indebtedness or obligations which,
by their terms, are expressly stated not to be superior in right of payment to
the Securities or to rank pari passu with the Securities. For purposes of
this. definition, "claim" shall have the meaning assigned thereto in Section
101(4) of the Bankruptcy Code of 1978, as amended and in effect on November 1,
1992.
"ECU" means the European Currency Unit as defined and revised
from time to time by the Council of European Communities.
"European Communities" means the European Economic Community
(the "EEC"), the European Coal and Steel Community and Eurotom.
"Event of Default" means, with respect to Securities of a
particular series, any event specified in Section 6.01(a), continued for the
period of time, if any, therein designated.
"Global Security" means, with respect to any series of
Securities, a Security executed by the Company and delivered by the Trustee to
the Depositary or pursuant to the Depositary's instruction, all in accordance
with the Indenture, which shall be registered in the name of the Depositary or
its nominee.
<PAGE> 22
5
"Governmental Obligations" means securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof, and shall
also include a depositary receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to
any such Governmental Obligation or a specific payment of principal of, or
interest on, any such Governmental Obligation held by such custodian for the
account of the holder of such depositary receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the Governmental Obligation or the
specific payment of principal of, or interest on, the Governmental Obligation
evidenced by such depositary receipt.
"Guarantee" means the guarantee, if any, that the Company may
enter into that operates directly or indirectly for the benefit of holders of
Preferred Securities issued by a JPM Capital Trust.
"Indenture" means this instrument as originally executed, or,
if amended or supplemented as herein provided, as so amended or supplemented,
including for all purposes of this instrument, as amended or supplemented, the
provisions of the Trust Indenture Act that are deemed to be a part of and
govern this instrument, as amended or supplemented.
"Interest Payment Date" when used with respect to any
installment of interest on a Security of a particular series means the date
specified in such Security or in a Board Resolution or in an indenture
supplemental hereto with respect to such series as the fixed date on which an
installment of interest with respect to Securities of that series is due and
payable.
"JPM Capital Trust" means such statutory business trust
created under the laws of the State of Delaware specified in the applicable
Board Resolution or supplemental indenture establishing a particular series of
Securities
<PAGE> 23
6
pursuant to Section 2.01 and to whom such series of Securities will be sold.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the Vice-Chairman of the Board, the President or any
Vice President and by the Treasurer or any Assistant Treasurer or the
Controller or any Assistant Controller or the Secretary or any Assistant
Secretary of the Company and delivered to the Trustee. Each such certificate
shall include the statements provided for in Section 13.06, if and to the
extent required by the provisions thereof.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of, or counsel for, the Company and who
shall be satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 13.06, if and to the extent required by the
provisions thereof.
"Outstanding", when used with reference to Securities of any
series, subject to the provisions of Section 8.01, means, as of any particular
time, all Securities of that series theretofore authenticated and delivered by
the Trustee under this Indenture, except (a) Securities theretofore canceled by
the Trustee or any paying agent, or delivered to the Trustee or any paying
agent for cancelation or which have previously been canceled; (b) Securities or
portions thereof for the payment or redemption of which moneys or Governmental
Obligations in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been
set aside and segregated in trust for the holders of such Securities by the
Company (if the Company shall act as its own paying agent); provided, however,
that if such Securities or portions of such Securities are to be redeemed prior
to the maturity thereof, notice of such redemption shall have been given as in
Article III provided, or provision satisfactory to the Trustee shall have been
made for giving such notice; and (c) Securities in lieu of, or in substitution
for, which other Securities shall have been authenticated and delivered
pursuant to the terms of Section 2.07.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust,
unincorporated
<PAGE> 24
7
organization or government or any agency or political subdivision thereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 2.07 in lieu
of a lost, destroyed or stolen Security shall be deemed to evidence the same
debt as the lost, destroyed or stolen Security.
"Preferred Securities" means the preferred undivided
beneficial interests in the assets of the applicable JPM Capital Trust.
"Property Trustee" means the entity performing the function of
the Property Trustee under the applicable Declaration of Trust of a JPM Capital
Trust.
"Responsible Officer" when used with respect to the Trustee
means the chairman of the board of directors, the president, any vice
president, the secretary, the treasurer, any trust officer, any corporate trust
officer or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of, and familiarity with, the
particular subject.
"Security" or "Securities" means any Security or Securities,
as the case may be, authenticated and delivered under this Indenture.
"Security Exchange" when used with respect to the Securities
of any series which are held as trust assets of a JPM Capital Trust pursuant to
the Declaration of Trust of such JPM Capital Trust means the distribution of
the Securities of such series by such JPM Capital Trust in exchange for the
Preferred Securities and Common Securities of such JPM Capital Trust in
dissolution of such JPM Capital Trust pursuant to the Declaration of Trust of
such JPM Capital Trust.
"Securityholder", "holder of Securities", "registered holder",
or other similar term, means the person or persons in whose name or names a
particular Security
<PAGE> 25
8
shall be registered on the books of the Company kept for such purpose in
accordance with the terms of this Indenture.
"Senior Indebtedness" of the Company means the principal of,
premium, if any, and interest on: (a) all Debt of the Company, whether
outstanding on the date of execution of this Indenture or thereafter created,
assumed or incurred, except such Debt as is by its terms expressly stated to be
not superior in right of payment to the Securities or to rank pari passu with
the Securities and (b) any deferrals, renewals or extensions of any such Senior
Indebtedness; provided, however, that Senior Indebtedness shall not be deemed
to include (i) Debt which by its terms is subordinated to trade accounts
payable or accrued liabilities arising in the ordinary course of business to
the extent that payments made to the holders of such Debt by the holders of the
Securities under Article XIV of this Indenture would be greater than they
otherwise would have been as a result of any obligation of such holders to pay
amounts over to the obligees on such trade accounts payable or accrued
liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject; (ii) Debt which
constitutes Subordinated Indebtedness and (iii) any other debt securities
issued pursuant to this Indenture.
"Stated Maturity" when used with respect to any Security or
any installment of principal thereof [or interest thereon] means the date
specified pursuant to the terms of such Security as the date on which the
principal of such Security [or such installment of interest] is due and payable
whether at the Stated Maturity or declaration of acceleration, call for
redemption or otherwise, as such Stated Maturity may be shortened or extended
as set forth in this Indenture.
"Subordinated Indebtedness" of the Company means the principal
of, premium, if any, and interest, on Debt, whether outstanding on the date of
execution of this Indenture or thereafter created, assumed or incurred, which
Subordinated Indebtedness is by its terms expressly stated to be junior and
subordinate in right of payment to other Debt of the Company (other than the
Securities).
"Subsidiary" means any corporation, association or other
business entity of which a majority of the outstanding stock, having under
ordinary circumstances (not dependent upon the happening of a contingency)
voting power to elect a
<PAGE> 26
9
majority of the board of directors (or persons performing similar functions) of
such corporation, association or other business entity in question, is at the
time, directly or indirectly, owned or controlled by the Company or by one or
more Subsidiaries or by the Company and one or more Subsidiaries; collectively,
the "Subsidiaries".
"Trustee" means First Trust of New York, National Association,
a national banking association, and, subject to the provisions of Article
Seven, shall also include its successors and assigns, and, if at any time there
is more than one person acting in such capacity hereunder, "Trustee" shall mean
each such person. The term "Trustee" as used with respect to a particular
series of the Securities means the trustee with respect to such series.
"Trust Indenture Act", subject to the provisions of Sections
9.01 and 9.02, means the Trust Indenture Act of 1939, as amended and in effect
at the date of execution of this Indenture.
ARTICLE II
Issue, Description, Terms, Execution,
Registration and Exchange of Securities
SECTION 2.01. The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series up to the
aggregate principal amount of Securities of that series authorized in or
pursuant to one or more indentures supplemental hereto, prior to the initial
issuance of Securities of a particular series. Prior to the initial issuance
of Securities of any series, there shall be established in or pursuant to one
or more indentures supplemental hereto:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon
<PAGE> 27
10
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series);
(3) the date or dates on which the principal of the Securities
of the series is payable and the right, if any, to extend or shorten
such date or dates and the conditions, if any, to such extension;
(4) the rate or rates at which the Securities of the series
shall bear interest or the manner of calculation of such rate or
rates, if any;
(5) the date or dates from which such interest shall accrue,
the Interest Payment Dates on which such interest will be payable or
the manner of determination of such Interest Payment Dates and the
record date for the determination of holders to whom interest is
payable on any such Interest Payment Dates;
(6) the right, if any, to extend or defer the interest payment
periods and the duration of such extension or deferral and the
conditions, if any, to such an extension or deferral;
(7) the period or periods within which, the price or prices at
which, and the terms and conditions upon which, Securities of the
series may be redeemed, in whole or in part, at the option of the
Company;
(8) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions (including payments made in cash in anticipation
of future sinking fund obligations) or at the option of a holder
thereof and the period or periods within which, the price or prices at
which, and the terms and conditions upon which, Securities of the
series shall be redeemed or purchased, in whole or in part, pursuant
to such obligation;
(9) the form of the Securities of the series, including the
form of the Certificate of Authentication for the series;
(10) if other than denominations of $25 or any integral
multiple thereof, the denominations in which the Securities of the
series shall be issuable;
<PAGE> 28
11
(11) whether the Securities of the series are issuable as a
Global Security and, in such case, the identity of the Depositary for
the Securities of the series;
(12) any and all other terms with respect to the Securities of
the series (which terms shall not be inconsistent with the terms of
this Indenture);
(13) if the Securities of the series are to be deposited as
trust assets in a JPM Capital Trust, the name of the applicable JPM
Capital Trust (which shall distinguish such statutory business trust
from all other JPM Capital Trusts) into which the Securities of the
series are to be deposited as trust assets and the date of its
Declaration of Trust; and
(14) any condition to, or restriction on, the transferability
of the Securities.
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to any indenture supplemental hereto.
SECTION 2.02. The Securities of any series and the Trustee's
certificate of authentication to be borne by such Securities shall be
substantially of the tenor and purport as set forth in one or more indentures
supplemental hereto and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Indenture, or as may be required
to comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which Securities of that
series may be listed, or to conform to usage.
SECTION 2.03. The Securities shall be issuable as registered
Securities and in the denominations of $25 or any integral multiple thereof,
subject to Section 2.01(10). The Securities of a particular series shall bear
interest payable on the dates and at the rate specified with respect to that
series. The principal of and the interest on the Securities of any series, as
well as any premium thereon in case of redemption thereof prior to maturity,
shall be payable in such coin or currency of the United States of
<PAGE> 29
12
America as at the time of payment is legal tender for public and private debt,
at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, the City and State of New York. Each Security shall be
dated the date of its authentication. Interest on the Securities shall be
computed on the basis of a 360-day year of twelve 30-day months.
The interest installment on any Security which is payable, and
is punctually paid or duly provided for, on any Interest Payment Date for
Securities of that series shall be paid to the person in whose name such
Security (or one or more Predecessor Securities) is registered at the close of
business on the regular record date for such interest installment. In the
event that any Security of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with
respect to any Interest Payment Date for Securities of that series and on or
prior to such Interest Payment Date, interest on such Security will be paid
upon presentation and surrender of such Security as provided in Section 3.03.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date for
Securities of that series (herein called "Defaulted Interest") shall forthwith
cease to be payable to the registered holder on the relevant regular record
date by virtue of having been such holder; and such Defaulted Interest shall be
paid by the Company, at its election, as provided in clause (1) or clause (2)
below:
(1) The Company may make payment of any Defaulted Interest on
Securities to the persons in whose names such Securities (or their
respective Predecessor Securities) are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner: the Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each such Security and the date of the
proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the persons entitled to such Defaulted
Interest as in this
<PAGE> 30
13
clause provided. Thereupon the Trustee shall fix a special record
date for the payment of such Defaulted Interest which shall not be
more than 15 nor less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the special record date therefor to be
mailed, first-class postage prepaid, to each Securityholder at his or
her address as it appears in the Security Register (as hereinafter
defined), not less than 10 days prior to such special record date.
Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the persons in whose names such
Securities (or their Predecessor Securities) are registered on such
special record date and shall be no longer payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest on
any Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Unless otherwise set forth in one or more indentures
supplemental hereto establishing the terms of any series of Securities pursuant
to Section 2.01, the term "regular record date" as used in this Section with
respect to a series of Securities with respect to any Interest Payment Date for
such series shall mean either (x) the fifteenth day of the month immediately
preceding the month in which an Interest Payment Date established for such
series pursuant to Section 2.01 shall occur, if such Interest Payment Date is
the first day of a month, or (y) the last day of the month immediately
preceding the month in which an Interest Payment Date established for such
series pursuant to Section 2.01 shall occur, if such Interest Payment Date is
the fifteenth day of a month, whether or not such date is a Business Day.
<PAGE> 31
14
Subject to the foregoing provisions of this Section, each
Security of a series delivered under this Indenture upon transfer of, or in
exchange for, or in lieu of, any other Security of such series shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by
such other Security.
SECTION 2.04. Subject to the provisions of Section 2.06, the
Securities shall be printed, lithographed or engraved on steel engraved borders
or produced by any combination of these methods or may be produced in any other
manner, as the proper officers of the Company may determine, and shall be
signed on behalf of the Company by the Chairman or Vice Chairman of its Board
of Directors or its President or one of its Vice Presidents, and its Treasurer
and Assistant Treasurer under its corporate seal attested by its Secretary or
one of its Assistant Secretaries. The signature of the Chairman, Vice
Chairman, President or a Vice President, the signature of the Treasurer or
Assistant Treasurer and/or the signature of the Secretary or an Assistant
Secretary in attestation of the corporate seal, upon the Securities, may be in
the form of a manual or facsimile signature of a present or any future
Chairman, Vice Chairman, President or Vice President and of a present or any
future Secretary or Assistant Secretary and may be imprinted or otherwise
reproduced on the Securities and for that purpose the Company may use the
manual or facsimile signature of any person who shall have been a Chairman,
Vice Chairman, President or Vice President, or of any person who shall have
been a Secretary or Assistant Secretary, notwithstanding the fact that at the
time the Securities shall be authenticated and delivered, or disposed of, such
person shall have ceased to be the Chairman, Vice Chairman, President or a Vice
President, or the Secretary or an Assistant Secretary, of the Company, as the
case may be. The seal of the Company may be in the form of a facsimile of the
seal of the Company and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities.
Only such Securities as shall bear thereon a Certificate of
Authentication substantially in the form established for such Securities,
executed manually by an authorized signatory of the Trustee, or by any
Authenticating Agent with respect to such Securities, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
Certificate of Authentication executed by the Trustee, or by any Authenticating
Agent appointed by the Trustee with respect
<PAGE> 32
15
to such Securities, upon any Security executed by the Company shall be
conclusive evidence that the Security so authenticated has been duly
authenticated and made available for delivery hereunder and that the holder is
entitled to the benefits of this Indenture.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a
written order of the Company in the form of an Officers' Certificate for the
authentication and delivery of such Securities, and the other documents
required by Section 13.06 and the Trustee, in accordance with such written
order, shall authenticate and make available for delivery such Securities.
In authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form
and terms thereof have been established in conformity with the provisions of
this Indenture.
The Trustee shall not be required to authenticate such
Securities if the issue of such Securities pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under the Securities,
this Indenture or otherwise in a manner which is not reasonably acceptable to
the Trustee.
SECTION 2.05. (a) Securities of any series may be exchanged,
upon presentation thereof at the office or agency of the Company designated for
such purpose in the Borough of Manhattan, the City and State of New York, for
other Securities of such series of authorized denominations, and for a like
aggregate principal amount, upon payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, all as provided in this
Section. In respect of any Securities so surrendered for exchange, the Company
shall execute, the Trustee shall authenticate and such office or agency shall
make available for delivery in exchange therefor the Security or Securities of
the same series which the Securityholder making the exchange shall be entitled
to receive, bearing numbers not contemporaneously outstanding.
<PAGE> 33
16
(b) The Company shall keep, or cause to be kept, at its
office or agency designated for such purpose in the Borough of Manhattan, the
City and State of New York, or such other location designated by the Company a
register or registers (herein referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
register the Securities and the transfers of Securities as in this Article
provided and which at all reasonable times shall be open for inspection by the
Trustee. The registrar for the purpose of registering Securities and transfers
of Securities as herein provided shall be appointed as authorized by Board
Resolution (the "Security Registrar").
Upon surrender for transfer of any Security at the office or
agency of the Company designated for such purpose in the Borough of Manhattan,
the City and State of New York, the Company shall execute, the Trustee shall
authenticate and such office or agency shall make available for delivery in the
name of the transferee or transferees a new Security or Securities of the same
series as the Security presented for a like aggregate principal amount.
All Securities presented or surrendered for exchange or
registration of transfer, as provided in this Section, shall be accompanied (if
so required by the Company or the Security Registrar) by a written instrument
or instruments of transfer, in form satisfactory to the Company or the Security
Registrar, duly executed by the registered holder or by his duly authorized
attorney in writing.
(c) No service charge shall be made for any exchange or
registration of transfer of Securities, or issue of new Securities in case of
partial redemption of any series, but the Company may require payment by the
Securityholder requesting an exchange or registration of transfer of a sum
sufficient to cover any tax or other governmental charge in relation thereto,
other than in connection with exchanges made pursuant to Section 2.06, Section
3.03(b) and Section 9.04 not involving any transfer.
(d) The Company shall not be required (i) to issue, register
the transfer of or exchange any Securities during a period beginning at the
opening of business 15 days before any selection for redemption of Securities
and ending at the close of business on the earliest date on which the relevant
notice of redemption is deemed to have been given to all holders of Securities
to be redeemed and
<PAGE> 34
17
(ii) register the transfer of or exchange any Securities so selected for
redemption, in whole or in part, except the unredeemed portion of any
Securities being redeemed in part. The provisions of this Section 2.05 are,
with respect to any Global Security, subject to Section 2.11.
SECTION 2.06. Pending the preparation of definitive
Securities of any series, the Company may execute, and the Trustee shall
authenticate and make available for delivery, temporary Securities (printed,
lithographed or typewritten) of any authorized denomination, and substantially
in the form of the definitive Securities in lieu of which they are issued, but
with such omissions, insertions and variations as may be appropriate for
temporary Securities, all as may be determined by the Company. Every temporary
Security of any series shall be executed by the Company and be authenticated by
the Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Securities of such series. Without
unnecessary delay the Company will execute and will furnish definitive
Securities of such series and thereupon any or all temporary Securities of such
series may be surrendered in exchange therefor (without charge to the holders),
at the office or agency of the Company designated for the purpose in the
Borough of Manhattan, the City and State of New York, and the Trustee shall
authenticate and such office or agency shall make available for delivery in
exchange for such temporary Securities an equal aggregate principal amount of
definitive Securities of such series, unless the Company advises the Trustee to
the effect that definitive Securities need not be executed and furnished until
further notice from the Company. Until so exchanged, the temporary Securities
of such series shall be entitled to the same benefits under this Indenture as
definitive Securities of such series authenticated and delivered hereunder.
SECTION 2.07. In case any temporary or definitive Security
shall become mutilated or be destroyed, lost or stolen, the Company (subject to
the next succeeding sentence) shall execute, and upon its request the Trustee
(subject as aforesaid) shall authenticate and make available for delivery, a
new Security of the same series bearing a number not contemporaneously
Outstanding, in exchange and substitution for the mutilated Security, or in
lieu of and in substitution for the Security so destroyed, lost or stolen. In
every case the applicant for a substituted Security shall furnish to the
Company and to the Trustee
<PAGE> 35
18
such security or indemnity as may be required by them to save each of them
harmless, and, in every case of destruction, loss or theft, the applicant shall
also furnish to the Company and to the Trustee evidence to their satisfaction
of the destruction, loss or theft of the applicant's Security and of the
ownership thereof. The Trustee may authenticate any such substituted Security
and make available for delivery the same upon the written request or
authorization of any officer of the Company. Upon the issuance of any
substituted Security, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith. In case any Security which has matured or is about to
mature shall become mutilated or be destroyed, lost or stolen, the Company may,
instead of issuing a substitute Security, pay or authorize the payment of the
same (without surrender thereof except in the case of a mutilated Security) if
the applicant for such payment shall furnish to the Company and to the Trustee
such security or indemnity as they may require to save each of them harmless,
and, in case of destruction, loss or theft, evidence to the satisfaction of the
Company and the Trustee of the destruction, loss or theft of such Security and
of the ownership thereof.
Every Security issued pursuant to the provisions of this
Section in substitution for any Security which is mutilated, destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security shall be found at any
time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Securities of
the same series duly issued hereunder. All Securities shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted
to the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.08. All Securities surrendered for the purpose of
payment, redemption, exchange or registration of transfer shall, if surrendered
to the Company or any paying agent, be delivered to the Trustee for
cancellation, or, if
<PAGE> 36
19
surrendered to the Trustee, shall be canceled by it, and no Securities shall be
issued in lieu thereof except as expressly required or permitted by any of the
provisions of this Indenture. On written request of the Company, the Trustee
shall deliver to the Company canceled Securities held by the Trustee. If the
Company shall otherwise acquire any of the Securities, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
delivered to the Trustee for cancelation.
SECTION 2.09. Nothing in this Indenture or in the Securities,
express or implied, shall give or be construed to give to any Person, other
than the parties hereto and the holders of the Securities, any legal or
equitable right, remedy or claim under, or in respect of, this Indenture, or
under any covenant, condition or provision herein contained; all such
covenants, conditions and provisions being for the sole benefit of the parties
hereto and of the holders of the Securities.
SECTION 2.10. So long as any of the Securities of any series
remain Outstanding there may be an Authenticating Agent for any or all such
series of Securities which the Trustee shall have the right to appoint. Said
Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, transfer or
partial redemption thereof, and Securities so authenticated shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. All references in this
Indenture to the authentication of Securities by the Trustee shall be deemed to
include authentication by an Authenticating Agent for such series except for
authentication upon original issuance or pursuant to Section 2.07 hereof. Each
Authenticating Agent shall be acceptable to the Company and shall be a
corporation which has a combined capital and surplus, as most recently reported
or determined by it, sufficient under the laws of any jurisdiction under which
it is organized or in which it is doing business to conduct a trust business,
and which is otherwise authorized under such laws to conduct such business and
is subject to supervision or examination by Federal or state authorities. If
at any time any Authenticating Agent shall cease to be eligible in accordance
with these provisions, it shall resign immediately.
<PAGE> 37
20
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee
may at any time (and upon request by the Company shall) terminate the agency of
any Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint
an eligible successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. (a) If, pursuant to Section 2.01, the Company
shall establish that the Securities of a particular series are to be issued as
one or more Global Securities, then the Company shall execute, and the Trustee
shall, in accordance with Section 2.04, authenticate and deliver, one or more
Global Securities which (i) shall represent, and shall be denominated in an
aggregate amount equal to the aggregate principal amount of, all of the
Outstanding Securities of such series, (ii) shall be registered in the name of
the Depositary or its nominee, (iii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction and (iv) shall bear a
legend substantially to the following effect: "Except as otherwise provided in
Section 2.11 of the Indenture, this Security may be transferred, in whole but
not in part, only to another nominee of the Depositary or to a successor
Depositary or to a nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.05, the
Global Security of a series may be transferred, in whole but not in part and in
the manner provided in Section 2.05, only to another nominee of the Depositary
for such series, or to a successor Depositary for such series selected or
approved by the Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of Securities
notifies the Company that it is unwilling or unable to continue as Depositary
for such series or if at any time the Depositary for such series shall no
longer be registered, or in good standing, under the Exchange Act or other
applicable statute or regulation and a successor Depositary for such series is
not appointed by the Company within 90 days after the Company receives such
notice or
<PAGE> 38
21
becomes aware of such condition, as the case may be, this Section 2.11 shall no
longer be applicable to the Securities of such series, and the Company will
execute, and subject to Section 2.05, the Trustee will authenticate and make
available for delivery, Securities of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Security of such series in
exchange for such Global Security. In addition, the Company may at any time
determine that the Securities of any series shall no longer be represented by
one or more Global Securities and that the provisions of this Section 2.11
shall no longer apply to the Securities of such series. In such event, the
Company will execute and, subject to Section 2.05, the Trustee, upon receipt of
an Officers' Certificate evidencing such determination by the Company, will
authenticate and deliver Securities of such series in definitive registered
form, without coupons, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global Security of such
series in exchange for such Global Security. Upon the exchange of a Global
Security for such Securities in definitive registered form, without coupons, in
authorized denominations, the Global Security shall be canceled by the Trustee.
Any Securities in definitive registered form issued in exchange for a Global
Security pursuant to this Section 2.11(c) shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Securities to the Depositary for
delivery to the persons in whose names such Securities are so registered.
SECTION 2.12. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" and "CINS" numbers (if then generally in use), and
the Trustee shall use CUSIP numbers or CINS numbers, as the case may be, in
notices of redemption or exchange as a convenience to Securityholders but no
representation shall be made by the Company, the Trustee or any other Person as
to the correctness of such numbers either as printed on the Securities or as
contained in any notice of redemption or exchange.
<PAGE> 39
22
ARTICLE III
Redemption of Securities and
Sinking Fund Provisions
SECTION 3.01. The Company may redeem the Securities of any
series issued hereunder on and after the dates and in accordance with the terms
established for such series pursuant to Section 2.01.
SECTION 3.02. (a) In case the Company shall desire to
exercise such right to redeem all or, as the case may be, a portion of the
Securities of any series in accordance with the right reserved so to do, it
shall give notice of such redemption, first class postage prepaid, not less
than 30 nor more than 60 days before the date fixed for redemption to holders
of the Securities of the series to be redeemed at their last addresses as they
shall appear upon the Security Register. Any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the registered holder receives the notice. In any case, failure
duly to give such notice to the holder of any Security of any series designated
for redemption in whole or in part, or any defect in the notice, shall not
affect the validity of the proceedings for the redemption of any other
Securities of such series or any other series. In the case of any redemption
of Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with any such restriction.
Each such notice of redemption shall specify the date fixed
for redemption and the redemption price at which Securities of that series are
to be redeemed, and shall state that payment of the redemption price of such
Securities to be redeemed will be made at the office or agency of the Company
in the Borough of Manhattan, the City and State of New York, upon presentation
and surrender of such Securities, that interest accrued to the date fixed for
redemption will be paid as specified in said notice, that from and after said
date interest will cease to accrue and that the redemption is for a sinking
fund, if such is the case. If less than all the Securities of a series are to
be redeemed, the notice to the holders of Securities of that series to be
redeemed in whole or in part shall specify the particular Securities to be so
redeemed. In case any
<PAGE> 40
23
Security is to be redeemed in part only, the notice which relates to such
Security shall state the portion of the principal amount thereof to be redeemed
and shall state that, on and after the redemption date, upon surrender of such
Security, a new Security or Securities of such series in principal amount equal
to the unredeemed portion thereof will be issued.
(b) If less than all the Securities of a series are to be
redeemed, the Company shall give the Trustee at least 45 days notice in advance
of the date fixed for redemption as to the aggregate principal amount of
Securities of the series to be redeemed, and thereupon the Trustee shall
select, by lot or in any other manner as it shall deem appropriate and fair in
its discretion and which may provide for the selection of a portion or portions
(equal to $25 or any integral multiple thereof) of the principal amount of such
Securities of a denomination larger than $25, the Securities to be redeemed and
shall thereafter promptly notify the Company in writing of the numbers of the
Securities to be redeemed, in whole or in part.
The Company may, if and whenever it shall so elect, by
delivery of instructions signed on its behalf by its President or any Vice
President, instruct the Trustee or any paying agent to call all or any part of
the Securities of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may
deem advisable. In any case in which notice of redemption is to be given by
the Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as
the case may be, such Security Register, transfer books or other records or
suitable copies or extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required under the
provisions of this Section.
SECTION 3.03. (a) If the giving of notice of redemption
shall have been completed as above provided, the Securities or portions of
Securities of the series to be redeemed specified in such notice shall become
due and payable on the date and at the place stated in such notice at the
applicable redemption price, together with interest accrued to but not
including the date fixed for redemption and interest on such Securities or
portions of Securities shall cease to accrue on and after the date fixed for
<PAGE> 41
24
redemption, unless the Company shall default in the payment of such redemption
price and accrued interest with respect to any such Security or portion
thereof. On presentation and surrender of such Securities on or after the date
fixed for redemption at the place of payment specified in the notice, said
Securities shall be paid and redeemed at the applicable redemption price for
such series, together with interest accrued thereon to but not including the
date fixed for redemption (but if the date fixed for redemption is after the
record date with respect to an Interest Payment Date and on or prior to such
Interest Payment Date, the interest installment payable on such Interest
Payment Date shall be payable to the registered holder at the close of business
on the applicable record date pursuant to Section 2.03).
(b) Upon presentation of any Security of such series which is
to be redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Security is presented shall
make available for delivery to the holder thereof, at the expense of the
Company, a new Security or Securities of the same series, of authorized
denominations in principal amount equal to the unredeemed portion of the
Security so presented.
SECTION 3.04. The provisions of Sections 3.04, 3.05 and 3.06
shall be applicable to any sinking fund for the retirement of Securities of a
series, except as otherwise specified as contemplated by Section 2.01 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as "mandatory
sinking fund payment", and any payment in excess of such minimum amount
provided for by the terms of Securities of any series is herein referred to as
an "optional sinking fund payment". If provided for by the terms of Securities
for any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 3.05. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 3.05. The Company (i) may deliver Outstanding
Securities of a series (other than any previously called for redemption) and
(ii) may apply as credit Securities of a series which have been redeemed,
<PAGE> 42
25
either at the election of the Company pursuant to the terms of such Securities
or through the application of permitted optional sinking fund payments pursuant
to the terms of such Securities, in each case in satisfaction of all or any
part of any sinking fund payment with respect to the Securities of such series
required to be made pursuant to the terms of such Securities as provided for by
the terms of such series; provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for
such purpose by the Trustee at the redemption price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly.
SECTION 3.06. Not less than 45 days prior to each sinking
fund payment date for any series of Securities, the Company (i) will deliver to
the Trustee an Officers' Certificate specifying (x) the amount of the next
ensuing sinking fund payment for that series pursuant to the terms of such
series, and (y) the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of such series pursuant to Section 3.05 and
the basis for such credit and (ii) will, together with such Officers'
Certificate, deliver to the Trustee any Securities to be so delivered. Not
less than 30 days before each such sinking fund payment date, the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 3.02 and cause notice of the redemption thereof to
be given in the name and at the expense of the Company in the manner provided
in Section 3.02. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Section
3.03.
ARTICLE IV
Particular Covenants of the Company
The Company covenants and agrees for each series of the
Securities as follows:
SECTION 4.01. The Company will duly and punctually pay or
cause to be paid the principal of (and premium, if any), and interest on, the
Securities of such series at the time and place and in the manner provided
herein and established with respect to such Securities.
<PAGE> 43
26
SECTION 4.02. So long as any series of the Securities remain
Outstanding, the Company agrees to maintain an office or agency in the Borough
of Manhattan, The City and State of New York, with respect to each such series
and at such other location or locations as may be designated as provided in
this Section 4.02, where (i) Securities of that series may be presented for
payment, (ii) Securities of that series may be presented as hereinabove
authorized for registration of transfer and exchange, and (iii) notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be given or served, such designation to continue with
respect to such office or agency until the Company shall, by written notice
signed by its President or a Vice President and delivered to the Trustee,
designate some other office or agency for any or all of such purposes. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, notices and demands.
SECTION 4.03. (a) If the Company shall appoint one or more
paying agents for all or any series of the Securities, other than the Trustee,
the Company will cause each such paying agent to execute and deliver to the
Trustee an instrument in which such paying agent shall agree with the Trustee,
subject to the provisions of this Section:
(1) that it will hold all sums held by it as such agent for
the payment of the principal of (and premium, if any), or interest on,
the Securities of that series (whether such sums have been paid to it
by the Company or by any other obligor of such Securities) in trust
for the benefit of the persons entitled thereto;
(2) that it will give the Trustee written notice of any
failure by the Company (or by any other obligor of such Securities) to
make any payment of the principal of (and premium, if any), or
interest on, the Securities of that series when the same shall be due
and payable;
(3) that it will, at any time during the continuance of any
failure referred to in the preceding paragraph (a)(2) above, upon the
written request of the
<PAGE> 44
27
Trustee, forthwith pay to the Trustee all sums so held in trust by
such paying agent; and
(4) that it will perform all other duties of paying agent as
set forth in this Indenture.
(b) If the Company shall act as its own paying agent with
respect to any series of the Securities, it will, on or before each due date of
the principal of (and premium, if any), or interest on, Securities of that
series, set aside, segregate and hold in trust for the benefit of the persons
entitled thereto a sum sufficient to pay such principal (and premium, if any)
or interest so becoming due on Securities of that series until such sums shall
be paid to such persons or otherwise disposed of as herein provided and will
promptly notify the Trustee in writing of such action, or any failure (by it or
any other obligor on such Securities) to take such action. Whenever the
Company shall have one or more paying agents for any series of Securities, it
will, prior to each due date of the principal of (and premium, if any), or
interest on, any Securities of that series, deposit with the paying agent a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the persons entitled to
such principal, premium or interest, and (unless such paying agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
(c) Anything in this Section to the contrary notwithstanding,
(i) the agreement to hold sums in trust as provided in this Section is subject
to the provisions of Section 11.04 and (ii) the Company may at any time, for
the purpose of obtaining the satisfaction and discharge of this Indenture or
for any other purpose, pay, or direct any paying agent to pay, to the Trustee
all sums held in trust by the Company or such paying agent, such sums to be
held by the Trustee upon the same terms and conditions as those upon which such
sums were held by the Company or such paying agent; and, upon such payment by
any paying agent to the Trustee, such paying agent shall be released from all
further liability with respect to such money.
SECTION 4.04. The Company, whenever necessary to avoid or
fill a vacancy in the office of Trustee, will appoint, in the manner provided
in Section 7.10, a Trustee, so that there shall at all times be a Trustee
hereunder.
<PAGE> 45
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ARTICLE V
Securityholders' Lists and Reports
by the Company and the Trustee
SECTION 5.01. The Company will furnish or cause to be
furnished to the Trustee (a) on a monthly basis on each regular record date (as
defined in Section 2.03) a list, in such form as the Trustee may reasonably
require, of the names and addresses of the holders of each series of Securities
as of such regular record date; provided that the Company shall not be
obligated to furnish or cause to be furnished such list at any time that the
list shall not differ in any respect from the most recent list furnished to the
Trustee by the Company and (b) at such other times as the Trustee may request
in writing within 30 days after the receipt by the Company of any such request,
a list of similar form and content as of a date not more than 15 days prior to
the time such list is furnished; provided, however, that no such list need be
furnished for any series for which the Trustee shall be the Security Registrar.
SECTION 5.02. (a) The Trustee shall preserve, in as current
a form as is reasonably practicable, all information as to the names and
addresses of the holders of Securities contained in the most recent list
furnished to it as provided in Section 5.01 and as to the names and addresses
of holders of Securities received by the Trustee in its capacity as Security
Registrar (if acting in such capacity).
(b) The Trustee may destroy any list furnished to it as
provided in Section 5.01 upon receipt of a new list so furnished.
(c) In case three or more holders of Securities of a series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has owned a
Security for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Securities of such series or holders of all
Securities with respect to their rights under this Indenture or under such
Securities, and such application is accompanied by a copy of the form of proxy
or other communication which such applicants propose to transmit, then the
Trustee shall
<PAGE> 46
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within five business days after the receipt of such application, at its
election, either:
(1) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions
of subsection (a) of this Section 5.02; or
(2) inform such applicants as to the approximate number of
holders of Securities of such series or of all Securities, as the case
may be, whose names and addresses appear in the information preserved
at the time by the Trustee, in accordance with the provisions of
subsection (a) of this Section 5.02, and as to the approximate cost of
mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
(d) If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each holder of such series or of all Securities, as the
case may be, whose name and address appears in the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of this
Section 5.02, a copy of the form of proxy or other communication which is
specified in the application of such applicants received pursuant to subsection
(c) of this Section 5.02, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission (the "Commission"), together with a copy of
the material to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the best interests of
the holders of Securities of such series or of all Securities, as the case may
be, or would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the
entry of an order sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing, that all the objections
so sustained have been met and shall enter an order so declaring, the Trustee
shall mail copies of such material to
<PAGE> 47
30
all such Securityholders with reasonable promptness after the entry of such
order and the renewal of such tender; otherwise, the Trustee shall be relieved
of any obligation or duty to such applicants respecting their application.
(e) Each and every holder of the Securities, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any paying agent nor any Security Registrar shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the holders of Securities in accordance with the
provisions of this Section, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under this Section.
SECTION 5.03. (a) The Company covenants and agrees to file
with the Trustee, within 15 days after the Company is required to file the same
with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may from time to time by rules and regulations prescribe)
which the Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to either of such
Sections, then to file with the Trustee and the Commission in accordance with
the rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Exchange Act, in respect of a
security listed and registered on a national securities exchange, as may be
prescribed from time to time in such rules and regulations. Delivery of such
reports, information and documents to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not constitute constructive notice
of any information contained therein, including the Company's compliance with
any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers' Certificates).
(b) The Company covenants and agrees to file with the Trustee
and the Commission, in accordance with the rules and regulations prescribed
from time to time by the Commission, such additional information, documents and
reports with respect to compliance by the Company with the
<PAGE> 48
31
conditions and covenants provided for in this Indenture as may be required from
time to time by such rules and regulations.
(c) The Company covenants and agrees to transmit by mail,
first-class postage prepaid, or by reputable overnight delivery service which
provides for evidence of receipt, to the Securityholders, as their names and
addresses appear upon the Security Register, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to subsections (a) and (b)
of this Section as may be required by rules and regulations prescribed from
time to time by the Commission.
(d) The Company covenants and agrees to furnish to the
Trustee, on or before May 15 in each calendar year in which any of the
Securities are Outstanding, or on or before such other day in each calendar
year as the Company and the Trustee may from time to time agree upon, a
Certificate of the principal executive officer, principal financial officer, or
principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture. For
purposes of this subsection (d), such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture.
SECTION 5.04. (a) On or before July 15 in each year in which
any of the Securities are Outstanding, the Trustee shall transmit by mail,
first class postage prepaid, to the Securityholders, as their names and
addresses appear upon the Security Register, a brief report dated as of the
preceding May 15, with respect to any of the following events which may have
occurred within the previous 12 months (but if no such event has occurred
within such period no report need be transmitted):
(1) any change to its eligibility under Section 7.09, and its
qualifications under Section 7.08;
(2) the creation of, or any material change to, a relationship
specified in paragraphs (1) through (10) of subsection (c) of Section
7.08;
(3) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances
<PAGE> 49
32
surrounding the making thereof) made by the Trustee (as such) which
remain unpaid on the date of such report, and for the reimbursement of
which it claims or may claim a lien or charge, prior to that of the
Securities, on any property or funds held or collected by it as
Trustee if such advances so remaining unpaid aggregate more than 1/2
of 1% of the principal amount of the Securities outstanding,
determined in accordance with Section 8.04, on the date of such
report;
(4) any change to the amount, interest rate, and maturity date
of all other indebtedness owing by the Company, or by any other
obligor on the Securities, to the Trustee in its individual capacity,
on the date of such report, with a brief description of any property
held as collateral security therefor, except any indebtedness based
upon a creditor relationship arising in any manner described in
paragraph (2), (3), (4) or (6) of subsection (b) of Section 7.13;
(5) any change to the property and funds, if any, physically
in the possession of the Trustee as such on the date of such report;
(6) any release, or release and substitution, of property
subject to the lien of this Indenture (and the consideration thereof,
if any) which it has not previously reported;
(7) any additional issue of Securities which the Trustee has
not previously reported; and
(8) any action taken by the Trustee in the performance of its
duties under this Indenture which it has not previously reported and
which in its opinion materially affects the Securities or the
Securities of any series, except any action in respect of a default,
notice of which has been or is to be withheld by it in accordance with
the provisions of Section 6.07.
(b) The Trustee shall transmit by mail, first class postage
prepaid, to the Securityholders, as their names and addresses appear upon the
Security Register, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee as such since the date of
the last report transmitted pursuant to the provisions of subsection (a) of
<PAGE> 50
33
this Section (or if no such report has yet been so transmitted, since the date
of execution of this Indenture), for the reimbursement of which it claims or
may claim a lien or charge prior to that of the Securities of any series on
property or funds held or collected by it as Trustee, and which it has not
previously reported pursuant to this subsection if such advances remaining
unpaid at any time aggregate more than 10% of the principal amount of
Securities of such series outstanding, determined in accordance with Section
8.04, at such time, such report to be transmitted within 90 days after such
advances.
(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with the Company, with
each stock exchange upon which any Securities are listed (if so listed) and
also with the Commission. The Company agrees to notify the Trustee when any
Securities become listed on any stock exchange.
ARTICLE VI
Remedies of the Trustee and
Securityholders on Event of Default
SECTION 6.01. (a) Whenever used herein with respect to
Securities of a particular series, "Event of Default" means any one or more of
the following events which has occurred and is continuing:
(1) default in the payment of any installment of interest upon
any of the Securities of that series, as and when the same shall
become due and payable, and continuance of such default for a period
of 30 days; provided, however, that a valid extension of an interest
payment period by the Company in accordance with the terms of any
indenture supplemental hereto, shall not constitute a default in the
payment of interest;
(2) default in the payment of the principal of (or premium, if
any, on) any of the Securities of that series as and when the same
shall become due and payable whether at maturity, upon redemption, by
declaration or otherwise, or in any payment required by any sinking or
analogous fund established with respect to that series;
<PAGE> 51
34
(3) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company with respect to that series contained in such Securities or
otherwise established with respect to that series of Securities
pursuant to Section 2.01 or contained in this Indenture (other than a
covenant or agreement which has been expressly established solely for
the benefit of one or more series of Securities other than such
series) for a period of 90 days after the date on which written notice
of such failure, requiring the same to be remedied and stating that
such notice is a "Notice of Default" hereunder, shall have been given
to the Company by the Trustee, by registered or certified mail, or to
the Company and the Trustee by the holders of at least 25% in
principal amount of the Securities of that series at the time
outstanding, determined in accordance with Section 8.04;
(4) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 90 consecutive
days; or
(5) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect
of the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing
<PAGE> 52
35
by it of a petition or answer or consent seeking reorganization or
relief under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action.
(b) If an Event of Default occurs and is continuing with
respect to Securities of a particular series, unless the principal of all the
Securities of such series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of
the Securities of that series then outstanding hereunder, determined in
accordance with Section 8.04, by notice in writing to the Company (and to the
Trustee if given by such Securityholders), may declare the principal of all the
Securities of that series to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything contained in this Indenture or in the Securities of that series or
established with respect to that series pursuant to Section 2.01 to the
contrary notwithstanding.
(c) Section 6.01(b), however, is subject to the condition
that if, at any time after the principal of the Securities of a series shall
have been so declared due and payable, and before any judgment or decree for
the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest upon all the
Securities of such series and the principal of (and premium, if any, on) any
and all Securities of that series which shall have become due otherwise than by
acceleration (with interest upon such principal (and premium, if any), and, to
the extent that such payment is enforceable under applicable law, upon overdue
installments of interest, at the rate per annum expressed in the Securities of
such series to the date of such payment or deposit) and the amount payable to
the Trustee under Section 7.06, and any and all defaults under the Indenture,
other than the nonpayment of principal on
<PAGE> 53
36
Securities of such series which shall not have become due by their terms, shall
have been remedied or waived as provided in Section 6.06, then the holders of a
majority in aggregate principal amount of the Securities of such series then
outstanding, determined in accordance with Section 8.04, (subject to, in the
case of any series of Securities held as trust assets of a JPM Capital Trust
and with respect to which a Security Exchange has not theretofore occurred,
such consent of the holders of the Preferred Securities and the Common
Securities of such JPM Capital Trust as may be required under the Declaration
of Trust of such JPM Capital Trust), by written notice to the Company and to
the Trustee, may rescind and annul such declaration and its consequences with
respect to such series of Securities; but no such rescission and annulment
shall extend to or shall affect any subsequent default, or shall impair any
right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any
right with respect to Securities of a series under this Indenture and such
proceedings shall have been discontinued or abandoned because of rescission or
annulment as provided in (c) above or for any other reason or shall have been
determined adversely to the Trustee, then the Company and the Trustee shall be
restored to their former respective positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
(e) If, prior to a Security Exchange with respect to the
Securities of any series, a Default with respect to the Securities of such
series shall have occurred, the Company expressly acknowledges that under the
circumstances set forth in the applicable Declaration of Trust, any holder of
Preferred Securities of the applicable JPM Capital Trust may enforce directly
against the Company the applicable Property Trustee's rights hereunder. In
furtherance of the foregoing and for the avoidance of any doubt, the Company
acknowledges that, under the circumstances described in the applicable
Declaration of Trust, any such holder of Preferred Securities, in its own name,
in the name of the applicable JPM Capital Trust or in the name of the holders
of the Preferred Securities issued by such JPM Capital Trust, may institute or
cause to be instituted a proceeding, including, without limitation, any suit in
equity, an action at law or other judicial or administrative proceeding, to
enforce the applicable Property Trustee's rights hereunder directly against the
Company as issuer of the applicable
<PAGE> 54
37
series of Securities, and may prosecute such proceeding to judgment or final
decree, and enforce the same against the Company.
SECTION 6.02. (a) The Company covenants that (1) in case
default shall be made in the payment of any installment of interest on any of
the Securities of a series, or any payment required by any sinking or analogous
fund established with respect to such series as and when the same shall have
become due and payable, and such default shall have continued for a period of
10 Business Days, or (2) in case default shall be made in the payment of the
principal of (or premium, if any, on) any of the Securities of a series when
the same shall have become due and payable, whether upon maturity of the
Securities of a series or upon redemption or upon declaration or otherwise,
then, upon demand of the Trustee, the Company will pay to the Trustee, for the
benefit of the holders of the Securities of such series, the whole amount that
then shall have become due and payable on all Securities of such series for
principal (and premium, if any) or interest, or both, as the case may be, with
interest upon the overdue principal (and premium, if any) and (to the extent
that payment of such interest is enforceable under applicable law and without
duplication of any other amounts paid by the Company or the applicable JPM
Capital Trust in respect thereof) upon overdue installments of interest at the
rate per annum expressed in the Securities of such series; and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, and the amount payable to the Trustee under Section
7.06.
(b) In case the Company shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any action or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company
or other obligor upon the Securities of such series and collect in the manner
provided by law out of the property of the Company or other obligor upon the
Securities of such series wherever situated the moneys adjudged or decreed to
be payable.
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition or other
judicial proceedings
<PAGE> 55
38
affecting the Company, any other obligor on the Securities of any series, or
the creditors or property of either, the Trustee shall have the power to
intervene in such proceedings and take any action therein that may be permitted
by the court and shall (except as may be otherwise provided by law) be entitled
to file such proofs of claim and other papers and documents as may be necessary
or advisable in order to have the claims of the Trustee and of the holders of
Securities of such series allowed for the entire amount due and payable by the
Company or such other obligor under the Indenture at the date of institution of
such proceedings and for any additional amount which may become due and payable
by the Company or such other obligor after such date, and to collect and
receive any moneys or other property payable or deliverable on any such claim,
and to distribute the same after the deduction of the amount payable to the
Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy
or reorganization is hereby authorized by each of the holders of Securities of
such series to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to such
Securityholders, to pay to the Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to Securities of
any series, may be enforced by the Trustee without the possession of any of
such Securities, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for payment to the Trustee of any
amounts due under Section 7.06, be for the ratable benefit of the holders of
the Securities of such series.
In case of an Event of Default hereunder, the Trustee may in
its discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
<PAGE> 56
39
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding.
SECTION 6.03. Any moneys collected by the Trustee pursuant to
Section 6.02 with respect to a particular series of Securities shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such moneys on account of principal (or premium, if any)
or interest, upon presentation of the Securities of such series, and stamping
thereon the payment, if only partially paid, and upon surrender thereof if
fully paid:
FIRST: To the payment of costs and expenses of collection and
of all amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of the amounts then due and unpaid
upon Securities of such series for principal (and premium, if any) and
interest, in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 6.04. No holder of any Security of any series shall
have any right by virtue or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless such holder previously shall have
given to the Trustee written notice of an Event of Default and of the
continuance thereof with respect to Securities of such series specifying such
Event of Default, as hereinbefore provided, and unless also the holders of not
less than 25% in aggregate principal amount of the Securities of such series
then outstanding, determined in accordance with Section 8.04, shall have made
<PAGE> 57
40
written request upon the Trustee to institute such action, suit or proceeding
in its own name as trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
failed to institute any such action, suit or proceeding; it being understood
and intended, and being expressly covenanted by the holders and the Trustee,
that no one or more holders of Securities of such series shall have any right
in any manner whatsoever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of the holders of any
other of such Securities, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Securities of such series. For the protection
and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provisions of this Indenture,
however, the right of any holder of any Security to receive payment of the
principal of (and premium, if any) and interest on such Security, as therein
provided, on or after the respective due dates expressed in such Security (or
in the case of redemption, on the redemption date), or to institute suit for
the enforcement of any such payment on or after such respective dates or
redemption date, shall not be impaired or affected without the consent of such
holder.
SECTION 6.05. (a) All powers and remedies given by this
Article to the Trustee or to the Securityholders shall, to the extent permitted
by law, be deemed cumulative and not exclusive of any others thereof or of any
other powers and remedies available to the Trustee or the holders of the
Securities, by judicial proceedings or otherwise, to enforce performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Securities.
(b) No delay or omission by the Trustee or by any holder of
any of the Securities to exercise any right or power accruing upon any Event of
Default occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed to be a waiver of any such
<PAGE> 58
41
default or an acquiescence therein; and, subject to the provisions of Section
6.04, every power and remedy given by this Article or by law to the Trustee or
to the Securityholders may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Securityholders.
SECTION 6.06. The holders of a majority in aggregate
principal amount of the Securities of any series at the time outstanding,
determined in accordance with Section 8.04 (with, in the case of any series of
Securities held as trust assets of a JPM Capital Trust and with respect to
which a Security Exchange has not theretofore occurred, such consent of holders
of the Preferred Securities and the Common Securities of such JPM Capital Trust
as may be required under the Declaration of Trust of such JPM Capital Trust),
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to such series; provided, however,
that such direction shall not be in conflict with any rule of law or with this
Indenture or unduly prejudicial to the rights of holders of Securities of any
other series at the time outstanding (determined in accordance with Section
8.04) and not parties thereto. Subject to the provisions of Section 7.01, the
Trustee shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer or Responsible Officers
of the Trustee, determine that the proceeding so directed would involve the
Trustee in personal liability. The holders of a majority in aggregate
principal amount of the Securities of any series at the time outstanding,
determined in accordance with Section 8.04, affected thereby, determined in
accordance with Section 8.04 (with, in the case of any series of Securities
held as trust assets of a JPM Capital Trust and with respect to which a
Security Exchange has not theretofore occurred, such consent of holders of the
Preferred Securities and the Common Securities of such JPM Capital Trust as may
be required under the Declaration of Trust of such JPM Capital Trust), may, on
behalf of the holders of all of the Securities of such series, waive any past
default in the performance of any of the covenants contained herein or
established pursuant to Section 2.01 with respect to such series and its
consequences, except a default in the payment of the principal of, or premium,
if any, or interest on, any of the Securities of such series as and when the
same shall become due (x) by the terms of such Securities otherwise than by
<PAGE> 59
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acceleration (unless such default has been cured and a sum sufficient to pay
all matured installments of interest and principal and any premium has been
deposited with the Trustee (in accordance with Section 6.01(c)) or (y) as a
result of a call for redemption of Securities of such series. Upon any such
waiver, the default covered thereby shall be deemed to be cured for all
purposes of this Indenture and the Company, the Trustee and the holders of the
Securities of such series shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 6.07. The Trustee shall, within 90 days after the
occurrence of a default with respect to a particular series, transmit by mail,
first-class postage prepaid, to the holders of Securities of such series, as
their names and addresses appear upon the Security Register, notice of all
defaults with respect to such series known to the Trustee, unless such defaults
shall have been cured before the giving of such notice (the term "defaults" for
the purpose of this Section being hereby defined to be the events specified in
subsections (1), (2), (3), (4) and (5) of Section 6.01(a), not including any
periods of grace provided for therein and irrespective of the giving of notice
provided for by subsection (3) of Section 6.01(a)); provided that, except in
the case of default in the payment of the principal of (or premium, if any), or
interest on, any of the Securities of such series or in the payment of any
sinking fund installment established with respect to such series, the Trustee
shall be protected in withholding such notice if and so long as the Board of
Directors, the executive committee, or a trust committee of directors and/or
Responsible Officers, of the Trustee in good faith determine that the
withholding of such notice is in the interests of the holders of Securities of
such series; provided further, however, that, in the case of any default of the
character specified in Section 6.01(a)(3) with respect to Securities of such
series, no such notice to the holders of the Securities of such series shall be
given until at least 30 days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any
default, except (i) a default under subsection (a)(1) or (a)(2) of Section 6.01
as long as the Trustee is acting as paying agent for such series of Securities
or (ii) any default as to which the Trustee shall have received written notice
or a Responsible Officer charged with the
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43
administration of this Indenture shall have obtained written notice.
SECTION 6.08. All parties to this Indenture agree, and each
holder of any Securities by his or her acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, or by any Securityholder, or group of
Securityholders, holding more than 10% in aggregate principal amount of the
Securities of any series at the time outstanding, determined in accordance with
Section 8.04, or to any suit instituted by any Securityholder for the
enforcement of the payment of the principal of (premium, if any), or interest
on, any Security of such series, on or after the respective due dates expressed
in such Security or established pursuant to this Indenture.
ARTICLE VII
Concerning the Trustee
SECTION 7.01. (a) The Trustee, prior to the occurrence of an
Event of Default with respect to Securities of a series and after the curing of
all Events of Default with respect to Securities of that series which may have
occurred, shall undertake to perform with respect to Securities of such series
such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to Securities of a
series has occurred (which has not been cured or waived), the Trustee shall
exercise with respect to Securities of that series such of the rights and
powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
<PAGE> 61
44
(b) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own wilful misconduct, except that:
(1) prior to the occurrence of an Event of Default with
respect to Securities of a series and after the curing or waiving of
all such Events of Default which may have occurred with respect to
such series:
(i) the duties and obligations of the Trustee shall
with respect to Securities of such series be determined solely
by the express provisions of this Indenture, and the Trustee
shall not be liable with respect to Securities of such series
except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may with respect to Securities of such
series conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Indenture but need not confirm or
investigate the accuracy of mathematical calculations or other
facts stated therein;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the holders of not less than a majority in principal
<PAGE> 62
45
amount of the Securities of any series at the time outstanding,
determined in accordance with Section 8.04, relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee under this Indenture with respect to the Securities of such
series;
(4) none of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Indenture or adequate indemnity against such risk is not reasonably
assured to it; and
(5) whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject
to the provisions of this Article VII.
SECTION 7.02. Except as otherwise provided in Section 7.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order,
approval, bond, security or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board Resolution
or an instrument signed in the name of the Company by the Chairman or
the Vice Chairman of the Board of Directors or the President or any
Vice President and by the Secretary or any Assistant Secretary or the
Treasurer or any Assistant Treasurer or the Controller or any
Assistant Controller (unless other evidence in respect thereof is
specifically prescribed herein);
<PAGE> 63
46
(c) the Trustee may consult with counsel of its selection and
the written advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any
action taken or suffered or omitted hereunder in good faith and in
reliance thereon;
(d) the Trustee shall be under no obligations to exercise any
of the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders, pursuant to the
provisions of this Indenture, unless such Securityholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or
thereby; nothing herein contained shall, however, relieve the Trustee
of the obligation, upon the occurrence of an Event of Default with
respect to a series of the Securities (which has not been cured or
waived) to exercise with respect to Securities of that series such of
the rights and powers vested in it by this Indenture, and to use the
same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his
own affairs;
(e) the Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, security, or other papers or documents, unless
requested in writing so to do by the holders of not less than a
majority in principal amount of the Securities of the particular
series outstanding affected thereby, determined in accordance with
Section 9.04; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such costs, expenses
or liabilities as a
<PAGE> 64
47
condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Company or, if paid by the Trustee,
shall be repaid by the Company upon demand; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 7.03. (a) The recitals contained herein and in the
Securities (other than the Certificate of Authentication on the Securities)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities.
(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Securities or of the proceeds of such
Securities, or for the use or application of any moneys paid over by the
Trustee in accordance with any provision of this Indenture or established
pursuant to Section 2.01, or for the use or application of any moneys received
by any paying agent other than the Trustee.
SECTION 7.04. The Trustee or any paying agent or Security
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Securities with the same rights it would have if it were not
Trustee, paying agent or Security Registrar.
SECTION 7.05. Subject to the provisions of Section 11.04, all
moneys received by the Trustee shall until used or applied as herein provided,
be held in trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any moneys received by it hereunder
except such as it may agree with the Company to pay thereon.
SECTION 7.06. (a) The Company covenants and agrees to pay to
the Trustee from time to time, and the
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48
Trustee shall be entitled to, such reasonable compensation as the Company and
the Trustee shall from time to time agree in writing (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust) for all services rendered by it in the execution of the
trusts hereby created and in the exercise and performance of any of the powers
and duties hereunder of the Trustee, and the Company will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from
its negligence or bad faith. The Company also covenants to indemnify the
Trustee (and its officers, agents, directors and employees) for, and to hold it
harmless against, any loss, liability or expense including taxes (other than
taxes based upon, measured by or determined by the income of the Trustee)
incurred without negligence or bad faith on the part of the Trustee and arising
out of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim or
liability in the premises.
(b) The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder. Such additional indebtedness shall be secured by a lien prior to
that of the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the holders of
particular Securities.
SECTION 7.07. Except as otherwise provided in Section 7.01,
whenever in the administration of the provisions of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established
prior to taking or suffering or omitting to take any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee and such certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full warrant to
the
<PAGE> 66
49
Trustee for any action taken, suffered or omitted to be taken by it under the
provisions of this Indenture in reliance thereon.
SECTION 7.08. (a) If the Trustee has or shall acquire any
conflicting interest, as defined in this Section, with respect to the
Securities of any series and if the Default to which such conflicting interest
relates has not been cured, duly waived or otherwise eliminated, within 90 days
after ascertaining that it has such conflicting interest, it shall either
eliminate such conflicting interest, except as otherwise provided herein, or
resign with respect to the Securities of such series in the manner and with the
effect specified in Section 7.10 and the Company shall promptly appoint a
successor Trustee in the manner provided herein.
(b) In the event that the Trustee shall fail to comply with
the provisions of subsection (a) of this Section, with respect to the
Securities of any series the Trustee shall, within ten days after the
expiration of such 90-day period, transmit notice of such failure by mail,
first class postage prepaid, to the Securityholders of such series as their
names and addresses appear upon the Security Register.
(c) For the purposes of this Section, the Trustee shall be
deemed to have a conflicting interest with respect to the Securities of any
series if a Default has occurred and is continuing and:
(1) the Trustee is trustee under this Indenture with respect
to the Outstanding Securities of any series other than such series, or
is trustee under another indenture under which any other securities,
or certificates of interest or participation in any other securities,
of the Company are outstanding, unless such other indenture is a
collateral trust indenture under which the only collateral consists of
Securities issued under this Indenture; provided, however, that there
shall be excluded from the operation of this paragraph the Securities
of any series other than such series and any other indenture or
indentures under which other securities, or certificates of interest
or participation in other securities, of the Company are outstanding
if (i) this Indenture and such other indenture or indentures and all
series of securities issuable thereunder are wholly unsecured and rank
<PAGE> 67
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equally and such other indenture or indentures (and such series) are
hereafter qualified under the Trust Indenture Act, unless the
Commission shall have found and declared by order pursuant to
subsection (b) of Section 305 or subsection (c) of Section 307 of the
Trust Indenture Act, that differences exist between (A) the provisions
of this Indenture with respect to Securities of that series and with
respect to one or more other series or (B) the provisions of this
Indenture and the provisions of such other indenture or indentures (or
such series), which are so likely to involve a material conflict of
interest as to make it necessary in the public interest or for the
protection of investors to disqualify the Trustee from acting as such
under this Indenture with respect to the Securities of such series and
such other series or such other indenture or indentures, or (ii) the
Company shall have sustained the burden of proving, on application to
the Commission and after opportunity for hearing thereon, that the
trusteeship under this Indenture with respect to Securities of such
series and such other series or such other indenture or indentures is
not so likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of investors to
disqualify the Trustee from acting as such under this Indenture with
respect to Securities of such series and such other series or under
such other indentures;
(2) the Trustee or any of its directors or executive officers
is an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly
or indirectly controlled by or is under direct or indirect common
control with or an underwriter for, the Company;
(4) the Trustee or any of its directors or executive officers
is a director, officer, partner, employee, appointee or representative
of the Company, or of an underwriter (other than the Trustee itself)
for the Company who is currently engaged in the business of
underwriting, except that (A) one individual may be a director and/or
an executive officer of the Trustee and a director and/or an executive
officer of the Company, but may not be at the same time an executive
officer of both the Trustee and the Company; (B) if and so long as the
number of
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51
directors of the Trustee in office is more than nine, one additional
individual may be a director and/or an executive officer of the
Trustee and a director of the Company; and (C) the Trustee may be
designated by the Company or by an underwriter for the Company to act
in the capacity of transfer agent, registrar, custodian, paying agent,
fiscal agent, escrow agent, or depositary, or in any other similar
capacity, or, subject to the provisions of paragraph (1) of this
subsection (c), to act as trustee whether under an indenture or
otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner,
or executive officer thereof, or 20% or more of such voting securities
is beneficially owned, collectively, by any two or more of such
persons; or 10% or more of the voting securities of the Trustee is
beneficially owned either by an underwriter for the Company or by any
director, partner, or executive officer thereof, or is beneficially
owned, collectively by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this subsection (c) defined), (A) 5% or more of the
voting securities, or 10% or more of any other class of security, of
the Company, not including the Securities issued under this Indenture
and securities issued under any other indenture under which the
Trustee is also trustee, or (B) 10% or more of any class of security
of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this subsection (c) defined), 5% or more of the voting
securities of any person who, to the knowledge of the Trustee, owns
10% or more of the voting securities of, or controls directly or
indirectly or is under direct or indirect common control with, the
Company;
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this subsection (c) defined), 10% or more of any class
of security of any
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52
person who, to the knowledge of the Trustee, owns 50% or more of the
voting securities of the Company;
(9) the Trustee owns, on the date of Default upon the
Securities of any series or any anniversary of such Default while such
Default upon the Securities issued under this Indenture remains
Outstanding, in the capacity of executor, administrator, testamentary
or inter vivos trustee, guardian, committee or conservator, or in any
other similar capacity, an aggregate of 25% or more of the voting
securities, or of any class of security, of any person, the beneficial
ownership of a specified percentage of which would have constituted a
conflict of interest under paragraph (6), (7), or (8) of this
subsection (c). As to any such securities of which the Trustee
acquired ownership through becoming executor, administrator or
testamentary trustee of an estate which includes them, the provisions
of the preceding sentence shall not apply, for a period of two years
from the date of such acquisition, to the extent that such securities
in such estate do not exceed 25% of such voting securities or 25% of
any such class of security. Promptly after the dates of any such
Default upon the Securities issued under this Indenture and annually
in each succeeding year that the Securities issued under this
Indenture remain in Default, the Trustee shall make a check of its
holding of such securities in any of the above-mentioned capacities as
of such dates. If the Company fails to make payment in full of
principal of, or interest on, any of the Securities when and as the
same become due and payable, and such failure continues for 30 days
thereafter, the Trustee shall make a prompt check of its holding of
such securities in any of the above-mentioned capacities as of the
date of the expiration of such 30-day period, and after such date,
notwithstanding the foregoing provisions of this paragraph (9), all
such securities so held by the Trustee, with sole or joint control
over such securities vested in it, shall be considered to be
beneficially owned by the Trustee for the purposes of paragraphs (6),
(7) and (8) of this subsection (c), but only for so long as such
failure shall continue; or
(10) except under the circumstances described in paragraph
(1), (3), (4), (5) or (6) of subsection (b) of Section 7.13 the
Trustee shall be or shall become a creditor of the Company.
<PAGE> 70
53
For purposes of paragraph (1) of this subsection (c), and of
Section 6.06, the term "series of securities" or "securities" means a series,
class or group of securities issuable under an indenture pursuant to which
holders of one such series may vote to direct the indenture trustee, or
otherwise take action pursuant to a vote of such holders, separately from
holders of another such series; provided that "series of securities" or
"series" shall not include any series of securities issuable under an indenture
if all such series rank equally and are wholly secured.
The specification of percentages in paragraphs (5) to (9),
inclusive, of this subsection (c) shall not be construed as indicating that the
ownership of such percentages of securities of a person is or is not necessary
or sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this subsection (c).
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection (c) only, (A) the terms "security" and "securities" shall include
only such securities as are generally known as corporate securities, but shall
not include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (B) an obligation shall be deemed to
be in "default", when a default in payment of principal shall have continued
for 30 days or more and shall not have been cured; and (C) the Trustee shall
not be deemed to be the owner or holder of (i) any security which it holds as
collateral security (as trustee or otherwise) for any obligation which is not
in default as defined in clause (B) above, or (ii) any security which it holds
as collateral security under this Indenture, irrespective of any Default
hereunder, or (iii) any security which it holds as agent for collection, or as
custodian, escrow agent or depositary, or in any similar representation
capacity.
Except as above provided, the word "security" or "securities"
as used in this Indenture shall mean any note, stock, treasury stock, bond,
indenture, evidence of indebtedness, certificate of interest or participation
in any profit-sharing agreement, collateral trust certificate, pre-organization
certificate or subscription, transferable share, investment contract, voting
trust certificate, certificate of deposit for a security, fractional undivided
interest in oil, gas, or other mineral rights, or, in
<PAGE> 71
54
general, any interest or instrument commonly known as a "security", or any
certificate of interest or participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or right to subscribe to or
purchase, any of the foregoing.
(d) For the purposes of this Section:
(1) The term "underwriter" when used with reference to the
Company shall mean every person, who, within one year prior to the
time as of which the determination is made, has purchased from the
Company with a view to, or has offered or sold for the Company in
connection with, the distribution of any security of the Company, or
has participated or has had a direct or indirect participation in any
such undertaking, or has participated or has had participation in the
direct or indirect underwriting of any such undertaking, but such term
shall not include a person whose interest was limited to a commission
from an underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(2) The term "director" shall mean any member of the board of
directors of a corporation or any individual performing similar
functions with respect to any organization whether incorporated or
unincorporated.
(3) The term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock company, a
trust, an unincorporated organization or a government or political
subdivision thereof. As used in this paragraph, the term "trust"
shall include only a trust where the interest or interests of the
beneficiary or beneficiaries are evidenced by a security.
(4) The term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a person, or any security
issued under or pursuant to any trust, agreement or arrangement
whereby a trustee or trustees or agent or agents for the owner or
holder of such security are presently entitled to vote in the
direction or management of the affairs of a person.
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(5) The term "Company" shall mean any obligor upon the
Securities.
(6) The term "executive officer" shall mean the chairman of
the board of directors, president, every vice president, every
assistant vice president, every trust officer, the cashier, the
secretary, and the treasurer of a corporation, and any individual
customarily performing similar functions with respect to any
organization whether incorporated or unincorporated.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:
(1) A specified percentage of the voting securities of the
Trustee, the Company or any other person referred to in this Section
(each of whom is referred to as a "person" in this paragraph) means
such amount of the outstanding voting securities of such person as
entitles the holder or holders thereof to cast such specified
percentage of the aggregate votes which the holders of all the
outstanding voting securities of such person are entitled to cast in
the direction or management of the affairs of such person.
(2) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of
the class outstanding.
(3) The term "amount", when used in regard to securities,
means the principal amount if relating to evidences of indebtedness,
the number of shares if relating to capital shares and the number of
units if relating to any other kind of security.
(4) The term "outstanding" means issued and not held by or
for the account of the issuer. The following securities shall not be
deemed outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
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(ii) securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if the
obligation evidenced by such other class of securities is not
in default as to principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to
principal or interest or otherwise; and
(iv) securities held in escrow if placed in escrow by
the issuer thereof, provided, however, that any voting
securities of an issuer shall be deemed outstanding if any
person other than the issuer is entitled to exercise the
voting rights thereof.
(5) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders
thereof substantially the same rights and privileges; provided,
however, that, in the case of secured evidences of indebtedness, all
of which are issued under a single indenture, differences in the
interest rates or maturity dates of various series thereof shall not
be deemed sufficient to constitute such series different classes; and
provided further that, in the case of unsecured evidences of
indebtedness, differences in the interest rates or maturity dates
thereof shall not be deemed sufficient to constitute them securities
of different classes, whether or not they are issued under a single
indenture.
(f) Except in the case of a default in the payment of the
principal of (or premium, if any), or interest on, any Securities issued under
this Indenture, or in the payment of any sinking or analogous fund installment,
the Trustee shall not be required to resign as provided by this Section 7.08 if
such Trustee shall have sustained the burden of proving, on application to the
Commission and after opportunity for hearing thereon, that (i) the default
under the Indenture may be cured or waived during a reasonable period and under
the procedures described in such application and (ii) a stay of the Trustee's
duty to resign will not be inconsistent with the interests of Securityholders.
The filing of such an application shall
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automatically stay the performance of the duty to resign until the Commission
orders otherwise.
Any resignation of the Trustee shall become effective only
upon the appointment of a successor trustee and such successor's acceptance of
such an appointment.
SECTION 7.09. There shall at all times be a Trustee with
respect to the Securities issued hereunder which shall at all times be a
corporation organized and doing business under the laws of the United States of
America or any State or Territory thereof or of the District of Columbia, or a
corporation or other person permitted to act as trustee by the Commission,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million dollars, and subject to
supervision or examination by Federal, State, Territorial, or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. The Company may not, nor may any Person directly or
indirectly controlling, controlled by, or under common control with the
Company, serve as Trustee. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 7.10.
SECTION 7.10. (a) The Trustee or any successor hereafter
appointed may at any time resign with respect to the Securities of one or more
series by giving written notice thereof to the Company and by transmitting
notice of resignation by mail, first class postage prepaid, to the
Securityholders of such series, as their names and addresses appear upon the
Security Register. Upon receiving such notice of resignation, the Company
shall promptly appoint a successor trustee with respect to Securities of such
series by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
mailing of such notice of resignation, the resigning Trustee may petition any
court of competent
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jurisdiction for the appointment of a successor trustee with respect to
Securities of such series, or any Securityholder of that series who has been a
bona fide holder of a Security or Securities for at least six months may,
subject to the provisions of Section 6.08, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 7.08 after written request therefor by the
Company or by any Securityholder who has been a bona fide holder of a
Security or Securities for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with
the provisions of Section 7.09 and shall fail to resign after written
request therefor by the Company or by any such Securityholder; or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then, in any
such case, the Company may remove the Trustee with respect to all
Securities and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of
which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee. If no successor trustee shall have
been so appointed and have accepted appointment within 30 days after
the mailing of such notice of removal, the Trustee so removed may
petition any court of competent jurisdiction for the appointment of a
successor trustee with respect to Securities of such series, or any
Securityholder of that series who has been a bona fide holder of a
Security or Securities for at least six months may, subject to the
provisions of Section 6.08, on behalf of himself and all others
similarly situated, petition any such court for the removal of the
Trustee and the appointment of a successor trustee. Such court
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may thereupon after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount
of the Securities of any series at the time outstanding, determined in
accordance with Section 8.04, may at any time remove the Trustee with respect
to such series and appoint a successor trustee.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee with respect to the Securities of a series pursuant to
any of the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section
may be appointed with respect to the Securities of one more series or all such
series, but at any time there shall be only one Trustee with respect to the
Securities of any particular series.
SECTION 7.11. (a) In case of the appointment hereunder of a
successor trustee with respect to all Securities, such successor trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor trustee all the rights, powers, and trusts of
the retiring Trustee and shall duly assign, transfer and deliver to such
successor trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor
trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer
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and confirm to, and to vest in, each successor trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of
that or those series to which the appointment of such successor trustee
relates, (2) shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust, that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee and that no Trustee shall be responsible
for any act or failure to act on the part of any other Trustee hereunder; and
upon the execution and delivery of such supplemental indenture the resignation
or removal of the retiring Trustee shall become effective to the extent
provided therein, such retiring Trustee shall with respect to the Securities of
that or those series to which the appointment of such successor trustee relates
have no further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, and each such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor trustee, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor trustee relates.
(c) Upon request of any such successor trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in,
and confirming to, such successor trustee all such rights, power and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
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61
(d) No successor trustee shall accept its appointment unless
at the time of such acceptance such successor trustee shall be qualified and
eligible under this Article.
(e) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Company shall transmit notice of the succession
of such trustee hereunder by mail, first class postage prepaid, to the
Securityholders, as their names and addresses appear upon the Security
Register. If the Company fails to transmit such notice within ten days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the Company.
SECTION 7.12. Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be qualified under the provisions of
Section 7.08 and eligible under the provisions of Section 7.09, without the
execution or filing of any paper of any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. In case any
Securities shall have been authenticated, but not made available for delivery,
by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
make available for delivery the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 7.13. (a) Subject to the provisions of subsection
(b) of this Section, if the Trustee shall be or shall become a creditor,
directly or indirectly, secured or unsecured, of the Company within three
months prior to a default, as defined in subsection (b) of this Section, or
subsequent to such a default, then, unless and until such default shall be
cured, the Trustee shall set apart and hold in a special account for the
benefit of the Trustee individually, the holders of the Securities and the
holders
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of other indenture securities (as defined in subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of principal
or interest, effected after the beginning of such three months' period
and valid as against the Company and its other creditors, except any
such reduction resulting from the receipt or disposition of any
property described in paragraph (2) of this subsection, or from the
exercise of any right of setoff which the Trustee could have exercised
if a petition in bankruptcy had been filed by or against the Company
upon the date of such default; and
(2) all property received by the Trustee in respect of any
claim as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the beginning
of such three months' period, or an amount equal to the proceeds of
any such property, if disposed of, subject, however, to the rights, if
any, of the Company and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of
the Trustee:
(A) to retain for its own account (i) payments made on account
of any such claim by any person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim
by the Trustee to a third person, and (iii) distributions made in
cash, securities, or other property in respect of claims filed against
the Company in bankruptcy or receivership or in a case for
reorganization pursuant to the Federal Bankruptcy Code or applicable
State law;
(B) to realize, for its own account, upon any property held by
it as security for any such claim, if such property was so held prior
to the beginning of such three month period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such three month period and such property was received as
security therefor simultaneously with the creation
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thereof, and if the Trustee shall sustain the burden of proving that
the time such property was so received the Trustee had no reasonable
cause to believe that a default, as defined in subsection (c) of this
Section, would occur within three months; or
(D) to receive payment on any claim referred to in paragraph
(B) or (C), against the release of any property held as security for
such claim as provided in such paragraph (B) or (C), as the case may
be, to the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three month period for property held as
security at the time of such substitution shall, to the extent of the fair
value of the property released, have the same status as the property released,
and, to the extent that any claim referred to in any of such paragraphs is
created in renewal of or in substitution for or for the purpose of repaying or
refunding any pre-existing claim of the Trustee as such creditor, such claim
shall have the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned between the Trustee, the Securityholders and the holders of other
indenture securities in such manner that the Trustee, the Securityholders and
the holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in a case for reorganization pursuant
to the Federal Bankruptcy Code or applicable State law, the same percentage of
their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the funds and
property in such special account and before crediting to the respective claims
of the Trustee, the Securityholders and the holders of other indenture
securities dividends on claims filed against the Company in bankruptcy or
receivership or in a case for reorganization pursuant to the Federal Bankruptcy
Code or applicable State law, but after crediting thereon receipts on account
of the indebtedness represented by their respective claims from all sources
other than from such dividends and from the funds and property so held in such
special account. As used in this paragraph, with respect to any claim, the
term "dividends" shall include any
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distribution with respect to such claim, in bankruptcy or receivership or in a
case for reorganization pursuant to the Federal Bankruptcy Code or applicable
State law, whether such distribution is made in cash, securities, or other
property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or a case for reorganization is pending shall have jurisdiction
(i) to apportion between the Trustee, the Securityholders and the holders of
other indenture securities, in accordance with the provisions of this
paragraph, the funds and property held in such special account and the proceeds
thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to
the provisions of this paragraph due consideration in determining the fairness
of the distributions to be made to the Trustee, the Securityholders and the
holders of other indenture securities with respect to their respective claims,
in which event it shall not be necessary to liquidate or to appraise the value
of any securities or other property held in such special account or as security
for any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or otherwise to
apply the provisions of this paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the
beginning of such three month period shall be subject to the provisions of this
subsection (a) as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such three month
period, it shall be subject to the provisions of this subsection (a) if and
only if the following conditions exist:
(i) the receipt of property or reduction of claim which would
have given rise to the obligation to account, if such Trustee had
continued as trustee, occurred after the beginning of such three-month
period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
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(b) There shall be excluded from the operation of subsection
(a) of this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court
of competent jurisdiction, or by this Indenture, for the purpose of
preserving any property other than cash which shall at any time be
subject to the lien, if any, of this Indenture or of discharging tax
liens or other prior liens or encumbrances thereon, if notice of such
advance and of the circumstances surrounding the making thereof is
given to the Securityholders at the time and in the manner provided in
this Indenture;
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, subscription agent, fiscal agent or
depositary, or other similar capacity;
(4) any indebtedness created as a result of services rendered
or premises rented; or any indebtedness created as a result of goods
or securities sold in a cash transaction as defined in subsection (c)
of this Section;
(5) the ownership of stock or of other securities of a Company
organized under the provisions of Section 25(a) of the Federal Reserve
Act, as amended, which is directly or indirectly a creditor of the
Company; or
(6) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptance or obligations which fall
within the classification of self-liquidating paper as defined in
subsection (c) of this Section.
(c) As used in this Section:
(1) The term "default" shall mean any failure to make payment
in full of the principal of (or premium,
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if any) or interest upon any of the Security or upon the other
indenture securities when and as such principal (or premium, if any)
or interest becomes due and payable.
(2) The term "other indenture securities" shall mean
securities upon which the Company is an obligor (as defined in the
Trust Indenture Act) outstanding under any other indenture (A) under
which the Trustee is also trustee, (B) which contains provisions
substantially similar to the provisions of subsection (a) of this
Section, and (C) under which a default exists at the time of the
apportionment of the funds and property held in said special account.
(3) The term "cash transaction" shall mean any transaction in
which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in
checks or other orders drawn upon banks or bankers and payable upon
demand.
(4) The term "self-liquidating paper" shall mean any draft,
bill of exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Company for the purpose of financing the
purchase, processing, manufacture, shipment, storage or sale of goods,
wares or merchandise and which is secured by documents evidencing
title to, possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the sale of
the goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Company arising
from the making, drawing, negotiating or incurring of the draft, bill
of exchange, acceptance or obligation.
(5) The term "Company shall mean any obligor upon any of the
Securities.
ARTICLE VIII
Concerning the Securityholders
SECTION 8.01. Whenever in this Indenture it is provided that
the holders of a majority or a specified
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percentage in aggregate principal amount of the Securities of a particular
series may take any action (including the making of any demand or request, the
giving of any notice, consent or waiver or the taking of any other action), the
fact that, at the time of taking any such action, the holders of such majority
or specified percentage of such series have joined therein may be evidenced by
any instrument or any number of instruments of similar terms executed by the
holders of Securities of such series in person or by agent or proxy appointed
in writing.
If the Company shall solicit from the Securityholders of any
series any request, demand, authorization, direction, notice, consent, waiver
or other action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such series for the determination
of Securityholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Securityholders of record at the
close of business on the record date shall be deemed to be Securityholders for
the purposes of determining whether Securityholders of the requisite proportion
of outstanding Securities of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the outstanding Securities of that series
shall be computed as of the record date; provided that no such authorization,
agreement or consent by such Securityholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
SECTION 8.02. Subject to the provisions of Section 7.01,
proof of the execution of any instrument by a Securityholder (such proof will
not require notarization) or his agent or proxy and proof of the holding by any
person of any of the Securities shall be sufficient if made in the following
manner:
(a) The fact and date of the execution by any such person of
any instrument may be proved in any reasonable manner acceptable to
the Trustee.
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(b) The ownership of Securities shall be proved by the
Security Register for Securities of such series or by a certificate of
the Security Registrar with respect thereto.
(c) The Trustee may require such additional proof of any
matter referred to in this Section as it shall deem necessary.
SECTION 8.03. Prior to the due presentment for registration
of transfer of any Security, the Company, the Trustee, any paying agent and any
Security Registrar may deem and treat the person in whose name such Security
shall be registered upon the books of the Company as the absolute owner of such
Security (whether or not such Security shall be overdue and notwithstanding any
notice of ownership or writing thereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of, or on account of, the
principal of, premium, if any, and (subject to Section 2.03) interest on, such
Security and for all other purposes; and neither the Company nor the Trustee
nor any paying agent nor any Security Registrar shall be affected by any notice
to the contrary.
SECTION 8.04. In determining whether the holders of the
requisite aggregate principal amount of Securities of a particular series have
concurred in any direction, consent or waiver under this Indenture, Securities
of that series which are owned by the Company or any other obligor on the
Securities of that series or by any Subsidiary of the Company or of such other
obligor on the Securities of that series shall be disregarded and deemed not to
be outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only Securities of such series which the
Trustee actually knows are so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as outstanding for
the purposes of this Section, if the pledgee shall establish to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not a person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any such other obligor. In case of a dispute as to such right,
any decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.
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SECTION 8.05. At any time prior to (but not after) the
evidencing to the Trustee, as provided in Section 8.01, of the taking of any
action by the holders of the majority or a specified percentage in aggregate
principal amount of the Securities of a particular series, any holder of a
Security of that series which is shown by the evidence to be included in the
Securities the holders of which have consented to such action may, by filing
written notice with the Trustee, and upon proof of holding as provided in
Section 8.02, revoke such action so far as concerns such Security. Except as
aforesaid any such action taken by the holder of any Security shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Security, and of any Security issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether
or not any notation in regard thereto is made upon such Security. Any action
required by the Indenture to be taken, and that is taken, by the holders of the
majority or a specified percentage in aggregate principal amount of the
Securities of a particular series shall be conclusively binding upon the
Company, the Trustee and the holders of all the Securities of that series.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. The Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act of 1939 as in force at the date of the
execution thereof) for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more series any
property or assets;
(b) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of
the Company pursuant to Article X;
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(c) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions as its Board of
Directors and the Trustee shall consider to be for the protection of
the holders of Securities, and to make the occurrence, or the
occurrence and continuance, of a default in any such additional
covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided that in
respect of any such additional covenant, restriction, condition or
provision such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or longer
than that allowed in the case of other defaults) or may provide for an
immediate enforcement upon such an Event of Default or may limit the
remedies available to the Trustee upon such an Event of Default or may
limit the right of the holders of a majority in aggregate principal
amount of the Securities of affected series to waive such an Event of
Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture; or to make such other provisions in
regard to matters or questions arising under this Indenture or under
any supplemental indenture as the Board of Directors may deem
necessary or desirable and which shall not [materially] 2/ adversely
affect the interests of the holders of the Securities;
(e) to establish the form or terms of Securities of any series
as permitted by Sections 2.01, 2.02 and 2.03;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder
- --------------------
2/ Not in Paine Webber.
<PAGE> 88
71
by more than one trustee, pursuant to the requirements of Section
7.11; and
(g) to add to, change or eliminate any of the provisions of
this Indenture; provided that any such addition, change or elimination
(i) shall become effective only when there is no Security Outstanding
of any series created prior to the execution of such supplemental
indenture which is entitled to the benefit of such provision or (ii)
shall not apply to any Security then Outstanding.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed without the consent of the Holders of any of the
Securities at the time outstanding, notwithstanding any of the provisions of
Section 9.02.
SECTION 9.02. With the consent (evidenced as provided in
Article VIII) of the holders of not less than a majority in aggregate principal
amount of the Securities at the time Outstanding of all series affected by such
supplemental indenture (voting as one class), (and, in the case of any series
of Securities held as trust assets of a JPM Capital Trust and with respect to
which a Security Exchange has not theretofore occurred, such consent of the
holders of the Preferred Securities and the Common Securities of such JPM
Capital Trust as may be required under the Declaration of Trust of such JPM
Capital Trust), the Company, when authorized by a Board Resolution, and the
Trustee may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act of 1939 as in force at the date of execution thereof) for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the holders of the
Securities of
<PAGE> 89
72
each such series; provided that no such supplemental indenture shall (a) extend
the final maturity of any Security, or reduce the principal amount thereof or
the method in which amounts of payments of principal or interest thereon are
determined, or reduce the rate or extend the time of payment of interest
thereon, [or change the coin or currency or units based on or related to
currencies (including ECU) of payment thereof,] 3/ or the method in which
amounts of payments of principal or interest thereon are determined, or reduce
any amount payable on redemption thereof or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon an
acceleration of the maturity thereof pursuant to Section 6.01 or the amount
thereof provable in bankruptcy pursuant to Section 6.02, or impair or affect
the right of any Security holder to institute suit for the payment thereof or,
if the Securities provide therefor, any right of repayment at the option of the
Security holder without the consent of the holder of each Security so affected,
or (b) reduce the aforesaid percentage of Securities of any series, the consent
of the holders of which is required for any such supplemental indenture,
without the consent of the holders of each Security (and, in the case of any
series of Securities held as trust assets of a JPM Capital Trust and with
respect to which a Security Exchange has not theretofore occurred, such consent
of the holders of the Preferred Securities and the Common Securities of such
JPM Capital Trust as may be required under the Declaration of Trust of such JPM
Capital Trust) so affected. A supplemental indenture which changes or
eliminates any covenant or other provision of this Indenture which has
expressly been included solely for the benefit of one or more particular series
of Securities or which modifies the rights of the holders of Securities of such
series with respect to such covenant or other provision shall be deemed not to
affect the rights under this Indenture of the holders of any other series.
Upon the request of the Company, accompanied by a copy of a
Board Resolution certified by the secretary or an assistant secretary of the
Company authorizing the execution of any such supplemental indenture, and upon
the filing with
- --------------------
3/ If this is kept in, other sections from JPM indenture (e.g. Section
12.11) must be imported; if not kept in, delete definitions for ECU and European
Communities and delete from base prospectus.
<PAGE> 90
73
the Trustee of evidence of the consent of Security holders as aforesaid and
other documents, if any, required by Section 8.01, (and, in the case of any
series of Securities held as trust assets of a JPM Capital Trust and with
respect to which a Security Exchange has not theretofore occurred, such consent
of the holders of the Preferred Securities and the Common Securities of such
JPM Capital Trust as may be required under the Declaration of Trust of such JPM
Capital Trust), the Trustee shall join with the Company in the execution of
such supplemental indenture unless such supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise,
in which case the Trustee may in its discretion, but shall not be obligated to,
enter into such supplemental indenture.
It shall not be necessary for the consent of the Security
holders under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Company shall mail a notice thereof by first-class mail to the holders of then
Outstanding Securities of each series affected thereby at their addresses as
they shall appear on the Security Register. Such notice shall set forth in
general terms the substance of such supplemental indenture. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Upon the execution of any supplemental
indenture pursuant to the provisions hereof, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the holders of Securities of each
series affected thereby shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
<PAGE> 91
74
SECTION 9.04. The Trustee, subject to the provisions of
Sections 7.01 and 7.02, may receive an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed
pursuant to this Article IX complies with the applicable provisions of this
Indenture.
SECTION 9.05. Securities of any series authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article may bear a notation in form approved by the Trustee
for such series as to any matter provided for by such supplemental indenture or
as to any action taken at any such meeting. If the Company or the Trustee
shall so determine, new Securities of any series so modified as to conform, in
the opinion of the Trustee and the Board of Directors, to any modification of
this Indenture contained in any such supplemental indenture may be prepared by
the Company, authenticated by the Trustee and delivered in exchange for the
Securities of such series then outstanding.
SECTION 9.06. Anything in this Indenture to the contrary
notwithstanding, any of the acts which the Company is required to do or is
prohibited from doing by any of the provisions of this Indenture may, to the
extent that such provisions might be changed or eliminated by a supplemental
indenture pursuant to Section 9.02 upon consent of holders of a majority in
aggregate principal amount of the Securities or any series thereof at the time
outstanding, be omitted or done by the Company, if there is obtained the prior
written consent thereto (evidenced as provided in Article VIII), or the prior
written waiver of compliance with any such provision or provisions, by the
holders of at least a majority of the aggregate principal amount of the
Securities or such series thereof at the time outstanding. The Company agrees
promptly to file with the Trustee a duplicate original of each such consent or
waiver.
SECTION 9.07. The Company may, but shall not be obligated to,
fix a record date for the purpose of determining the holders entitled to take
any action under this Indenture by vote or consent. Except as provided herein,
such record date shall be the later of (i) 30 days prior to the first
solicitation of such consent or vote or (ii) the date of the most recent list
of Security holders furnished to the Trustee pursuant to Section 5.01 prior to
such solicitation. If a record date is fixed, those Persons who were Security
holders at such record date (or their duly
<PAGE> 92
75
designated proxies), and only those Persons, shall be entitled to take such
action by vote or consent or to revoke any vote or consent previously given,
whether or not such Persons continue to be holders after such record date;
provided, however, that unless such vote or consent is obtained from the
holders (or their duly designated proxies) of the requisite principal amount of
Securities Outstanding prior to the date which is the 120th day after such
record date, any such vote or consent previously given shall automatically and
without further action by any Holder be canceled and of no further effect.
ARTICLE X
Consolidation, Merger, Sale or Conveyance
SECTION 10.01. The Company covenants that it will not merge
or consolidate with any other corporation or sell or convey all or
substantially all of its assets to any Person, unless (i) either the Company
shall be the continuing corporation, or the successor corporation (if other
than the Company) shall be a corporation organized under the laws of the United
States of America or any State thereof and shall expressly assume the due and
punctual payment of the principal of and interest on all the Securities,
according to their tenor, and the due and punctual performance and observance
of all of the covenants and conditions of this Indenture to be performed or
observed by the Company, by supplemental indenture satisfactory to the Trustee,
executed and delivered to the Trustee by such corporation, and (ii) the Company
or such successor corporation, as the case may be, shall not, immediately after
such merger or consolidation, or such sale or conveyance, be in default in the
performance of any such covenant or condition.
SECTION 10.02. In case of any such consolidation, merger,
sale or conveyance, other than a conveyance by way of lease, and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it
had been named herein as the Company, and the Company shall thereupon be
released from all obligations hereunder and under the Securities and the
Company as the predecessor corporation may thereupon or at any time thereafter
be dissolved, wound up or liquidated. Such successor corporation thereupon may
cause to be signed, and may issue
<PAGE> 93
76
either in its own name or in the name of J.P. Morgan & Co. Incorporated any or
all of the Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the order of such
successor corporation instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All of
the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter issued
in accordance with the terms of this Indenture as though all of such Securities
had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 10.03. The Trustee, subject to the provisions of
Sections 7.01 and 7.02, may receive an Opinion of Counsel and/or an Officers'
Certificate, prepared in accordance with Section 13.06, as conclusive evidence
that any such consolidation, merger, sale or conveyance, and any such
assumption complies with the applicable provisions of Article IX.
ARTICLE XI
Satisfaction and Discharge of Indenture;
Unclaimed Moneys
SECTION 11.01. (A) If at any time (a) the Company shall have
paid or caused to be paid the principal of, and interest on, all the Securities
of any series outstanding hereunder (other than Securities of such series which
have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.07) as and when the same shall have become due and
payable, or (b) the Company shall have delivered to the Trustee for
cancellation all Securities of any series theretofore authenticated (other than
any Securities of such series which shall have
<PAGE> 94
77
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.07) or (c)) (i) all the Securities of any series not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and (ii) the Company shall
have irrevocably deposited or caused to be deposited with the Trustee as trust
funds the entire amount in cash (other than moneys repaid by the Trustee or any
paying agent to the Company in accordance with Section 11.04) or Government
Obligations, maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash, or a combination thereof,
sufficient in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay (A) the principal and interest on all Securities of such series
on each date that such principal or interest is due and payable and (B) any
mandatory sinking fund payments on the dates on which such payments are due and
payable in accordance with the terms of the Indenture and the Securities of
such series; and if, in any such case, the Company shall also pay or cause to
be paid all other sums payable hereunder by the Company, then this Indenture
shall cease to be of further effect (except as to (i) rights of registration of
transfer and exchange of Securities of such series and the Company's right of
optional redemption, if any, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities, (iii) rights of holders of Securities to
receive payments of principal thereof and interest thereon, upon the original
stated due dates therefor (but not upon acceleration), and remaining rights of
the Securityholders to receive mandatory sinking fund payments, if any, (iv)
the rights, obligations, duties and immunities of the Trustee hereunder, (v)
the rights of the holders of Securities of such series as beneficiaries hereof
with respect to the property so deposited with the Trustee payable to all or
any of them, and (vi) the obligations of the Company under Section 4.02) and
the Trustee, on demand of the Company accompanied by an Officers' Certificate
and an Opinion of Counsel and at the cost and expense of the Company, shall
execute proper instruments acknowledging such satisfaction of and discharging
this Indenture; provided that the rights of Holders of the Securities to
receive amounts in respect of principal of, and interest on, the Securities
held by them shall not be delayed longer than
<PAGE> 95
78
required by then-applicable mandatory rules or policies of any securities
exchange upon which the Securities are listed. The Company agrees to reimburse
the Trustee for any costs or expenses thereafter reasonably and properly
incurred and to compensate the Trustee for any services thereafter reasonably
and properly rendered by the Trustee in connection with this Indenture or the
Securities of such series.
(B) The following provisions shall apply to the Securities of
each series unless specifically otherwise provided in a supplemental indenture
hereto pursuant to Section 2.01. In addition to discharge of the Indenture
pursuant to the next preceding paragraph, the Company shall be deemed to have
paid and discharged the entire indebtedness on all the Securities of a series
on the date of the deposit referred to in subparagraph (a) below, and the
provisions of this Indenture with respect to the Securities of such series
shall no longer be in effect (except as to (i) rights of registration of
transfer and exchange of Securities of such series and the Company's right of
optional redemption, if any, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities, (iii) rights of holders of Securities to
receive payments of principal thereof and interest thereon, upon the original
stated due dates therefor (but not upon acceleration), and remaining rights of
the holders of Securities to receive mandatory sinking fund payments, if any,
(iv) the rights, obligations, duties and immunities of the Trustee hereunder,
(v) the rights of the holders of Securities as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of
them and (vi) the obligations of the Company under Section 4.02) and the
Trustee, at the expense of the Company, shall at the Company's request, execute
proper instruments acknowledging the same, if
(a) with reference to this provision the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as trust funds in trust, specifically pledged as security for,
and dedicated solely to, the benefit of the holders of the Securities
of such series (i) cash in an amount, or (ii) Governmental Obligations
maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash or (iii) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants
<PAGE> 96
79
expressed in a written certification thereof delivered to the Trustee,
to pay (A) the principal and interest on all Securities of such series
on each date that such principal or interest is due and payable and
(B) any mandatory sinking fund payments on the dates on which such
payments are due and payable in accordance with the terms of the
Indenture and the Securities of such series;
(b) such deposit will not result in a breach or violation of,
or constitute a default under, any agreement or instrument to which
the Company is a party or by which it is bound;
(c) the Company has delivered to the Trustee an Opinion of
Counsel based on the fact that (x) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or
(y) since the date hereof, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and such
opinion shall confirm that, the holders of the Securities of such
series will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit, defeasance and discharge and
will be subject to Federal income tax on the same amount and in the
same manner and at the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred;
(d) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the defeasance
contemplated by this provision have been complied with; and
(e) no event or condition shall exist that, pursuant to the
provisions of Section 14.02 or 14.03, would prevent the Company from
making payments of the principal of or interest on the Securities of
such series on the date of such deposit.
SECTION 11.02. Subject to Section 11.04, all moneys deposited
with the Trustee (or other trustee) pursuant to Section 11.01 shall be held in
trust and applied by it to the payment, either directly or through any paying
agent (including the Company acting as its own paying agent), to the holders of
the particular Securities of such series for the payment or redemption of which
such moneys
<PAGE> 97
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have been deposited with the Trustee, of all sums due and to become due thereon
for principal and interest; but such money need not be segregated from other
funds except to the extent required by law.
SECTION 11.03. In connection with the satisfaction and
discharge of this Indenture with respect to Securities of any series, all
moneys then held by any paying agent under the provisions of this Indenture
with respect to such series of Securities shall, upon demand of the Company be
repaid to it or paid to the Trustee and thereupon such paying agent shall be
released from all further liability with respect to such moneys.
SECTION 11.04. Any moneys deposited with, or paid to, the
Trustee or any paying agent for the payment of principal of, or interest on,
any Security of any series and not applied but remaining unclaimed for two
years after the date upon which such principal or interest shall have become
due and payable, shall, upon the written request of the Company and unless
otherwise required by mandatory provisions of applicable escheat or abandoned
or unclaimed property law, be repaid to the Company by the Trustee for such
series or such paying agent, and the holder of any Securities of such series
shall, unless otherwise required by mandatory provisions of applicable escheat
or abandoned or unclaimed property laws, thereafter look only to the Company
for any payment which such holder may be entitled to collect, and all liability
of the Trustee or any paying agent with respect to such moneys shall thereupon
cease; provided, however, that the Trustee or such paying agent, before being
required to make any such repayment with respect to moneys deposited with it
for any payment, shall, at the expense of the Company, mail by first-class mail
to holders of such Securities at their addresses as they shall appear on the
Security Register, notice that such moneys remain and that, after a date
specified therein, which shall not be less than 30 days from the date of such
mailing, any unclaimed balance of such money then remaining will be repaid to
the Company.
SECTION 11.05. The Company shall pay and indemnify the
Trustee against any tax, fee or other charge imposed on, or assessed against,
the Governmental Obligations deposited pursuant to Section 11.01 or the
principal or interest received in respect of such obligations.
<PAGE> 98
81
ARTICLE XII
Immunity of Incorporators, Stockholders,
Officers and Directors
SECTION 12.01. No recourse under or upon any obligation,
covenant or agreement of this Indenture, or of any Security, or for any claim
based thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, either
directly or through the Company or any such predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations issued hereunder
are solely corporate obligations, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the incorporators,
stockholders, officers or directors, as such, of the Company or of any
predecessor or successor corporation, or any of them, because of the creation
of the indebtedness hereby authorized, or under or by reason of the obligations
covenants or agreements contained in this Indenture or in any of the Securities
or implied therefrom; and that any and all such personal liability of every
name and nature, either at common law or in equity or by constitution or
statute, and any and all such rights and claims against every such
incorporator, stockholder, officer or director, as such, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom, are hereby expressly waived and released
as a condition of, and as a consideration for, the execution of this Indenture
and the issuance of such Securities.
ARTICLE XIII
Miscellaneous Provisions
SECTION 13.01. All the covenants, stipulations, promises and
agreements in this Indenture made by, or on behalf of, the Company shall bind
its successors and assigns, whether so expressed or not.
<PAGE> 99
82
SECTION 13.02. Any act or proceeding required by any
provision of this Indenture to be authorized or performed by any board,
committee or officer of the Company shall and may be done and performed with
like force and effect by the corresponding board, committee or officer of any
corporation that shall at the time be the lawful sole successor of the Company.
SECTION 13.03. The Company, by instrument in writing executed
by authority of two-thirds of its Board of Directors and delivered to the
Trustee, may surrender any of the powers reserved to the Company and thereupon
such power so surrendered shall terminate both as to the Company and as to any
successor corporation.
SECTION 13.04. Except as otherwise expressly provided herein,
any notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders of Securities
to or on the Company may be given or served by being deposited first class
postage prepaid in a post-office letterbox addressed (until another address is
filed in writing by the Company with the Trustee), as follows: J.P. Morgan &
Co. Incorporated, 60 Wall Street, New York, New York 10015, Attention of
Secretary. Any notice, election, request or demand by the Company or any
Securityholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the Corporate
Trust Office of the Trustee.
SECTION 13.05. This Indenture and each Security shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of said State
(without regard to principles of conflicts of laws thereof).
SECTION 13.06. (a) Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent have
been complied with, except that in the case of any such application or demand
as to which the furnishing of such documents is specifically required by any
provision of this
<PAGE> 100
83
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant in this Indenture (other than the Certificate provided
pursuant to Section 5.03(d) shall include (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based; (3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 13.07. Except as provided pursuant to Section 2.01 in
one or more indentures supplemental to this Indenture, in any case where the
date of maturity of interest or principal of any Security or the date of
redemption of any Security shall not be a Business Day then payment of interest
or principal (and premium, if any) may be made on the next succeeding day which
is a Business Day with the same force and effect as if made on the nominal date
of maturity or redemption, and no interest shall accrue for the period after
such nominal date.
SECTION 13.08. If and to the extent that any provision of
this Indenture limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 13.09. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
SECTION 13.10. In case any one or more of the provisions
contained in this Indenture or in the Securities of any series shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this Indenture or of such Securities, but this
<PAGE> 101
84
Indenture and such Securities shall be construed as if such invalid or illegal
or unenforceable provision had never been contained herein or therein.
SECTION 13.11. The Company will have the right at all times
to assign any of its rights or obligations under this Indenture to a direct or
indirect wholly owned Subsidiary of the Company; provided that, in the event of
any such assignment, the Company will remain jointly and severally liable for
all such obligations. Subject to the foregoing, this Indenture is binding upon
and inures to the benefit of the parties thereto and their respective
successors and assigns. This Indenture may not otherwise be assigned by the
parties hereto.
SECTION 13.12. The Company hereby acknowledges that, to the
extent specifically set forth herein, prior to a Security Exchange with respect
to the Securities of any series held as trust assets of a JPM Capital Trust,
the holders of the Preferred Securities of such JPM Capital Trust shall
expressly be third party beneficiaries of this Indenture. The Company further
acknowledges that, prior to a Security Exchange with respect to Securities of
any series held as trust assets of a JPM Capital Trust, if the Property Trustee
of such JPM Capital Trust fails to enforce its rights under this Indenture as
the holder of the Securities of a series held as trust assets of such JPM
Capital Trust, any holder of the Preferred Securities of such JPM Capital Trust
may institute legal proceedings directly against the Company to enforce such
Property Trustee's rights under this Indenture without first instituting any
legal proceedings against such Property Trustee or any other Person.
ARTICLE XIV
Subordination of the Securities
SECTION 14.01. The Company, for itself, its successors and
assigns, covenants and agrees, and each holder of a Security likewise covenants
and agrees by his acceptance thereof, that any payment of principal of and
interest on each and all of the Securities is hereby expressly subordinated, to
the extent and in the manner hereinafter set forth, to the prior payment in
full of all Senior Indebtedness, Subordinated Indebtedness and Derivative
Obligations of the Company.
<PAGE> 102
85
SECTION 14.02. No payment of principal of or interest on the
Securities shall be made and no holder of the Securities shall be entitled to
demand or receive any such payment (i) unless all amounts then due for
principal of, premium, if any, and interest (including interest accruing
subsequent to the commencement of any proceeding for the bankruptcy or
reorganization of the Company under any applicable bankruptcy, insolvency or
similar law now or hereafter in effect) on all Senior Indebtedness,
Subordinated Indebtedness and Derivative Obligations of the Company have been
paid in full or duly provided for, or (ii) if, at the time of such payment or
immediately after giving effect thereto, there shall exist with respect to any
such Senior Indebtedness, Subordinated Indebtedness or Derivative Obligations
any event of default permitting the holders thereof to accelerate the maturity
or payment thereof or any event which, with notice or lapse of time or both,
would become such an event of default.
SECTION 14.03. Upon any distribution of the assets of the
Company in connection with dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
any other marshalling of the assets and liabilities of the Company or
otherwise), the holders of Senior Indebtedness and Subordinated Indebtedness
and creditors in respect of Derivative Obligations of the Company shall first
be entitled to receive payment in full in accordance with the terms of such
Senior Indebtedness, Subordinated Indebtedness and Derivative Obligations of
the principal thereof, premium, if any, and the interest due thereon (including
interest accruing subsequent to the commencement of any proceeding for the
bankruptcy or reorganization of the Company under any applicable bankruptcy,
insolvency or similar law now or hereafter in effect) before the holders of the
Securities are entitled to receive any payment of the principal of, premium, if
any, or interest thereon; and, upon any such dissolution, winding up,
liquidation or reorganization, any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the holders of the Securities or the Trustee would be entitled except for
the provisions of this Article, including any such payment or distribution
which may be payable or deliverable by reason of the payment of any other Debt
of the Company being subordinated to the payment of the Securities, shall be
made by the liquidating trustee or
<PAGE> 103
86
agent or other person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to the
holders of Senior Indebtedness and Subordinated Indebtedness and creditors in
respect of Derivative Obligations of the Company or their representative or
representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness, Subordinated
Indebtedness and Derivative Obligations may have been issued, ratably according
to the aggregate amounts remaining unpaid on account of the principal of,
premium, if any, and interest (including interest accruing subsequent to the
commencement of any proceeding for the bankruptcy or reorganization of the
Company under any applicable bankruptcy, insolvency, or similar law now or
hereafter in effect) on the Senior Indebtedness, Subordinated Indebtedness and
Derivative Obligations of the Company held or represented by each, to the
extent necessary to pay in full all such Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment or distribution to the holders of
such Senior Indebtedness and Subordinated Indebtedness and creditors in respect
of Derivative Obligations.
In the event that, notwithstanding the foregoing, upon any
such dissolution, winding up, liquidation or reorganization, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, including any such payment or distribution which
may be payable or deliverable by reason of the payment of any other Debt of the
Company being subordinated to the payment of the Securities, shall be received
by the Trustee or the holders of the Securities before all Senior Indebtedness,
Subordinated Indebtedness and Derivative Obligations of the Company are paid in
full, such payment or distribution shall be held in trust for the benefit of
and shall be paid over to the holders of such Senior Indebtedness and
Subordinated Indebtedness and creditors in respect of Derivative Obligations or
their representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior
Indebtedness, Subordinated Indebtedness and Derivative Obligations may have
been issued, ratably as aforesaid for application to the payment of all Senior
Indebtedness, Subordinated Indebtedness and Derivative Obligations of the
Company remaining unpaid until all such Senior Indebtedness, Subordinated
Indebtedness and Derivative Obligations shall have been paid in full, after
<PAGE> 104
87
giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness and Subordinated Indebtedness and creditors in respect of
Derivative Obligations.
Subject to the payment in full of all Senior Indebtedness,
Subordinated Indebtedness and Derivative Obligations of the Company, the
holders of the Securities shall be subrogated (equally and ratably with the
holders of all Debt of the Company which by its express terms is subordinated
to Debt of the Company to substantially the same extent as the Securities are
subordinated and is entitled to like rights of subrogation) to the rights of
the holders of such Senior Indebtedness and Subordinated Indebtedness and
creditors in respect of Derivative Obligations to receive payments or
distributions of assets of the Company applicable to such Senior Indebtedness,
Subordinated Indebtedness and Derivative Obligations until the Securities shall
be paid in full and none of the payments or distributions to the holders of
such Senior Indebtedness and Subordinated Indebtedness and creditors in respect
of Derivative Obligations to which the holders of the Securities or the Trustee
would be entitled except for the provisions of this Article or of payments
over, pursuant to the provisions of this Article, to the holders of such Senior
Indebtedness and Subordinated Indebtedness and creditors in respect of
Derivative Obligations by the holders of the Securities or the Trustee shall,
as between the Company, its creditors other than the holders of such Senior
Indebtedness and Subordinated Indebtedness and creditors in respect of
Derivative Obligations and the holders of the Securities, be deemed to be a
payment by the Company to or on account of such Senior Indebtedness,
Subordinated Indebtedness and Derivative Obligations; it being understood that
the provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the holders of the Securities, on the one hand,
and the holders of the Senior Indebtedness and Subordinated Indebtedness and
creditors in respect of Derivative Obligations of the Company (and, the holders
of other Debt of the Company which by its terms is subordinated to Debt of the
Company to substantially the same extent as the Securities are subordinated and
entitled to like rights of subordination), on the other hand.
The Company shall give prompt written notice to the Trustee of
any dissolution, winding up, liquidation or reorganization of the Company
within the meaning of this
<PAGE> 105
88
Article. The Trustee shall be entitled to assume that no such event has
occurred unless the Company or any one or more holders of Senior Indebtedness
or Subordinated Indebtedness of the Company or any trustee therefor or any
creditor in respect of Derivative Obligations has given written notice thereof
to the Trustee at its corporate trust office. Upon any distribution of assets
of the Company referred to in this Article, the Trustee and the holders of the
Securities shall be entitled to rely upon any order or decree of a court of
competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and Subordinated Indebtedness of the Company, the creditors in
respect of Derivative Obligations, the amounts thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article, and the Trustee and the holders of the Securities
shall be entitled to rely upon a certificate of the liquidating trustee or
agent or other person making any distribution to the Trustee or to the holders
of the Securities for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
the Subordinated Indebtedness of the Company, the creditors in respect of
Derivative Obligations, the amounts thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article. In the event that the Trustee determines, in good faith, that
further evidence is required with respect to the right of any person, as a
holder of Senior Indebtedness or Subordinated Indebtedness of the Company or as
a creditor in respect of Derivative Obligations, to participate in any payment
or distribution pursuant to this Article, the Trustee may request such person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of such Senior Indebtedness, Subordinated Indebtedness or such
Derivative Obligations, as applicable, held by such person, as to the extent to
which such person is entitled to participation in such payment or distribution,
and as to other facts pertinent to the rights of such person under this
Article, and if such evidence is not furnished, the Trustee may defer any
payment to such person pending judicial determination as to the right of such
person to receive such payment.
SECTION 14.04. In the event that any Securities are declared
due and payable before their Stated Maturity,
<PAGE> 106
89
then and in such event the holders of all Senior Indebtedness and Subordinated
Indebtedness and creditors in respect of Derivative Obligations outstanding at
the time such Securities so become due and payable shall be entitled to receive
payment in full of all amounts due on or in respect of such Senior
Indebtedness, Subordinated Indebtedness and Derivative Obligations (including
any amounts due upon acceleration), or provision shall be made for such payment
in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Indebtedness, Subordinated Indebtedness and Derivative
Obligations before the holders of the Securities are entitled to receive any
payment or distribution of any kind or character, whether in cash, properties
or securities, including any such payment or distribution which may be payable
or deliverable by reason of the payment of any other Debt of the Company being
subordinated to the payment of the Securities, by the Company on account of the
principal of, premium, if any, or interest on the Securities or on account of
the purchase or other acquisition of Securities by the Company or any
Subsidiary; [provided, however, that nothing in this Section shall prevent the
satisfaction of any sinking fund payment in accordance with this Indenture or
as otherwise specified as contemplated by Section 2.01 for the Securities of
any series by delivering and crediting pursuant to Section 3.05 or as otherwise
specified as contemplated by Section 2.01 for the Securities of any series
Securities which have been acquired (upon redemption or otherwise) prior to
such declaration of acceleration; provided [further], however, that holders of
Senior Indebtedness shall not be entitled to receive payment of any such
amounts in preference or prior to the Securities to the extent that such
Subordinated Indebtedness is by its terms subordinated in right of payment to
any trade creditors.
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, including any such payment or distribution which
may be payable or deliverable by reason of the payment of any other Debt of the
Company being subordinated to the payment of the Securities, shall be received
by the Trustee or the holders of the Securities before all Senior Indebtedness,
Subordinated Indebtedness and Derivative Obligations of the Company are paid in
full, such payment or distribution shall be held in trust for the benefit of
and shall be paid over to the holders of such Senior Indebtedness or
Subordinated Indebtedness or creditors in respect of such Derivative
<PAGE> 107
90
Obligations or their representative or representatives or to the trustee or
trustees under any indenture under which any instruments evidencing any of such
Senior Indebtedness, Subordinated Indebtedness and Derivative Obligations may
have been issued, ratably as aforesaid for application to the payment of all
Senior Indebtedness, Subordinated Indebtedness and Derivative Obligations of
the Company remaining unpaid until all such Senior Indebtedness, Subordinated
Indebtedness and Derivative Obligations shall have been paid in full, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness [shall be paid over and delivered forthwith to the
Company]. 4/
The provisions of this Section shall not apply to any payment
with respect to which Section 14.02 would be applicable.
SECTION 14.05. Nothing contained in this Article or elsewhere
in this Indenture or in the Securities is intended to or shall impair as
between the Company and the holders of the Securities, the obligation of the
Company, which is absolute and unconditional (and which, subject to the rights
under this Article of the holders of Senior Indebtedness and Subordinated
Indebtedness and the creditors in respect of Derivative Obligations, is
intended to rank pari passu with all other general obligations of the Company)
to pay to the holders of the Securities the principal of and interest
(including interest accruing subsequent to the commencement of any proceeding
for the bankruptcy or reorganization of the Company under any applicable
bankruptcy, insolvency or similar law now or hereafter in effect) on the
Securities as and when the same shall become due and payable in accordance with
the terms thereof, or is intended to or shall affect the relative rights of the
holders of the Securities and creditors of the Company other than the holders
of the Senior Indebtedness and Subordinated Indebtedness of the Company and
creditors in respect of Derivative Obligations of the Company, nor shall
anything herein or therein prevent the Trustee or the holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article of the
holders of Senior Indebtedness and Subordinated Indebtedness of the Company,
and of creditors
- ----------------------
4/ Goldman alternative.
<PAGE> 108
91
in respect of Derivative Obligations of the Company, in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
SECTION 14.06. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness or Subordinated
Indebtedness of the Company or creditors in respect of Derivative Obligations
of the Company, except as provided in Section 10.03.
SECTION 14.07. Notwithstanding any of the provisions of this
Article or any other provision of this Indenture, the Trustee shall not at any
time be charged with knowledge of the existence of any facts which would
prohibit the making of any payment of moneys to or by the Trustee, unless and
until the Trustee shall have received at its corporate trust office written
notice thereof from the Company or from one or more holders of Senior
Indebtedness or Subordinated Indebtedness of the Company or from any trustee
therefor or from any creditor in respect of Derivative Obligations who shall
have been certified by the Company or otherwise established to the reasonable
satisfaction of the Trustee to be such a holder, trustee or creditor; and,
prior to the receipt of any such written notice, the Trustee shall be entitled
in all respects to assume that no such facts exist; provided that if prior to
the fifth business day preceding the date upon which by the terms hereof any
such moneys may become payable for any purpose, or in the event of the
execution of an instrument pursuant to Section 11.01 acknowledging satisfaction
and discharge of this Indenture, then if prior to the second business day
preceding the date of such execution the Trustee shall not have received with
respect to such moneys the notice provided for in this Section, then, anything
herein contained to the contrary notwithstanding, the Trustee may, in its
discretion, receive such moneys and apply the same to the purpose for which
they were received, and shall not be affected by any notice to the contrary
which may be received by it on or after such date; provided, however, no such
application shall affect the obligations under this Article of the persons
receiving such moneys from the Trustee. In any case, the Trustee shall have no
responsibility to holders of Senior Indebtedness or Subordinated Indebtedness
or creditors in respect of Derivative Obligations for payments made to holders
of Securities by the Company, any transfer agent or any paying agent unless
such payments are made at the direction of the Trustee.
<PAGE> 109
92
SECTION 14.08. Anything in this Indenture to the contrary
notwithstanding, any deposit of moneys by the Company with the Trustee, any
transfer agent or any paying agent (whether or not in trust) for the payment of
the principal of or interest on any Securities shall, except as provided in
Section 10.07, be subject to the provisions of Sections 14.01, 14.02, 14.03 and
14.04.
SECTION 14.09. No right of any present or future holders of
any Senior Indebtedness or Subordinated Indebtedness of the Company or
creditors in respect of Derivative Obligations to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder or creditor, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof which any such holder or creditor may have
or be otherwise charged with. The holders of Senior Indebtedness and
Subordinated Indebtedness of the Company and the creditors in respect of
Derivative Obligations may at any time or from time to time and in their
absolute discretion, change the manner, place or terms of payment, change or
extend the time of payment of, or renew or alter, any such Senior Indebtedness,
Subordinated Indebtedness or Derivative Obligations, or amend or supplement any
instrument pursuant to which any such Senior Indebtedness, Subordinated
Indebtedness or Derivative Obligations is issued or by which it may be secured,
or release any security therefor, or exercise or refrain from exercising any
other of their rights under the Senior Indebtedness and Subordinated
Indebtedness of the Company or Derivative Obligations including, without
limitation, the waiver of default thereunder, all without notice to or assent
from the holders of the Securities or the Trustee and without affecting the
obligations of the Company, the Trustee or the holders of the Securities under
this Article.
SECTION 14.10. Each holder of a Security, by his acceptance
thereof, authorizes and expressly directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article. If, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise) tending towards
<PAGE> 110
93
liquidation of the business and assets of the Company, a proper claim or proof
of debt in the form required in such proceeding is not filed by all of the
holders of the Securities prior to 30 days before the expiration of the time to
file such claim or claims, and is not filed by the Trustee pursuant to the
authority granted to the Trustee pursuant to the provisions of Section 6.02
prior to 15 days before such expiration, then the holder or holders of Senior
Indebtedness and Subordinated Indebtedness of the Company and creditors in
respect of Derivative Obligations are hereby authorized to, and have the right
to, file an appropriate claim for and on behalf of the holders of the
Securities.
SECTION 14.11. The Trustee shall be entitled to all of the
rights set forth in this Article in respect of any Senior Indebtedness,
Subordinated Indebtedness or Derivative Obligations of the Company at any time
held by it to the same extent as any other holder of such Senior Indebtedness
or Subordinated Indebtedness or creditor in respect of such Derivative
Obligations, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder or creditor.
SECTION 14.12. The failure to make a payment pursuant to the
Securities by reason of any provision in this Article shall not be construed as
preventing the occurrence of an Event of Default under Section 6.01.
First Trust of New York, National Association, as Trustee,
hereby accepts the trust in this Indenture declared and provided, upon the
terms and conditions hereinabove set forth.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
J.P. MORGAN & CO.
INCORPORATED,
by
-----------------------------------
Name:
Title:
<PAGE> 111
94
Attest:
- -------------------------------
Name:
Title:
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION,
AS TRUSTEE,
by
-----------------------------------
Name:
Title:
Attest:
- -------------------------------
Name:
Title:
<PAGE> 112
96
STATE OF NEW YORK, )
) ss.:
COUNTY OF NEW YORK, )
On __________, 199__ before me, _________________, Notary
Public, personally appeared _____________________ and
/ / personally known tome -OR-
/ / proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
- -------------------------
Signature of Notary
CAPACITY CLAIMED BY SIGNER
/ / INDIVIDUAL(S) _______________________
/ / CORPORATE OFFICER(S)
/ / PARTNER(S)
/ / ATTORNEY-IN-FACT
/ / TRUSTEE(S)
/ / GUARDIAN/CONSERVATOR
/ / OTHER:
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
J.P. MORGAN & CO. INCORPORATED
<PAGE> 1
EXHIBIT 4(g)(1)
DECLARATION OF TRUST, dated as of October 29, 1996, between
J.P. Morgan & Co. Incorporated, a Delaware corporation, as Sponsor, First Trust
of New York National Association, Wilmington Trust Company, a Delaware banking
corporation, as Delaware Trustee, and H. Christian Raymond, Andrew G. Kerber
and Susan L. McCullin as Regular Trustees (collectively with the Delaware
Trustee, the "Trustees"). The Sponsor and the Trustees hereby agree as
follows:
1. The trust created hereby (the "Trust") shall be known as
"JPM Capital Trust I", in which name the Trustees, or the Sponsor to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets
over to the Trustees the sum of $10. The Trustees hereby acknowledge receipt
of such amount in trust from the Sponsor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Sponsor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under Chapter
38 of Title 12 of the Delaware Code, 12 Del. C. Sections 3801 et seq. (the
"Business Trust Act"), and that this document constitute the governing
instrument of the Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust in the office of the Secretary of State
of the State of Delaware in the form attached hereto. The Trust is hereby
established by the Sponsor and the Trustees for the purposes of (i) issuing
preferred securities ("Preferred Securities") representing undivided beneficial
interests in the assets of the Trust in exchange for cash and investing the
proceeds thereof in junior subordinated debentures of the Sponsor, (ii) issuing
and selling common securities ("Common Securities" and, together with the
Preferred Securities, "Trust Securities") representing undivided beneficial
interests in the assets of the Trust to the Sponsor in exchange for cash and
investing the proceeds thereof in additional junior subordinated debentures of
the Sponsor and (iii) engaging in such other activities as are necessary,
convenient or incidental thereto.
3. Concurrent with the first issuance of any Trust Securities
by the Trust, the Sponsor and the Trustees intend to enter into an amended and
restated Declaration of Trust, satisfactory to each such party and
substantially in the form included as an exhibit to the 1933 Act Registration
<PAGE> 2
2
Statement referred to below at the time such registration statement becomes
effective under the Securities Act of 1933, as amended (the "Securities Act"),
to provide for the contemplated operation of the Trust created hereby and the
issuance of the Preferred Securities and the Common Securities referred to
therein. Prior to the execution and delivery of such amended and restated
Declaration of Trust, the Trustees shall not have any duty or obligation
hereunder or with respect to the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain, prior to such execution and
delivery, any licenses, consents or approvals required by applicable law or
otherwise.
4. The Sponsor and the Trustees hereby authorize and direct
the Sponsor, as the sponsor of the Trust, (i) to prepare and file with the
Securities and Exchange Commission (the "Commission") and execute, in each case
on behalf of the Trust, (a) a Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to such Registration Statement, relating to the registration of the
Preferred Securities under the Securities Act and (b) a Registration Statement
on Form 8-A (the "1934 Act Registration Statement") (including any
pre-effective or post-effective amendments thereto) relating to the
registration of the Preferred Securities under Section 12(b) of the Securities
Exchange Act of 1934, as amended; (ii) to prepare and file with the New York
Stock Exchange and execute, in each case on behalf of the Trust, a listing
application and all other applications, statements, certificates, agreements
and other instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed on the New York Stock Exchange; (iii) to prepare and
file and execute, in each case on behalf of the Trust, such applications,
reports, surety bonds, irrevocable consents, appointments of attorney for
service of process and other papers and documents as shall be necessary or
desirable to register the Preferred Securities under the securities or "blue
sky" laws of such jurisdictions as the Sponsor, on behalf of the Trust, may
deem necessary or desirable; and (iv) to negotiate the terms of, and execute on
behalf of the Trust, an underwriting agreement among the Trust, the Sponsor and
any underwriter, dealer or agent relating to the Preferred Securities,
substantially in the form included as an exhibit to the 1933 Act Registration
Statement at the time it becomes effective under the Securities Act. It is
hereby acknowledged and agreed that in connection with any execution, filing or
document referred to in clauses (i)-(iii) above, (A) any
<PAGE> 3
3
Regular Trustee (or his attorneys-in-fact and agents or the Sponsor as
permitted herein) is authorized on behalf of the Trust to file and execute such
document on behalf of the Trust and (B) the Delaware Trustee shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission or the
New York Stock Exchange or state securities or blue sky laws, and in such case
only to the extent so required. In connection with all of the foregoing, the
Sponsor and each Regular Trustee, solely in its capacity as Trustee of the
Trust, hereby constitutes and appoints Gene A. Capello and James C.P. Berry,
and each of them, his, her or its, as the case may be, true and lawful
attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for the Sponsor or such Trustee and in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign and file
(i) any and all amendments (including post-effective amendments) to the 1933
Act Registration Statement and the 1934 Act Registration Statement with all
exhibits thereto, and other documents in connection therewith, and (ii) a
registration statement and any and all amendments thereto filed pursuant to
Rule 462(b) under the Securities Act with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as the Sponsor or such Trustee
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his or her substitute
or substitutes, shall do or cause to be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more
counterparts.
6. The number of Trustees initially shall be four (4) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor which may increase
or decrease the number of Trustees; provided, however, that the number of
Trustees shall in no event be less than four (4); and provided, further,
however, that to the extent required by the Business Trust Act, one Trustee
shall either be a natural person who is a resident of the State of Delaware or,
if not a natural person, an entity which has its principal place of business in
the State of Delaware and meets any other requirements imposed by applicable
law. Subject to the foregoing, the Sponsor is entitled to appoint
<PAGE> 4
4
or remove without cause any Trustee at any time. Any Trustee may resign upon
30 days prior notice to the Sponsor provided, however, that the Delaware
Trustee may resign immediately upon notice to the Sponsor if the Delaware
Trustee is required to join in any filing or execute on behalf of the Trust any
document pursuant to the provisions of paragraph 4 hereof and, upon giving such
notice, the Delaware Trustee shall not be required to join in any such filing
or execute on behalf of the Trust any such document; provided, further,
however, that no resignation of the Delaware Trustee shall be effective until a
successor Delaware Trustee has been appointed and has accepted such appointment
by instrument executed by such successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware Trustee.
7. To the fullest extent permitted by applicable law, the
Sponsor agrees to indemnify (i) the Delaware Trustee, (ii) any affiliate of the
Delaware Trustee, and (iii) any officers, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of the
Delaware Trustee (each of the persons or entities in (i) through (iii) being
referred to as an "Indemnified Person") for, and to hold each Indemnified
Person harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this paragraph 7 shall survive the
termination of this Declaration.
8. The Trust may terminate without issuing any Trust
Securities at the election of the Sponsor.
<PAGE> 5
5
IN WITNESS WHEREOF, the parties hereto have caused this
Declaration of Trust to be duly executed as of the day and year first above
written.
J.P. MORGAN & CO.
INCORPORATED, as Sponsor,
by
/s/ Gene A. Capello
---------------------------------
Name: Gene A. Capello
Title: Vice President and
Assistant General
Counsel
Wilmington Trust Company, as
Delaware Trustee,
by
/s/ Norma P. Close
---------------------------------
Name: Norma P. Close
Title: Vice President
/s/ H. Christian Raymond
-------------------------------------
H. Christian Raymond,
as Trustee
/s/ Andrew G. Kerber
-------------------------------------
Andrew G. Kerber,
as Trustee
/s/ Susan L. McCullin
-------------------------------------
Susan L. McCullin,
as Trustee
<PAGE> 1
EXHIBIT 4(g)(2)
CERTIFICATE OF TRUST
OF
JPM CAPITAL TRUST I
This Certificate of Trust is being executed as of October 29,
1996 for the purpose of organizing a business trust pursuant to the Delaware
Business Trust Act, 12 Del. C. Sections 3801 et seq. (the "Act").
The undersigned hereby certifies as follows:
1. Name. The name of the business trust is "JPM Capital
Trust I" (the "Trust").
2. Delaware Trustee. The name and business address of
the Delaware resident trustee of the Trust meeting the requirements of Section
3807 of the Act are as follows:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
3. Effective. This Certificate of Trust shall be
effective immediately upon filing in the Office of the Secretary of State of
the State of Delaware.
<PAGE> 2
4. Counterparts. This Certificate of Trust may be
executed in one or more counterparts.
IN WITNESS WHEREOF, the undersigned, being all of the trustees
of the Trust, have duly executed this Certificate of Trust as of the day and
year first above written.
WILMINGTON TRUST COMPANY,
as Delaware Trustee
by: /s/ Norma P. Close
------------------------
Name: Norma P. Close
Title: Vice President
/s/ H. Christian Raymond
------------------------------
H. Christian Raymond
Trustee
/s/ Andrew G. Kerber
------------------------------
Andrew G. Kerber
Trustee
/s/ Susan L. McCullin
------------------------------
Susan L. McCullin
Trustee
<PAGE> 1
EXHIBIT 4(g)(3)
DECLARATION OF TRUST, dated as of October 29, 1996, between
J.P. Morgan & Co. Incorporated, a Delaware corporation, as Sponsor, First Trust
of New York National Association, Wilmington Trust Company, a Delaware banking
corporation, as Delaware Trustee, and H. Christian Raymond, Andrew G. Kerber
and Susan L. McCullin as Regular Trustees (collectively with the Delaware
Trustee, the "Trustees"). The Sponsor and the Trustees hereby agree as
follows:
1. The trust created hereby (the "Trust") shall be known as
"JPM Capital Trust II", in which name the Trustees, or the Sponsor to the
extent provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets
over to the Trustees the sum of $10. The Trustees hereby acknowledge receipt
of such amount in trust from the Sponsor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Sponsor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under Chapter
38 of Title 12 of the Delaware Code, 12 Del. C. Sections 3801 et seq. (the
"Business Trust Act"), and that this document constitute the governing
instrument of the Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust in the office of the Secretary of State
of the State of Delaware in the form attached hereto. The Trust is hereby
established by the Sponsor and the Trustees for the purposes of (i) issuing
preferred securities ("Preferred Securities") representing undivided beneficial
interests in the assets of the Trust in exchange for cash and investing the
proceeds thereof in junior subordinated debentures of the Sponsor, (ii) issuing
and selling common securities ("Common Securities" and, together with the
Preferred Securities, "Trust Securities") representing undivided beneficial
interests in the assets of the Trust to the Sponsor in exchange for cash and
investing the proceeds thereof in additional junior subordinated debentures of
the Sponsor and (iii) engaging in such other activities as are necessary,
convenient or incidental thereto.
3. Concurrent with the first issuance of any Trust Securities
by the Trust, the Sponsor and the Trustees intend to enter into an amended and
restated Declaration of Trust, satisfactory to each such party and
substantially in the form included as an exhibit to the 1933 Act Registration
<PAGE> 2
2
Statement referred to below at the time such registration statement becomes
effective under the Securities Act of 1933, as amended (the "Securities Act"),
to provide for the contemplated operation of the Trust created hereby and the
issuance of the Preferred Securities and the Common Securities referred to
therein. Prior to the execution and delivery of such amended and restated
Declaration of Trust, the Trustees shall not have any duty or obligation
hereunder or with respect to the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain, prior to such execution and
delivery, any licenses, consents or approvals required by applicable law or
otherwise.
4. The Sponsor and the Trustees hereby authorize and direct
the Sponsor, as the sponsor of the Trust, (i) to prepare and file with the
Securities and Exchange Commission (the "Commission") and execute, in each case
on behalf of the Trust, (a) a Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to such Registration Statement, relating to the registration of the
Preferred Securities under the Securities Act and (b) a Registration Statement
on Form 8-A (the "1934 Act Registration Statement") (including any
pre-effective or post-effective amendments thereto) relating to the
registration of the Preferred Securities under Section 12(b) of the Securities
Exchange Act of 1934, as amended; (ii) to prepare and file with the New York
Stock Exchange and execute, in each case on behalf of the Trust, a listing
application and all other applications, statements, certificates, agreements
and other instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed on the New York Stock Exchange; (iii) to prepare and
file and execute, in each case on behalf of the Trust, such applications,
reports, surety bonds, irrevocable consents, appointments of attorney for
service of process and other papers and documents as shall be necessary or
desirable to register the Preferred Securities under the securities or "blue
sky" laws of such jurisdictions as the Sponsor, on behalf of the Trust, may
deem necessary or desirable; and (iv) to negotiate the terms of, and execute on
behalf of the Trust, an underwriting agreement among the Trust, the Sponsor and
any underwriter, dealer or agent relating to the Preferred Securities,
substantially in the form included as an exhibit to the 1933 Act Registration
Statement at the time it becomes effective under the Securities Act. It is
hereby acknowledged and agreed that in connection with any execution, filing or
document referred to in clauses (i)-(iii) above, (A) any
<PAGE> 3
3
Regular Trustee (or his attorneys-in-fact and agents or the Sponsor as
permitted herein) is authorized on behalf of the Trust to file and execute such
document on behalf of the Trust and (B) the Delaware Trustee shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission or the
New York Stock Exchange or state securities or blue sky laws, and in such case
only to the extent so required. In connection with all of the foregoing, the
Sponsor and each Regular Trustee, solely in its capacity as Trustee of the
Trust, hereby constitutes and appoints Gene A. Capello and James C.P. Berry,
and each of them, his, her or its, as the case may be, true and lawful
attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for the Sponsor or such Trustee and in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign and file
(i) any and all amendments (including post-effective amendments) to the 1933
Act Registration Statement and the 1934 Act Registration Statement with all
exhibits thereto, and other documents in connection therewith, and (ii) a
registration statement and any and all amendments thereto filed pursuant to
Rule 462(b) under the Securities Act with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as the Sponsor or such Trustee
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his or her substitute
or substitutes, shall do or cause to be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more
counterparts.
6. The number of Trustees initially shall be four (4) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor which may increase
or decrease the number of Trustees; provided, however, that the number of
Trustees shall in no event be less than four (4); and provided, further,
however, that to the extent required by the Business Trust Act, one Trustee
shall either be a natural person who is a resident of the State of Delaware or,
if not a natural person, an entity which has its principal place of business in
the State of Delaware and meets any other requirements imposed by applicable
law. Subject to the foregoing, the Sponsor is entitled to appoint
<PAGE> 4
4
or remove without cause any Trustee at any time. Any Trustee may resign upon
30 days prior notice to the Sponsor provided, however, that the Delaware
Trustee may resign immediately upon notice to the Sponsor if the Delaware
Trustee is required to join in any filing or execute on behalf of the Trust any
document pursuant to the provisions of paragraph 4 hereof and, upon giving such
notice, the Delaware Trustee shall not be required to join in any such filing
or execute on behalf of the Trust any such document; provided, further,
however, that no resignation of the Delaware Trustee shall be effective until a
successor Delaware Trustee has been appointed and has accepted such appointment
by instrument executed by such successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware Trustee.
7. To the fullest extent permitted by applicable law, the
Sponsor agrees to indemnify (i) the Delaware Trustee, (ii) any affiliate of the
Delaware Trustee, and (iii) any officers, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of the
Delaware Trustee (each of the persons or entities in (i) through (iii) being
referred to as an "Indemnified Person") for, and to hold each Indemnified
Person harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this paragraph 7 shall survive the
termination of this Declaration.
8. The Trust may terminate without issuing any Trust
Securities at the election of the Sponsor.
<PAGE> 5
5
IN WITNESS WHEREOF, the parties hereto have caused this
Declaration of Trust to be duly executed as of the day and year first above
written.
J.P. MORGAN & CO.
INCORPORATED, as Sponsor,
by
/s/ Gene A. Capello
---------------------------------
Name: Gene A. Capello
Title: Vice President and
Assistant General
Counsel
Wilmington Trust Company, as
Delaware Trustee,
by
/s/ Norma P. Close
---------------------------------
Name: Norma P. Close
Title: Vice President
/s/ H. Christian Raymond
-------------------------------------
H. Christian Raymond,
as Trustee
/s/ Andrew G. Kerber
-------------------------------------
Andrew G. Kerber,
as Trustee
/s/ Susan L. McCullin
-------------------------------------
Susan L. McCullin,
as Trustee
<PAGE> 1
EXHIBIT 4(g)(4)
CERTIFICATE OF TRUST
OF
JPM CAPITAL TRUST II
This Certificate of Trust is being executed as of October 29,
1996 for the purpose of organizing a business trust pursuant to the Delaware
Business Trust Act, 12 Del. C. Sections 3801 et seq. (the "Act").
The undersigned hereby certifies as follows:
1. Name. The name of the business trust is "JPM Capital
Trust II" (the "Trust").
2. Delaware Trustee. The name and business address of
the Delaware resident trustee of the Trust meeting the requirements of Section
3807 of the Act are as follows:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
3. Effective. This Certificate of Trust shall be
effective immediately upon filing in the Office of the Secretary of State of
the State of Delaware.
<PAGE> 2
4. Counterparts. This Certificate of Trust may be
executed in one or more counterparts.
IN WITNESS WHEREOF, the undersigned, being all of the trustees
of the Trust, have duly executed this Certificate of Trust as of the day and
year first above written.
WILMINGTON TRUST COMPANY,
as Delaware Trustee
by: /s/ Norma P. Close
-------------------------
Name: Norma P. Close
Title: Vice President
/s/ H. Christian Raymond
------------------------------
H. Christian Raymond
Trustee
/s/ Andrew G. Kerber
------------------------------
Andrew G. Kerber
Trustee
/s/ Susan L. McCullin
------------------------------
Susan L. McCullin
Trustee
<PAGE> 1
EXHIBIT 4(g)(5)
DECLARATION OF TRUST, dated as of October 29, 1996, between
J.P. Morgan & Co. Incorporated, a Delaware corporation, as Sponsor, First Trust
of New York National Association, Wilmington Trust Company, a Delaware banking
corporation, as Delaware Trustee, and H. Christian Raymond, Andrew G. Kerber
and Susan L. McCullin as Regular Trustees (collectively with the Delaware
Trustee, the "Trustees"). The Sponsor and the Trustees hereby agree as
follows:
1. The trust created hereby (the "Trust") shall be known as
"JPM Capital Trust III", in which name the Trustees, or the Sponsor to the
extent provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets
over to the Trustees the sum of $10. The Trustees hereby acknowledge receipt
of such amount in trust from the Sponsor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Sponsor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under Chapter
38 of Title 12 of the Delaware Code, 12 Del. C. Sections 3801 et seq. (the
"Business Trust Act"), and that this document constitute the governing
instrument of the Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust in the office of the Secretary of State
of the State of Delaware in the form attached hereto. The Trust is hereby
established by the Sponsor and the Trustees for the purposes of (i) issuing
preferred securities ("Preferred Securities") representing undivided beneficial
interests in the assets of the Trust in exchange for cash and investing the
proceeds thereof in junior subordinated debentures of the Sponsor, (ii) issuing
and selling common securities ("Common Securities" and, together with the
Preferred Securities, "Trust Securities") representing undivided beneficial
interests in the assets of the Trust to the Sponsor in exchange for cash and
investing the proceeds thereof in additional junior subordinated debentures of
the Sponsor and (iii) engaging in such other activities as are necessary,
convenient or incidental thereto.
3. Concurrent with the first issuance of any Trust Securities
by the Trust, the Sponsor and the Trustees intend to enter into an amended and
restated Declaration of Trust, satisfactory to each such party and
substantially in the form included as an exhibit to the 1933 Act Registration
<PAGE> 2
2
Statement referred to below at the time such registration statement becomes
effective under the Securities Act of 1933, as amended (the "Securities Act"),
to provide for the contemplated operation of the Trust created hereby and the
issuance of the Preferred Securities and the Common Securities referred to
therein. Prior to the execution and delivery of such amended and restated
Declaration of Trust, the Trustees shall not have any duty or obligation
hereunder or with respect to the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain, prior to such execution and
delivery, any licenses, consents or approvals required by applicable law or
otherwise.
4. The Sponsor and the Trustees hereby authorize and direct
the Sponsor, as the sponsor of the Trust, (i) to prepare and file with the
Securities and Exchange Commission (the "Commission") and execute, in each case
on behalf of the Trust, (a) a Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to such Registration Statement, relating to the registration of the
Preferred Securities under the Securities Act and (b) a Registration Statement
on Form 8-A (the "1934 Act Registration Statement") (including any
pre-effective or post-effective amendments thereto) relating to the
registration of the Preferred Securities under Section 12(b) of the Securities
Exchange Act of 1934, as amended; (ii) to prepare and file with the New York
Stock Exchange and execute, in each case on behalf of the Trust, a listing
application and all other applications, statements, certificates, agreements
and other instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed on the New York Stock Exchange; (iii) to prepare and
file and execute, in each case on behalf of the Trust, such applications,
reports, surety bonds, irrevocable consents, appointments of attorney for
service of process and other papers and documents as shall be necessary or
desirable to register the Preferred Securities under the securities or "blue
sky" laws of such jurisdictions as the Sponsor, on behalf of the Trust, may
deem necessary or desirable; and (iv) to negotiate the terms of, and execute on
behalf of the Trust, an underwriting agreement among the Trust, the Sponsor and
any underwriter, dealer or agent relating to the Preferred Securities,
substantially in the form included as an exhibit to the 1933 Act Registration
Statement at the time it becomes effective under the Securities Act. It is
hereby acknowledged and agreed that in connection with any execution, filing or
document referred to in clauses (i)-(iii) above, (A) any
<PAGE> 3
3
Regular Trustee (or his attorneys-in-fact and agents or the Sponsor as
permitted herein) is authorized on behalf of the Trust to file and execute such
document on behalf of the Trust and (B) the Delaware Trustee shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission or the
New York Stock Exchange or state securities or blue sky laws, and in such case
only to the extent so required. In connection with all of the foregoing, the
Sponsor and each Regular Trustee, solely in its capacity as Trustee of the
Trust, hereby constitutes and appoints Gene A. Capello and James C.P. Berry,
and each of them, his, her or its, as the case may be, true and lawful
attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for the Sponsor or such Trustee and in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign and file
(i) any and all amendments (including post-effective amendments) to the 1933
Act Registration Statement and the 1934 Act Registration Statement with all
exhibits thereto, and other documents in connection therewith, and (ii) a
registration statement and any and all amendments thereto filed pursuant to
Rule 462(b) under the Securities Act with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as the Sponsor or such Trustee
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his or her substitute
or substitutes, shall do or cause to be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more
counterparts.
6. The number of Trustees initially shall be four (4) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor which may increase
or decrease the number of Trustees; provided, however, that the number of
Trustees shall in no event be less than four (4); and provided, further,
however, that to the extent required by the Business Trust Act, one Trustee
shall either be a natural person who is a resident of the State of Delaware or,
if not a natural person, an entity which has its principal place of business in
the State of Delaware and meets any other requirements imposed by applicable
law. Subject to the foregoing, the Sponsor is entitled to appoint
<PAGE> 4
4
or remove without cause any Trustee at any time. Any Trustee may resign upon
30 days prior notice to the Sponsor provided, however, that the Delaware
Trustee may resign immediately upon notice to the Sponsor if the Delaware
Trustee is required to join in any filing or execute on behalf of the Trust any
document pursuant to the provisions of paragraph 4 hereof and, upon giving such
notice, the Delaware Trustee shall not be required to join in any such filing
or execute on behalf of the Trust any such document; provided, further,
however, that no resignation of the Delaware Trustee shall be effective until a
successor Delaware Trustee has been appointed and has accepted such appointment
by instrument executed by such successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware Trustee.
7. To the fullest extent permitted by applicable law, the
Sponsor agrees to indemnify (i) the Delaware Trustee, (ii) any affiliate of the
Delaware Trustee, and (iii) any officers, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of the
Delaware Trustee (each of the persons or entities in (i) through (iii) being
referred to as an "Indemnified Person") for, and to hold each Indemnified
Person harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this paragraph 7 shall survive the
termination of this Declaration.
8. The Trust may terminate without issuing any Trust
Securities at the election of the Sponsor.
<PAGE> 5
5
IN WITNESS WHEREOF, the parties hereto have caused this
Declaration of Trust to be duly executed as of the day and year first above
written.
J.P. MORGAN & CO.
INCORPORATED, as Sponsor,
by
/s/ Gene A. Capello
------------------------------
Name: Gene A. Capello
Title: Vice President and
Assistant General
Counsel
Wilmington Trust Company, as
Delaware Trustee,
by
/s/ Norma P. Close
------------------------------
Name: Norma P. Close
Title: Vice President
/s/ H. Christian Raymond
----------------------------------
H. Christian Raymond,
as Trustee
/s/ Andrew G. Kerber
----------------------------------
Andrew G. Kerber,
as Trustee
/s/ Susan L. McCullin
----------------------------------
Susan L. McCullin,
as Trustee
<PAGE> 1
EXHIBIT 4(g)(6)
CERTIFICATE OF TRUST
OF
JPM CAPITAL TRUST III
This Certificate of Trust is being executed as of October 29,
1996 for the purpose of organizing a business trust pursuant to the Delaware
Business Trust Act, 12 Del. C. Sections 3801 et seq. (the "Act").
The undersigned hereby certifies as follows:
1. Name. The name of the business trust is "JPM Capital
Trust III" (the "Trust").
2. Delaware Trustee. The name and business address of
the Delaware resident trustee of the Trust meeting the requirements of Section
3807 of the Act are as follows:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
3. Effective. This Certificate of Trust shall be
effective immediately upon filing in the Office of the Secretary of State of
the State of Delaware.
<PAGE> 2
4. Counterparts. This Certificate of Trust may be
executed in one or more counterparts.
IN WITNESS WHEREOF, the undersigned, being all of the trustees
of the Trust, have duly executed this Certificate of Trust as of the day and
year first above written.
WILMINGTON TRUST COMPANY,
as Delaware Trustee
by: /s/ Norma P. Close
----------------------------
Name: Norma P. Close
Title: Vice President
/s/ H. Christian Raymond
---------------------------------
H. Christian Raymond
Trustee
/s/ Andrew G. Kerber
---------------------------------
Andrew G. Kerber
Trustee
/s/ Susan L. McCullin
---------------------------------
Susan L. McCullin
Trustee
<PAGE> 1
EXHIBIT 4(g)(7)
DECLARATION OF TRUST, dated as of October 29, 1996, between
J.P. Morgan & Co. Incorporated, a Delaware corporation, as Sponsor, First Trust
of New York National Association, Wilmington Trust Company, a Delaware banking
corporation, as Delaware Trustee, and H. Christian Raymond, Andrew G. Kerber
and Susan L. McCullin as Regular Trustees (collectively with the Delaware
Trustee, the "Trustees"). The Sponsor and the Trustees hereby agree as
follows:
1. The trust created hereby (the "Trust") shall be known as
"JPM Capital Trust IV", in which name the Trustees, or the Sponsor to the
extent provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets
over to the Trustees the sum of $10. The Trustees hereby acknowledge receipt
of such amount in trust from the Sponsor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Sponsor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under Chapter
38 of Title 12 of the Delaware Code, 12 Del. C. Sections 3801 et seq. (the
"Business Trust Act"), and that this document constitute the governing
instrument of the Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust in the office of the Secretary of State
of the State of Delaware in the form attached hereto. The Trust is hereby
established by the Sponsor and the Trustees for the purposes of (i) issuing
preferred securities ("Preferred Securities") representing undivided beneficial
interests in the assets of the Trust in exchange for cash and investing the
proceeds thereof in junior subordinated debentures of the Sponsor, (ii) issuing
and selling common securities ("Common Securities" and, together with the
Preferred Securities, "Trust Securities") representing undivided beneficial
interests in the assets of the Trust to the Sponsor in exchange for cash and
investing the proceeds thereof in additional junior subordinated debentures of
the Sponsor and (iii) engaging in such other activities as are necessary,
convenient or incidental thereto.
3. Concurrent with the first issuance of any Trust Securities
by the Trust, the Sponsor and the Trustees intend to enter into an amended and
restated Declaration of Trust, satisfactory to each such party and
substantially in the form included as an exhibit to the 1933 Act Registration
<PAGE> 2
2
Statement referred to below at the time such registration statement becomes
effective under the Securities Act of 1933, as amended (the "Securities Act"),
to provide for the contemplated operation of the Trust created hereby and the
issuance of the Preferred Securities and the Common Securities referred to
therein. Prior to the execution and delivery of such amended and restated
Declaration of Trust, the Trustees shall not have any duty or obligation
hereunder or with respect to the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain, prior to such execution and
delivery, any licenses, consents or approvals required by applicable law or
otherwise.
4. The Sponsor and the Trustees hereby authorize and direct
the Sponsor, as the sponsor of the Trust, (i) to prepare and file with the
Securities and Exchange Commission (the "Commission") and execute, in each case
on behalf of the Trust, (a) a Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to such Registration Statement, relating to the registration of the
Preferred Securities under the Securities Act and (b) a Registration Statement
on Form 8-A (the "1934 Act Registration Statement") (including any
pre-effective or post-effective amendments thereto) relating to the
registration of the Preferred Securities under Section 12(b) of the Securities
Exchange Act of 1934, as amended; (ii) to prepare and file with the New York
Stock Exchange and execute, in each case on behalf of the Trust, a listing
application and all other applications, statements, certificates, agreements
and other instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed on the New York Stock Exchange; (iii) to prepare and
file and execute, in each case on behalf of the Trust, such applications,
reports, surety bonds, irrevocable consents, appointments of attorney for
service of process and other papers and documents as shall be necessary or
desirable to register the Preferred Securities under the securities or "blue
sky" laws of such jurisdictions as the Sponsor, on behalf of the Trust, may
deem necessary or desirable; and (iv) to negotiate the terms of, and execute on
behalf of the Trust, an underwriting agreement among the Trust, the Sponsor and
any underwriter, dealer or agent relating to the Preferred Securities,
substantially in the form included as an exhibit to the 1933 Act Registration
Statement at the time it becomes effective under the Securities Act. It is
hereby acknowledged and agreed that in connection with any execution, filing or
document referred to in clauses (i)-(iii) above, (A) any
<PAGE> 3
3
Regular Trustee (or his attorneys-in-fact and agents or the Sponsor as
permitted herein) is authorized on behalf of the Trust to file and execute such
document on behalf of the Trust and (B) the Delaware Trustee shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission or the
New York Stock Exchange or state securities or blue sky laws, and in such case
only to the extent so required. In connection with all of the foregoing, the
Sponsor and each Regular Trustee, solely in its capacity as Trustee of the
Trust, hereby constitutes and appoints Gene A. Capello and James C.P. Berry,
and each of them, his, her or its, as the case may be, true and lawful
attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for the Sponsor or such Trustee and in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign and file
(i) any and all amendments (including post-effective amendments) to the 1933
Act Registration Statement and the 1934 Act Registration Statement with all
exhibits thereto, and other documents in connection therewith, and (ii) a
registration statement and any and all amendments thereto filed pursuant to
Rule 462(b) under the Securities Act with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as the Sponsor or such Trustee
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his or her substitute
or substitutes, shall do or cause to be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more
counterparts.
6. The number of Trustees initially shall be four (4) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor which may increase
or decrease the number of Trustees; provided, however, that the number of
Trustees shall in no event be less than four (4); and provided, further,
however, that to the extent required by the Business Trust Act, one Trustee
shall either be a natural person who is a resident of the State of Delaware or,
if not a natural person, an entity which has its principal place of business in
the State of Delaware and meets any other requirements imposed by applicable
law. Subject to the foregoing, the Sponsor is entitled to appoint
<PAGE> 4
4
or remove without cause any Trustee at any time. Any Trustee may resign upon
30 days prior notice to the Sponsor provided, however, that the Delaware
Trustee may resign immediately upon notice to the Sponsor if the Delaware
Trustee is required to join in any filing or execute on behalf of the Trust any
document pursuant to the provisions of paragraph 4 hereof and, upon giving such
notice, the Delaware Trustee shall not be required to join in any such filing
or execute on behalf of the Trust any such document; provided, further,
however, that no resignation of the Delaware Trustee shall be effective until a
successor Delaware Trustee has been appointed and has accepted such appointment
by instrument executed by such successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware Trustee.
7. To the fullest extent permitted by applicable law, the
Sponsor agrees to indemnify (i) the Delaware Trustee, (ii) any affiliate of the
Delaware Trustee, and (iii) any officers, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of the
Delaware Trustee (each of the persons or entities in (i) through (iii) being
referred to as an "Indemnified Person") for, and to hold each Indemnified
Person harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this paragraph 7 shall survive the
termination of this Declaration.
8. The Trust may terminate without issuing any Trust
Securities at the election of the Sponsor.
<PAGE> 5
5
IN WITNESS WHEREOF, the parties hereto have caused this
Declaration of Trust to be duly executed as of the day and year first above
written.
J.P. MORGAN & CO.
INCORPORATED, as Sponsor,
by
/s/ Gene A. Capello
---------------------------------
Name: Gene A. Capello
Title: Vice President and
Assistant General
Counsel
Wilmington Trust Company, as
Delaware Trustee,
by
/s/ Norma P. Close
---------------------------------
Name: Norma P. Close
Title: Vice President
/s/ H. Christian Raymond
-------------------------------------
H. Christian Raymond,
as Trustee
/s/ Andrew G. Kerber
-------------------------------------
Andrew G. Kerber,
as Trustee
/s/ Susan L. McCullin
-------------------------------------
Susan L. McCullin
as Trustee
<PAGE> 1
EXHIBIT 4(g)(8)
CERTIFICATE OF TRUST
OF
JPM CAPITAL TRUST IV
This Certificate of Trust is being executed as of October 29,
1996 for the purpose of organizing a business trust pursuant to the Delaware
Business Trust Act, 12 Del. C. Sections 3801 et seq. (the "Act").
The undersigned hereby certifies as follows:
1. Name. The name of the business trust is "JPM Capital
Trust IV" (the "Trust").
2. Delaware Trustee. The name and business address of
the Delaware resident trustee of the Trust meeting the requirements of Section
3807 of the Act are as follows:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
3. Effective. This Certificate of Trust shall be
effective immediately upon filing in the Office of the Secretary of State of
the State of Delaware.
<PAGE> 2
4. Counterparts. This Certificate of Trust may be
executed in one or more counterparts.
IN WITNESS WHEREOF, the undersigned, being all of the trustees
of the Trust, have duly executed this Certificate of Trust as of the day and
year first above written.
WILMINGTON TRUST COMPANY,
as Delaware Trustee
by: /s/ Norma P. Close
-----------------------------
Name: Norma P. Close
Title: Vice President
/s/ H. Christian Raymond
----------------------------------
H. Christian Raymond
Trustee
/s/ Andrew G. Kerber
----------------------------------
Andrew G. Kerber
Trustee
/s/ Susan L. McCullin
--------------------------
Susan L. McCullin
Trustee
<PAGE> 1
EXHIBIT 4(h)
================================================================================
FORM OF
AMENDED AND RESTATED DECLARATION OF TRUST
OF
JPM CAPITAL TRUST [ ]
_________________
DATED AS OF , 199
================================================================================
<PAGE> 2
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
</TABLE>
ARTICLE I
Definitions
<TABLE>
<S> <C> <C>
SECTION 1.01 Certain terms defined; other terms defined in the Trust Indenture
Act of 1939, as amended, or by reference therein in the
Securities Act of 1933, as amended, to have the meanings
assigned therein . . . . . . . . . . . . . . . . . . . . . . .
2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Book Entry Interest . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Trust Act . . . . . . . . . . . . . . . . . . . . . . . . 3
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Certificate of Trust . . . . . . . . . . . . . . . . . . . . . . . 3
Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Clearing Agency Participant . . . . . . . . . . . . . . . . . . . . 3
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Common Securities . . . . . . . . . . . . . . . . . . . . . . . . . 4
Common Security Certificate . . . . . . . . . . . . . . . . . . . . 4
Covered Person . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Debenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 4
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Definitive Preferred Security Certificates . . . . . . . . . . . . 4
Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 4
Depositary Agreement . . . . . . . . . . . . . . . . . . . . . . . 4
</TABLE>
__________________________________
* This Table of Contents does not constitute part of the Amended and
Restated Declaration of Trust and should not have any bearing upon the
interpretation of any of its terms or provisions.
<PAGE> 3
Contents p. 2
<TABLE>
<S> <C>
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . 5
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Global Certificate . . . . . . . . . . . . . . . . . . . . . . . . 5
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Indemnified Person . . . . . . . . . . . . . . . . . . . . . . . . 5
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Indenture Event of Default . . . . . . . . . . . . . . . . . . . . 5
Investment Company . . . . . . . . . . . . . . . . . . . . . . . . 5
Investment Company Act . . . . . . . . . . . . . . . . . . . . . . 5
Legal Action . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Liquidation Distribution . . . . . . . . . . . . . . . . . . . . . 5
Majority in liquidation amount of the Securities . . . . . . . . . 6
Ministerial Action . . . . . . . . . . . . . . . . . . . . . . . . 6
Option Closing Date . . . . . . . . . . . . . . . . . . . . . . . . 6
Original Declaration . . . . . . . . . . . . . . . . . . . . . . . 6
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Preferred Guarantee . . . . . . . . . . . . . . . . . . . . . . . . 6
Preferred Securities . . . . . . . . . . . . . . . . . . . . . . . 6
Preferred Security Beneficial Owner . . . . . . . . . . . . . . . . 6
Preferred Security Certificate . . . . . . . . . . . . . . . . . . 7
Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 7
Property Account . . . . . . . . . . . . . . . . . . . . . . . . . 7
Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regular Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Related Party . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Resignation Request . . . . . . . . . . . . . . . . . . . . . . . . 7
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . 7
Rule 3a-7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . 7
66-2/3% in liquidation amount of the Securities . . . . . . . . . . 8
Special Event . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Sponsor or JPM . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Successor Delaware Trustee . . . . . . . . . . . . . . . . . . . . 8
Successor Property Trustee . . . . . . . . . . . . . . . . . . . . 8
10% in liquidation amount of the Securities . . . . . . . . . . . . 8
Treasury Regulations . . . . . . . . . . . . . . . . . . . . . . . 8
Trustee or Trustees . . . . . . . . . . . . . . . . . . . . . . . . 9
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . 9
Underwriting Agreement . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
<PAGE> 4
Contents p. 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE II
Trust Indenture Act
-------------------
SECTION 2.01 Trust Indenture Act; Application . . . . . . . . . . . . . . . . . 9
SECTION 2.02 List of Holders of Preferred
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.03 Reports by the Property Trustee . . . . . . . . . . . . . . . . . . 10
SECTION 2.04 Periodic Reports to Property Trustee . . . . . . . . . . . . . . . 10
SECTION 2.05 Evidence of Compliance with Conditions Precedent . . . . . . . . .
10
SECTION 2.06 Events of Default; Waiver . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.07 Disclosure of Information . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE III
Organization
------------
SECTION 3.01 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.02 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.03 Issuance of the Trust Securities . . . . . . . . . . . . . . . . . 14
SECTION 3.04 Purchase of Debentures . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.05 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.06 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.07 Title to Property of the Trust . . . . . . . . . . . . . . . . . . 16
SECTION 3.08 Powers and Duties of the Regular
Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.09 Prohibition of Actions by Trust and Trustees . . . . . . . . . . . 19
SECTION 3.10 Powers and Duties of the Property Trustee . . . . . . . . . . . . . 20
SECTION 3.11 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.12 Certain Rights and Duties of the Property Trustee . . . . . . . . . 24
SECTION 3.13 Registration Statement and Related Matters . . . . . . . . . . . . 28
SECTION 3.14 Filing of Amendments to Certificate of Trust . . . . . . . . . . . 29
SECTION 3.15 Execution of Documents by Regular Trustees . . . . . . . . . . . . 29
SECTION 3.16 Trustees Not Responsible for Recitals or Issuance of Securities . . 29
SECTION 3.17 Duration of Trust . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
<PAGE> 5
Contents p. 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE IV
Sponsor
-------
SECTION 4.01 Purchase of Common Securities by
Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.02 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE V
Trustees
--------
SECTION 5.01 Number of Trustees; Qualifications . . . . . . . . . . . . . . . . 31
SECTION 5.02 Appointment, Removal and Resignation of Trustees . . . . . . . . . 34
SECTION 5.03 Vacancies Among Trustees . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.04 Effect of Vacancies . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.05 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.06 Delegation of Power . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VI
Distributions
-------------
SECTION 6.01 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VII
Issuance of Securities
----------------------
SECTION 7.01 General Provisions Regarding
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VIII
Termination of Trust
--------------------
SECTION 8.01 Termination of Trust . . . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>
<PAGE> 6
Contents p. 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE IX
Transfer of Interests
---------------------
SECTION 9.01 Transfer of Securities . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 9.02 Transfer of Certificates . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.03 Deemed Security Holders . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 9.04 Book Entry Interests . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 9.05 Notices to Holders of Certificates . . . . . . . . . . . . . . . . 43
SECTION 9.06 Appointment of Successor Clearing
Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 9.07 Definitive Preferred Securities Certificates . . . . . . . . . . . 43
SECTION 9.08 Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . 44
ARTICLE X
Limitation of Liability, Indemnification
----------------------------------------
SECTION 10.01 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 10.02 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 10.03 Outside Business . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE XI
Accounting
----------
SECTION 11.01 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 11.02 Certain Accounting Matters . . . . . . . . . . . . . . . . . . . . 47
SECTION 11.03 Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 11.04 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE XII
Amendments and Meetings
-----------------------
SECTION 12.01 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 12.02 Meetings of the Holders of Securities; Action by Written Consent . 50
</TABLE>
<PAGE> 7
Contents p. 6
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE XIII
Representations of Property Trustee
-----------------------------------
and Delaware Trustee
--------------------
SECTION 13.01 Representations and Warranties of Property Trustee . . . . . . . . 52
ARTICLE XIV
Miscellaneous
-------------
SECTION 14.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 14.02 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 14.03 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 14.04 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 14.05 Partial Enforceability . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 14.06 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 14.07 Intention of the Parties . . . . . . . . . . . . . . . . . . . . . 56
SECTION 14.08 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 56
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
</TABLE>
EXHIBIT A CERTIFICATE OF TRUST
EXHIBIT B TERMS OF THE PREFERRED SECURITIES
EXHIBIT C TERMS OF THE COMMON SECURITIES
<PAGE> 8
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
JPM CAPITAL TRUST [ ]
, 199
AMENDED AND RESTATED DECLARATION OF TRUST
("Declaration"), dated and effective as of
, 199 , by the undersigned trustees (together with
all other Persons from time to time duly appointed
and serving as trustees in accordance with the
provisions of this Declaration, the "Trustees"), J.P.
Morgan & Co. Incorporated, a Delaware corporation, as
trust sponsor ("JPM" or the "Sponsor"), and the
holders, from time to time, of undivided beneficial
interests in the assets of the JPM Capital Trust [
] to be issued pursuant to this Declaration.
WHEREAS the Sponsor and the Trustees entered into a
Declaration of Trust dated as of October 29, 1996 (the "Original Declaration")
in order to establish JPM Capital Trust [ ], a statutory business trust (the
"Trust") under the Business Trust Act (as defined herein);
WHEREAS the Certificate of Trust (the "Certificate of Trust")
of the Trust was filed with the office of the Secretary of State of the State
of Delaware on October 29, 1996;
WHEREAS the Trustees and the Sponsor desire to continue the
Trust pursuant to the Business Trust Act for the purpose of, as described more
fully in Sections 3.03, 3.04 and 3.05 hereof, (i) issuing and selling Preferred
Securities (as defined herein) representing preferred undivided beneficial
interests in the assets of the Trust for cash and investing the proceeds
thereof in Debentures (as defined herein) of JPM issued under the Indenture (as
defined herein) to be held as assets of the Trust, (ii) issuing and selling
Common Securities (as defined herein) representing common undivided beneficial
interests in the assets of the Trust to JPM for cash and investing the
<PAGE> 9
2
proceeds thereof in additional Debentures issued under the Indenture to be held
as assets of the Trust and (iii) engaging in such other activities as are
necessary, convenient or incidental thereto; and
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute a business trust under the Business Trust Act, that
the Original Declaration be amended and restated in its entirety as provided
herein and that this Declaration constitute the governing instrument of such
business trust, the Trustees declare that all assets referred to in clauses (i)
and (ii) of the previous Whereas clause purchased by the Trust will be held in
trust for the benefit of the Holders (as defined herein) from time to time of
the Certificates (as defined herein) representing undivided beneficial
interests in the assets of the Trust issued hereunder, subject to the
provisions of this Declaration.
ARTICLE I
Definitions
SECTION 1.01. Definitions. (a) Capitalized terms used in
this Declaration but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.01; (b) a term defined anywhere in
this Declaration has the same meaning throughout; (c) all references to "the
Declaration" or "this Declaration" are to this Amended and Restated Declaration
of Trust (including Exhibits A, B and C hereto (the "Exhibits")) as modified,
supplemented or amended from time to time; (d) all references in this
Declaration to Articles and Sections and Exhibits are to Articles and Sections
of and Exhibits to this Declaration unless otherwise specified; (e) a term
defined in the Trust Indenture Act has the same meaning when used in this
Declaration unless otherwise defined in this Declaration or unless the context
otherwise requires; and (f) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
<PAGE> 10
3
"Book Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Clearing Agency as described in Section 9.04.
"Business Day" means any day other than a Saturday, Sunday or
any other day on which banking institutions in New York, New York are
authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Certificate of Trust" has the meaning set forth in the second
Whereas clause above.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depository for the Preferred Securities and in whose name, or in the name of a
nominee of that organization, shall be registered a Global Certificate and
which shall undertake to effect book entry transfers and pledges of the
Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
"Closing Date" means the Closing Date as specified in the
Underwriting Agreement, which date is also the date of execution and delivery
of this Declaration.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation. A reference to a specific
section of the Code refers not only to such specific section but also to any
corresponding provision of any Federal tax statute enacted after the date of
this Declaration, as such specific section or corresponding provision is in
effect on the date of application of the provisions of this Declaration
containing such reference.
<PAGE> 11
4
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section
7.01(b).
"Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security substantially in the
form of Annex I to Exhibit C.
"Covered Person" means (i) any officer, director, shareholder,
partner, member, representative, employee or agent of the Trust or its
Affiliates, (ii) any officer, director, shareholder, employee, representative
or agent of JPM or any of its Affiliates and (iii) the Holders from time to
time of the Securities.
"Debenture Trustee" means First Trust of New York, National
Association, as trustee under the Indenture, until a successor, if any, is
appointed thereunder and thereafter means such successor trustee.
"Debentures" means the series of Junior Subordinated
Debentures issued by JPM under the Indenture to the Property Trustee and
entitled the "___% Junior Subordinated Debentures due [ ]".
"Definitive Preferred Security Certificates" has the meaning
set forth in Section 9.04.
"Delaware Trustee" has the meaning set forth in Section
5.01(a)(3).
"Depositary Agreement" means the agreement among the Trust,
the Property Trustee and DTC dated as of the Closing Date, as the same may be
amended or supplemented from time to time.
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.01.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an
Indenture Event of Default has occurred and is continuing in respect of the
Debentures.
<PAGE> 12
5
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Fiscal Year" has the meaning specified in Section 11.01.
"Global Certificate" has the meaning set forth in Section
9.04.
"Holder" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means any Trustee, any Affiliate of any
Trustee, any officer, director, shareholder, member, partner, employee,
representative or agent of any Trustee, or any employee or agent of the Trust
or any of its Affiliates.
"Indenture" means the Indenture dated as of , 199
between JPM and the Debenture Trustee, as supplemented by the [ ]
Supplemental Indenture thereto dated as of , 199 , pursuant to
which the Debentures are to be issued, as each may be amended or supplemented
from time to time.
"Indenture Event of Default" means an event or condition
defined as an "Event of Default" with respect to the Debentures under Section
6.01(a) of the Indenture has occurred and is continuing.
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning specified in Section 3.08(g).
"Liquidation Distribution" has the meaning set forth in the
terms of the Securities as set forth in Exhibits B and C hereto.
<PAGE> 13
6
"Majority in liquidation amount of the Securities" means,
except as otherwise required by the Trust Indenture Act and except as provided
in the penultimate paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
represents more than 50% of the liquidation amount of all outstanding
Securities of such class.
"Ministerial Action" has the meaning set forth in Section 4(c)
of the terms of the Securities as set forth in Exhibits B and C hereto.
"Option Closing Date" means the Option Closing Date as
specified in the Underwriting Agreement.
"Original Declaration" has the meaning set forth in the first
Whereas clause above.
"Paying Agent" has the meaning specified in Section 3.10(i).
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Guarantee" means the Guarantee Agreement dated as
of , 199 of JPM in respect of the Preferred Securities.
"Preferred Securities" has the meaning specified in Section
7.01(b).
"Preferred Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect
<PAGE> 14
7
participant, in each case in accordance with the rules of such Clearing
Agency).
"Preferred Security Certificate" means a definitive
certificate in fully registered form representing a Preferred Security
substantially in the form of Annex I to Exhibit B.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.01(c) and having the duties set forth for
the Property Trustee herein.
"Property Account" has the meaning specified in Section
3.10(c)(i).
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both such Regular Trustees.
"Regular Trustee" means any Trustee other than the Property
Trustee or the Delaware Trustee.
"Related Party" means any direct or indirect wholly owned
subsidiary of JPM or any Person which owns, directly or indirectly, 100% of the
outstanding voting securities of JPM.
"Resignation Request" has the meaning specified in Section
5.02(d).
"Responsible Officer" means, with respect to the Property
Trustee, any officer of the Property Trustee with responsibility for the
administration of this Declaration and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of, and familiarity with, the particular
subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act
or any successor rule thereunder.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
<PAGE> 15
8
"66-2/3% in liquidation amount of the Securities" means,
except as otherwise required by the Trust Indenture Act and except as provided
in the penultimate paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities,
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
represents 66-2/3% or more of the liquidation amount of all outstanding
Securities of such class.
"Special Event" has the meaning set forth in Section 4(c) of
the terms of the Securities as set forth in Exhibits B and C hereto.
"Sponsor" or "JPM" means J.P. Morgan & Co. Incorporated, a
Delaware corporation, or any successor entity in a merger, consolidation or
other business combination transaction in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning specified in
Section 5.02(b)(ii).
"Successor Property Trustee" means a successor Trustee
possessing the qualifications to act as Property Trustee under Section
5.02(b)(i).
"10% in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities,
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
represents 10% or more of the liquidation amount of all outstanding Securities
of such class.
<PAGE> 16
9
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as a Trustee in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement
dated , 199 among the Trust, the Sponsor and J.P. Morgan
Securities, Inc. [and the other representatives named therein], as
representative[s] of the several underwriters named therein.
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This
Declaration is subject to the provisions of the Trust Indenture Act that are
required to be part of this Declaration and shall, to the extent applicable, be
governed by such provisions; (b) if and to the extent that any provision of
this Declaration limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control; (c) the Property Trustee, to the extent permitted by applicable
law and/or the rules and regulations of the Commission, shall be the only
Trustee which is a trustee for the purposes of the Trust Indenture Act; and (d)
the application of the Trust Indenture Act to this Declaration shall not affect
the nature of the Securities as equity securities representing undivided
beneficial interests in the assets of the Trust.
<PAGE> 17
10
SECTION 2.02. Lists of Holders of Preferred Securities. (a)
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide the Property Trustee with such information as is required under Section
312(a) of the Trust Indenture Act at the times and in the manner provided in
Section 312(a); and (b) the Property Trustee shall comply with its obligations
under Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Property Trustee. Within 60
days after [May 15] of each year, the Property Trustee shall provide to the
Holders of the Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form, in the manner and at the times
provided by Section 313 of the Trust Indenture Act. The Property Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Property Trustee. Each of
the Sponsor and the Regular Trustees on behalf of the Trust shall provide to
the Property Trustee, the Commission and the Holders of the Securities, as
applicable, such documents, reports and information as required by Section
314(a)(1)-(3) (if any) of the Trust Indenture Act and the compliance
certificates required by Section 314(a)(4) and (c) of the Trust Indenture Act,
any such certificates to be provided in the form, in the manner and at the
times required by Section 314(a)(4) and (c) of the Trust Indenture Act
(provided that any certificate to be provided pursuant to Section 314(a)(4) of
the Trust Indenture Act shall be provided within 120 days of the end of each
Fiscal Year).
SECTION 2.05. Evidence of Compliance with Conditions
Precedent. Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration which relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given pursuant to Section 314(c) shall
comply with Section 314(e) of the Trust Indenture Act.
SECTION 2.06. Events of Default; Waiver. (a) Subject to
Section 2.06(c), Holders of Preferred Securities may, by vote of at least a
Majority in liquidation amount of the Preferred Securities, (A) in accordance
with the terms of the Preferred Securities, direct the time, method and place
of conducting any
<PAGE> 18
11
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee, or (B) on behalf of the
Holders of all Preferred Securities, waive any past Event of Default in respect
of the Preferred Securities and its consequences; provided that, if the Event
of Default arises out of an Indenture Event of Default:
(i) which is not waivable under the Indenture, the Event of
Default under this Declaration shall also be not waivable; or
(ii) which requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority
in principal amount of the Debentures, or (2) each holder of
Debentures, the Event of Default under this Declaration may only be
waived by, in the case of clause (1) above, the vote of Holders of
Preferred Securities representing such specified percentage of the
aggregate liquidation amount of the Preferred Securities or, in the
case of clause (2) above, each Holder of Preferred Securities.
Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Preferred Securities or impair any right consequent thereto.
(b) Subject to Section 2.06(c), Holders of Common Securities
may, by vote of at least a Majority in liquidation amount of the Common
Securities, (A) in accordance with the terms of the Common Securities, direct
the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee, or (B) on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences; provided that if the Event of Default arises
out of an Indenture Event of Default:
(i) which is not waivable under the Indenture, except where
the Holders of the Common Securities are deemed to have waived such
Event of Default under the
<PAGE> 19
12
Declaration as provided below, the Event of Default under this
Declaration shall also not be waivable; or
(ii) which requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority
in principal amount of the Debentures or (2) each holder of
Debentures, except where the holders of the Common Securities are
deemed to have waived such Event of Default under this Declaration as
provided below, the Event of Default under this Declaration may only
be waived by, in the case of clause (1) above, the vote of Holders of
Common Securities representing such specified percentage of the
aggregate liquidation amount of the Common Securities or, in the case
of clause (2) above, each holder of Common Securities; and
provided further that each Holder of Common Securities will be deemed to have
waived any Event of Default with respect to the Common Securities and its
consequences until all Events of Default with respect to the Preferred
Securities have been cured, waived by the Holders of Preferred Securities as
provided in this Declaration or otherwise eliminated and until all Events of
Default with respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely
on behalf of the Holders of the Preferred Securities and only the Holders of
the Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of this Declaration or the Securities. In the event
that an Event of Default with respect to the Preferred Securities is waived by
the Holders of Preferred Securities as provided in this Declaration, the
Holders of Common Securities agree that such waiver shall also constitute the
waiver of such Event of Default with respect to the Common Securities for all
purposes under this Declaration without any further act, vote or consent of the
Holders of the Common Securities. Subject to the foregoing provisions of this
Section 2.06(b), upon such waiver, any such default shall cease to exist and
any Event of Default with respect to the Common Securities arising therefrom
shall be deemed to have been cured for every purpose of this Declaration, but
no such waiver shall extend to any subsequent or other default or Event of
Default with respect to the Common Securities or impair any right consequent
thereon.
<PAGE> 20
13
(c) The right of any Holder of Securities to receive payment
of Distributions on the Securities in accordance with this Declaration and the
terms of the Securities set forth in Exhibits B and C on or after the
respective payment dates therefor, or to institute suit for the enforcement of
any such payment on or after such payment dates, shall not be impaired without
the consent of such Holder.
(d) As provided in the terms of the Securities set forth in
Exhibits B and C hereto, a waiver of an Indenture Event of Default by the
Property Trustee at the written direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding Event of Default under
this Declaration in respect of the Securities.
SECTION 2.07. Disclosure of Information. The disclosure of
information as to the names and addresses of the Holders of the Securities in
accordance with Section 312 of the Trust Indenture Act, regardless of the
source from which such information was derived, shall not be deemed to be a
violation of any existing law or any law hereafter enacted which does not
specifically refer to Section 312 of the Trust Indenture Act, nor shall the
Property Trustee be held accountable by reason of mailing any material pursuant
to a request made under Section 312(b) of the Trust Indenture Act.
ARTICLE III
Organization
SECTION 3.01. Name. The Trust continued by this Declaration
is named "JPM Capital Trust [ ]" as such name may be modified from time to
time by the Regular Trustees following written notice to the Holders of
Securities. The Trust's activities may be conducted under the name of the
Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.02. Office. The address of the principal office of
the Trust is c/o J.P. Morgan & Co. Incorporated, 60 Wall Street, New York, New
York 10260-0060. Upon ten days' written notice to the Holders (a copy of such
notice to be sent to the Property Trustee and the Delaware Trustee), the
Regular Trustees may change the location of the Trust's principal office. The
name of the registered agent and office of the Trust in the State of Delaware
is
<PAGE> 21
14
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890. At any time, the Regular Trustees may designate
another registered agent and/or registered office.
SECTION 3.03. Issuance of the Trust Securities. On
, 199 , the Sponsor, on behalf of the Trust and pursuant to the Original
Declaration, executed and delivered the Underwriting Agreement. On the Closing
Date and contemporaneously with the execution and delivery of this Declaration,
the Regular Trustees, on behalf of the Trust, shall execute and deliver (i) to
the underwriters named in the Underwriting Agreement, a Global Certificate,
registered in the name of the nominee of the initial Clearing Agency as
specified in Section 9.04, in an aggregate amount of Preferred
Securities having an aggregate liquidation amount of $ , against
receipt of the aggregate purchase price of such Preferred Securities of $
, and (ii) to the Sponsor, Common Securities Certificates, registered in the
name of the Sponsor, in an aggregate amount of Common Securities having an
aggregate liquidation amount of $ , against receipt of the aggregate
purchase price of such Common Securities of $ . In the event and to
the extent the overallotment option granted by the Trust pursuant to the
Underwriting Agreement is exercised by such underwriters, on the Option Closing
Date the Regular Trustees, on behalf of the Trust, shall execute and deliver
(i) to such underwriters a Global Certificate, registered in the name of the
nominee of the initial Clearing Agency as specified in Section 9.04, in an
aggregate amount of up to Preferred Securities having an aggregate
liquidation amount of up to $ , against receipt of the aggregate
purchase price of such Preferred Securities of up to $ , and (ii) to the
Sponsor, Common Securities Certificates, registered in the name of the Sponsor,
in an aggregate amount of up to [ ] Common Securities having an aggregate
liquidation amount of up to $[ ] against receipt of the aggregate purchase
price of such Common Securities of up to $[ ].
SECTION 3.04. Purchase of Debentures. On the Closing Date
and contemporaneously with the execution and delivery of this Declaration, the
Regular Trustees, on behalf of the Trust, shall purchase from the Sponsor with
the proceeds received by the Trust from the sale of the Securities on such date
pursuant to Section 3.03, at a purchase price of 100% of the principal amount
thereof,
<PAGE> 22
15
Debentures, registered in the name of the Property Trustee and having an
aggregate principal amount equal to $ , and, in satisfaction of the
purchase price for such Debentures, the Regular Trustee, on behalf of the
Trust, shall deliver or cause to be delivered to the Sponsor the sum of $
. In the event the overallotment option granted by the Trust with respect to
the Preferred Securities pursuant to the Underwriting Agreement is exercised by
the underwriters named therein, on the Option Closing Date the Regular
Trustees, on behalf of the Trust, shall purchase from the Sponsor with the
proceeds received by the Trust from the sale of the Securities on such date
pursuant to Section 3.03, at a purchase price of 100% of the principal amount
thereof, additional Debentures, registered in the name of the Property Trustee
and having an aggregate principal amount of up to $ , and, in
satisfaction of the purchase price for such Debentures, the Regular Trustees,
on behalf of the Trust, shall deliver or cause to be delivered to the Sponsor
an amount equal to the aggregate principal amount of the Debentures being
purchased.
SECTION 3.05. Purpose. The exclusive purposes and functions
of the Trust are: (a)(i) to issue and sell Preferred Securities for cash and
use the proceeds of such sales to acquire from JPM Debentures issued under the
Indenture having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities so issued and sold; (ii) to
enter into such agreements and arrangements as may be necessary in connection
with the sale of Preferred Securities to the initial purchasers thereof
(including the Underwriting Agreement) and to take all actions and exercise
such discretion as may be necessary or desirable in connection therewith and to
file such registration statements or make such other filings under the
Securities Act, the Exchange Act or state securities or "Blue Sky" laws as may
be necessary or desirable in connection therewith and the issuance of the
Preferred Securities; and (iii) to issue and sell Common Securities to JPM for
cash and use the proceeds of such sale to purchase as trust assets an equal
aggregate principal amount of Debentures issued under the Indenture; and (b)
except as otherwise limited herein, to engage in such other activities as are
necessary, convenient or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets or, at any time while the Securities are outstanding, otherwise
undertake (or permit to be undertaken) an activity that would result in or
cause the Trust to be treated as
<PAGE> 23
16
anything other than a grantor trust for United States federal income tax
purposes.
SECTION 3.06. Authority. Subject to the limitations provided
in this Declaration and to the specific duties of the Property Trustee, the
Regular Trustees shall have exclusive and complete authority to carry out the
purposes of the Trust. An action taken by the Regular Trustees in accordance
with their powers shall constitute the act of and serve to bind the Trust and
an action taken by the Property Trustee in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the
Trustees acting on behalf of the Trust, no Person shall be required to inquire
into the authority of the Trustees to bind the Trust. Persons dealing with the
Trust are entitled to rely conclusively on the power and authority of the
Trustees as set forth in this Declaration.
SECTION 3.07. Title to Property of the Trust. Except as
provided in Section 3.10 with respect to the Debentures and the Property
Account or unless otherwise provided in this Declaration, legal title to all
assets of the Trust shall be vested in the Trust. The Holders shall not have
legal title to any part of the assets of the Trust, but shall have an
individual undivided beneficial interest in the assets of the Trust.
SECTION 3.08. Powers and Duties of the Regular Trustees. The
Regular Trustees shall have the exclusive power, authority and duty to cause
the Trust, and shall cause the Trust, to engage in the following activities:
(a) to issue Preferred Securities and Common Securities, in
each case in accordance with this Declaration; provided, however, that
the Trust may issue no more than one series of Preferred Securities
and no more than one series of Common Securities; and provided further
that there shall be no interests in the Trust other than the
Securities and the issuance of Securities shall be limited to (x) a
one-time, simultaneous issuance of both Preferred Securities and
Common Securities on the Closing Date and (y) any subsequent issuance
of both Preferred Securities and Common Securities on the Option
Closing Date pursuant to an exercise of the overallotment option
granted to the underwriters in the Underwriting Agreement;
<PAGE> 24
17
(b) in connection with the issuance of the Preferred
Securities, at the direction of the Sponsor, to effect or cause to be
effected the filings, and to execute or cause to be executed the
documents, set forth in Section 3.13 and to execute, deliver and
perform on behalf of the Trust the Depositary Agreement;
(c) to acquire as trust assets Debentures with the proceeds of
the sale of the Preferred Securities and Common Securities; provided,
however, that the Regular Trustees shall cause all the Debentures to
be held of record in the name of the Property Trustee for the benefit
of the Holders of the Preferred Securities and the Common Securities;
(d) to cause the Trust to enter into such agreements and
arrangements as may be necessary or desirable in connection with the
sale of Preferred Securities to the initial purchasers thereof and the
consummation thereof, and to take all action, and exercise all
discretion, as may be necessary or desirable in connection with the
consummation thereof;
(e) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event; provided that the
Regular Trustees shall consult with the Sponsor and the Property
Trustee before taking or refraining to take any Ministerial Action in
relation to a Special Event;
(f) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established,
including for the purposes of Section 316(c) of the Trust Indenture
Act and with respect to Distributions, voting rights, redemptions and
exchanges, and to issue relevant notices to Holders of the Preferred
Securities and the Common Securities as to such actions and applicable
record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action or otherwise adjust claims or demands of or
against the Trust ("Legal Action"), unless, pursuant to Section
3.10(e), the Property Trustee has the exclusive power to bring such
Legal Action;
<PAGE> 25
18
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors,
advisors and consultants and pay reasonable compensation for such
services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate to the Property Trustee required
by Section 314(a)(4) of the Trust Indenture Act, which certificate may
be executed by any Regular Trustee;
(k) to incur expenses which are necessary or incidental to
carrying out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar
and transfer agent for the Securities, the Regular Trustees hereby
initially appointing the Property Trustee for such purposes;
(m) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to the terms of the
Securities set forth in Exhibits B and C hereto;
(n) to execute all documents or instruments, perform all
duties and powers and do all things for and on behalf of the Trust in
all matters necessary, convenient or incidental to the foregoing;
(o) to take all action which may be necessary or appropriate
for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business
trust under the laws of the State of Delaware and of each other
jurisdiction in which such existence is necessary to protect the
limited liability of the Holders of the Securities or to enable the
Trust to effect the purposes for which the Trust has been created;
(p) to take all action, not inconsistent with this Declaration
or with applicable law, which the Regular Trustees determine in their
discretion to be reasonable
<PAGE> 26
19
and necessary or desirable in carrying out the activities of the Trust
as set out in this Section 3.08, in order that:
(i) the Trust will not be deemed to be an Investment
Company required to be registered under the Investment Company
Act;
(ii) the Trust will not be classified for United
States Federal income tax purposes as an association taxable
as a corporation or a partnership and will be treated as a
grantor trust for United States Federal income tax purposes;
and
(iii) the Trust will comply with any requirements
imposed by any taxing authority on holders of instruments
treated as indebtedness for Unites States Federal income tax
purposes;
provided that such action does not adversely affect the interests of
Holders;
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Regular
Trustees, on behalf of the Trust; and
(r) subject to the requirements of Rule 3a-7 and Section
317(b) of the Trust Indenture Act, to appoint one or more Paying
Agents in addition to the Property Trustee.
The Regular Trustees must exercise the powers set forth in
this Section 3.08 in a manner which is consistent with the purposes and
functions of the Trust set out in Section 3.05 and the Regular Trustees shall
not take any action which is inconsistent with the purposes and functions of
the Trust set forth in Section 3.05.
Subject to this Section 3.08, the Regular Trustees shall have
none of the powers nor any of the authority of the Property Trustee set forth
in Section 3.10.
SECTION 3.09. Prohibition of Actions by Trust and Trustees.
The Trust shall not, and the Trustees (including the Property Trustee) shall
cause the Trust not to, engage in any activity other than as required or
authorized by this
<PAGE> 27
20
Declaration. In particular, the Trust shall not, and the Trustees (including
the Property Trustee) shall cause the Trust not to:
(a) invest any proceeds received by the Trust from holding the
Debentures, but shall promptly distribute all such proceeds to Holders
of Securities pursuant to the terms of this Declaration and of the
Securities;
(b) acquire any assets other than as expressly provided
herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the
Debentures;
(e) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way
whatsoever;
(f) issue any securities or other evidences of beneficial
ownership of, or beneficial interests in, the Trust other than the
Securities;
(g) incur any indebtedness for borrowed money; or
(h)(i) direct the time, method and place of exercising any
trust or power conferred upon the Debenture Trustee with respect to
the Debentures, (ii) waive any past default that is waivable under
Section 6.06 of the Indenture, (iii) exercise any right to rescind or
annul any declaration that the principal of all of the Debentures
shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures, where
such consent shall be required, unless in the case of this clause (h)
the Property Trustee shall have received an unqualified opinion of
nationally recognized independent tax counsel recognized as expert in
such matters to the effect that such action will not cause the Trust
to be classified for United States Federal income tax purposes as an
association taxable as a corporation or partnership and that the Trust
will continue to be classified as a grantor trust for United States
federal income tax purposes.
<PAGE> 28
21
SECTION 3.10. Powers and Duties of the Property Trustee. (a)
The Debentures shall be held of record in the name of the Property Trustee in
trust for the benefit of the Holders of the Securities. The right, title and
interest of the Property Trustee to the Debentures shall vest automatically in
each Person who may hereafter be appointed as Property Trustee in accordance
with Article V. Such vesting and cessation of title shall be effective whether
or not conveyancing documents have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or, if the Property
Trustee does not also act as the Delaware Trustee, the Delaware Trustee.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non- interest bearing
bank account (the "Property Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of
the Securities and on the receipt of payments of funds made in respect
of the Debentures held by the Property Trustee, deposit such funds
into the Property Account and, without any further acts of the
Property Trustee or the Regular Trustees, promptly make payments to
the Holders of the Preferred Securities and Common Securities from the
Property Account in accordance with Section 6.01. Funds in the
Property Account shall be held uninvested, and without liability for
interest thereon, until disbursed in accordance with this Declaration.
The Property Account shall be an account which is maintained with a
banking institution whose long term unsecured indebtedness is rated by
a "nationally recognized statistical rating organization", as such
term is defined for purposes of Rule 436(g)(2) under the Securities
Act, at least equal to (but in no event less than "A" or the
equivalent) the rating assigned to the Preferred Securities by a
nationally recognized statistical rating organization;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect promptly the redemption of the
Preferred Securities and the Common Securities to the extent the
Debentures are redeemed or mature;
<PAGE> 29
22
(iii) upon notice of distribution issued by the Regular
Trustees in accordance with the terms of the Preferred Securities and
the Common Securities, engage in such ministerial activities as shall
be necessary or appropriate to effect promptly, pursuant to the terms
of the Securities, the distribution of Debentures to Holders of
Securities upon the occurrence of a Special Event; and
(iv) have the legal power to exercise all of the rights,
powers and privileges of a holder of the Debentures under the
Indenture and, if an Event of Default occurs and is continuing, the
Property Trustee, subject to Section 2.06(b), shall, for the benefit
of the Holders of the Securities, enforce its rights as holder of the
Debentures under the Indenture, subject to the rights of the Holders
of the Preferred Securities pursuant to the terms of this Declaration,
the Business Trust Act and the Trust Indenture Act.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities set forth in Exhibits B and C hereto.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default or the Property
Trustee's duties and obligations under this Declaration, the Business Trust Act
or the Trust Indenture Act.
(f) All moneys deposited in the Property Account, and all
Debentures held by the Property Trustee for the benefit of the Holders of the
Securities, will not be subject to any right, charge, security interest, lien
or claim of any kind in favor of, or for the benefit of, the Property Trustee
or its agents or their creditors.
(g) The Property Trustee shall, within 90 days after the
occurrence of a default with respect to the Securities, transmit by mail, first
class postage prepaid, to the holders of the Securities, as their names and
addresses appear upon the register, notice of all defaults with respect to the
Securities known to the Property Trustee, unless such defaults shall have been
cured before the giving of such notice (the term "defaults" for the purposes of
this Section 3.10(g) being hereby defined to be an Indenture Event of Default,
not including any periods of
<PAGE> 30
23
grace provided for in the Indenture and irrespective of the giving of any
notice provided therein); provided that, except in the case of default in the
payment of the principal of (or premium, if any) or interest on any of the
Debentures, the Property Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Property Trustee in
good faith determines that the withholding of such notice is in the interests
of the Holders of the Securities. The Property Trustee shall not be deemed to
have knowledge of any default, except (i) a default in the payment of principal
of (or premium, if any) or interest on the Debentures or (ii) any default as to
which the Property Trustee shall have received written notice or a Responsible
Officer charged with the administration of this Declaration shall have obtained
written notice.
(h) The Property Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds
thereof distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Property Trustee has been appointed and
accepted that appointment in accordance with Article V.
(i) The Property Trustee shall act as paying agent in respect
of the Common Securities and the Preferred Securities and, subject to Section
3.08(r), may authorize one or more Persons (each, a "Paying Agent") to pay
Distributions, redemption payments or liquidation payments on behalf of the
Trust with respect to the Preferred Securities. Any such Paying Agent shall
comply with Section 317(b) of the Trust Indenture Act. Any Paying Agent may be
removed by the Property Trustee, after consultation with the Regular Trustees,
at any time and a successor Paying Agent or additional Paying Agents may be
appointed at any time by the Property Trustee, subject to Section 3.08(r).
(j) The Property Trustee shall give prompt written notice to
the Holders of the Securities of any notice received by it from JPM of its
election to defer payments of interest on the Debentures by extending the
interest payment period with respect thereto.
<PAGE> 31
24
(k) Subject to this Section 3.10, the Property Trustee shall
have none of the powers or the authority of the Regular Trustees set forth in
Section 3.08.
(1) The Property Trustee shall exercise the powers, duties
and rights set forth in this Section 3.10 and Section 3.12 in a manner which is
consistent with the purposes and functions of the Trust set out in Section
3.05, and the Property Trustee shall not take any action which is inconsistent
with the purposes and functions of the Trust set forth in Section 3.05.
SECTION 3.11. Delaware Trustee. Notwithstanding any other
provision of this Declaration other than Section 5.01(a)(3), the Delaware
Trustee shall not be entitled to exercise any powers, nor shall the Delaware
Trustee have any of the duties and responsibilities of the Regular Trustees or
the Property Trustee described in this Declaration. Except as set forth in
Section 5.01(a)(3), the Delaware Trustee shall be a Trustee for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Business
Trust Act. No implied covenants or obligations shall be read into this
Declaration against the Delaware Trustee.
SECTION 3.12. Certain Rights and Duties of the Property
Trustee. (a) The Property Trustee, before the occurrence of an Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration, and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.06), the Property Trustee
shall exercise such of the rights and powers vested in it by this Declaration,
and use the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
<PAGE> 32
25
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Declaration, and the Property Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration,
and no implied covenants or obligations shall be read into
this Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Property Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee,
the Property Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements
of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders as provided herein
relating to the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee hereunder or under
the Indenture, or exercising any trust or power
<PAGE> 33
26
conferred upon the Property Trustee under this Declaration; and
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if it shall have
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Declaration or adequate indemnity against such risk or liability is
not reasonably assured to it.
(c) Subject to the provisions of Section 3.12(a) and (b):
(i) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part
and, if the Trust is excluded from the definition of Investment
Company solely by means of Rule 3a-7, subject to the requirements of
Rule 3a-7, request and rely upon a certificate, which shall comply
with the provisions of Section 314(e) of the Trust Indenture Act,
signed by any two of the Regular Trustees or by an authorized officer
of the Sponsor, as the case may be;
(ii) the Property Trustee (A) may consult with counsel (which
may be counsel to the Sponsor or any of its Affiliates and may include
any of its employees) selected by it in good faith and with due care
and the written advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon and in accordance with such advice
and opinion and (B) shall have the right at any time to seek
instructions concerning the administration of this Declaration from
any court of competent jurisdiction;
(iii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or
<PAGE> 34
27
attorneys and the Property Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed by it in good faith and with due care;
(iv) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holders, unless such Holders shall
have offered to the Property Trustee reasonable security and indemnity
against the costs, expenses (including attorneys' fees and expenses)
and liabilities that might be incurred by it in complying with such
request or direction; provided that nothing contained in this clause
(iv) shall relieve the Property Trustee of the obligation, upon the
occurrence of an Event of Default (which has not been cured or waived)
to exercise such of the rights and powers vested in it by this
Declaration, and to use the same degree of care and skill in this
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs;
(v) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities and
the signature of the Property Trustee or its agents alone shall be
sufficient and effective to perform any such action; and no third
party shall be required to inquire as to the authority of the Property
Trustee to so act, or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking such action;
(vi) the Property Trustee may rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, security or other paper or document
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties; and
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond,
<PAGE> 35
28
security or other paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
SECTION 3.13. Registration Statement and Related Matters. In
accordance with the Original Declaration, JPM and the Trustees have authorized
and directed, and hereby confirm the authorization of, JPM, as the sponsor of
the Trust, (i) to file with the Commission and execute, in each case on behalf
of the Trust, (a) the Registration Statement on Form S-3 (File Nos. 333-15079,
333-15079-1, 333-15079-2, 333-15079-3 and 333-15079-4) (the "1933 Act
Registration Statement") including any amendments thereto and any further
pre-effective or post-effective amendments to such Registration Statement,
relating to the registration under the Securities Act of, among other things,
the Preferred Securities of the Trust and the related guarantees of such
Preferred Securities by the Sponsor and (b) a Registration Statement on Form
8-A or other appropriate form (the "1934 Act Registration Statement")
(including all pre-effective and post-effective amendments thereto) relating to
the registration of the Preferred Securities of the Trust and the related
guarantees of such Preferred Securities by the Sponsor under Section 12(b) of
the Exchange Act; (ii) to file with the New York Stock Exchange and execute on
behalf of the Trust a listing application and all other applications,
statements, certificates, agreements and other instruments as shall be
necessary or desirable to cause the Preferred Securities to be listed on the
New York Stock Exchange; (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under the
securities or "Blue Sky" laws of such jurisdictions as JPM, on behalf of the
Trust, may deem necessary or desirable and (iv) to negotiate and execute on
behalf of the Trust the Underwriting Agreement. In the event that any filing
referred to in clauses (i)-(iii) above is required by the rules and regulations
of the Commission, the New York Stock Exchange or state securities or blue sky
laws, to be executed on behalf of the Trust by the Trustees, the Regular
Trustees, in their capacities as Trustees of the Trust, are hereby authorized
and directed to join in any such filing and to execute on behalf of the Trust
any and all of the foregoing, it being understood that the Property Trustee and
the Delaware Trustee, in their capacities as Trustees of the
<PAGE> 36
29
Trust, shall not be required to join in any such filing or execute on behalf of
the Trust any such document unless required by the rules and regulations of the
Commission, the New York Stock Exchange or state securities or blue sky laws.
In connection with all of the foregoing, JPM and each Trustee, solely in its
capacity as a Trustee of the Trust, have constituted and appointed, and hereby
confirm the appointment of [ ], [ ], [
] and [ ], and each of them, as his, her or its, as the case may
be, true and lawful attorneys-in-fact, and agents, with full power of
substitution and resubstitution, for JPM or such Trustee or in JPM's or such
Trustee's name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to the 1933 Act Registration
Statement and the 1934 Act Registration Statement and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as JPM or such Trustee might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his or her substitute or substitutes, shall do or cause to be done by
virtue hereof.
SECTION 3.14. Filing of Amendments to Certificate of Trust.
The Certificate of Trust as filed with the Secretary of State of the State of
Delaware on October 29, 1996 is attached hereto as Exhibit A. On or after the
date of execution of this Declaration, the Trustees shall cause the filing with
the Secretary of State of the State of Delaware of such amendments to the
Certificate of Trust as the Trustees shall deem necessary or desirable.
SECTION 3.15. Execution of Documents by Regular Trustees.
Unless otherwise determined by the Regular Trustees and except as otherwise
required by the Business Trust Act with respect to the Certificate of Trust or
otherwise, a majority of, or if there are only two, both of, the Regular
Trustees are authorized to execute and deliver on behalf of the Trust any
documents which the Regular Trustees have the power and authority to execute or
deliver pursuant to this Declaration.
SECTION 3.16. Trustees Not Responsible for Recitals or
Issuance of Securities. The recitals contained
<PAGE> 37
30
in this Declaration and the Securities shall be taken as the statements of the
Sponsor and the Trustees do not assume any responsibility for their
correctness. The Trustees make no representations as to the value or condition
of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration or the
Securities.
SECTION 3.17. Duration of Trust. The Trust, absent
termination pursuant to the provisions of Article VIII hereof, shall have
existence until , 203 .
ARTICLE IV
Sponsor
SECTION 4.01. Purchase of Common Securities by Sponsor. On
the Closing Date, the Sponsor will purchase all of the Common Securities issued
by the Trust at the same time as the Preferred Securities to be issued on such
date are issued, such purchase to be in an amount equal to 3% of the total
capital of the Trust. On the Option Closing Date, the Sponsor shall purchase
all of the Common Securities issued by the Trust at the same time as the
Preferred Securities to be issued on such date are issued, such purchase to be
in such amount so that the Common Securities continue to represent 3% of the
total capital of the Trust.
SECTION 4.02. Expenses. (a) In connection with the purchase
of the Debentures by the Trust, the Sponsor, in its capacity as Sponsor and not
as a Holder, shall be responsible for and shall pay for all debts and
obligations (other than with respect to the Securities) and all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance of the Preferred
Securities to initial purchasers thereof, the fees and expenses (including
reasonable counsel fees and expenses) of the Trustees (including any amounts
payable under Article X), the costs and expenses relating to the operation of
the Trust, including without limitation, costs and expenses of accountants,
attorneys, statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, Paying Agent(s), registrars,
transfer agent(s), duplicating, travel and telephone and other
<PAGE> 38
31
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(b) In connection with the purchase of the Debentures by the
Trust, the Sponsor, in its capacity as Sponsor and not as a Holder, will pay
any and all taxes (other than United States withholding taxes attributable to
the Trust or its assets) and all liabilities, costs and expenses with respect
to such taxes of the Trust.
(c) The Sponsor's obligations under this Section 4.02 shall
be for the benefit of, and shall be enforceable by, any Person to whom any such
debts, obligations, costs, expenses and taxes are owed (a "Creditor") whether
or not such Creditor has received notice hereof. Any such Creditor may enforce
the Sponsor's obligations under this Section 4.02 directly against the Sponsor
and the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before
proceeding against the Sponsor. The Sponsor agrees to execute such additional
agreements as may be necessary or desirable in order to give full effect to the
provisions of this Section 4.02.
ARTICLE V
Trustees
SECTION 5.01. Number of Trustees; Qualifications. (a)
Except as provided in (1) below, the number of Trustees initially shall be five
(5). At any time (i) before the issuance of the Securities, the Sponsor may,
by written instrument, increase or decrease the number of, and appoint, remove
and replace the, Trustees, and (ii) after the issuance of the Securities the
number of Trustees may be increased or decreased solely by, and Trustees may be
appointed, removed or replaced solely by, vote of Holders of Common Securities
representing a Majority in liquidation amount of the Common Securities voting
as a class; provided that in any case:
(1) the number of Trustees shall be at least five (5) unless
the Trustee that acts as the Property Trustee also acts as the
Delaware Trustee, in which case the number of Trustees shall be at
least three (3);
<PAGE> 39
32
(2) at least a majority of the Trustees shall at all times be
officers or employees of JPM;
(3) if required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be either a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and
otherwise is permitted to act as a Trustee hereunder under the laws of
the State of Delaware, except that if the Property Trustee has its
principal place of business in the State of Delaware and otherwise is
permitted to act as a Trustee hereunder under the laws of the State of
Delaware, then the Property Trustee shall also be the Delaware Trustee
and Section 3.09 shall have no application; and
(4) there shall at all times be a Property Trustee hereunder
which shall satisfy the requirements of Section 5.01(c).
Each Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed
representatives.
(b) The initial Regular Trustees shall be:
[ ]
[ ]
[ ]
In care of J.P. Morgan & Co. Incorporated
60 Wall Street
New York, New York 10260-0060
(c) There shall at all times be one Trustee which shall act
as Property Trustee. In order to act as Property Trustee hereunder, such
Trustee shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted
by the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined
<PAGE> 40
33
capital and surplus of at least $50,000,000, and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then for the
purposes of this Section 5.01(c)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7 and to the extent
Rule 3a-7 requires a trustee having certain qualifications to hold
title to the "eligible assets" (as defined in Rule 3a-7) of the Trust,
the Property Trustee shall possess those qualifications.
If at any time the Property Trustee shall cease to satisfy the
requirements of clauses (i)-(iii) above, the Property Trustee shall immediately
resign in the manner and with the effect set out in Section 5.02(d). If the
Property Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Property Trustee and
the Holders of the Common Securities (as if such Holders were the obligor
referred to in Section 310(b) of the Trust Indenture Act) shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act. The
Preferred Guarantee shall be deemed to be specifically described in this
Declaration for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
The initial Trustee which shall serve as the Property Trustee
is First Trust of New York, National Association, whose address is as set forth
in Section 14.01(b).
(d) The initial Trustee which shall serve as the Delaware
Trustee is Wilmington Trust Company, a Delaware banking corporation, whose
address is as set forth in Section 14.01(c).
(e) Any action taken by Holders of Common Securities pursuant
to this Article V shall be taken at a meeting of Holders of Common Securities
convened for such purpose or by written consent as provided in Section 12.02.
<PAGE> 41
34
(f) No amendment may be made to this Section 5.01 which would
change any rights with respect to the number, existence or appointment and
removal of Trustees, except with the consent of each Holder of Common
Securities.
SECTION 5.02. Appointment, Removal and Resignation of
Trustees. (a) Subject to Section 5.02(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of the Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of the Securities by vote of the
Holders of a Majority in liquidation amount of the Common Securities
voting as a class.
(b)(i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.02(a) until a Successor Property
Trustee possessing the qualifications to act as Property Trustee under
Section 5.01(c) (a "Successor Property Trustee") has been appointed
and has accepted such appointment by written instrument executed by
such Successor Property Trustee and delivered to the Regular Trustees,
the Sponsor and the Property Trustee being removed; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.02(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Section
5.01(a)(3) (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such
Successor Delaware Trustee and delivered to the Regular Trustees, the
Sponsor and the Delaware Trustee being removed.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation.
(d) Any Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument (a "Resignation
Request") in writing signed by the Trustee and delivered to the
Sponsor and the Trust, which resignation shall take effect upon such
<PAGE> 42
35
delivery or upon such later date as is specified therein; provided,
however, that:
(i) no such resignation of the Trustee that acts as the
Property Trustee shall be effective until:
(A) a Successor Property Trustee possessing the
qualifications to act as Property Trustee under Section
5.01(c) has been appointed and has accepted such appointment
by instrument executed by such Successor Property Trustee and
delivered to the Trust, the Sponsor and the resigning Property
Trustee; or
(B) if the Trust is excluded from the definition of
an Investment Company solely by reason of Rule 3a-7, until the
assets of the Trust have been completely liquidated and the
proceeds thereof distributed to the Holders of the Securities;
and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware Trustee.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided
in this Section 5.02 within 60 days after delivery to the Sponsor and
the Trust of a Resignation Request, the resigning Property Trustee or
Delaware Trustee may petition any court of competent jurisdiction for
appointment of a Successor Property Trustee or Successor Delaware
Trustee. Such court may thereupon after such notice, if any, as it
may deem proper and prescribe, appoint a Successor Property Trustee or
Successor Delaware Trustee, as the case may be.
(f) The Sponsor shall provide notice to the Property Trustee
of any resignation or removal of a Regular Trustee.
SECTION 5.03. Vacancies Among Trustees. If a Trustee ceases
to hold office for any reason and the number of Trustees is not reduced
pursuant to Section 5.01 or if
<PAGE> 43
36
the number of Trustees is increased pursuant to Section 5.01, a vacancy shall
occur. A resolution certifying the existence of such vacancy by a majority of
the Regular Trustees shall be conclusive evidence of the existence of such
vacancy. The vacancy shall be filled with a Trustee appointed in accordance
with the requirements of this Article V.
SECTION 5.04. Effect of Vacancies. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee, or any one of them, shall not
operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur until such vacancy is filled as provided in this Article
V, the Regular Trustees in office, regardless of their number, shall have all
the powers granted to the Regular Trustees and shall discharge all the duties
imposed upon the Regular Trustees by this Declaration.
SECTION 5.05. Meetings. Meetings of the Regular Trustees
shall be held from time to time upon the call of any Trustee. Regular meetings
of the Regular Trustees may be held at a time and place fixed by resolution of
the Regular Trustees. Notice of any in-person meeting of the Regular Trustees
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 48 hours before
such meeting. Notice of any telephonic meeting of the Regular Trustees or any
committee thereof shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than
24 hours before such meeting. Notices shall contain a brief statement of the
time, place and anticipated purposes of the meeting. The presence (whether in
person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened.
Unless provided otherwise in this Declaration, any action of the Regular
Trustees may be taken at a meeting by vote of a majority of the Regular
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter; provided that a Quorum is present, or without a meeting
by the unanimous written consent of the Regular Trustees.
<PAGE> 44
37
SECTION 5.06. Delegation of Power. (a) Any Regular Trustee
may, by power of attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the purpose of executing
any registration statement or amendment thereto or other document or schedule
filed with the Commission or making any other governmental filing (including,
without limitation the filings referred to in Section 3.13).
(b) The Regular Trustees shall have the power to delegate
from time to time to such of their number or to officers of the Trust or to
officers of JPM the doing of such things and the execution of such instruments
either in the name of the Trust or the names of the Regular Trustees or
otherwise as the Regular Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the provisions of
the Trust, as set forth herein.
ARTICLE VI
Distributions
SECTION 6.01. Distributions. Holders shall receive periodic
distributions, redemption payments and liquidation distributions in accordance
with the applicable terms of the relevant Holder's Securities
("Distributions"). Distributions shall be made to the Holders of Preferred
Securities and Common Securities in accordance with the terms of the Securities
as set forth in Exhibits B and C hereto. If and to the extent that JPM makes a
payment of interest (including Compounded Interest (as defined in the
Indenture)), premium or principal on the Debentures held by the Property
Trustee (the amount of any such payment being a "Payment Amount"), the Property
Trustee shall and is directed to promptly make a Distribution of the Payment
Amount to Holders in accordance with the terms of the Securities as set forth
in Exhibits B and C hereto.
ARTICLE VII
Issuance of Securities
SECTION 7.01. General Provisions Regarding Securities. (a)
The Regular Trustees shall issue on behalf of the Trust securities in fully
registered form
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representing undivided beneficial interests in the assets of the Trust in
accordance with Section 7.01(b) and for the consideration specified in Section
3.03.
(b) The Regular Trustees shall issue on behalf of the Trust
one class of preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Exhibit B (the
"Preferred Securities") which terms are incorporated by reference in, and made
a part of, this Declaration as if specifically set forth herein, and one class
of common securities representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Exhibit C (the "Common
Securities") which terms are incorporated by reference in, and made a part of,
this Declaration as if specifically set forth herein. The Trust shall have no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust
by the Regular Trustees (or if there are more than two Regular Trustees by any
two of the Regular Trustees). Such signatures may be the manual or facsimile
signatures of the present or any future Regular Trustee. Typographical and
other minor errors or defects in any such reproduction of any such signature
shall not affect the validity of any Certificate. In case any Regular Trustee
of the Trust who shall have signed any of the Certificates shall cease to be
such Regular Trustee before the Certificate so signed shall be delivered by the
Trust, such Certificate nevertheless may be delivered as though the person who
signed such Certificate had not ceased to be such Regular Trustee; and any
Certificate may be signed on behalf of the Trust by such persons as, at the
actual date of the execution of such Certificate, shall be the Regular Trustees
of the Trust, although at the date of the execution and delivery of the
Declaration any such person was not such a Regular Trustee. Certificates shall
be printed, lithographed or engraved or may be produced in any other manner as
is reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Securities may be listed, or to
conform to usage. Pending
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the preparation of definitive Certificates, the Regular Trustees on behalf of
the Trust may execute temporary Certificates (printed, lithographed or
typewritten), in substantially the form of the definitive Certificates in lieu
of which they are issued, but with such omissions, insertions and variations as
may be appropriate for temporary Certificates, all as may be determined by the
Regular Trustees. Each temporary Certificate shall be executed by the Regular
Trustees on behalf of the Trust upon the same conditions and in substantially
the same manner, and with like effect, as definitive Certificates. Without
unnecessary delay, the Regular Trustees on behalf of the Trust will execute and
furnish definitive Certificates and thereupon any or all temporary Certificates
may be surrendered to the transfer agent and registrar in exchange therefor
(without charge to the Holders). Each Certificate whether in temporary or
definitive form shall be countersigned by the manual or facsimile signature of
an authorized signatory of the Person acting as registrar and transfer agent
for the Securities, which shall initially be the Property Trustee.
(d) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable.
(f) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
(g) Upon issuance of the Securities as provided in this
Declaration, the Regular Trustees on behalf of the Trust shall return to JPM
the $10 constituting initial trust assets as set forth in the Original
Declaration.
ARTICLE VIII
Termination of Trust
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SECTION 8.01. Termination of Trust. The Trust shall dissolve
when:
(i) all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders of Securities in accordance with the terms of
the Securities; or
(ii) all of the Debentures shall have been distributed to the
Holders of Securities in exchange for all of the Securities in
accordance with the terms of the Securities; or
(iii) upon the expiration of the term of the Trust as set
forth in Section 3.17,
and thereafter the Trustees shall, after satisfaction of all obligations of the
Trust, file a certificate of cancelation with the Secretary of State of the
State of Delaware and the Trust shall terminate. The Trustees shall so file
such a certificate as soon as practicable after the occurrence of an event
referred to in this Section 8.01.
The provisions of Sections 3.12 and 4.02 and Article X shall
survive the termination of the Trust.
ARTICLE IX
Transfer of Interests
SECTION 9.01. Transfer of Securities. (a) Securities may
only be transferred, in whole or in part, in accordance with the terms and
conditions set forth in this Declaration. Any transfer or purported transfer
of any Security not made in accordance with this Declaration shall be null and
void.
(b) Subject to this Article IX, Preferred Securities shall be
freely transferable.
(c) Subject to this Article IX, JPM and any Related Party may
only transfer Common Securities to JPM or a Related Party; provided that any
such transfer shall be subject to the condition that the transferor shall have
obtained (1) either a ruling from the Internal Revenue Service or an
unqualified written opinion addressed to the
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Trust and delivered to the Trustees of nationally recognized independent tax
counsel experienced in such matters to the effect that such transfer will not
(i) cause the Trust to be treated as issuing a class of interests in the Trust
differing from the class of interests represented by the Common Securities
originally issued to JPM, (ii) result in the Trust acquiring or disposing of,
or being deemed to have acquired or disposed of, an asset, or (iii) result in
or cause the Trust to be treated as anything other than a grantor trust for
United States Federal income tax purposes and (2) an unqualified written
opinion addressed to the Trust and delivered to the Trustees of a nationally
recognized independent counsel experienced in such matters that such transfer
will not cause the Trust to be an Investment Company or controlled by an
Investment Company.
SECTION 9.02. Transfer of Certificates. The Regular Trustees
shall cause to be kept at an office or agency to be maintained by the Trust a
register in which, subject to such reasonable regulations as it may prescribe,
the Trust shall provide for the registration of Certificates and of transfers
of Certificates, which will be effected without charge but only upon payment
(with such indemnity as the Trust may require) in respect of any tax or other
government charges which may be imposed in relation to it. The Property
Trustee will be the initial registrar and transfer agent (the "Registrar") for
the purpose of registering Certificates and transfers of Certificates as
provided herein.
Upon surrender for registration of transfer of any Certificate
at the office or agency of the Registrar, the Regular Trustees shall execute
and the Registrar shall countersign in accordance with section 7.01(c) one or
more new Certificates of any authorized denominations and of a like aggregate
liquidation amount to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer shall
be accompanied by a written instrument of transfer in form satisfactory to the
Trust duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Certificate surrendered for registration of transfer shall be
canceled by the Regular Trustees. A transferee of a Certificate shall be
entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by this
Declaration.
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SECTION 9.03. Deemed Security Holders. The Trustees may
treat the Person in whose name any Certificate shall be registered on the books
and records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trustees shall have actual or other notice
thereof.
SECTION 9.04. Book Entry Interests. Unless otherwise
specified in the terms of the Preferred Securities, the Preferred Securities
Certificates, on original issuance (including Preferred Securities, if any,
issued on the Option Closing Date pursuant to the exercise of the overallotment
option set forth in the Underwriting Agreement), will be issued in the form of
one or more, fully registered, global Preferred Security Certificates (each a
"Global Certificate"), to be delivered to DTC, the initial Clearing Agency, by,
or on behalf of, the Trust. Such Global Certificates shall initially be
registered on the books and records of the Trust in the name of Cede & Co., the
nominee of DTC, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 9.07. Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been
issued to the Preferred Security Beneficial Owners pursuant to Section 9.07:
(i) the provisions of this Section 9.04 shall be in full force
and effect;
(ii) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including
the payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall
have no obligation to the Preferred Security Beneficial Owners;
(iii) to the extent that the provisions of this Section 9.04
conflict with any other provisions of this
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Declaration, the provisions of this Section 9.04 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing Agency and/or
the Clearing Agency Participants. DTC will make book entry transfers
among the Clearing Agency Participants and receive and transmit
payments of Distributions on the Global Certificates to such Clearing
Agency Participants.
SECTION 9.05. Notices to Holders of Certificates. Whenever a
notice or other communication to the Holders is required to be given under this
Declaration, unless and until Definitive Preferred Security Certificates shall
have been issued pursuant to Section 9.07, the relevant Trustees shall give all
such notices and communications, specified herein to be given to Preferred
Securities Holders, to the Clearing Agency and, with respect to any Preferred
Security Certificate registered in the name of a Clearing Agency or the nominee
of a Clearing Agency, the Trustees shall, except as set forth herein have no
notice obligations to the Preferred Security Beneficial Owners.
SECTION 9.06. Appointment of Successor Clearing Agency. If
any Clearing Agency elects to discontinue its services as securities depository
with respect to the Preferred Securities, the Regular Trustees may, in their
sole discretion, appoint a successor Clearing Agency with respect to the
Preferred Securities.
SECTION 9.07. Definitive Preferred Securities Certificates.
If (i) a Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.06 or (ii) the Regular Trustees elect after consultation with the
Sponsor to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities, then (x) Definitive Preferred Security
Certificates shall be prepared by the Regular Trustees on behalf of the Trust
with respect to such Preferred Securities and (y) upon surrender of the Global
Certificates by the Clearing Agency, accompanied by registration instructions,
the Regular Trustees shall cause
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definitive Preferred Security Certificates to be delivered to Preferred
Security Beneficial Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for any delay in
delivery of such instructions and each of them may conclusively rely on, and
shall be protected in relying on, such instructions.
SECTION 9.08. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate and (b) there
shall be delivered to the Regular Trustees such security or indemnity as may be
required by them to keep each of them harmless, then in the absence of notice
that such Certificate shall have been acquired by a bona fide purchaser, any
two Regular Trustees on behalf of the Trust shall execute and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like denomination. In connection with the
issuance of any new Certificate under this Section 9.08, the Regular Trustees
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive
evidence of an ownership interest in the relevant Securities, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
ARTICLE X
Limitation of Liability; Indemnification
SECTION 10.01 Exculpation. (a) No Indemnified Person shall
be liable, responsible or accountable in damages or otherwise to the Trust or
any Covered Person for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of the authority conferred on such Indemnified Person by
this Declaration or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence (or, in the case of the Property Trustee,
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negligence) or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be
paid.
(c) Pursuant to Section 3803(a) of the Business Trust Act,
the Holders of Securities, in their capacities as Holders, shall be entitled to
the same limitation of liability that is extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.
SECTION 10.02. Indemnification and Compensation. (a) To the
fullest extent permitted by applicable law, the Sponsor shall indemnify and
hold harmless each Indemnified Person from and against any loss, damage or
claim incurred by such Indemnified Person by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee, negligence) or willful misconduct with respect to such acts
or omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Sponsor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Sponsor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that
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the Indemnified Person is not entitled to be indemnified as authorized in
Section 10.02(a).
(c) The Sponsor agrees to pay the Property Trustee and the
Delaware Trustee from time to time such compensation for all services rendered
by the Property Trustee and the Delaware Trustee hereunder as may be mutually
agreed upon in writing by the Sponsor and the Property Trustee or the Delaware
Trustee, as the case may be, and, except as otherwise expressly provided
herein, to reimburse the Property Trustee and the Delaware Trustee upon its or
their request for all reasonable expenses, disbursements and advances incurred
or made by the Property Trustee or the Delaware Trustee, as the case may be, in
accordance with the provisions of this Declaration, except any such expense,
disbursement or advance as may be attributable to its or their negligence or
bad faith.
SECTION 10.03. Outside Businesses. Any Covered Person, the
Sponsor, JPM, the Delaware Trustee and the Property Trustee may engage in or
possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the Holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. None of the Covered Persons, the Sponsor, JPM, the Delaware Trustee
or the Property Trustee shall be obligated to present any particular investment
or other opportunity to the Trust even if such opportunity is of a character
that, if presented to the Trust, could be taken by the Trust, and any Covered
Person, the Sponsor, JPM, the Delaware Trustee and the Property Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for, or act on any committee or body of holders of, securities or
other obligations of the Sponsor or its Affiliates.
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ARTICLE XI
Accounting
SECTION 11.01. Fiscal Year. The fiscal year ("Fiscal Year")
of the Trust shall be the calendar year, or such other year as is required by
the Code.
SECTION 11.02. Certain Accounting Matters. (a) At all times
during the existence of the Trust, the Regular Trustees shall keep, or cause to
be kept, full books of account, records and supporting documents, which shall
reflect in reasonable detail each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles consistently applied. The Trust
shall use the accrual method of accounting for United States Federal income tax
purposes. The books and records of the Trust, together with a copy of this
Declaration and a certified copy of the Certificate of Trust, or any amendment
thereto, shall at all times be maintained at the principal office of the Trust
and shall be open for inspection for any examination by any Holder or its duly
authorized representative for any purpose reasonably related to its interest in
the Trust during normal business hours.
(b) The Regular Trustees shall, as soon as available after
the end of each Fiscal Year of the Trust, cause to be prepared and mailed to
each Holder of Securities unaudited financial statements of the Trust for such
Fiscal Year, prepared in accordance with generally accepted accounting
principles; provided that if the Trust is required to comply with the periodic
reporting requirements of Sections 13(a) or 15(d) of the Exchange Act, such
financial statements for such Fiscal Year shall be examined and reported on by
a firm of independent certified public accountants selected by the Regular
Trustees (which firm may be the firm used by the Sponsor).
(c) The Regular Trustees shall cause to be prepared and
mailed to each Holder of Securities an annual United States Federal income tax
information statement, on such form as is required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the
Code to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements
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within 30 days after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be prepared and filed
with the appropriate taxing authority an annual United States Federal income
tax return, on such form as is required by the Code, and any other annual
income tax returns required to be filed by the Regular Trustees on behalf of
the Trust with any state or local taxing authority, such returns to be filed as
soon as practicable after the end of each Fiscal Year of the Trust.
SECTION 11.03. Banking. The Trust shall maintain one or more
bank accounts in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Debentures held by the
Property Trustee shall be made directly to the Property Account and no other
funds from the Trust shall be deposited in the Property Account. The sole
signatories for such accounts shall be designated by the Regular Trustees;
provided, however, that the Property Trustee shall designate the sole
signatories for the Property Account.
SECTION 11.04. Withholding. The Trust and the Trustees shall
comply with all withholding requirements under United States Federal, state and
local law. The Trust shall request, and the Holders shall provide to the
Trust, such forms or certificates as are necessary to establish an exemption
from withholding with respect to each Holder, and any representations and forms
as shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Property
Trustee shall file required forms with applicable jurisdictions and, unless an
exemption from withholding is properly established by a Holder, the Property
Trustee shall remit amounts withheld with respect to the Holder to applicable
jurisdictions. To the extent that the Trust is required to withhold and pay
over any amounts to any authority with respect to distributions or allocations
to any Holder, the amount withheld shall be deemed to be a distribution in the
amount of the withholding to the Holder. In the event of any claimed
overwithholding, Holders shall be limited to an action against the applicable
jurisdiction. If the amount to be withheld was not withheld from a
Distribution, the Property Trustee may reduce subsequent Distributions by the
amount of such withholding.
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ARTICLE XII
Amendments and Meetings
SECTION 12.01. Amendments. (a) Except as otherwise provided
in this Declaration or by any applicable terms of the Securities, this
Declaration may be amended by, and only by, a written instrument executed by a
majority of the Regular Trustees (or, if there are only two Regular Trustees,
both Regular Trustees); provided, however, that (i) no amendment to this
Declaration shall be made unless the Regular Trustees shall have obtained (A)
either a ruling from the Internal Revenue Service or a written unqualified
opinion of nationally recognized independent tax counsel experienced in such
matters to the effect that such amendment will not cause the Trust to be
classified for United States Federal income tax purposes as an association
taxable as a corporation or a partnership and to the effect that the Trust will
continue to be treated as a grantor trust for purposes of United States Federal
income taxation and (B) a written unqualified opinion of nationally recognized
independent counsel experienced in such matters to the effect that such
amendment will not cause the Trust to be an Investment Company which is
required to be registered under the Investment Company Act, (ii) if Securities
are outstanding, any amendment which would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only
after satisfaction of such additional requirements as may be set forth in the
terms of such Securities, (iii) Section 4.02, Section 9.01(c) and this Section
12.01 shall not be amended without the consent of all Holders of the
Securities, (iv) no amendment which adversely affects the rights, powers and
privileges of the Property Trustee or the Delaware Trustee shall be made
without the consent of the Property Trustee or the Delaware Trustee, as the
case may be, (v) Article IV shall not be amended without the consent of the
Sponsor, and (vi) the rights of Holders of Common Securities under Article V to
increase or decrease the number of, and to appoint, replace or remove, Trustees
shall not be amended without the consent of each Holder of Common Securities.
(b) Notwithstanding Section 12.02(a)(ii), this Declaration
may be amended without the consent of the Holders of the Securities to (i) cure
any ambiguity, (ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other
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provision of this Declaration, (iii) to add to the covenants, restrictions or
obligations of the Sponsor, and (iv) to conform to any changes in Rule 3a-7 or
any change in interpretation or application of Rule 3a-7 by the Commission,
which amendment does not adversely affect the rights, preferences or privileges
of the Holders.
(c) The Regular Trustees shall promptly furnish to each of
the Property Trustee and the Delaware Trustee a copy of each amendment to this
Declaration.
SECTION 12.02. Meetings of the Holders of Securities; Action
by Written Consent. (a) Meetings of the Holders of Preferred Securities
and/or Common Securities may be called at any time by the Regular Trustees (or
as provided in the terms of the Securities) to consider and act on any matter
on which Holders of such class of Securities are entitled to act under the
terms of this Declaration, the terms of the Securities or the rules of any
stock exchange on which the Preferred Securities are listed or admitted for
trading. The Regular Trustees shall call a meeting of Holders of Preferred
Securities or Common Securities if directed to do so by Holders of at least 10%
in liquidation amount of such class of Securities. Such direction shall be
given by delivering to the Regular Trustees one or more notices in writing
stating that the signing Holders of Securities wish to call a meeting and
indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing
the Certificates held by the Holders of Securities exercising the right to call
a meeting and only those specified Certificates shall be counted for purposes
of determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provision shall apply to meetings of Holders of
Securities:
(i) Notice of any such meeting shall be given by mail to each
Trustee and all the Holders of Securities having a right to vote
thereat not less than seven days nor more than 60 days prior to the
date of such meeting. Whenever a vote, consent or approval of the
Holders of Securities is permitted or required under this Declaration
or the rules of any stock exchange on which the Preferred Securities
are listed or admitted for trading, such vote, consent or approval may
be
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given at a meeting of the Holders of Securities. Any action that may
be taken at a meeting of the Holders of Securities may be taken
without a meeting if a consent in writing setting forth the action so
taken is signed by Holders of Securities owning not less than the
minimum aggregate liquidation amount of Securities that would be
necessary to authorize or take such action at a meeting at which all
Holders of Securities having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a meeting shall
be given to the Holders of Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that any
written ballot submitted to the Holders of Securities for the purpose
of taking any action without a meeting shall be returned to the Trust
within the time specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of a Security is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after
the expiration of 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure
of the Holder of Security executing it. Except as otherwise provided
herein or in the terms of the Securities, all matters relating to the
giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies and
judicial interpretations thereunder as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate.
(iv) Unless otherwise provided in the Business Trust Act, this
Declaration or the rules of any stock exchange on which the Preferred
Securities are then listed or admitted for trading, the Regular
Trustees, in their sole discretion, shall establish all other
provisions relating to meetings of Holders of Securities, including
notice of the time, place or purpose of any meeting at which any
matter is to be voted on by any Holders of Securities, waiver of any
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such notice, action by consent without a meeting, the establishment of
a record date, quorum requirements, voting in person or by proxy or
any other matter with respect to the exercise of any such right to
vote.
ARTICLE XIII
Representations of Property Trustee
and Delaware Trustee
SECTION 13.01. Representations and Warranties of Property
Trustee. (a) The Trustee which acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(i) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under
the laws of the State of its incorporation, with trust power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(ii) The execution, delivery and performance by the Property
Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Declaration
has been duly executed and delivered by the Property Trustee, and
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered
in a proceeding in equity or at law).
(iii) The execution, delivery and performance of this Declaration
by the Property Trustee does not conflict with or constitute a breach
of the charter or By-laws of the Property Trustee.
<PAGE> 60
53
(iv) No consent, approval or authorization of, or registration
with or notice to, any banking authority which supervises or regulates
the Property Trustee is required for the execution, delivery or
performance by the Property Trustee of this Declaration.
(v) The Property Trustee satisfies the qualifications set
forth in Section 5.01(c).
(b) The Trustee which acts as initial Delaware Trustee
represents and warrants to the Trust and the Sponsor at the date of this
Declaration, and each Successor Delaware Trustee represents and warrants to the
Trust and the Sponsor at the time of the Successor Delaware Trustee's
acceptance of its appointment as Delaware Trustee, that it satisfies the
qualifications set forth in Section 5.01(a)(3).
ARTICLE XIV
Miscellaneous
SECTION 14.01. Notices. All notices provided for in this
Declaration shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as
the Regular Trustees on behalf of the Trust may give notice of to the
Property Trustee, the Delaware Trustee and the Holders of the
Securities):
JPM Capital Trust [ ]
In care of J.P. Morgan & Co. Incorporated
60 Wall Street
New York, New York 10260-0060
Attention of [ ]
[ ]
[ ],
Trustees
Facsimile No: (212) [ ]
(b) if given to the Property Trustee, at the mailing address
of the Property Trustee set forth below (or such other address as the
Property Trustee may give
<PAGE> 61
54
notice of to the Trust and the Holders of the Securities):
First Trust of New York, National Association
100 Wall Street, Suite 2000
New York, New York 10005
Attention of [ ]
Facsimile No: [ ]
(c) if given to the Delaware Trustee, at the mailing address
of the Delaware Trustee set forth below (or such other address as the
Delaware Trustee may give notice of to the Trust and the Holders of
the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention of [ ]
Facsimile No: (302) [ ]
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address
as the Holder of the Common Securities may give notice to the Property
Trustee, the Delaware Trustee and the Trust):
J.P. Morgan & Co. Incorporated
60 Wall Street
New York, New York 10260-0060
Attention of [ ]
Facsimile No: (212) [ ]
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
A copy of any notice to the Property Trustee or the Delaware
Trustee shall also be sent to the Trust. All notices shall be deemed to have
been given when received in person, telecopied with receipt confirmed, or
mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed
address of which no notice was given, such notice or other document shall be
deemed to have been delivered on the date of such refusal or inability to
deliver.
<PAGE> 62
55
SECTION 14.02. Undertaking for Costs. All parties to this
Declaration agree, and each Holder of any Securities by his or her acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Declaration, or in any suit against the Property Trustee for any action taken
or omitted by it as Property Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 14.02 shall not apply to any suit instituted by the
Property Trustee, to any suit instituted by any Holder of Preferred Securities,
or group of Holders of Preferred Securities, holding more than 10% in aggregate
liquidation amount of the outstanding Preferred Securities, or to any suit
instituted by any Holder of Preferred Securities for the enforcement of the
payment of the principal of (or premium, if any) or interest on the Debentures,
on or after the respective due dates expressed in such Debentures.
SECTION 14.03. Governing Law. This Declaration and the
rights of the parties hereunder shall be governed by and interpreted in
accordance with the laws of the State of Delaware and all rights and remedies
shall be governed by such laws without regard to principles of conflict of
laws.
SECTION 14.04. Headings. Headings contained in this
Declaration are inserted for convenience of reference only and do not affect
the interpretation of this Declaration or any provision hereof.
SECTION 14.05. Partial Enforceability. If any provision of
this Declaration, or the application of such provision to any Person or
circumstance, shall be held invalid, the remainder of this Declaration, or the
application of such provision to persons or circumstances other than those to
which it is held invalid, shall not be affected thereby.
SECTION 14.06. Counterparts. This Declaration may contain
more than one counterpart of the signature pages and this Declaration may be
executed by the affixing of the signature of the Sponsor and each of the
Trustees to one of such counterpart signature pages. All of such counterpart
<PAGE> 63
56
signature pages shall be read as though one, and they shall have the same force
and effect as though all of the signers had signed a single signature page.
SECTION 14.07. Intention of the Parties. It is the intention
of the parties hereto that the Trust not be classified for United States
Federal income tax purposes as an association taxable as a corporation or
partnership but that the Trust be treated as a grantor trust for United States
Federal income tax purposes. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
SECTION 14.08. Successors and Assigns. Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Declaration by the Sponsor and the Trustees shall bind and
inure to the benefit of their respective successors and assigns, whether so
expressed.
IN WITNESS WHEREOF, the undersigned have caused these presents
to be executed as of the day and year first above written.
J.P. MORGAN & CO. INCORPORATED, as
Sponsor
by
------------------------------------
Name:
Title:
[ ], as Trustee,
by
--------------------------------
Name:
Title:
<PAGE> 64
57
[ ], as Trustee,
by
-------------------------------------
Name:
Title:
[ ], as Trustee,
by
------------------------------------
Name:
Title:
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION, as
Property Trustee,
by
-----------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY, as
Delaware Trustee,
by
-----------------------------------
Name:
Title:
<PAGE> 65
STATE OF NEW YORK, )
) ss.
COUNTY OF NEW YORK, )
BEFORE ME, the undersigned authority, on this day of
, 199 , personally appeared (on behalf of J.P. Morgan & Co.
Incorporated), [ ], [ ] and [ ],
each known to me (or proved to me by introduction upon the oath of a person
known to me) to be the person and officer, as the case may be, whose name is
subscribed to the foregoing instrument, and each acknowledged to me that he
executed the same as the act of such trust for the purposes and consideration
herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS day of , 199 .
----------------------------------------
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:
Commission Expires:
<PAGE> 66
STATE OF NEW YORK, )
) ss.
COUNTY OF NEW YORK, )
BEFORE ME, the undersigned authority, on this day of
, 199 , personally appeared [ ] of First Trust of New York,
National Association known to me (or proved to me by introduction upon the oath
of a person known to me) to be the person and officer whose names are
subscribed to the foregoing instrument, and acknowledged to me that she
executed the same as the act of such trust for the purposes and consideration
herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS day of , 199 .
(SEAL)
----------------------------------------
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:
Commission Expires:
<PAGE> 67
STATE OF DELAWARE, )
) ss.
COUNTY OF , )
BEFORE ME, the undersigned authority, on this day of
, 199 , personally appeared [ ] of Wilmington Trust Company known
to me (or proved to me by introduction upon the oath of a person known to me)
to be the person and officer whose names are subscribed to the foregoing
instrument, and acknowledged to me that she executed the same as the act of
such trust for the purposes and consideration herein expressed and in the
capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS day of , 199 .
(SEAL)
----------------------------------------
NOTARY PUBLIC, STATE OF DELAWARE
Print Name:
Commission Expires:
<PAGE> 68
EXHIBIT A
CERTIFICATE OF TRUST
OF
JPM CAPITAL TRUST [ ]
THIS Certificate of Trust of JPM Capital Trust [ ] (the
"Trust"), dated October 29, 1996, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. Code Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby
is JPM Capital Trust [ ].
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of
Delaware is Wilmington Trust Company, a Delaware banking corporation, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890.
3. Effective Date. This Certificate of Trust shall be
effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustees
of the Trust, have executed this Certificate of Trust as of the date first
above written.
WILMINGTON TRUST COMPANY, as
Delaware Trustee,
by
------------------------------------
Name:
Title:
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION, as
Property Trustee,
by
------------------------------------
Name:
Title:
<PAGE> 69
2
----------------------------------------
Name:
as Trustee
----------------------------------------
Name:
as Trustee
----------------------------------------
Name:
as Trustee
<PAGE> 70
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.01 of the Amended and Restated
Declaration of Trust of JPM Capital Trust [ ] dated as of , 199 (as amended
from time to time, the "Declaration"), the designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities are set forth below (each capitalized term used but not defined
herein having the meaning set forth in the Declaration):
1. Designation and Number. Preferred Securities of the Trust
with an aggregate liquidation amount in the assets of the Trust of
Dollars ($ ) (including up to Dollars ($ )
issuable upon exercise of the overallotment option set forth in the
Underwriting Agreement) and a liquidation amount in the assets of the Trust of
$ per Preferred Security are hereby designated as " % Preferred Trust
Securities". The Preferred Security Certificates evidencing the Preferred
Securities shall be substantially in the form attached hereto as Annex I, with
such changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of any stock
exchange on which the Preferred Securities are listed. In connection with the
issuance and sale of the Preferred Securities and the Common Securities, the
Trust will purchase, as trust assets, Debentures of JPM having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities and the Common Securities so issued and bearing interest at an
annual rate equal to the annual Distribution rate on the Preferred Securities
and the Common Securities and having payment and redemption provisions which
correspond to the payment and redemption provisions of the Preferred Securities
and the Common Securities.
2. Distributions. (a) Distributions payable on each
Preferred Security will be fixed at a rate per annum of % (the "Coupon
Rate") of the stated liquidation amount of $ per Preferred Security.
Distributions in arrears for more than one quarter will bear interest at the
rate per annum of % thereof (to the extent permitted by law), compounded
quarterly. The term "Distributions" as used in these terms means such periodic
cash distributions and any such interest payable unless otherwise stated. A
Distribution will be made by the Property Trustee only to
<PAGE> 71
2
the extent that interest payments are made in respect of the Debentures held by
the Property Trustee. The amount of Distributions payable for any period will
be computed for any quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a 90-day
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days
elapsed.
(b) Distributions on the Preferred Securities will be
cumulative, will accrue from , 199 and will be payable quarterly
in arrears, on the last day of March, June, September and December of each year
commencing on , 199 , except as otherwise described below, but only
if and to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee. So long as JPM is not in default in
the payment of interest on the Debentures, JPM shall have the right under the
Indenture for the Debentures to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not to
exceed 20 consecutive quarterly interest periods (a "Deferral Period"). During
any such Deferral Period, quarterly Distributions will continue to accrue with
interest thereon (to the extent permitted by applicable law) at the rate of
% per annum, compounded quarterly. Prior to the termination of any such
Deferral Period, JPM may further extend such Deferral Period; provided that
such Deferral Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarterly interest periods. Upon the
termination of any Deferral Period and the payment of all amounts then due, JPM
may commence a new Deferral Period, subject to the above requirements.
Payments of accrued Distributions will be payable to Holders of Preferred
Securities as they appear on the books and records of the Trust on the record
date for the first interest payment date occurring at or after the end of the
Deferral Period.
(c) Distributions on the Preferred Securities will be payable
promptly by the Property Trustee (or other Paying Agent) upon receipt of
immediately available funds to the Holders thereof as they appear on the books
and records of the Trust on the relevant record dates. While the Preferred
Securities remain in book-entry only form, the relevant record dates shall be
one Business Day prior to the relevant Distribution date, and if the Preferred
Securities are no longer in book-entry only form, the relevant record
<PAGE> 72
3
dates will be the fifteenth (15th) day of the month in which the relevant
Distribution date occurs, which record and payment dates correspond to the
record and interest payment dates for the Debentures. Distributions payable on
any Preferred Securities that are not punctually paid on any Distribution
payment date as a result of JPM having failed to make the corresponding
interest payment on the Debentures will forthwith cease to be payable to the
Person in whose name such Preferred Security is registered on the relevant
record date, and such defaulted Distribution will instead be payable to the
Person in whose name such Preferred Security is registered on the special
record date established by the Regular Trustees, which record date shall
correspond to the special record date or other specified date determined in
accordance with the Indenture; provided, however, that Distributions shall not
be considered payable on any Distribution payment date falling within a
Deferral Period unless JPM has elected to make a full or partial payment of
interest accrued on the Debentures on such Distribution payment date. Subject
to any applicable laws and regulations and the provisions of the Declaration,
each payment in respect of the Preferred Securities will be made as described
in paragraph 9 hereof. If any date on which Distributions are payable on the
Preferred Securities is not a Business Day, then payment of the Distribution
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
(d) All Distributions paid with respect to the Preferred
Securities and the Common Securities will be paid pro rata to the Holders
thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
(e) In the event that there is any money or other property
held by or for the Trust that is not accounted for under the Declaration, such
money or property shall be distributed pro rata among the Holders of the
Preferred Securities and the Common Securities.
3. Liquidation Distribution upon Dissolution. In the event
of any voluntary or involuntary dissolution, winding-up or termination of the
Trust, the Holders of the
<PAGE> 73
4
Preferred Securities and the Common Securities at the date of the dissolution,
winding-up or termination, as the case may be, will be entitled to receive pro
rata solely out of the assets of the Trust available for distribution to
Holders of Preferred Securities and Common Securities after satisfaction of
liabilities to creditors, an amount equal to the aggregate of the stated
liquidation amount of $ per Preferred Security and Common Security plus
accrued and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution, winding-up or termination, and after satisfaction of liabilities
to creditors, Debentures in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Preferred Securities and Common
Securities and bearing accrued and unpaid interest in an amount equal to the
accrued and unpaid Distributions on such Preferred Securities and Common
Securities, shall be distributed pro rata to the Holders of the Preferred
Securities and Common Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and the Common Securities
shall be paid, subject to the next paragraph, on a pro rata basis.
Holders of Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution pro rata with Holders of
Preferred Securities, except that, if an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to such Liquidation Distribution.
4. Redemption and Distribution of Debentures. The Preferred
Securities and the Common Securities may only be redeemed if Debentures having
an aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and the Common Securities are repaid, redeemed or
distributed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in
part, whether at maturity or upon redemption at any time or from time to time
on or after , 200 , the proceeds of such repayment will be promptly
applied to redeem pro rata Preferred Securities and Common
<PAGE> 74
5
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid, upon not less than 30 nor more
than 60 days notice, at a redemption price of $ per Preferred and Common
Security plus an amount equal to accrued and unpaid Distributions thereon to
the date of redemption, payable in cash (the "Redemption Price"). The date of
any such repayment of Preferred Securities and Common Securities shall be
established to coincide with the repayment date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities
and Common Securities are to be so redeemed, the Preferred Securities and the
Common Securities will be redeemed pro rata, it being understood that Preferred
Securities held of record by a Clearing Agency or nominee will be redeemed as
described in paragraph 4(f)(ii) below. If a partial redemption would result in
the delisting of the Preferred Securities by any national securities exchange
or other organization on which the Preferred Securities are then listed, JPM
pursuant to the Indenture, will only redeem Debentures in whole and the Trust
will only redeem the Preferred Securities in whole.
(c) If, at any time, a Tax Event or an Investment Company
Event (each as hereinafter defined, and each, along with a Capital Treatment
Event, a "Special Event") shall occur and be continuing, the Regular Trustees
shall, unless the Debentures are redeemed in the limited circumstances
described below, dissolve the Trust and, after satisfaction of creditors, cause
Debentures held by the Property Trustee having an aggregate principal amount
equal to the aggregate stated liquidation amount of, and bearing accrued and
unpaid interest equal to accrued and unpaid Distributions on, and having the
same record date for payment as, the Preferred Securities and the Common
Securities, to be distributed to the Holders of the Preferred Securities and
the Common Securities on a pro rata basis in liquidation of such Holders'
interests in the Trust, within 90 days following the occurrence of such Special
Event (the "90 Day Period"); provided, however, that in the case of the
occurrence of a Tax Event, as a condition of such dissolution and distribution,
the Regular Trustees shall have received an opinion of a nationally recognized
independent tax counsel experienced in such matters (a "No Recognition
Opinion"), which opinion may rely on any then applicable published revenue
ruling of the Internal Revenue Service, to the effect that the Holders of the
Preferred Securities will not
<PAGE> 75
6
recognize any gain or loss for United States Federal income tax purposes as a
result of the dissolution of the Trust and distribution of Debentures; and
provided further that, if and as long as at the time there is available to the
Trust the opportunity to eliminate, within the 90 Day Period, the Special Event
by taking some ministerial action, such as filing a form or making an election,
or pursuing some other similar reasonable measure that has no adverse effect on
the Trust, JPM or the Holders of the Preferred Securities (a "Ministerial
Action"), the Trust will pursue such Ministerial Action in lieu of dissolution.
JPM may also elect, in its sole discretion, to shorten the maturity of the
Debentures, as provided in Section [ ] of the [ ] Supplemental Indenture to
the Indenture in lieu of dissolving the Trust, if doing so would eliminate the
Tax Event.
If in the case of the occurrence of a Tax Event, (i) the
Regular Trustees have received an opinion (a "Redemption Tax Opinion") of
nationally recognized independent tax counsel experienced in such matters that,
as a result of a Tax Event, there is more than an insubstantial risk that JPM
would be precluded from deducting the interest on the Debentures for United
States Federal income tax purposes even if the Debentures were distributed to
the Holders of Preferred Securities and Common Securities in liquidation of
such Holder's interest in the Trust as described in this paragraph 4(c) or (ii)
the Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, JPM shall have the right
at any time, subject to JPM having received prior approval of the Federal
Reserve to do so if then required under applicable capital guidelines or
policies of the Federal Reserve, upon not less than 30 nor more than 60 days
notice, to redeem the Debentures in whole or in part for cash at the Redemption
Price within 90 days following the occurrence of such Tax Event, and, promptly
following such redemption, Preferred Securities and Common Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed will be redeemed by the Trust at the Redemption Price on
a pro rata basis; provided, however, that, if at the time there is available to
JPM or the Regular Trustees on behalf of the Trust the opportunity to
eliminate, within such 90 day period, the Tax Event by taking some Ministerial
Action, JPM or the Regular Trustees on behalf of the Trust will pursue such
measure in lieu of redemption; and provided further that the foregoing
provisions shall not require JPM
<PAGE> 76
7
to shorten the maturity of the Debentures and JPM shall have no right to redeem
the Debentures while the Regular Trustees on behalf of the Trust are pursuing
such Ministerial Action. The Common Securities will be redeemed pro rata with
the Preferred Securities, except that if an Event of Default under the
Indenture has occurred and is continuing, the Preferred Securities will have a
priority over the Common Securities with respect to payment of the Redemption
Price.
"Tax Event" means that the Regular Trustees shall have
obtained an opinion of nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that,
on or after , 199 , as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision
or regulatory determination), (c) any interpretation or pronouncement that
provides for a position with respect to such laws or regulations that differs
from the theretofore generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after , 199 , there is more than an insubstantial risk that (i)
the Trust is, or will be within 90 days of the date thereof, subject to United
States Federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges or (iii) interest payable by JPM to the Trust on the
Debentures is not, or within 90 days of the date thereof will not be,
deductible by JPM for United States Federal income tax purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of nationally recognized independent counsel
experienced in practice under the Investment Company Act that, as a result of
the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any
<PAGE> 77
8
legislative body, court, governmental agency or regulatory authority (a "Change
in 1940 Act Law"), there is more than an insubstantial risk that the Trust is
or will be considered an Investment Company which is required to be registered
under the Investment Company Act, which Change in 1940 Act Law becomes
effective on or after , 199 .
"Capital Treatment Event" means that JPM has reasonably
determined that, as the result of the occurrence of a change in law or
regulation or a change in the interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that JPM will not be able
to treat the minority interest in the Trust as "Tier 1 capital" (or the
equivalent) for purposes of the capital adequacy guidelines of the Federal
Reserve, as then in effect and applicable to JPM.
On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Preferred Securities will no longer be deemed
to be outstanding and (ii) certificates representing Preferred Securities will
be deemed to represent beneficial interests in the Debentures having an
aggregate principal amount equal to the stated liquidation amount of, and
bearing accrued and unpaid interest equal to accrued and unpaid Distributions
on, such Preferred Securities until such certificates are presented to JPM or
its agent for transfer or reissuance.
(d) The Trust may not redeem fewer than all the outstanding
Preferred Securities unless all accrued and unpaid Distributions have been paid
on all Preferred Securities for all monthly Distribution periods terminating on
or prior to the date of redemption.
(e) If Debentures are distributed to Holders of the Preferred
Securities, JPM, pursuant to the terms of the Indenture, will use its best
efforts to have the Debentures listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities were listed immediately prior to the
distribution of the Debentures.
(f)(i) Notice of any redemption of, or notice of distribution
of Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the Regular
Trustees on behalf of the Trust by mail to each
<PAGE> 78
9
Holder of Preferred Securities and Common Securities to be redeemed or
exchanged not less than 30 nor more than 60 days prior to the date fixed for
redemption or exchange thereof. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are given pursuant to
this paragraph (f)(i), a Redemption/Distribution Notice shall be deemed to be
given on the day such notice is first mailed by first class mail, postage
prepaid, to Holders of Preferred Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of Preferred
Securities and Common Securities at the address of each such Holder appearing
in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Preferred Securities are to be redeemed, the Preferred Securities to be
redeemed will be redeemed pro rata from each Holder of Preferred Securities, it
being understood that, in respect of Preferred Securities registered in the
name of and held of record by DTC (or a successor Clearing Agency) or any other
nominee, the Preferred Securities will be redeemed from, and the distribution
of the proceeds of such redemption will be made to, each Clearing Agency
Participant (or person on whose behalf such nominee holds such securities) in
accordance with the procedures applied by such agency or nominee.
(iii) Subject to paragraph 9 hereof, if the Trust gives a
Redemption/Distribution Notice in respect of a redemption of Preferred
Securities as provided in this paragraph 4 (which notice will be irrevocable)
then (A) while the Preferred Securities are in book-entry only form, by 12:00
noon, New York City time, on the redemption date, provided that JPM has paid
the Property Trustee in immediately available funds a sufficient amount of cash
in connection with the related redemption or maturity of the Debentures, the
Property Trustee will deposit irrevocably with DTC (or any successor Clearing
Agency) funds sufficient to pay the applicable Redemption Price with respect to
the Preferred Securities and will give DTC (or any successor Clearing Agency)
irrevocable instructions and authority to pay the Redemption Price to the
Holders of the Preferred Securities and (B) if the Preferred Securities are
issued in definitive form, and provided that JPM has paid the Property
<PAGE> 79
10
Trustee in immediately available funds a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Property Trustee will pay the relevant Redemption Price to the Holders of such
Preferred Securities by check mailed to the address of the relevant Holder
appearing on the books and records of the Trust on the redemption date. If a
Redemption/ Distribution Notice shall have been given and funds deposited as
required, if applicable, then immediately prior to the close of business on the
redemption date, Distributions will cease to accrue on the Preferred Securities
called for redemption, such Preferred Securities will no longer be deemed to be
outstanding and all rights of Holders of such Preferred Securities so called
for redemption will cease, except the right of the Holders of such Preferred
Securities to receive the Redemption Price, but without interest on such
Redemption Price. Neither the Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Preferred Securities
which have been so called for redemption. If any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption.
If payment of the Redemption Price in respect of Preferred Securities is
improperly withheld or refused and not paid either by the Property Trustee or,
pursuant to the Preferred Securities Guarantee, by JPM, Distributions on such
Preferred Securities will continue to accrue, from the original redemption date
to the date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to DTC or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been issued or,
if Definitive Preferred Security Certificates have been issued, to the Holders
of the Preferred Securities.
(v) Upon the date of dissolution of the Trust and
distribution of Debentures as a result of the occurrence of a Special Event,
Preferred Security Certificates shall be deemed to represent beneficial
interests in the Debentures
<PAGE> 80
11
so distributed, and the Preferred Securities will no longer be deemed
outstanding and may be canceled by the Regular Trustees. The Debentures so
distributed shall have an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities so distributed.
(vi) Subject to the foregoing and applicable law (including,
without limitation, United States Federal securities laws), JPM or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
5. Voting Rights. (a) Except as provided under paragraph
5(b) below and as otherwise required by law and the Declaration, the Holders of
the Preferred Securities will have no voting rights.
(b) If any proposed amendment to the Declaration provides
for, or the Regular Trustees otherwise propose to effect, (i) any action that
would adversely affect the powers, preferences or special rights of the
Securities, whether by way of amendment to the Declaration or otherwise, or
(ii) the dissolution, winding-up or termination of the Trust, other than in
connection with the distribution of Debentures held by the Property Trustee,
upon the occurrence of a Special Event or in connection with the redemption of
Preferred Securities as a consequence of a redemption of Debentures, then the
Holders of outstanding Securities will be entitled to vote on such amendment or
proposal as a class and such amendment or proposal shall not be effective
except with the approval of the Holders of Securities representing 66-2/3% in
liquidation amount of such Securities; provided, however, that (A) if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or the Common Securities, then only the affected
class will be entitled to vote on such amendment or proposal and such amendment
or proposal shall not be effective except with the approval of 66-2/3% in
liquidation amount of such class of Securities and (B) amendments to the
Declaration shall be subject to such further requirements as are set forth in
Sections 12.1 and 12.2 of the Declaration.
In the event the consent of the Property Trustee, as the
holder of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Property
<PAGE> 81
12
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided that where such amendment, modification or
termination of the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures, the
Property Trustee may only vote with respect to that amendment, modification or
termination as directed by, in the case of clause (1) above, the vote of
Holders of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided further that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of Securities unless the Property Trustee shall have received, at the
expense of the Sponsor, an opinion of nationally recognized independent tax
counsel recognized as expert in such matters to the effect that the Trust will
not be classified for United States Federal income tax purposes as an
association taxable as a corporation or a partnership on account of such action
and will be treated as a grantor trust for United States Federal income tax
purposes following such action.
Subject to Section 2.6 of the Declaration, and the provisions
of this and the next succeeding paragraph, the Holders of a Majority in
liquidation amount of the Preferred Securities, voting separately as a class,
shall have the right to (A) on behalf of all Holders of Preferred Securities,
waive any past default that is waivable under the Declaration (subject to, and
in accordance with, the Declaration) and (B) direct the time, method and place
of conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee, as the holder
of the Debentures, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising any
trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 6.06 of
the Indenture, or (iii) exercise any right to rescind or annul a declaration
that the principal
<PAGE> 82
13
of all the Debentures shall be due and payable; provided that where the taking
of any action under the Indenture requires the consent or vote of (1) holders
of Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures, the
Property Trustee may only take such action if directed by, in the case of
clause (1) above, the vote of Holders of Preferred Securities representing such
specified percentage of the aggregate liquidation amount of the Preferred
Securities, or, in the case of clause (2) above, each Holder of Preferred
Securities. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee or the
Debenture Trustee as set forth above, the Property Trustee shall be under no
obligation to take any of the foregoing actions at the direction of the Holders
of Preferred Securities unless the Property Trustee shall have received, at the
expense of the Sponsor, an opinion of nationally recognized independent tax
counsel recognized as expert in such matters to the effect that the Trust will
not be classified for United States Federal income tax purposes as an
association taxable as a corporation or a partnership on account of such action
and will be treated as a grantor trust for United States federal income tax
purposes following such action. If the Property Trustee fails to enforce its
rights under the Declaration (including, without limitation, its rights, powers
and privileges as a holder of the Debentures under the Indenture), any Holder
of Preferred Securities may, to the extent permitted by law, after a period of
30 days has elapsed from such Holder's written request to the Property Trustee
to enforce such rights, institute a legal proceeding directed against JPM to
enforce the Property Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Property Trustee or any other
Person.
A waiver of an Indenture Event of Default by the Property
Trustee at the direction of the Holders of the Preferred Securities will
constitute a waiver of the corresponding Event of Default under the Declaration
in respect of the Securities.
Any required approval or direction of Holders of Preferred
Securities may be given at a separate meeting of Holders of Preferred
Securities convened for such purpose,
<PAGE> 83
14
at a meeting of all of the Holders of Securities of the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Preferred Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities in
accordance with the Declaration.
Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Preferred Securities at such time that are owned by JPM or by any entity
directly or indirectly controlling or controlled by or under direct or indirect
common control with JPM shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
Except as provided in this paragraph 5, Holders of the
Preferred Securities will have no rights to increase or decrease the number of
Trustees or to appoint, remove or replace a Trustee, which voting rights are
vested solely in the Holders of the Common Securities.
6. Pro Rata Treatment. A reference in these terms of the
Preferred Securities to any payment, distribution or treatment as being "pro
rata" shall mean pro rata to each Holder of Securities according to the
aggregate liquidation amount of the Securities held by the relevant Holder in
relation to the aggregate liquidation amount of all Securities outstanding
unless, in relation to a payment, an Event of Default has occurred and is
continuing, in which case any funds available to make such payment shall be
paid first to each Holder of the Preferred Securities pro rata according to the
aggregate liquidation amount of Preferred Securities held by the relevant
Holder relative to the aggregate liquidation amount of all Preferred Securities
<PAGE> 84
15
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Preferred Securities, to each Holder of Common Securities pro rata
according to the aggregate liquidation amount of Common Securities held by the
relevant Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
7. Ranking. The Preferred Securities rank pari passu and
payment thereon will be made pro rata with the Common Securities except that
where an Event of Default occurs and is continuing, the rights of Holders of
Preferred Securities to payment in respect of Distributions and payments upon
liquidation, redemption or otherwise rank in priority to the rights of Holders
of the Common Securities.
8. Mergers, Consolidations or Amalgamations. The Trust may
not consolidate, amalgamate, merge with or into, or be replaced by, or sell,
transfer or lease all or substantially all its properties and assets to, any
Person.
9. Transfer, Exchange, Method of Payments. Payment of
Distributions and payments on redemption of the Preferred Securities will be
payable, the transfer of the Preferred Securities will be registrable, and
Preferred Securities will be exchangeable for Preferred Securities of other
denominations of a like aggregate liquidation amount, at the principal
corporate trust office of the Property Trustee in The City of New York;
provided that payment of Distributions may be made at the option of the Regular
Trustees on behalf of the Trust by check mailed to the address of the Persons
entitled thereto and that the payment on redemption of any Preferred Security
will be made only upon surrender of such Preferred Security to the Property
Trustee.
10. Acceptance of Indenture and Preferred Guarantee. Each
Holder of Preferred Securities, by the acceptance thereof, agrees to the
provisions of (i) the Preferred Guarantee, including the subordination
provisions therein and (ii) the Indenture and the Debentures, including the
subordination provisions of the Indenture.
11. No Preemptive Rights. The Holders of Preferred
Securities shall have no preemptive rights to subscribe to any additional
Preferred Securities or Common Securities.
<PAGE> 85
16
12. Miscellaneous. These terms shall constitute a part of
the Declaration. The Trust will provide a copy of the Declaration and the
Indenture to a Holder without charge on written request to the Trust at its
principal place of business.
<PAGE> 86
ANNEX I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT--THIS PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS PREFERRED SECURITY
IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE DECLARATION AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A
TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY
A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TO THE TRUST OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC OR ANY SUCCESSOR DEPOSITARY AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC OR ANY SUCCESSOR DEPOSITARY, ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL, SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Preferred Securities _______________
Number ________________
CUSIP NO. _____________
<PAGE> 87
2
Certificate Evidencing Preferred Securities
of
JPM Capital Trust [ ]
% Preferred Trust Securities
(liquidation amount $ per Preferred Security)
JPM Capital Trust [ ], a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
(the "Holder") is the registered owner of [ ] preferred securities of
the Trust representing undivided beneficial interests in the assets of the
Trust designated the % Preferred Trust Securities (liquidation amount $ per
Preferred Security) (the "Preferred Securities"). The transfer of Preferred
Securities is registrable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for registration of transfer. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth in, and this certificate and the Preferred
Securities represented hereby are issued and shall in all respects be subject
to the terms and provisions of, the Amended and Restated Declaration of Trust
of the Trust dated as of ____________, 199_, as the same may be amended from
time to time (the "Declaration"), including the designation of the terms of
Preferred Securities as set forth in Exhibit B thereto. The Preferred
Securities and the Common Securities issued by the Trust pursuant to the
Declaration represent undivided beneficial interests in the assets of the
Trust, including the Debentures (as defined in the Declaration) issued by J.P.
Morgan & Co. Incorporated, a Delaware corporation ("JPM"), to the Trust
pursuant to the Indenture referred to in the Declaration. The Holder is
entitled to the benefits of the Guarantee Agreement of JPM dated as of
___________, 199_ (the "Guarantee"), to the extent provided therein. The Trust
will furnish a copy of the Declaration, the Guarantee and the Indenture to the
Holder without charge, upon written request to the Trust, at its principal
place of business or registered office.
The Holder of this Certificate, by accepting this Certificate,
is deemed to have (i) agreed to the terms of the Indenture and the Debentures,
including that the
<PAGE> 88
3
Debentures are subordinate and junior in right of payment to all Senior Debt
(as defined in the Indenture) as and to the extent provided in the Indenture
and (ii) agreed to the terms of the Guarantee, including that the Guarantee is
subordinate and junior in right of payment to all other indebtedness,
liabilities and obligations of JPM, including the Debentures, except those made
pari passu or subordinate by their terms, and senior to all capital stock now
or hereafter issued by JPM and to any guarantee now or hereafter entered into
by JPM in respect of any of its capital stock.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed
this certificate this ___ day of _____________, 199_.
JPM CAPITAL TRUST [ ],
by
------------------------------------
Name:
Title: Trustee
by
------------------------------------
Name:
Title: Trustee
Dated:
Countersigned and Registered:
First Trust of New York, National Association, as
Transfer Agent and Registrar
By:
---------------------------
Authorized Officer
<PAGE> 89
4
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:
-------------------------
Signature:
-------------------
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S)
AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE> 90
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration
of Trust of JPM Capital Trust [ ] dated as of , 199 (as amended from time to
time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. Designation and Number. Common Securities of the Trust
with an aggregate liquidation amount in the assets of the Trust of
Dollars ($ ) (including up to Dollars ($ ) issuable upon
exercise of the overallotment option set forth in the Underwriting Agreement)
and a liquidation amount in the assets of the Trust of $ per Common Security
are hereby designated as " % Common Trust Securities". The Common Security
Certificates evidencing the Common Securities shall be substantially in the
form attached hereto as Annex I, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
The Common Securities are to be issued and sold to J.P. Morgan & Co.
Incorporated ("JPM") in consideration of $ in cash. In connection
with the issuance and sale of the Preferred Securities and the Common
Securities, the Trust will purchase, as trust assets, Debentures of JPM having
an aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and the Common Securities so issued, and bearing interest
at an annual rate equal to the annual Distribution rate on the Preferred
Securities and the Common Securities and having payment and redemption
provisions which correspond to the payment and redemption provisions of the
Preferred Securities and the Common Securities.
2. Distributions. (a) Distributions payable on each Common
Security will be fixed at a rate per annum of % (the "Coupon Rate") of the
stated liquidation amount of $ per Common Security. Distributions in arrears
for more than one month will bear interest at the rate per annum of % thereof
(to the extent permitted by applicable law), compounded monthly. The term
"Distributions" as used in these terms means such periodic cash distributions
and any such interest payable unless otherwise stated. A
<PAGE> 91
2
Distribution will be made by the Property Trustee only to the extent that
interest payments are made in respect of the Debentures held by the Property
Trustee. The amount of Distributions payable for any period will be computed
for any monthly Distribution period on the basis of a 360-day year of twelve
30-day months, and for any Distribution period shorter than a 30-day monthly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed.
(b) Distributions on the Common Securities will be
cumulative, will accrue from , 199 and will be payable quarterly
in arrears, on the last day of March, June, September and December of each
year, commencing on , 199 , except as otherwise described below,
but only if and to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee. So long as JPM is not in default in
the payment of interest on the Debentures, JPM shall have the right under the
Indenture for the Debentures to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not to
exceed 20 consecutive quarterly interest periods (each, a "Deferral Period").
During any such Deferral Period, quarterly Distributions will continue to
accrue with interest thereon (to the extent permitted by applicable law) at the
rate of % per annum, compounded quarterly. Prior to the termination of any
such Deferral Period, JPM may further extend such Deferral Period; provided
that such Deferral Period, together with all such previous and further
extensions thereof, may not exceed 20 consecutive quarterly interest periods.
Upon the termination of any Deferral Period and the payment of all amounts then
due, JPM may commence a new Deferral Period, subject to the above requirements.
Payments of accrued Distributions will be payable to Holders of Common
Securities as they appear on the books and records of the Trust on the record
date for the first interest payment date occurring at or after the end of the
Deferral Period.
(c) Distributions on the Common Securities will be payable
promptly by the Property Trustee (or other Paying Agent) upon receipt of
immediately available funds to the Holders thereof as they appear on the books
and records of the Trust on the relevant record dates which will be one
Business Day prior to the relevant Distribution date unless the Preferred
Securities are no longer in book-entry only form, in which event the relevant
record dates will be the fifteenth (15th) day of the month in which the
relevant
<PAGE> 92
3
Distribution date occurs, which record and payment dates correspond to the
record and interest payment dates for the Debentures. Distributions payable on
any Common Securities that are not punctually paid on any Distribution date as
a result of JPM having failed to make the corresponding interest payment on the
Debentures will forthwith cease to be payable to the Person in whose name such
Common Security is registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such Common
Security is registered on the special record date established by the Regular
Trustees, which record date shall correspond to the special record date or
other specified date determined in accordance with the Indenture; provided,
however, that Distributions shall not be considered payable on any Distribution
payment date falling within a Deferral Period unless JPM has elected to make a
full or partial payment of interest accrued on the Debentures on such
Distribution payment date. Subject to any applicable laws and regulations and
the provisions of the Declaration, each payment in respect of the Common
Securities will be made as described in paragraph 9 hereof. If any date on
which Distributions are payable on the Common Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
(d) All Distributions paid with respect to the Common
Securities and the Preferred Securities will be paid pro rata to the Holders
thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
(e) In the event that there is any money or other property
held by or for the Trust that is not accounted for under the Declaration, such
money or property shall be distributed pro rata among the Holders of the
Preferred Securities and the Common Securities.
3. Liquidation Distribution Upon Dissolution. In the event
of any voluntary or involuntary dissolution, winding-up or termination of the
Trust, the Holders of the Preferred Securities and Common Securities at the
date of
<PAGE> 93
4
the dissolution, winding-up or termination, as the case may be, will be
entitled to receive pro rata solely out of the assets of the Trust available
for distribution to Holders of Preferred Securities and the Common Securities,
after satisfaction of liabilities to creditors, an amount equal to the
aggregate of the stated liquidation amount of $ per Preferred Security and
Common Security plus accrued and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, winding-up or termination, and after
satisfaction of liabilities to creditors, Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of such Preferred
Securities and Common Securities bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Preferred
Securities and Common Securities, shall be distributed pro rata to the Holders
of the Preferred Securities and Common Securities in exchange for such
Securities.
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and the Common Securities
shall be paid, subject to the next paragraph, on a pro rata basis.
Holders of Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution pro rata with Holders of
Preferred Securities, except that, if an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to such Liquidation Distribution.
4. Redemption and Distribution of Debentures. The Preferred
Securities and the Common Securities may only be redeemed if Debentures having
an aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and the Common Securities are repaid, redeemed or
distributed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in
part, whether at maturity or upon redemption at any time or from time to time
on or after , 200 , the proceeds of such repayment will be promptly
applied to redeem pro rata Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the
<PAGE> 94
5
aggregate principal amount of the Debentures so repaid, upon not less than 30
nor more than 60 days notice, at a redemption price of $ per Preferred and
Common Security plus an amount equal to accrued and unpaid Distributions
thereon to the date of redemption, payable in cash (the "Redemption Price").
The date of any such repayment of Preferred Securities and Common Securities
shall be established to coincide with the repayment or redemption date of the
Debentures.
(b) If fewer than all the outstanding Preferred Securities
and Common Securities are to be so redeemed, the Preferred Securities and the
Common Securities will be redeemed pro rata and, with respect to the Common
Securities to be redeemed, as described in paragraph 4(e)(ii) below. If a
partial redemption would result in the delisting of the Preferred Securities by
any national securities exchange or other organization on which the Preferred
Securities are then listed, JPM, pursuant to the Indenture, will only redeem
Debentures in whole and the Trust will only redeem the Common Securities in
whole.
(c) If, at any time, a Tax Event or an Investment Company
Event (each, as hereinafter defined, and each, along with a Capital Treatment
Event, a "Special Event") shall occur and be continuing, the Regular Trustees
shall, unless the Debentures are redeemed in the limited circumstances
described below, dissolve the Trust and, after satisfaction of creditors, cause
Debentures held by the Property Trustee having an aggregate principal amount
equal to the aggregate stated liquidation amount of, and bearing accrued and
unpaid interest equal to accrued and unpaid Distributions on, and having the
same record date for payment as, the Preferred Securities and the Common
Securities, to be distributed to the Holders of the Preferred Securities and
the Common Securities on a pro rata basis in liquidation of such Holders'
interests in the Trust, within 90 days following the occurrence of such Special
Event (the "90 Day Period"); provided, however, that in the case of the
occurrence of a Tax Event, as a condition of such dissolution and distribution,
the Regular Trustees shall have received an opinion of a nationally recognized
independent tax counsel experienced in such matters (a "No Recognition
Opinion"), which opinion may rely on any then applicable published revenue
rulings of the Internal Revenue Service, to the effect that the Holders of the
Preferred Securities will not recognize any gain or loss for United States
Federal income tax purposes as a result of the dissolution of the Trust and
<PAGE> 95
6
distribution of Debentures; and provided further that, if and as long as at the
time there is available to the Trust the opportunity to eliminate, within such
90 Day Period, the Special Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar reasonable
measure that has no adverse effect on the Trust, JPM or the Holders of the
Preferred Securities (a "Ministerial Action"), the Trust will pursue such
Ministerial Action in lieu of dissolution. JPM may also elect, in its sole
discretion, to shorten the maturity of the Debentures, as provided in Section [
] of the [ ] Supplemental Indenture to the Indenture in lieu of dissolving
the Trust, if doing so would eliminate the Tax Event.
If in the case of the occurrence of a Tax Event, (i) the
Regular Trustees have received an opinion (a "Redemption Tax Opinion") of
nationally recognized independent tax counsel experienced in such matters that,
as a result of a Tax Event, there is more than an insubstantial risk that JPM
would be precluded from deducting the interest on the Debentures for United
States Federal income tax purposes even if the Debentures were distributed to
the Holders of Preferred Securities and Common Securities in liquidation of
such Holders' interest in the Trust as described in this paragraph 4(c) or (ii)
the Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, JPM shall have the right
at any time, subject to JPM having received prior approval of the Federal
Reserve to do so if then required under applicable capital guidelines or
policies of the Federal Reserve, upon not less than 30 nor more than 60 days
notice, to redeem the Debentures in whole or in part for cash at the Redemption
Price within 90 days following the occurrence of such Tax Event, and, promptly
following such redemption, Preferred Securities and Common Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed will be redeemed by the Trust at the Redemption Price on
a pro rata basis; provided, however, that, if at the time there is available to
JPM or the Regular Trustees on behalf of the Trust the opportunity to
eliminate, within such 90 Day Period, the Tax Event by taking some Ministerial
Action, JPM or the Holders of the Preferred Securities, JPM or the Regular
Trustees, on behalf of the Trust, will pursue such measure in lieu of
redemption; and provided further, that the foregoing provisions shall not
require JPM to shorten the maturity of the Debentures and JPM shall have no
<PAGE> 96
7
right to redeem the Debentures while the Regular Trustees, on behalf of the
Trust, are pursuing such Ministerial Action. The Common Securities will be
redeemed pro rata with the Preferred Securities, except that if an Event of
Default under the Indenture has occurred and is continuing, the Preferred
Securities will have a priority over the Common Securities with respect to
payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have
obtained an opinion of nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that,
on or after , 199 as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision
or regulatory determination), (c) any interpretation or pronouncement that
provides for a position with respect to such laws or regulations that differs
from the theretofore generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after , 199 , there is more than an insubstantial risk that (i)
the Trust is, or will be within 90 days of the date thereof, subject to United
States Federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by JPM to the Trust on the Debentures is not,
or within 90 days of the date thereof will not be, deductible by JPM for United
States Federal income tax purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of nationally recognized independent counsel
experienced in practice under the Investment Company Act that, as a result of
the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court,
governmental agency or regulatory
<PAGE> 97
8
authority (a "Change in 1940 Act Law"), there is more than an insubstantial
risk that the Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which Change in
1940 Act Law becomes effective on or after , 199 .
"Capital Treatment Event" means that JPM has reasonably
determined that, as the result of the occurrence of a change in law or
regulation or a change in the interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that JPM will not be able
to treat the minority interest in the Trust as "Tier 1 capital" (or the
equivalent) for purposes of the capital adequacy guidelines of the Federal
Reserve, as then in effect and applicable to JPM.
On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Common Securities will no longer be deemed to
be outstanding and (ii) any certificates representing Common Securities will be
deemed to represent beneficial interests in the Debentures having an aggregate
principal amount equal to the stated liquidation amount of, and bearing accrued
and unpaid interest equal to accrued and unpaid Distributions on, such Common
Securities until such certificates are presented to JPM or its agent for
transfer or reissuance.
(d) The Trust may not redeem fewer than all the outstanding
Common Securities unless all accrued and unpaid Distributions have been paid on
all Common Securities for all monthly Distribution periods terminating on or
prior to the date of redemption.
(e)(i) Notice of any redemption of, or notice of distribution
of Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the Regular
Trustees on behalf of the Trust by mail to each Holder of Preferred Securities
and Common Securities to be redeemed or exchanged not less than 30 nor more
than 60 days prior to the date fixed for redemption or exchange thereof. For
purposes of the calculation of the date of redemption or exchange and the dates
on which notices are given pursuant to this paragraph (e)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders of
<PAGE> 98
9
Preferred Securities and Common Securities. Each Redemption/ Distribution
Notice shall be addressed to the Holders of Preferred Securities and Common
Securities at the address of each such Holder appearing in the books and
records of the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any other
Holder.
(ii) In the event that fewer than all the outstanding Common
Securities are to be redeemed, the Common Securities to be redeemed will be
redeemed pro rata from each Holder of Common Securities (subject to adjustment
to eliminate fractional Common Securities).
(iii) If the Trust gives a Redemption/Distribution Notice in
respect of a redemption of Common Securities as provided in this paragraph 4
(which notice will be irrevocable), then immediately prior to the close of
business on the redemption date, provided that JPM has paid to the Property
Trustee in immediately available funds a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures,
Distributions will cease to accrue on the Common Securities called for
redemption, such Common Securities will no longer be deemed to be outstanding
and all rights of Holders of such Common Securities so called for redemption
will cease, except the right of the Holders of such Common Securities to
receive the Redemption Price, but without interest on such Redemption Price.
Neither the Trustees nor the Trust shall be required to register or cause to be
registered the transfer of any Common Securities which have been so called for
redemption. If any date fixed for redemption of Common Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption
Price in respect of Common Securities is improperly withheld or refused and not
paid by the Property Trustee, Distributions on such Common Securities will
continue to accrue, from the original redemption date to the date of payment,
in which case the actual payment date will
<PAGE> 99
10
be considered the date fixed for redemption for purposes of calculating the
Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to the Holders of the Common
Securities.
(v) Upon the date of dissolution of the Trust and
distribution of Debentures as a result of the occurrence of a Special Event,
Common Security Certificates shall be deemed to represent beneficial interests
in the Debentures so distributed, and the Common Securities will no longer be
deemed outstanding and may be canceled by the Regular Trustees. The
Debentures so distributed shall have an aggregate principal amount equal to the
aggregate liquidation amount of the Common Securities so distributed.
5. Voting Rights. (a) Except as provided under paragraph
5(b) below and as otherwise required by law and the Declaration, the Holders of
the Common Securities will have no voting rights.
(b) Holders of Common Securities have the sole right under
the Declaration to increase or decrease the number of Trustees, and to appoint,
remove or replace a Trustee, any such increase, decrease, appointment, removal
or replacement to be approved by Holders of Common Securities representing a
Majority in liquidation amount of the Common Securities.
If any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than in connection
with the distribution of Debentures held by the Property Trustee, upon the
occurrence of a Special Event or in connection with the redemption of Common
Securities as a consequence of a redemption of Debentures, then the Holders of
outstanding Securities will be entitled to vote on such amendment or proposal
as a class and such amendment or proposal shall not be effective except with
the approval of the Holders of Securities representing 66-2/3% in liquidation
amount of such Securities; provided, however, that (A) if any amendment or
proposal referred to in clause (i) above would adversely affect only the
Preferred Securities or the Common Securities, then only the
<PAGE> 100
11
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of 66-2/3
in liquidation amount of such class of Securities, (B) the rights of Holders of
Common Securities under Article V of the Declaration to increase or decrease
the number of, and to appoint, replace or remove, Trustees shall not be amended
without the consent of each Holder of Common Securities, and (C) amendments to
the Declaration shall be subject to such further requirements as are set forth
in Sections 12.1 and 12.2 of the Declaration.
In the event the consent of the Property Trustee as the holder
of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Property Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination. The
Property Trustee shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of the Securities
voting together as a single class; provided that where such amendment,
modification or termination of the Indenture requires the consent or vote of
(1) holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of
Debentures, the Property Trustee may vote only with respect to that amendment,
modification or termination as directed by, in the case of clause (1) above,
the vote of Holders of Securities representing such specified percentage of the
aggregate liquidation amount of the Securities, or, in the case of clause (2)
above, each Holder of Securities; and provided, further, that the Property
Trustee shall be under no obligation to take any action in accordance with the
directions of the Holders of the Securities unless the Property Trustee shall
have received, at the expense of the Sponsor, an opinion of nationally
recognized independent tax counsel recognized as an expert in such matters to
the effect that the Trust will not be classified for United States Federal
income tax purposes as an association taxable as a corporation or a partnership
on account of such action and will be treated as a grantor trust for United
States Federal income tax purposes following such action.
Subject to Section 2.6 of the Declaration and the provisions
of this and the next succeeding paragraph, the Holders of a Majority in
liquidation amount of the Common
<PAGE> 101
12
Securities, voting separately as a class, shall have the right to (A) on behalf
of all Holders of Common Securities, waive any past default that is waivable
under the Declaration (subject to, and in accordance with, the Declaration) and
(B) direct the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under the Declaration, including the right
to direct the Property Trustee, as holder of the Debentures, to (i) direct the
time, method and place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waive any past default
and its consequences that is waivable under Section 6.06 of the Indenture, or
(iii) exercise any right to rescind or annul a declaration that the principal
of all the Debentures shall be due and payable; provided that where the taking
of any action under the Indenture requires the consent or vote of (1) holders
of Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (e) each holder of Debentures, the
Property Trustee may take such action only if directed by, in the case of
clause (1) above, the vote of Holders of Common Securities representing such
specified percentage of the aggregate liquidation amount of the Common
Securities, or, in the case of clause (2) above, each Holder of Common
Securities. Pursuant to this paragraph, the Property Trustee shall not revoke,
or take any action inconsistent with, any action previously authorized or
approved by a vote of the Holders of the Preferred Securities, and shall not
take any action in accordance with the direction of the Holders of the Common
Securities under this paragraph if the action is prejudicial to the Holders of
Preferred Securities. Other than with respect to directing the time, method
and place of conducting any proceeding for any remedy available to the Property
Trustee or the Debenture Trustee as set forth above, the Property Trustee shall
be under no obligation to take any of the foregoing actions at the direction of
the Holders of Common Securities unless the Property Trustee shall have
received, at the expense of the Sponsor, an opinion of nationally recognized
independent tax counsel recognized as expert in such matters to the effect that
the Trust will not be classified for United States Federal income tax purposes
as an association taxable as a corporation or a partnership on account of such
action and will be treated as a grantor trust for United States income tax
purposes following such action.
<PAGE> 102
13
Notwithstanding any other provision of these terms, each
Holder of Common Securities will be deemed to have waived any Event of Default
with respect to the Common Securities and its consequences until all Events of
Default with respect to the Preferred Securities have been cured, waived by the
Holders of Preferred Securities as provided in the Declaration or otherwise
eliminated, and until all Events of Default with respect to the Preferred
Securities have been so cured, waived by the Holders of Preferred Securities or
otherwise eliminated, the Property Trustee will be deemed to be acting solely
on behalf of the Holders of Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Declaration or of the Securities. In the
event that any Event of Default with respect to the Preferred Securities is
waived by the Holders of Preferred Securities as provided in the Declaration,
the Holders of Common Securities agree that such waiver shall also constitute
the waiver of such Event of Default with respect to the Common Securities for
all purposes under the Declaration without any further act, vote or consent of
the Holders of the Common Securities.
A waiver of an Indenture Event of Default by the Property
Trustee at the direction of the Holders of the Preferred Securities will
constitute a waiver of the corresponding Event of Default under the Declaration
in respect of the Securities.
Any required approval of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities of the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
<PAGE> 103
14
No vote or consent of the Holders of Common Securities will be
required for the Trust to redeem and cancel Common Securities in accordance
with the Declaration.
6. Pro Rata Treatment. A reference in these terms of the
Common Securities to any payment, distribution or treatment as being "pro rata"
shall mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding,
and only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
7. Ranking. The Common Securities rank pari passu and
payment thereon will be made pro rata with the Preferred Securities except that
where an Event of Default occurs and is continuing, the rights of Holders of
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption or otherwise are subordinate to the rights of Holders
of the Preferred Securities.
8. Mergers, Consolidations or Amalgamations. The Trust may
not consolidate, amalgamate, merge with or into, or be replaced by, or sell,
transfer or lease all or substantially all its properties and assets to, any
Person.
9. Transfers, Exchanges, Method Payments. Payment of
Distributions and payments on redemption of the Common Securities will be
payable, the transfer of the Common Securities will be registrable, and Common
Securities will be exchangeable for Common Securities of other denominations of
a like aggregate liquidation amount, at the principal corporate trust office of
the Property Trustee in The City of New York; provided that payment of
Distributions may be made at the option of the Regular Trustees on behalf of
the Trust by check mailed to the address of the Persons
<PAGE> 104
15
entitled thereto and that the payment on redemption of any Common Security will
be made only upon surrender of such Common Security to the Property Trustee.
Notwithstanding the foregoing, transfers of Common Securities are subject to
conditions set forth in Section 9.1(c) of the Declaration.
10. Acceptance of Indenture. Each Holder of Common
Securities, by the acceptance thereof, agrees to the provisions of the
Indenture and the Debentures, including the subordination provisions thereof.
11. No Preemptive Rights. The Holders of Common Securities
shall have no preemptive rights to subscribe to any additional Common
Securities or Preferred Securities.
12. Miscellaneous. These terms shall constitute a part of
the Declaration. The Trust will provide a copy of the Declaration and the
Indenture to a Holder without charge on written request to the Trust at its
principal place of business.
<PAGE> 105
Annex I
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
JPM Capital Trust [ ]
___% Common Trust Securities
(liquidation amount $ per Common Security)
JPM Capital Trust [ ], a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that J.P.
Morgan & Co. Incorporated (the "Holder") is the registered owner of
( ) common securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the " % Common Trust
Securities" (liquidation amount $ per Common Security) (the "Common
Securities"). The transfer of Common Securities is registrable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for registration
of transfer and satisfaction of the other conditions set forth in the
Declaration (as defined below) including, without limitation, Section 9.01(c)
thereof. The designations, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and shall
in all respects be subject to the terms and provisions of, the Amended and
Restated Declaration of Trust of the Trust dated as of , 199 , as the
same may be amended from time to time (the "Declaration"), including the
designation of the terms of Common Securities as set forth in Exhibit C
thereto. The Common Securities and the Preferred Securities issued by the
Trust pursuant to the Declaration represent undivided beneficial interests in
the assets of the Trust,
<PAGE> 106
2
including the Debentures (as defined in the Declaration) issued by J.P. Morgan
& Co. Incorporated, a Delaware corporation, to the Trust pursuant to the
Indenture referred to in the Declaration. The Trust will furnish a copy of the
Declaration and the Indenture to the Holder without charge upon written request
to the Trust at its principal place of business or registered office.
The Holder of this Certificate, by accepting this Certificate,
is deemed to have agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Debt (as defined in the Indenture) as and to the extent provided in
the Indenture.
<PAGE> 107
3
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed
this certificate this day of , 199 .
JPM CAPITAL TRUST [ ],
by ,
-------------------------
Name:
Title: Trustee
by ,
-------------------------
Name:
Title: Trustee
Dated:
Countersigned and Registered:
The First Trust of New York, National Association
Transfer Agent and Registrar
by
--------------------------
Authorized Officer
<PAGE> 108
4
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
------------------------------
Signature:
-------------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
<PAGE> 1
Exhibit 4(j)
================================================================================
J.P. MORGAN & CO. INCORPORATED
AND
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION
as Trustee
______________________
[ ] SUPPLEMENTAL INDENTURE
Dated as of , 199
TO
INDENTURE
Dated as of November , 1996
______________________
% Junior Subordinated Debentures
Due 20
================================================================================
<PAGE> 2
[ ] SUPPLEMENTAL INDENTURE, dated as of the
day of 199 (this "[ ] Supplemental
Indenture"), between J.P. MORGAN & CO. INCORPORATED,
a corporation duly organized and existing under the
laws of the State of Delaware (hereinafter sometimes
referred to as the "Company") and FIRST TRUST OF NEW
YORK, NATIONAL ASSOCIATION, a national banking
association, as trustee (hereinafter sometimes
referred to as the "Trustee") under the Indenture
dated as of November , 1996, between the Company and
the Trustee (the "Indenture"); as set forth in
Section 7.01 hereto and except as otherwise set forth
herein, all terms used and not defined herein are
used as defined in the Indenture).
WHEREAS the Company executed and delivered the Indenture to
the Trustee to provide for the future issuance of its junior subordinated debt
securities (the "Securities"), said Securities to be issued from time to time
in series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered
thereunder as in the Indenture provided;
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its Securities to
be known as its % Junior Subordinated Debentures due 20[ ] (said series
being hereinafter referred to as the "Series % Debentures"), the form of
such Series % Debentures and the terms, provisions and conditions thereof
to be as provided in the Indenture and this [ ] Supplemental Indenture;
WHEREAS the Company has caused to be formed JPM Capital Trust
[ ] (the "Trust") as a statutory business trust under the Business Trust Act of
the State of Delaware (12 Del. Code Sec. 801 et seq.) pursuant to a declaration
of trust dated October [29], 1996 (the "Original Declaration"), and the filing
of a certificate of trust with the Secretary of State of the State of Delaware
on October [29], 1996;
WHEREAS the Original Declaration is to be amended and restated
in its entirety pursuant to an Amended and Restated Declaration of Trust dated
as of , 199 , (such Amended and Restated Declaration of Trust, as
amended from time to time, the "Declaration of Trust");
<PAGE> 3
WHEREAS the Trust desires to issue its % Cumulative
Preferred Trust Securities (the "Preferred Securities") and sell such Preferred
Securities to initial purchasers;
WHEREAS, in connection with such purchases of Preferred
Securities and the related purchase by the Company of the Common Securities (as
defined in the Declaration of Trust) of the Trust, the Trust will purchase as
trust assets Series % Debentures;
WHEREAS, pursuant to the Declaration of Trust, the legal title
to the Series % Debentures shall be held by and in the name of First Trust
New York, National Association or its successor under the Declaration of Trust,
as Property Trustee (the "Property Trustee"), in trust for the benefit of
holders of the Preferred Securities and the Common Securities;
WHEREAS, upon the occurrence of a Special Event (as defined in
the Declaration of Trust), the Regular Trustees (as defined in the Declaration
of Trust) of the Trust shall, unless the Series % Debentures are redeemed
as described herein, dissolve the Trust and cause to be distributed to the
holders of the Preferred Securities and Common Securities, on a Pro Rata basis
(determined as provided in the terms of the Preferred Securities and Common
Securities attached as Exhibits B and C to the Declaration of Trust), Series
% Debentures and, in connection with a Liquidation Distribution (as defined in
the Declaration of Trust), the Regular Trustees may cause to be distributed to
holders of Preferred Securities and Common Securities, on such Pro Rata basis,
Series % Debentures (each a "Dissolution Event"); and
WHEREAS the Company desires and has requested the Trustee to
join with it in the execution and delivery of this [ ] Supplemental Indenture,
and all requirements necessary to make this [ ] Supplemental Indenture a valid
instrument, enforceable in accordance with its terms, and to make the Series
% Debentures, when executed by the Company and authenticated and delivered by
the Trustee, the valid obligations of the Company, have been performed and
fulfilled, and the execution and delivery of this Supplemental Indenture and
the Series % Debentures have been in all respects duly authorized.
<PAGE> 4
NOW, THEREFORE, in consideration of the purchase and
acceptance of the Series % Debentures by the holders thereof, and for the
purpose of setting forth, as provided in the Indenture, the form of the Series
% Debentures and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
ARTICLE I
General Terms and Conditions of
the Series % Debentures
SECTION 1.01. (a) There shall be and is hereby authorized a
series of Securities designated the " % Junior Subordinated Debentures Due
20[ ]", limited in aggregate principal amount to $ (except as
provided in this Section 1.01 and Section 6.01). Upon exercise of the
overallotment option set forth in the Underwriting Agreement (as defined in the
Declaration of Trust), additional Series % Debentures in the aggregate
principal amount of up to $ may be executed by the Company and delivered
to the Trustee for authentication, and the Trustee shall thereupon authenticate
and deliver said Series % Debentures to or upon the written order of the
Company, which order shall be accompanied by evidence satisfactory to the
Trustee that the overallotment option has been exercised. Except as provided
in Section 1.01(b) and 1.01(c), the Series % Debentures shall mature and
the principal thereof shall be due and payable, together with all accrued and
unpaid interest thereon, including Compounded Interest (as defined below) on
, 20[ ].
(b) Subject to the terms of Article II of the Indenture, the
Company shall have the right to shorten the Stated Maturity of the Series %
Debentures to a date no earlier than , 2001; provided, that at the
time any election to shorten the Stated Maturity is made and at the time of
such shortening the Company shall have received Federal Reserve Approval (as
defined below) therefor.
(c) Subject to the terms of Article II of the Indenture, the
Company shall have the right to extend the Stated Maturity of the Series %
Debentures to a date no later than [the 49th anniversary of the initial
issuance of the Preferred Securities] [ , 2045]; provided, that at the
time such election to extend the Stated Maturity is made and at the time of
such extension, (i) the Company is not in
<PAGE> 5
bankruptcy, otherwise insolvent or in liquidation, (ii) the Company is not in
default on the payment of any interest or principal on the Series % Debentures
[and no deferred interest payments thereon have accrued], (iii) JPM Capital
Trust [ ] is not in arrears on payments of Distributions (as defined in the
Declaration) on its Preferred Securities and no deferred Distributions thereon
are accumulated, (iv) the Series % Debentures are rated by a nationally
recognized statistical rating organization and such rating is BBB- or higher if
such organization is Standard & Poor's Rating Services, Baa3 or higher if such
organization is Moody's Investors Services Inc. or an equivalent rating if such
organization is any other nationally recognized statistical rating organization
and (v) the Company shall have received Federal Reserve Approval therefor.
"Federal Reserve Approval" means the approval of the Board of
Governors of the Federal Reserve System (the "Federal Reserve") then required
to be obtained under applicable capital guidelines or policies of the Federal
Reserve in connection with any action to be taken by the Company or JPM Capital
Trust [ ] with respect to the Series % Debentures or the Preferred
Securities.
SECTION 1.02. (a) Except as provided in Section 1.02(b), the
Series % Debentures shall be issued in definitive registered certificated
form without interest coupons. Principal and interest on the Series %
Debentures issued in certificated form will be payable, the transfer of such
Series % Debentures will be registrable and such Series % Debentures
will be exchangeable for Series % Debentures bearing identical terms and
provisions at the office or agency of the Company in the Borough of Manhattan,
The City and State of New York; provided, however, that payment of interest may
be made at the option of the Company by check mailed to the registered holder
at such address as shall appear in the Security Register and that the payment
of principal with respect to the Series % Debentures will only be made upon
surrender of the Series % Debentures to the Trustee. Notwithstanding the
foregoing, so long as the Property Trustee is the record holder of Series %
Debentures, the payment of the principal of, and interest (including Compounded
Interest, if any) on, the Series % Debentures held of record by the
Property Trustee will be made by the Company in immediately available funds on
the payment date therefor to the Property Account (as defined in the
<PAGE> 6
Declaration of Trust) established and maintained by the Property Trustee
pursuant to the Declaration of Trust.
(b) In connection with a Dissolution Event:
(i) Series % Debentures in certificated form in an
aggregate principal amount equal to the aggregate liquidation amount
of all Preferred Securities held in book-entry form may be presented
to the Trustee by the Property Trustee in exchange for a Global
Debenture representing such Series % Debentures, such Global
Debenture to be registered in the name of the Depositary, or its
nominee, and delivered by the Trustee to the Depositary pursuant to
the instructions of the Regular Trustees (as defined in the
Declaration of Trust) for crediting to the accounts of the
Depositary's participants. The Company, upon any such presentation,
shall execute a Global Debenture representing the Series %
Debentures in such aggregate principal amount and deliver the same to
the Trustee for authentication and delivery in accordance with the
Indenture and this [ ] Supplemental Indenture. Payments on the
Series % Debentures issued as a Global Debenture will be made to
the Depositary.
(ii) If any Preferred Securities are held in non book-entry
certificated form ("Non Book-Entry Preferred Securities"), Series
% Debentures in certificated form in an aggregate principal amount
equal to the aggregate liquidation amount of any such Non Book-Entry
Preferred Securities may be presented to the Trustee by the Property
Trustee, and any Preferred Security Certificate (as defined in the
Declaration of Trust) held in non book-entry certificated form will be
deemed to represent beneficial interests in such Series %
Debentures presented to the Trustee by the Property Trustee having an
aggregate principal amount equal to the aggregate liquidation amount
of the Non Book-Entry Preferred Securities represented by such
Preferred Security Certificate until such Preferred Security
Certificate is presented to the Security registrar for transfer or
reissuance at which time such Preferred Security Certificate will be
canceled and a Series % Debenture, registered in the name of the
holder of the Preferred Security Certificate or the transferee of the
holder of such Preferred Security Certificate, as the case may be,
with an aggregate
<PAGE> 7
principal amount equal to the aggregate liquidation amount of the
Preferred Security Certificate canceled will be executed by the
Company and delivered to the Trustee for authentication and delivery
in accordance with the Indenture and this [ ] Supplemental Indenture.
On issue of such Series % Debentures, Series % Debentures with
an equivalent aggregate principal amount that were presented by the
Property Trustee to the Trustee will be deemed to have been canceled.
SECTION 1.03. Each Series % Debenture will bear interest
at the rate of % per annum from , 199 until the principal
thereof becomes due and payable, and on any overdue principal, and (to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum, compounded
quarterly, payable (subject to the provisions of Article III) quarterly in
arrears on the last day of each [March, June, September and December of each
year] (each, an "Interest Payment Date", commencing on , 199 ),
to the person in whose name such Series % Debenture (or one or more
Predecessor Securities) is registered at the close of business on the regular
record date for such interest installment, which, except as set forth below,
shall be, in respect of any Series % Debentures represented by a Global
Security or of which the Property Trustee is the registered holder, the close
of business on the Business Day next preceding the Interest Payment Date with
respect to such interest installment. Notwithstanding the foregoing sentence,
if the Preferred Securities are no longer in book-entry only form or if,
pursuant to the provisions of Section 2.11(c) of the Indenture, the Series %
Debentures are no longer represented solely by a Global Debenture, the regular
record date for such interest installment shall be the close of business on the
fifteenth day of the month in which the Interest Payment Date with respect to
such interest installment occurs. Any installment of interest not punctually
paid or duly provided for shall forthwith cease to be payable to the registered
holder of a Series % Debenture on such regular record date and may be paid to
the person in whose name such Series % Debenture (or one or more Predecessor
Securities) is registered at the close of business on a special record date to
be fixed by the Trustee for the payment of such defaulted interest, notice
whereof to be given to the registered holders of the Series % Debentures not
less than 10 days prior to such special
<PAGE> 8
record date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Series % Debentures may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture.
The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months and for any period
shorter than a quarterly interest period for which interest is computed, the
amount of interest payable will be computed on the basis of the actual number
of days elapsed. In the event that any date on which interest is payable on
the Series % Debentures is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
ARTICLE II
Optional Redemption of the Series
% Debentures
SECTION 2.01. Except as provided in Section 2.02, Series %
Debentures may not be redeemed by the Company prior to , 200 . Subject
to the terms of Article III of the Indenture, the Company shall have the right
to redeem the Series % Debentures, in whole or in part, at any time or from
time to time, on or after , 200 , at a redemption price equal to
100% of the principal amount to be redeemed plus any accrued and unpaid
interest thereon, including Compounded Interest, if any, to the date of such
redemption (the "Optional Redemption Price"); provided that at the time of such
election to redeem and at the time of such redemption, the Company shall have
received Federal Reserve Approval therefor. Any redemption pursuant to this
Section will be made upon not less than 30 nor more than 60 days' notice.
SECTION 2.02. If, at any time, a Tax Event (as defined below)
shall occur or be continuing and (i) the Regular Trustees and the Company shall
have received an opinion (a "Redemption Tax Opinion") of nationally recognized
independent tax counsel experienced in such
<PAGE> 9
matters that, as a result of such Tax Event, there is more than an
insubstantial risk that the Company would be precluded from deducting the
interest on the Series % Debentures for United States Federal income tax
purposes even if the Series % Debentures were distributed to the holders of
Preferred Securities and Common Securities in liquidation of such holders'
interest in the Trust as set forth in the Declaration of Trust or (ii) the
Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion (as defined below) cannot be delivered to the Trust, the
Company shall have the right, upon not less than 30 or more than 60 days
notice, to redeem the Series % Debentures in whole or in part for cash at
the Optional Redemption Price within 90 days following the occurrence of such
Tax Event; provided that, at the time of such election to redeem and at the
time of such redemption, the Company shall have received Federal Reserve
Approval therefor; and provided further that if at the time there is available
to the Company or the Regular Trustees, on behalf of the Trust, the opportunity
to eliminate, within such 90-day period, such Tax Event by taking some
ministerial action ("Ministerial Action"), such as filing a form or making an
election, or pursuing some other similar reasonable measure that has no adverse
effect on the Trust, the Company or the holders of the Preferred Securities,
then the Company or the Regular Trustees, on behalf of the Trust, will pursue
such measure in lieu of redemption; and provided further that the Company shall
have no right to redeem the Series % Debentures while the Regular Trustees,
on behalf of the Trust, are pursuing any such Ministerial Action.
"Tax Event" means that the Regular Trustees and the Company
shall have obtained an opinion of nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that on
or after , 199 as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision
or regulatory determination), (c) any interpretation or pronouncement that
provides for a position with respect to such laws or regulations that differs
from the theretofore generally accepted position or (d) any action taken by any
<PAGE> 10
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or effective or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after , 199 , there is more than an insubstantial risk that (i) the
Trust, is, or will be within 90 days of the date thereof, subject to United
States Federal income tax with respect to income accrued or received on the
Series % Debentures, (ii) the Trust is, or will be within 90 days of the
date thereof, subject to more than a de minimis amount of other taxes, duties
or other governmental charges or (iii) interest payable by the Company to the
Trust on the Series % Debentures is not, or within 90 days of the date
thereof will not be, deductible by the Company for United States Federal income
tax purposes.
"No Recognition Opinion" means an opinion of nationally
recognized independent tax counsel experienced in such matters, which opinion
may rely on any then applicable published revenue rulings of the Internal
Revenue Service, to the effect that the holders of the Preferred Securities
will not recognize any gain or loss for United States Federal income tax
purposes as a result of a dissolution of the Trust and distribution of the
Series % Debentures as provided in the Declaration of Trust.
SECTION 2.03. If the Series % Debentures are only
partially redeemed pursuant to this Article II, the Series % Debentures will be
redeemed pro rata or by lot or by any other equitable method chosen by the
Trustee; provided that if, at the time of redemption, any Series %
Debentures are represented by a Global Debenture, the Depositary shall
determine by lot the principal amount of such Series % Debentures held by
each Debentureholder to be redeemed in accordance with its customary
procedures. Notwithstanding the foregoing, if a partial redemption of the
Series % Debentures would result in the delisting of the Preferred
Securities by any national securities exchange on which the Preferred
Securities are then listed, the Company shall not be permitted to effect such
partial redemption and will only redeem the Series % Debentures in whole.
<PAGE> 11
ARTICLE III
Deferral of Interest Payment Period
SECTION 3.01. So long as the Company is not in default in the
payment of interest on the Series % Debentures, the Company shall have the
right, at any time during the term of the Series % Debentures, from time to
time to defer the interest payment period of the Series % Debentures for a
period not exceeding 20 consecutive quarterly interest periods (a "Deferral
Period"); provided, however, that at the end of any such period the Company
shall pay all interest accrued and unpaid thereon (together with interest on
such accrued and unpaid interest at the rate of % per annum, to the extent
permitted by applicable law, compounded quarterly ("Compounded Interest")).
During any Deferral Period, the Company shall not declare or pay any dividends
on, or redeem, purchase, acquire or make a distribution or liquidation payment
with respect to, any of its common stock or preferred stock or make any
payments on guarantees with respect thereto; provided, however, that the
foregoing restrictions shall not apply to (i) dividends, redemptions,
purchases, acquisitions, distributions or payments made by the Company by way
of issuance of shares of its capital stock, (ii) payments of accrued dividends
by the Company upon the redemption, exchange or conversion of any preferred
stock of the Company as may be outstanding from time to time in accordance with
the terms of such preferred stock or (iii) cash payments made by the Company in
lieu of delivering fractional shares upon the redemption, exchange or
conversion of any preferred stock of the Company as may be outstanding from
time to time in accordance with the terms of such preferred stock. Prior to
the termination of any Deferral Period, the Company may pay all or any portion
of the interest accrued on the Series % Debentures on any Interest Payment
Date to holders of record on the regular record date for such Interest Payment
Date or from time to time further defer such Deferral Period; provided that
such Deferral Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarterly interest periods. Upon the
termination of any Deferral Period and upon the payment of all accrued and
unpaid interest then due, together with Compounded Interest, the Company may
select a new Deferral Period. No interest shall be due and payable during a
Deferral Period, except at the end thereof. At the end of any Deferral Period,
the Company shall pay all interest accrued and unpaid on the Series %
<PAGE> 12
Debentures, including any Compounded Interest, to the holders in whose names
the Series % Debentures are registered on the Security Register on the
regular record date for the first Interest Payment Date occurring at or after
the end of the Extended Interest Payment Period.
SECTION 3.02. (a) So long as the Property Trustee is the
sole record holder of the Series % Debentures, at the time the Company
selects a Deferral Period, the Company shall give both the Property Trustee and
the Trustee written notice of its selection of such Deferral Period at least
one Business Day prior to the earlier of (i) the next succeeding date on which
distributions on the Preferred Securities are payable and (ii) the date on
which the Trust is required to give notice of the record or payment date for
such distribution to the New York Stock Exchange (if the Preferred Securities
are then listed thereon) or other applicable self-regulatory organization or to
holders of the Preferred Securities, but in any event not less than one
Business Day prior to such record date. The Company shall cause the Trust to
give notice to the holders of the Preferred Securities of the Company's
selection of such Deferral Period.
(b) If as a result of a Dissolution Event, Series %
Debentures have been distributed to holders of Preferred Securities and Common
Securities, at the time the Company selects a Deferral Period, the Company
shall give the holders of the Series % Debentures and the Trustee written
notice of its selection of such Deferral Period at least 10 business days prior
to the earlier of (i) the next succeeding Interest Payment Date or (ii) the
date the Company is required to give notice of the record or payment date for
such interest payment to the New York Stock Exchange (if the Series %
Debentures are then listed thereon) or other applicable self-regulatory
organization or to holders of the Series % Debentures.
SECTION 3.03. The quarter in which any notice is given
pursuant to Section 3.02 shall be counted as one of the 20 consecutive
quarterly interest periods permitted in the maximum Extended Interest Payment
Period permitted under this Article III.
<PAGE> 13
ARTICLE IV
Covenants Applicable to Series % Debentures
SECTION 4.01. So long as any Preferred Securities remain
outstanding, the Company will not declare or pay any dividends on, or redeem,
purchase, acquire or make a distribution or liquidation payment with respect
to, any of its common stock or preferred stock or make any payments on
guarantees with respect thereto if at such time (i) the Company shall be in
default with respect to its Guarantee Payments (as defined in the Guarantee
Agreement) or other payment obligations under the Guarantee Agreement or (ii)
there shall have occurred any Event of Default under the Indenture with respect
to the Series % Debentures; provided, however, that the foregoing
restrictions shall not apply to (i) dividends, redemptions, purchases,
acquisitions, distributions or payments made by the Company by way of issuance
of shares of its capital stock, (ii) payments of accrued dividends by the
Company upon the redemption, exchange or conversion of any preferred stock of
the Company as may be outstanding from time to time in accordance with the
terms of such preferred stock or (iii) cash payments made by the Company in
lieu of delivering fractional shares upon the redemption, exchange or
conversion of any preferred stock of the Company as may be outstanding from
time to time in accordance with the terms of such preferred stock.
SECTION 4.02. In connection with the distribution of the
Series % Debentures to the holders of the Preferred Securities upon a
Dissolution Event, the Company will use its best efforts to list such Series
% Debentures on the New York Stock Exchange or on such other exchange as the
Preferred Securities are then listed.
SECTION 4.03. The Company covenants and agrees for the
benefit of the holders of the Preferred Securities to comply fully with all its
obligations and agreements under the Declaration of Trust, including, without
limitation, its obligations under Article IV thereof.
SECTION 4.04. Prior to the distribution of Series %
Debentures to the holders of Preferred Securities upon a Dissolution Event, the
Company covenants and agrees for the benefit of the holders of the Preferred
Securities (i) to remain the sole direct or indirect owner of all
<PAGE> 14
Common Securities issued by the Trust and not to cause or permit the Common
Securities to be transferred except to the extent permitted by the Declaration
of Trust; provided that any permitted successor of the Company under the
Indenture may succeed to the Company's ownership of such Common Securities and
(ii) to use reasonable efforts to cause the Trust to continue to be treated as
a grantor trust for United States Federal income tax purposes, except in
connection with a distribution of the Series % Debentures as provided in the
Declaration of Trust.
ARTICLE V
Form of Series % Debentures
SECTION 5.01. The Series % Debentures and the Trustee's
Certificate of Authentication to be endorsed thereon are to be substantially in
the following forms:
(FORM OF FACE OF SECURITY)
[IF THE NOTE IS A GLOBAL SECURITY, INSERT: This Security is a
Global Security within the meaning of the Indenture hereinafter referred to and
is registered in the name of a Depositary or a nominee of a Depositary. This
Security is exchangeable for Securities registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Security (other than a
transfer of this Security as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in such limited
circumstances.
UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
<PAGE> 15
No. $
CUSIP NO. _____________
J.P. MORGAN & CO. INCORPORATED
% JUNIOR SUBORDINATED DEBENTURE
DUE 20
J.P. Morgan & Co. Incorporated, a corporation duly organized
and existing under the laws of the State of Delaware (herein referred to as the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
, or registered assigns, the principal sum of Dollars on , 20[ ] (the
"Stated Maturity", such date subject to shortening or extension as set forth
herein and in the Indenture) and to pay interest on said principal sum from
, 199 or from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly provided for,
quarterly (subject to deferral as set forth herein) in arrears on the last day
of each quarter commencing , 199 , at the rate of % per annum,
until the principal hereof shall have become due and payable, and on any
overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
same rate per annum, compounded quarterly. The amount of interest payable for
any period will be computed on the basis of a 360-day year of twelve 30-day
months and for any period shorter than a quarterly interest period for which
interest is computed, the amount of interest payable will be computed on the
basis of the actual number of days elapsed. In the event that any date on
which interest is payable on this Debenture is not a Business Day, then payment
of interest payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date. The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture referred to on the
reverse side hereof, be paid to the
<PAGE> 16
person in whose name this Debenture (or one or more Predecessor Securities) is
registered at the close of business on the regular record date for such
interest installment, which shall be the close of business on the Business Day
next preceding such Interest Payment Date; provided, however, that if the
Preferred Securities are no longer in book-entry only form or if, pursuant to
the provisions of Section 2.11(c) of the Indenture, the Series % Debentures
are no longer represented solely by a Global Security, the regular record date
shall be the close of business on the fifteenth day of the month in which such
Interest Payment Date occurs. Any such interest installment not punctually
paid or duly provided for shall forthwith cease to be payable to the registered
holder of this Security on such regular record date, and may be paid to the
person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof to be given
to the registered holders of this series of Securities not less than 10 days
prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which this series of Securities may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in the Indenture. The
principal of, and the interest on, this Security shall be payable at the office
or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City and State of New York in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the registered holder at
such address as shall appear in the Security Register and that the payment of
principal will only be made upon the surrender of this Security to the Trustee.
Notwithstanding the foregoing, so long as the record holder of this Security is
the Property Trustee (as defined in the Indenture), the payment of the
principal of, and interest on, this Security will be made to such account of
the Property Trustee as may be designated by the Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, Subordinated Indebtedness and
Derivative Obligations and this Debenture is issued subject
<PAGE> 17
to the provisions of the Indenture with respect thereto. Each holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact,
for any and all such purposes. Each holder hereof, by his acceptance hereof
hereby waives all notice of the acceptance of the subordination provisions
contained herein and in the Indenture by each holder of Senior Indebtedness and
Subordinated Indebtedness, and each creditor in respect of Derivative
Obligations, whether now outstanding or hereafter incurred, and waives reliance
by each such Holder upon such provisions.
Unless the Certificate of Authentication hereon has been
executed by the Trustee referred to on the reverse side hereof, this Debenture
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
The provisions of this Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed.
Date
-----------------------
J.P. MORGAN & CO.
INCORPORATED,
by
----------------------------
Attest:
- -----------------------------
Secretary
<PAGE> 18
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
First Trust New York, National Association,
as Trustee,
------------------------------
or as Authentication Agent
by
----------------------- ------------------------------
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF SECURITY)
This Security is one of a duly authorized series of Securities
of the Company (herein sometimes referred to as the "Securities"), all issued
or to be issued in one or more series under and pursuant to an Indenture dated
as of November , 1996 duly executed and delivered between the Company and
First Trust New York, National Association, a national banking association, as
Trustee (herein referred to as the "Trustee"), as supplemented by the [
] Supplemental Indenture dated as of , 199 between the Company and
the Trustee (said Indenture as so supplemented being hereinafter referred to as
the "Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Securities, and, to the extent specifically set
forth in the Indenture, the holders of Senior Indebtedness, Subordinated
Indebtedness and Preferred Securities and creditors in respect of Derivative
Obligations. By the terms of the Indenture, the Securities are issuable in
series which may vary as to amount, date of maturity, rate of interest and in
other
<PAGE> 19
respects as in the Indenture provided. This series of Securities is designated
the % Junior Subordinated Debentures due 20 (the "Series % Debentures") and
is limited in aggregate principal amount as specified in said [ ]
Supplemental Indenture.
Except as provided in the next paragraph, the Series %
Debentures may not be redeemed by the Company prior to , 20 . The Company
shall have the right to redeem the Series % Debentures, in whole or in part,
at any time or from time to time on or after , 20 (an "Optional
Redemption"), at a redemption price equal to 100% of the principal amount to be
redeemed plus any accrued and unpaid interest, including any Compounded
Interest, thereon to the date of such redemption; provided that at the time of
such election to redeem and at the time of such redemption, the Company shall
have received Federal Reserve Approval therefor. Any redemption pursuant to
this paragraph will be made upon not less than 30 nor more 60 days notice. If
the Series ___% Debentures are only partially redeemed by the Company pursuant
to an Optional Redemption, the Series % Debentures will be redeemed pro rata or
by lot or by any other equitable method chosen by the Trustee; provided that if,
at the time of redemption, any Series % Debentures are represented by a Global
Security, the Depository shall determine by lot the principal amount of such
Series % Debentures held by each holder of Series % Debentures to be
redeemed in accordance with its customary procedures.
If, at any time, a Tax Event (as defined below) shall occur or
be continuing and (i) the Regular Trustees and the Company shall have received
an opinion (a "Redemption Tax Opinion") of nationally recognized independent
tax counsel experienced in such matters that, as a result of such Tax Event,
there is more than an insubstantial risk that the Company would be precluded
from deducting the interest on the Series % Debentures for United States
Federal income tax purposes even if the Series % Debentures were distributed
to the holders of Preferred Securities and Common Securities in liquidation of
such holders' interest in the Trust as set forth in the Declaration of Trust or
(ii) the Regular Trustees shall have been informed by such tax counsel that a
No Recognition Opinion (as defined below) cannot be delivered to the Trust, the
Company shall have the right, upon not less than 30 nor more than 60 days
notice, to redeem the Series % Debentures in whole or in part for cash at
the Optional
<PAGE> 20
Redemption Price within 90 days following the occurrence of such Tax Event;
provided that at the time of such election to redeem and at the time of such
redemption, the Company shall have received Federal Reserve Approval therefor;
provided further that, if at the time there is available to the Company or the
Regular Trustees, on behalf of the Trust, the opportunity to eliminate, within
such 90-day period, the Tax Event by taking some ministerial action
("Ministerial Action"), such as filing a form or making an election, or
pursuing some other similar reasonable measure, which has no adverse effect on
the Trust, the Company or the holders of the Preferred Securities, the Company
or the Regular Trustees, on behalf of the Trust, will pursue such measure in
lieu of redemption; and provided further that the Company shall have no right
to redeem the Series % Debentures while the Regular Trustees, on behalf of
the Trust, are pursuing any such Ministerial Action.
"Tax Event" means that the Regular Trustees and the Company
shall have obtained an opinion of nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that on
or after , 199 , as a result of (a) any amendment to, or change (or
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change in, an interpretation or application
of any such laws or regulations by any legislative body, court, governmental
agency or regulatory authority (including the enactment of any legislation and
the publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
effective or which interpretation or pronouncement is issued or announced or
which action is taken, in each case on or after , 199 , there is
more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date thereof, subject to United States Federal income tax with
respect to income accrued or received on the Series % Debentures, (ii) the
Trust is, or will be within 90 days of the date thereof, subject to more than a
de minimis amount of other taxes, duties or other governmental charges or (iii)
interest payable by the Company to the Trust on the Series % Debentures is
not, or within 90 days of the date
<PAGE> 21
thereof will not be, deductible by the Company for United States Federal income
tax purposes.
"No Recognition Opinion" means an opinion of nationally
recognized independent tax counsel experienced in such matters, which opinion
may rely on any then applicable published revenue rulings of the Internal
Revenue Service, to the effect that the holders of the Preferred Securities
will not recognize any gain or loss for United States Federal income tax
purposes as a result of a dissolution of the Trust and distribution of the
Series % Debentures as provided in the Declaration of Trust.
If the Series ___% Debentures are only partially redeemed by
the Company pursuant to an Optional Redemption or as a result of a Tax Event as
described above, the ___% Debentures will be redeemed pro rata or by lot or by
any other equitable method chosen by the Trustee. Notwithstanding the
foregoing, if a partial redemption of the Series % Debentures would result
in the delisting of the Preferred Securities by any national securities
exchange on which the Preferred Securities are then listed, the Company shall
not be permitted to effect such partial redemption and will only redeem the
Series ___% Debentures in whole.
In the event of redemption of this Series ___% Debenture in
part only, a new Series ___% Debenture or Debentures will be issued for the
unredeemed portion hereof in the name of the holder hereof upon the cancelation
of this Debenture.
The Indenture contains provisions permitting the Company to
shorten or extend the Stated Maturity subject, in each case, to certain
conditions set forth therein, including the receipt by the Company at the time
of the election to shorten or extend such Stated Maturity and at the time of
such shortening or extension, as the case may be, of Federal Reserve Approval
(as defined in the Indenture) therefor.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Series %
Debentures may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture.
<PAGE> 22
The Indenture contains provisions for defeasance at any time
of the entire indebtedness of the Series % Debentures upon compliance by the
Company with certain conditions set forth therein.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities of each series affected at the
time Outstanding, as defined in Section 8.04 of the Indenture, (and, in the
case of any series of Securities held as trust assets of a JPM Capital Trust
and with respect to which a Security Exchange has not theretofore occurred,
such consent of holders of the Preferred Securities and the Common Securities
of such JPM Capital Trust as may be required under the Declaration of Trust of
such JPM Capital Trust), to execute supplemental indentures for the purpose of
adding any provisions to or modifying in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of modifying in
any manner the rights of the holders of any series of Securities; provided,
however, that no such supplemental indenture shall (i) extend the final
maturity of any Securities of any series, or reduce the principal amount
thereof or the method in which amounts of payments of principal or interest
thereon are determined, or reduce the rate or extend the time of payment of
interest thereon, [or change the coin or currency units based on or related to
currencies (including ECU (as defined in the Indenture) of payment thereof] or
reduce any amount payable upon the redemption thereof, or reduce the amount of
the principal of an Original Issue Discount Security that would be due and
payable upon an acceleration of the maturity thereof pursuant to Section 6.01
or the amount thereof provable in bankruptcy pursuant to Section 6.02, or
impair or affect the right of any holder of the Security to institute suit for
the payment thereof or, if the Securities provide therefor, any right of
repayment at the option of the holder of the Security, without the consent of
the holder of each Security so affected or (ii) reduce the aforesaid percentage
of Securities, the consent of the holders of which is required any such
supplemental indenture, without the consent of the holders of each Security
(and, in the case of any series of Securities held as trust assets of a JPM
Capital Trust and with respect to which a Security Exchange has not theretofore
occurred, such consent of the holders of the Preferred Securities and the
Common Securities of such JPM Capital Trust as may be required under the
Declaration of
<PAGE> 23
Trust of such JPM Capital Trust) so affected thereby. The Indenture also
contains provisions permitting the holders of a majority in aggregate principal
amount of the Securities of a series at the time outstanding affected thereby
(subject, in the case of any series of Securities held as trust assets of a JPM
Capital Trust and with respect to which a Securities Exchange has not
theretofore occurred, to such consent of holders of Preferred Securities and
Common Securities of such JPM Capital Trust as may be required under the
Declaration of Trust of such JPM Capital Trust), on behalf of the holders of
the Securities of such series, to waive any past default in the performance of
any of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series and its consequences, except a default in
the payment of the principal of, or premium, if any, or interest on, any of the
Debentures of such series. Any such consent or waiver by the registered holder
of this Series % Debenture (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such holder and upon all future holders
and owners of this Series % Debenture and of any Security issued in
exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Series % Debenture.
Subject to Section 13.11 of the Indenture, no reference herein
to the Indenture (other than such Section) and no provision of this Series
% Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Series % Debenture at the time and
place at the rate and in the money herein prescribed.
So long as the Company is not in default in the payment of
interest on the Series % Debentures, the Company shall have the right, at any
time during the term of the Series % Debentures, from time to time to defer
the interest payment period of the Series % Debentures for a period not
exceeding 20 consecutive quarterly interest periods (a "Deferral Period");
provided, however, that at the end of any such period the Company shall pay all
interest accrued and unpaid thereon, together with any Compounded Interest.
During any Deferral Period, the Company shall not declare or pay any dividends
on, or redeem, purchase, acquire or make a distribution or liquidation payment
with respect to, any of its common stock
<PAGE> 24
or preferred stock, or make any payments on guarantees with respect thereto;
provided, however, that the foregoing restrictions shall not apply to (i)
dividends, redemptions, purchases, acquisitions, distributions or payments made
by the Company by way of issuance of shares of its capital stock, (ii) payments
of accrued dividends by the Company upon the redemption, exchange or conversion
of any preferred stock of the Company as may be outstanding from time to time
in accordance with the terms of such preferred stock or (iii) cash payments
made by the Company in lieu of delivering fractional shares upon the
redemption, exchange or conversion of any preferred stock of the Company as may
be outstanding from time to time in accordance with the terms of such preferred
stock. Prior to the termination of any Deferral Period, the Company may pay
all or any portion of the interest accrued on the Series % Debentures on any
Interest Payment Date to holders of record on the regular record date for such
Interest Payment Date or from time to time further extend such Deferral Period;
provided that such Deferral Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarterly interest periods.
Upon the termination of any Deferral Period and upon the payment of all accrued
and unpaid interest then due, together with Compounded Interest, the Company
may select a new Deferral Period. No interest shall be due and payable during
a Deferral Period, except at the end thereof. At the end of any Deferral
Period, the Company shall pay all interest accrued and unpaid on the Series
% Debentures, including any Compounded Interest which shall be payable to the
holders in whose names the Series % Debentures are registered on the
Security Register on the regular record date for the first Interest Payment
Date occurring on or after the end of the Deferral Period.
As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by the registered
holder hereof on the Security Register of the Company, upon surrender of this
Series % Debenture for registration of transfer at the office or agency of
the Company designated for such purpose in the Borough of Manhattan, The City
and State of New York, accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Security registrar duly
executed by the registered holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Series % Debentures of authorized
denominations and for the same aggregate principal amount will be issued to the
designated transferee or transferees.
<PAGE> 25
No service charge will be made for any such transfer, but the Company may
require payment by the holder of the Series % Debenture seeking such
transfer of a sum sufficient to cover any tax or other governmental charge
payable in relation thereto.
Prior to due presentment for registration of transfer of this
Security, the Company, the Trustee, any paying agent and any Security registrar
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Series % Debenture shall be overdue and
notwithstanding any notice of ownership or writing hereon made by anyone other
than the Security registrar) for the purpose of receiving payment of or on
account of the principal hereof and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Security registrar shall be affected by any notice to the contrary.
No recourse under or upon any obligation, covenant or
agreement of the Indenture, or of this Series % Debenture, or for any claim
based thereon or hereon, or otherwise in respect thereof or hereof shall be had
against any incorporator, stockholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor corporation,
either directly or through the Company or any such predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Series % Debenture and the obligations
represented hereunder are solely corporate obligations, and that no such
personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors, as such, of the Company or
of any predecessor or successor corporation, or any of them, because of the
creation of this indebtedness, or under or by reason of the obligations
covenants or agreements contained in the Indenture or this Debenture or implied
therefrom; and that any and all such personal liability of every name and
nature, either at common law or in equity or by constitution or statute, and
any and all such rights and claims against every such incorporator,
stockholder, officer or director, as such, because of the creation of this
indebtedness, or under or by reason of the obligations, covenants or agreements
contained in the Indenture or in this Series % Debenture or implied
therefrom, are hereby expressly waived and released by the acceptance hereof
and
<PAGE> 26
as a condition of, and as a consideration for, the execution of the Indenture
and the issuance of this Series % Debenture.
[IF THE SECURITY IS A GLOBAL SECURITY INSERT: This Global
Security is exchangeable for Securities in definitive form under certain
limited circumstances set forth in the Indenture.]
The Series % Debentures are issuable only in registered
form without interest coupons in denominations of $25 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations [IF
THE SECURITY IS A GLOBAL SECURITY, INSERT: herein and] therein set forth,
Series % Debentures are exchangeable for a like aggregate principal amount
of Series % Debentures of a different authorized denomination, as requested
by the holder surrendering the same.
Terms used and not defined in this Series % Debenture
shall have the meanings assigned to them in the Indenture.
ARTICLE VI
Original Issue of Series % Debentures
SECTION 6.01. Except as provided in Section 1.01 and this
Section 6.01, Series % Debentures in the aggregate principal amount equal to
$ may, upon execution of this [ ] Supplemental Indenture, be executed
by the Company and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and make available for delivery said Series %
Debentures to or upon the written order of the Company, signed by its Chairman,
its President, Vice President, its Treasurer or an Assistant Treasurer and
attested to by its Secretary or an Assistant Secretary, without any further
action by the Company. Upon exercise of the overallotment option set forth in
the Underwriting Agreement, additional Series ___% Debentures in the aggregate
principal amount of up to $ may be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and make available for delivery said Series % Debentures to or
upon the written order of the Company, which order shall be accompanied by
evidence
<PAGE> 27
satisfactory to the Trustee that the overallotment option has been exercised.
ARTICLE VII
Miscellaneous Provisions
SECTION 7.01. Except as otherwise expressly provided in this
[ ] Supplemental Indenture or in the form of Series % Debenture or
otherwise clearly required by the context hereof or thereof, all terms used
herein or in said form of Series % Debenture that are defined in the
Indenture shall have the several meanings respectively assigned to them
thereby.
SECTION 7.02. The Indenture, as supplemented by this [ ]
Supplemental Indenture, is in all respects ratified and confirmed. This [ ]
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.
SECTION 7.03. The recitals herein contained are made by the
Company and not by the Trustee, and the Trustee assumes no responsibility for
the correctness thereof. The Trustee makes no representation as to the
validity or sufficiency of this [ ] Supplemental Indenture.
SECTION 7.04. This [ ] Supplemental Indenture may be
executed in any number of counterparts each of which
<PAGE> 28
shall be an original; but such counterparts shall together constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this [ ]
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, on the date or dates indicated in
the acknowledgments and as of the day and year first above written.
J.P. MORGAN & CO.
INCORPORATED,
by
------------------------------
Name:
Title:
Attest:
- ---------------------------------
Name:
Title:
FIRST TRUST OF NEW YORK, A
NATIONAL ASSOCIATION, as
Trustee,
by
------------------------------
Name:
Title:
Attest:
- --------------------------------
Name:
Title:
<PAGE> 29
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of , in the year one thousand nine
hundred ninety- , before me personally came to me known, who, being by me
duly sworn, did depose and say that he or she resides at ; that he or she is
of J.P. MORGAN & CO. INCORPORATED, one of the corporations described in and
which executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to such instrument is such corporation seal;
that it was so affixed by authority of the Board of Directors of such
corporation, and that he signed his name thereto by like authority.
-----------------------------
Notary Public
My Commission Expires
<PAGE> 30
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of , in the year one thousand nine
hundred ninety- , before me personally came to me known, who, being by me
duly sworn, did depose and say that he resides at ; that he
or she is a of FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION,
one of the corporations described in and which executed the above instrument;
that he or she knows the corporate seal of said corporation; that the seal
affixed to such instrument is such corporation seal; that it was so affixed by
authority of the Board of Directors of such corporation and that he signed his
name thereto by like authority.
----------------------
Notary Public
My Commission Expires
<PAGE> 1
EXHIBIT 4(l)(1)
================================================================================
FORM OF
GUARANTEE AGREEMENT
OF
JPM CAPITAL TRUST I
________________
DATED AS OF , 199
================================================================================
<PAGE> 2
2
This GUARANTEE AGREEMENT, dated as of
, 199 , is executed and delivered by J.P.
Morgan & Co. Incorporated, a Delaware corporation
(the "Guarantor"), and First Trust of New York,
National Association, as the initial GUARANTEE
Trustee (as defined herein) for the benefit of the
Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of JPM
Capital Trust I, a Delaware statutory business trust
(the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of , 199 among the trustees of
the Issuer named therein, J.P. Morgan & Co. Incorporated, as Sponsor, and the
Holders from time to time of undivided beneficial interests in the assets of
the Issuer, the Issuer may issue up to aggregate liquidation
amount of its % Preferred Trust Securities (the "Preferred Securities")
representing undivided beneficial interests in the assets of the Issuer and
having the terms set forth in Exhibit B to the Declaration, of which $
liquidation amount of the Preferred Securities are being issued as of the date
hereof. Up to the remaining $ liquidation amount of Preferred
Securities may be issued by the Issuer if and to the extent that the
over-allotment option granted by the Guarantor and the Issuer pursuant to the
Underwriting Agreement (as defined in the Declaration) is exercised by the
Underwriters named in the Underwriting Agreement.
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
the GUARANTEE Payments (as defined herein) and to make certain other payments
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by the
initial purchasers thereof of Preferred Securities, which purchase the
Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and
delivers this GUARANTEE Agreement for the benefit of the Holders from time to
time of the Preferred Securities.
<PAGE> 3
3
ARTICLE I
Definitions
(a) Capitalized terms used in this GUARANTEE Agreement but
not defined in the preamble above have the respective meanings assigned to them
in this Section 1.01.
(b) A term defined anywhere in this GUARANTEE Agreement has
the same meaning throughout.
(c) All references to "the GUARANTEE Agreement" or "this
GUARANTEE Agreement" are to this GUARANTEE Agreement as modified, supplemented
or amended from time to time.
(d) All references in this GUARANTEE Agreement to Articles
and Sections are to Articles and Sections of this GUARANTEE Agreement unless
otherwise specified.
(e) A term defined in the Trust Indenture Act as the same
meaning when used in this GUARANTEE Agreement unless otherwise defined in this
GUARANTEE Agreement or unless the context otherwise requires.
(f) A reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing
undivided beneficial interests in the assets of the Issuer, having the terms
set forth in Exhibit C to the Declaration.
"Covered Person" means any Holder of Preferred Securities.
"Debentures" means the series of Junior Subordinated
Debentures issued by the Guarantor under the Indenture to the Property Trustee
and entitled the " % Junior Subordinated Debentures due ".
<PAGE> 4
4
"Distributions" means the periodic distributions and other
payments payable to Holders of Preferred Securities in accordance with the
terms of the Preferred Securities set forth in Exhibit B to the Declaration.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this GUARANTEE Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions and the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price"), with respect
to the Preferred Securities called for redemption by the Issuer but only if and
to the extent that in each case the Guarantor has made a payment to the
Property Trustee of interest or principal on the Debentures and (ii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Debentures to Holders or the
redemption of all the Preferred Securities upon the maturity or redemption of
the Debentures as provided in the Declaration), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, to the extent the Issuer has funds
available therefor, or (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution").
"Guarantee Trustee" means First Trust of New York, National
Association until a Successor GUARANTEE Trustee has been appointed and accepted
such appointment pursuant to the terms of this GUARANTEE Agreement and
thereafter means each such Successor GUARANTEE Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any entity directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Guarantor.
<PAGE> 5
5
"Indemnified Person" means the GUARANTEE Trustee, any
Affiliate of the GUARANTEE Trustee, and any officers, directors, shareholders,
members, partners, employees, representatives or agents of the GUARANTEE
Trustee.
"Indenture" means the Junior Subordinated Indenture dated as
of November , 1996 between the Guarantor and First Trust of New York,
National Association, as trustee, as supplemented by the [ ] Supplemental
Indenture thereto dated as of 199 , pursuant to which the Debentures are to be
issued.
"Majority in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class, who are the
record owners of Preferred Securities whose liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) represents more than 50% of the liquidation amount of all
outstanding Preferred Securities.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning set forth in the first
WHEREAS clause above.
"Property Trustee" means the Person acting as Property Trustee
under the Declaration.
"Redemption Price" means the amount payable on redemption of
the Preferred Securities in accordance with the terms of the Preferred
Securities.
"Responsible Officer" means, with respect to the GUARANTEE
Trustee, the chairman of the board of directors, the president, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the GUARANTEE Trustee
customarily performing functions similar to those performed by any of the above
designated officers
<PAGE> 6
6
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"66- 2/3% in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class who are the
record owners of Preferred Securities whose liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) represents 66- 2/3% or more of the liquidation amount of all
Preferred Securities.
"Successor GUARANTEE Trustee" means a successor GUARANTEE
Trustee possessing the qualifications to act as a GUARANTEE Trustee under
Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This
GUARANTEE Agreement is subject to the provisions of the Trust Indenture Act
that are required to be part of this GUARANTEE Agreement and shall, to the
extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this GUARANTEE
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(c) The application of the Trust Indenture Act to this
GUARANTEE Agreement shall not affect the nature of the Preferred Securities as
equity securities representing undivided beneficial interests in the assets of
the Issuer.
<PAGE> 7
7
SECTION 2.02. Lists of Holders of Preferred Securities. (a)
The Guarantor shall provide the GUARANTEE Trustee with such information as is
required under Section 312(a) of the Trust Indenture Act at the times and in
the manner provided in Section 312(a).
(b) The GUARANTEE Trustee shall comply with its obligations
under Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the GUARANTEE Trustee. Within 60
days after May 15 of each year, the GUARANTEE Trustee shall provide to the
Holders of the Preferred Securities such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form, in the manner and at the times
provided by Section 313 of the Trust Indenture Act. The GUARANTEE Trustee
shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.04. Periodic Reports to the GUARANTEE Trustee. The
Guarantor shall provide to the GUARANTEE Trustee, the Commission and the
Holders of the Preferred Securities, as applicable, such documents, reports and
information as required by Section 314(a)(1)-(3) (if any) of the Trust
Indenture Act and the compliance certificates required by Section 314(a)(4) and
(c) of the Trust Indenture Act, any such certificates to be provided in the
form, in the manner and at the times required by Section 314(a)(4) and (c) of
the Trust Indenture Act (provided that any certificate to be provided pursuant
to Section 314(a)(4) of the Trust Indenture Act shall be provided within 120
days of the end of each fiscal year of the Issuer).
SECTION 2.05. Evidence of Compliance with Conditions
Precedent. The Guarantor shall provide the GUARANTEE Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
GUARANTEE Agreement which relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given pursuant to Section 314(c) shall comply with Section 314(e) of the Trust
Indenture Act.
SECTION 2.06. Events of Default; Waiver. (a) Subject to
Section 2.06(b), Holders of Preferred Securities may by vote of at least a
Majority in liquidation amount of the Preferred Securities, (A) direct the
time, method and place of conducting any proceeding for any remedy
<PAGE> 8
8
available to the GUARANTEE Trustee, or exercising any trust or power conferred
upon by the GUARANTEE Trustee or (B) on behalf of the Holders of all Preferred
Securities waive any past Event of Default and its consequences. Upon such
waiver, any such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
GUARANTEE Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
(b) The right of any Holder of Preferred Securities to
receive payment of the GUARANTEE Payments in accordance with this GUARANTEE
Agreement, or to institute suit for the enforcement of any such payment, shall
not be impaired without the consent of each such Holder.
SECTION 2.07. Disclosure of Information. The disclosure of
information as to the names and addresses of the Holders of the Preferred
Securities in accordance with Sections 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, shall not be
deemed to be a violation of any existing law, or any law hereafter enacted
which does not specifically refer to Section 312 of the Trust Indenture Act,
nor shall the GUARANTEE Trustee be held accountable by reason of mailing any
material pursuant to a request made under Section 312(b) of the Trust Indenture
Act.
SECTION 2.08. Conflicting Interest. The Declaration shall be
deemed to be specifically described in this GUARANTEE Agreement for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III
Powers, Duties and Rights of Guarantee Trustee
SECTION 3.01. Powers and Duties of the GUARANTEE Trustee.
(a) This GUARANTEE Agreement shall be held by the GUARANTEE Trustee in trust
for the benefit of the Holders of the Preferred Securities. The GUARANTEE
Trustee shall not transfer its right, title and interest in the GUARANTEE
Agreement to any Person except a Successor GUARANTEE Trustee on acceptance by
such Successor GUARANTEE Trustee of its appointment to act as GUARANTEE Trustee
or to a Holder of Preferred Securities exercising his or her rights pursuant
<PAGE> 9
9
to Section 5.04. The right, title and interest of the GUARANTEE Trustee to the
GUARANTEE Agreement shall vest automatically in each Person who may hereafter
be appointed as GUARANTEE Trustee in accordance with Article IV. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered.
(b) If an Event of Default occurs and is continuing, the
GUARANTEE Trustee shall enforce this GUARANTEE Agreement for the benefit of the
Holders of the Preferred Securities.
(c) This GUARANTEE Agreement and all moneys received by the
Property Trustee hereunder in respect of the GUARANTEE Payments will not be
subject to any right, charge, security interest, lien or claim of any kind in
favor of, or for the benefit of the GUARANTEE Trustee or its agents or their
creditors.
(d) The GUARANTEE Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the holders of the Preferred Securities, as their names and
addresses appear upon the register, notice of all Events of Default known to
the GUARANTEE Trustee, unless such defaults shall have been cured before the
giving of such notice; provided, that, the GUARANTEE Trustee shall be protected
in withholding such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors and/or Responsible
Officers, of the GUARANTEE Trustee in good faith determine that the withholding
of such notice is in the interests of the Holders of the Preferred Securities.
The GUARANTEE Trustee shall not be deemed to have knowledge of any default
except any default as to which the GUARANTEE Trustee shall have received
written notice or a Responsible Officer charged with the administration of the
GUARANTEE Agreement shall have obtained written notice.
(e) The GUARANTEE Trustee shall not resign as a Trustee
unless a Successor GUARANTEE Trustee has been appointed and accepted that
appointment in accordance with Article IV.
SECTION 3.02. Certain Rights and Duties of the GUARANTEE
Trustee. (a) The GUARANTEE Trustee, before the occurrence of an Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically
<PAGE> 10
10
set forth in this GUARANTEE Agreement, and no implied covenants shall be read
into this GUARANTEE Agreement against the GUARANTEE Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section
2.06(a)), the GUARANTEE Trustee shall exercise such of the rights and powers
vested in it by this GUARANTEE Agreement, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in this conduct of his or her own affairs.
(b) No provision of this GUARANTEE Agreement shall be
construed to relieve the GUARANTEE Trustee from liability for its own negligent
action, its own negligent failure to act or its own wilful misconduct, except
that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred;
(A) the duties and obligations of the GUARANTEE
Trustee shall be determined solely by the express provisions
of this GUARANTEE Agreement, and the GUARANTEE Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this GUARANTEE
Agreement, and no implied covenants or obligations shall be
read into this GUARANTEE Agreement against the GUARANTEE
Trustee; and
(B) in the absence of bad faith on the part of the
GUARANTEE Trustee, the GUARANTEE Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the GUARANTEE Trustee and conforming to
the requirements of this GUARANTEE Agreement; but in the case
of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
GUARANTEE Trustee, the GUARANTEE Trustee shall be under a duty
to examine the same to determine whether or not they conform
to the requirements of this GUARANTEE Agreement;
(ii) the GUARANTEE Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
GUARANTEE Trustee, unless it
<PAGE> 11
11
shall be proved that the GUARANTEE Trustee was negligent in
ascertaining the pertinent facts;
(iii) the GUARANTEE Trustee shall not be liable with respect
to any action take or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Preferred Securities
as provided herein relating to the time, method and place of
conducting any proceeding for any remedy available to the GUARANTEE
Trustee, or exercising any trust or power conferred upon the GUARANTEE
Trustee under this GUARANTEE Agreement; and
(iv) no provision of this GUARANTEE Agreement shall require
the GUARANTEE Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
GUARANTEE Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.02(a) and (b):
(i) whenever in the administration of this GUARANTEE
Agreement, the GUARANTEE Trustee shall deem it desirable that a matter
proved or established prior to taking, suffering or omitting any
action hereunder, the GUARANTEE Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon a certificate, which shall comply with
the provisions of Section 314(e) of the Trust Indenture Act, signed by
any authorized officer of the Guarantor;
(ii) the GUARANTEE Trustee (A) may consult with counsel (which
may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees) selected by it in good faith and with
due care and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon and in accordance with
such advice and opinion and (B) shall have the right at
<PAGE> 12
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any time to seek instructions concerning the administration of this
GUARANTEE Agreement from any court of competent jurisdiction;
(iii) the GUARANTEE Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the GUARANTEE Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed by it in good faith and with due care;
(iv) the GUARANTEE Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this GUARANTEE
Agreement at the request or direction of any Holders of Preferred
Securities, unless such Holders shall have offered to the GUARANTEE
Trustee reasonable security and indemnity against the costs, expenses
(including its attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or direction;
provided that nothing contained in this clause (iv) shall relieve the
GUARANTEE Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured or waived) to exercise such of
the rights and powers vested in it by this GUARANTEE Agreement, and to
use the same degree of care and skill in this exercise, as a prudent
person would exercise or use under the circumstances in the conduct of
his or her own affairs; and
(v) any action taken by the GUARANTEE Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities and the
signature of the GUARANTEE Trustee or its agents alone shall be
sufficient and effective to perform any such action; and no third
party shall be required to inquire as to the authority of the
GUARANTEE Trustee to so act, or as to its compliance with any of the
terms and provisions of this GUARANTEE Agreement, both of which shall
be conclusively evidenced by the GUARANTEE Trustee's or its agent's
taking such action.
SECTION 3.03. Not Responsible for Recitals or Issuance of
Guarantee. The recitals contained in this GUARANTEE shall be taken as the
statements of the Guarantor and the GUARANTEE Trustee does not assume any
responsibility for their correctness. The GUARANTEE Trustee makes no
<PAGE> 13
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representations as to the validity or sufficiency of this GUARANTEE Agreement.
ARTICLE IV
Guarantee Trustee
SECTION 4.01. Qualifications. (a) There shall at all times
be a GUARANTEE Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted
by the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000,
and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred
to above, then for the purposes of this Section 4.01(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent
report of condition so published.
If at any time the GUARANTEE Trustee shall cease to satisfy
the requirements of clauses (i)-(ii) above, the GUARANTEE Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02.
If the GUARANTEE Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the GUARANTEE Trustee
and the Guarantor shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
SECTION 4.02. Appointment, Removal and Resignation of
GUARANTEE Trustee. (a) Subject to Section 4.02(b), the GUARANTEE Trustee may
be appointed or removed without cause at any time by the Guarantor.
<PAGE> 14
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(b) The GUARANTEE Trustee shall not be removed in accordance
with Section 4.02(a) until a Successor GUARANTEE Trustee possessing the
qualifications to act as GUARANTEE Trustee under Section 4.01(a) has been
appointed and has accepted such appointment by written instrument executed by
such Successor GUARANTEE Trustee and delivered to the Guarantor and the
GUARANTEE Trustee being removed.
(c) The GUARANTEE Trustee appointed to office shall hold
office until his successor shall have been appointed or until its removal or
resignation.
(d) The GUARANTEE Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument (a "Resignation
Request") in writing signed by the Guarantee Trustee and delivered to the
Guarantor, which resignation shall take effect upon such delivery or upon such
later date as is specified therein; provided, however, that no such resignation
of the GUARANTEE Trustee shall be effective until a Successor GUARANTEE Trustee
possessing the qualifications to act as GUARANTEE Trustee under Section 4.01(a)
has been appointed and has accepted such appointment by instrument executed by
such Successor GUARANTEE Trustee and delivered to Guarantor and the resigning
GUARANTEE Trustee.
(e) If no Successor GUARANTEE Trustee shall have been
appointed and accepted appointed as provided in this Section 4.02 within 60
days after delivery to the Guarantor of a Resignation Request, the resigning
GUARANTEE Trustee may petition any court of competent jurisdiction for
appointment of a Successor GUARANTEE Trustee. Such court may thereupon after
such notice, if any, as it may deem proper and prescribe, appoint a Successor
GUARANTEE Trustee.
ARTICLE V
Guarantee
SECTION 5.01. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the GUARANTEE Payments
(without duplication of amounts theretofore paid by the Issuer) regardless of
any defense, right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a GUARANTEE Payment may be
satisfied by direct payment of the
<PAGE> 15
15
required amounts by the Guarantor to the Holders or by causing the Issuer to
pay such amounts to the Holders.
SECTION 5.02. Waiver of Notice. The Guarantor hereby waives
notice of acceptance of this GUARANTEE Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require
a proceeding first against the Issuer or any other Person before proceeding
against the Guarantor, protect, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
SECTION 5.03. Obligations Not Affected. The obligations,
covenants, agreements and duties of the Guarantor under this GUARANTEE
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the
Preferred Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions (other than an extension of time
for payment of Distributions that results from the extension of any
interest payment period on the Debentures), Redemption Price,
Liquidation Distribution (as defined in the Declaration) or any other
sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
<PAGE> 16
16
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstances whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. Enforcement of Guarantee. The Guarantor and
the GUARANTEE Trustee expressly acknowledge that (i) this Guarantee Agreement
will be deposited with the GUARANTEE Trustee to be held for the benefit of the
Holders; (ii) the GUARANTEE Trustee has the right to enforce this GUARANTEE
Agreement on behalf of the Holders; (iii) Holders representing not less than a
Majority in liquidation amount of the Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available in respect of this GUARANTEE Agreement including the giving of
directions to the GUARANTEE Trustee, or exercising any trust or other power
conferred upon the GUARANTEE Trustee under this GUARANTEE Agreement, and (iv)
if the GUARANTEE Trustee fails to enforce this GUARANTEE Agreement, any Holder
of Preferred Securities may institute a legal proceeding directly against the
Guarantor to enforce its rights under this GUARANTEE Agreement, without first
instituting a legal proceeding against the Issuer, the GUARANTEE Trustee, or
any other Person.
SECTION 5.05. GUARANTEE of Payment. This GUARANTEE Agreement
creates a GUARANTEE of payment and not merely of collection. This GUARANTEE
Agreement will not be discharged except by payment of the GUARANTEE Payments in
full (without duplication of amounts theretofore paid by the Issuer).
<PAGE> 17
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SECTION 5.06. Subrogation. The Guarantor shall be subrogated
to all (if any) rights of the Holders against the Issuer in respect of any
amounts paid to the Holders by the Guarantor under this GUARANTEE Agreement;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this GUARANTEE
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this GUARANTEE Agreement. If any amount shall be paid to the Guarantor
in violation of the preceding sentence, the Guarantor agrees to hold such
amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.07. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Preferred Securities and that the Guarantor
shall be liable as principal and as debtor hereunder to make GUARANTEE Payments
pursuant to the terms of this GUARANTEE Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 5.03 hereof.
ARTICLE VI
Limitation of Transactions; Subordination
SECTION 6.01. Limitation of Transactions. So long as any
Preferred Securities remain outstanding, the Guarantor will not declare or pay
dividends on, or redeem, purchase, acquire or make a distribution or
liquidation payment with respect to, any of its common stock or preferred stock
or make any GUARANTEE payment with respect thereto if at such time (i) the
Guarantor shall be in default with respect to its GUARANTEE Payments or other
payment obligations hereunder, (ii) there shall have occurred any event of
default under the Declaration or (iii) the Guarantor shall have given notice of
its selection of a Deferral Period (as defined in the Indenture) and such
period, or any extension thereof, is continuing; provided, however, that the
foregoing restrictions shall not apply to (i) dividends, redemptions,
purchases, acquisitions, distributions or payments made by the Guarantor by way
of issuance of shares of its capital stock, (ii) payments of
<PAGE> 18
18
accrued dividends by the Guarantor upon the redemption, exchange or conversion
of any preferred stock of the Guarantor as may be outstanding from time to time
in accordance with the terms of such preferred stock, (iii) cash payments made
by the Guarantor in lieu of delivering fractional shares upon the redemption,
exchange or conversion of any preferred stock of the Guarantor as may be
outstanding from time to time in accordance with the terms of such preferred
stock, (iv) repurchases, redemptions or other acquisitions of shares of capital
stock of the Guarantor in connection with any employment contract, benefit plan
or other similar arrangement with or for the benefit of employees, officers,
directors of consultants, or (v) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of
stock under any such plan in the future, or the redemption or repurchase of
such rights pursuant thereto. In addition, so long as any Preferred Securities
remain outstanding, the Guarantor (i) will remain the sole direct or indirect
owner of all of the outstanding Common Securities and shall not cause or permit
the Common Securities to be transferred except to the extent such transfer is
permitted under Section 9.01(c) of the Declaration; provided that any permitted
successor of the Guarantor under the Indenture may succeed to the Guarantor's
ownership of the Common Securities and (ii) will use reasonable efforts to
cause the Issuer to continue to be treated as a grantor trust for United States
Federal income tax purposes except in connection with a distribution of
Debentures as provided in the Declaration.
SECTION 6.02. Subordination. This GUARANTEE Agreement will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Guarantor, including the Debentures, except those made pari passu or
subordinate by their terms, and (ii) senior to all capital stock now or
hereafter issued by the Guarantor and to any GUARANTEE now or hereafter entered
into by the Guarantor in respect of any of its capital stock. The Guarantor's
obligations under this GUARANTEE Agreement will rank pari passu with respect to
obligations under other GUARANTEE agreements which it may enter into from time
to time to the extent that such agreements shall be entered into in
substantially the form hereof and provided for comparable guarantees by the
Guarantor of payment on preferred securities issued by other JPM Capital
Trusts.
<PAGE> 19
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ARTICLE VII
Termination
SECTION 7.01. This GUARANTEE Agreement shall terminate and be
of no further force and effect upon full payment of the Redemption Price of all
Preferred Securities, or upon the distribution of Debentures to Holders of
Preferred Securities and Common Securities in exchange for all of the Preferred
Securities and Common Securities, or upon full payment of the amounts payable
in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, the GUARANTEE Agreement will continue to be
executive or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to the Preferred Securities
or this GUARANTEE Agreement.
ARTICLE VIII
Limitation of Liability; Indemnification
SECTION 8.01. Exculpation. (a) No Indemnified Person shall
be liable, responsible or accountable in damages or otherwise to the Guarantor
or any Covered Person for any loss, damage or claim incurred by reason of any
act or omission performed or omitted by such Indemnified Person in good faith
and in a manner such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this GUARANTEE
Agreement or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or wilful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amounts of assets from which
<PAGE> 20
20
Distributions to Holders of Preferred Securities might properly be paid.
SECTION 8.02. Indemnification. (a) To the fullest extent
permitted by applicable law, the Guarantor shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission performed or omitted
by such Indemnified Person in good faith and in a manner such Indemnified
Person reasonably believed to be within the scope of authority conferred on
such Indemnified Person by this GUARANTEE Agreement, except that no Indemnified
Person shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by such Indemnified Person by reason of negligence or wilful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Guarantor of an undertaking by
or on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 8.02(a).
ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns. All guarantees and
agreements contained in this GUARANTEE Agreement shall bind the successors,
assignees, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article Ten of the Indenture,
the Guarantor shall not assign its obligations hereunder.
SECTION 9.02. Amendments. Except with respect to any changes
which do not adversely affect the rights of Holders (in which case no consent
of Holders will be required), this GUARANTEE Agreement may only be amended with
the prior approval of the Holders of not less than 66- 2/3% in
<PAGE> 21
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liquidation amount of the Preferred Securities. The provisions of Section
12.02 of the Declaration concerning meetings of Holders shall apply to the
giving of such approval.
SECTION 9.03 Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be in writing,
duly signed by the party giving such notice, and delivered, telecopied or
mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the
Holders:
J.P. Morgan & Co. Incorporated
60 Wall Street
New York, New York 10260-0060
Facsimile No.: (212) [ ]
Attention: [ ]
(b) if given to the GUARANTEE Trustee, to the address set
forth below or such other address as the GUARANTEE Trustee may give
notice to the Holders:
First Trust of New York, National Association
100 Wall Street
Suite 2000
New York, New York 10005
Facsimile No.: (212) [ ]
Attention: [ ]
(c) if given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.04. Genders. The masculine, feminine and neuter
genders used herein shall include the masculine, feminine and neuter genders.
<PAGE> 22
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SECTION 9.05. Benefit. This GUARANTEE Agreement is solely
for the benefit of the Holders and subject to Section 3.01(a) is not separately
transferable from the Preferred Securities.
SECTION 9.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).
SECTION 9.07. Counterparts. This GUARANTEE Agreement may be
executed in counterparts, each of which shall be an original; but such
counterparts shall together constitute one and the same instrument.
SECTION 9.08. Exercise of Overallotment Option. If and to
the extent that Preferred Securities are issued by the Issuer upon exercise of
the overallotment option referred to the second WHEREAS clause, the Guarantor
agrees to give prompt notice thereof to the GUARANTEE Trustee but the failure
to give such notice shall not relieve the Guarantor of any of its obligations
hereunder.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
J.P. MORGAN & CO. INCORPORATED,
by
------------------------------------
Name:
Title:
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION, as
GUARANTEE Trustee,
by
------------------------------------
Name:
Title:
<PAGE> 23
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STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of
, 199 , personally appeared of J.P. Morgan & Co. Incorporated,
known to me (or proved to me by introduction upon the oath of a person known to
me) to be the person and officer whose name is subscribed to the foregoing
instrument, and acknowledged to me that he/she executed the same as the act of
such trust for the purposes and consideration herein expressed and in the
capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS DAY OF , 199 .
{SEAL}
----------------------------------------
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:
-----------------------------
Commission Expires:
---------------------
<PAGE> 24
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STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of , 199 ,
personally appeared of First Trust of New York,
National Association, known to me (or proved to me by introduction upon the
oath of a person known to me) to be the person and officer whose name is
subscribed to the foregoing instrument, and acknowledged to me that he/she
executed the same as the act of such trust for the purposes and consideration
herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS DAY OF , 199 .
{SEAL}
----------------------------------------
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:
-----------------------------
Commission Expires:
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EXHIBIT 4(l)(2)
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FORM OF
GUARANTEE AGREEMENT
OF
JPM CAPITAL TRUST II
________________
DATED AS OF , 199
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<PAGE> 2
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This GUARANTEE AGREEMENT, dated as of
, 199 , is executed and delivered by J.P.
Morgan & Co. Incorporated, a Delaware corporation
(the "Guarantor"), and First Trust of New York,
National Association, as the initial GUARANTEE
Trustee (as defined herein) for the benefit of the
Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of JPM
Capital Trust II, a Delaware statutory business trust
(the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of , 199 among the trustees of
the Issuer named therein, J.P. Morgan & Co. Incorporated, as Sponsor, and the
Holders from time to time of undivided beneficial interests in the assets of
the Issuer, the Issuer may issue up to aggregate liquidation
amount of its % Preferred Trust Securities (the "Preferred Securities")
representing undivided beneficial interests in the assets of the Issuer and
having the terms set forth in Exhibit B to the Declaration, of which $
liquidation amount of the Preferred Securities are being issued as of the date
hereof. Up to the remaining $ liquidation amount of Preferred
Securities may be issued by the Issuer if and to the extent that the
over-allotment option granted by the Guarantor and the Issuer pursuant to the
Underwriting Agreement (as defined in the Declaration) is exercised by the
Underwriters named in the Underwriting Agreement.
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
the GUARANTEE Payments (as defined herein) and to make certain other payments
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by the
initial purchasers thereof of Preferred Securities, which purchase the
Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and
delivers this GUARANTEE Agreement for the benefit of the Holders from time to
time of the Preferred Securities.
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ARTICLE I
Definitions
(a) Capitalized terms used in this GUARANTEE Agreement but
not defined in the preamble above have the respective meanings assigned to them
in this Section 1.01.
(b) A term defined anywhere in this GUARANTEE Agreement has
the same meaning throughout.
(c) All references to "the GUARANTEE Agreement" or "this
GUARANTEE Agreement" are to this GUARANTEE Agreement as modified, supplemented
or amended from time to time.
(d) All references in this GUARANTEE Agreement to Articles
and Sections are to Articles and Sections of this GUARANTEE Agreement unless
otherwise specified.
(e) A term defined in the Trust Indenture Act as the same
meaning when used in this GUARANTEE Agreement unless otherwise defined in this
GUARANTEE Agreement or unless the context otherwise requires.
(f) A reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing
undivided beneficial interests in the assets of the Issuer, having the terms
set forth in Exhibit C to the Declaration.
"Covered Person" means any Holder of Preferred Securities.
"Debentures" means the series of Junior Subordinated
Debentures issued by the Guarantor under the Indenture to the Property Trustee
and entitled the " % Junior Subordinated Debentures due ".
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"Distributions" means the periodic distributions and other
payments payable to Holders of Preferred Securities in accordance with the
terms of the Preferred Securities set forth in Exhibit B to the Declaration.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this GUARANTEE Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions and the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price"), with respect
to the Preferred Securities called for redemption by the Issuer but only if and
to the extent that in each case the Guarantor has made a payment to the
Property Trustee of interest or principal on the Debentures and (ii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Debentures to Holders or the
redemption of all the Preferred Securities upon the maturity or redemption of
the Debentures as provided in the Declaration), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, to the extent the Issuer has funds
available therefor, or (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution").
"Guarantee Trustee" means First Trust of New York, National
Association until a Successor GUARANTEE Trustee has been appointed and accepted
such appointment pursuant to the terms of this GUARANTEE Agreement and
thereafter means each such Successor GUARANTEE Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any entity directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Guarantor.
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"Indemnified Person" means the GUARANTEE Trustee, any
Affiliate of the GUARANTEE Trustee, and any officers, directors, shareholders,
members, partners, employees, representatives or agents of the GUARANTEE
Trustee.
"Indenture" means the Junior Subordinated Indenture dated as
of November , 1996 between the Guarantor and First Trust of New York,
National Association, as trustee, as supplemented by the [ ] Supplemental
Indenture thereto dated as of 199 , pursuant to which the Debentures are to be
issued.
"Majority in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class, who are the
record owners of Preferred Securities whose liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) represents more than 50% of the liquidation amount of all
outstanding Preferred Securities.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning set forth in the first
WHEREAS clause above.
"Property Trustee" means the Person acting as Property Trustee
under the Declaration.
"Redemption Price" means the amount payable on redemption of
the Preferred Securities in accordance with the terms of the Preferred
Securities.
"Responsible Officer" means, with respect to the GUARANTEE
Trustee, the chairman of the board of directors, the president, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the GUARANTEE Trustee
customarily performing functions similar to those performed by any of the above
designated officers
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and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"66- 2/3% in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class who are the
record owners of Preferred Securities whose liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) represents 66- 2/3% or more of the liquidation amount of all
Preferred Securities.
"Successor GUARANTEE Trustee" means a successor GUARANTEE
Trustee possessing the qualifications to act as a GUARANTEE Trustee under
Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This
GUARANTEE Agreement is subject to the provisions of the Trust Indenture Act
that are required to be part of this GUARANTEE Agreement and shall, to the
extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this GUARANTEE
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(c) The application of the Trust Indenture Act to this
GUARANTEE Agreement shall not affect the nature of the Preferred Securities as
equity securities representing undivided beneficial interests in the assets of
the Issuer.
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SECTION 2.02. Lists of Holders of Preferred Securities. (a)
The Guarantor shall provide the GUARANTEE Trustee with such information as is
required under Section 312(a) of the Trust Indenture Act at the times and in
the manner provided in Section 312(a).
(b) The GUARANTEE Trustee shall comply with its obligations
under Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the GUARANTEE Trustee. Within 60
days after May 15 of each year, the GUARANTEE Trustee shall provide to the
Holders of the Preferred Securities such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form, in the manner and at the times
provided by Section 313 of the Trust Indenture Act. The GUARANTEE Trustee
shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.04. Periodic Reports to the GUARANTEE Trustee. The
Guarantor shall provide to the GUARANTEE Trustee, the Commission and the
Holders of the Preferred Securities, as applicable, such documents, reports and
information as required by Section 314(a)(1)-(3) (if any) of the Trust
Indenture Act and the compliance certificates required by Section 314(a)(4) and
(c) of the Trust Indenture Act, any such certificates to be provided in the
form, in the manner and at the times required by Section 314(a)(4) and (c) of
the Trust Indenture Act (provided that any certificate to be provided pursuant
to Section 314(a)(4) of the Trust Indenture Act shall be provided within 120
days of the end of each fiscal year of the Issuer).
SECTION 2.05. Evidence of Compliance with Conditions
Precedent. The Guarantor shall provide the GUARANTEE Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
GUARANTEE Agreement which relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given pursuant to Section 314(c) shall comply with Section 314(e) of the Trust
Indenture Act.
SECTION 2.06. Events of Default; Waiver. (a) Subject to
Section 2.06(b), Holders of Preferred Securities may by vote of at least a
Majority in liquidation amount of the Preferred Securities, (A) direct the
time, method and place of conducting any proceeding for any remedy
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available to the GUARANTEE Trustee, or exercising any trust or power conferred
upon by the GUARANTEE Trustee or (B) on behalf of the Holders of all Preferred
Securities waive any past Event of Default and its consequences. Upon such
waiver, any such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
GUARANTEE Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
(b) The right of any Holder of Preferred Securities to
receive payment of the GUARANTEE Payments in accordance with this GUARANTEE
Agreement, or to institute suit for the enforcement of any such payment, shall
not be impaired without the consent of each such Holder.
SECTION 2.07. Disclosure of Information. The disclosure of
information as to the names and addresses of the Holders of the Preferred
Securities in accordance with Sections 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, shall not be
deemed to be a violation of any existing law, or any law hereafter enacted
which does not specifically refer to Section 312 of the Trust Indenture Act,
nor shall the GUARANTEE Trustee be held accountable by reason of mailing any
material pursuant to a request made under Section 312(b) of the Trust Indenture
Act.
SECTION 2.08. Conflicting Interest. The Declaration shall be
deemed to be specifically described in this GUARANTEE Agreement for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III
Powers, Duties and Rights of Guarantee Trustee
SECTION 3.01. Powers and Duties of the GUARANTEE Trustee.
(a) This GUARANTEE Agreement shall be held by the GUARANTEE Trustee in trust
for the benefit of the Holders of the Preferred Securities. The GUARANTEE
Trustee shall not transfer its right, title and interest in the GUARANTEE
Agreement to any Person except a Successor GUARANTEE Trustee on acceptance by
such Successor GUARANTEE Trustee of its appointment to act as GUARANTEE Trustee
or to a Holder of Preferred Securities exercising his or her rights pursuant
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to Section 5.04. The right, title and interest of the GUARANTEE Trustee to the
GUARANTEE Agreement shall vest automatically in each Person who may hereafter
be appointed as GUARANTEE Trustee in accordance with Article IV. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered.
(b) If an Event of Default occurs and is continuing, the
GUARANTEE Trustee shall enforce this GUARANTEE Agreement for the benefit of the
Holders of the Preferred Securities.
(c) This GUARANTEE Agreement and all moneys received by the
Property Trustee hereunder in respect of the GUARANTEE Payments will not be
subject to any right, charge, security interest, lien or claim of any kind in
favor of, or for the benefit of the GUARANTEE Trustee or its agents or their
creditors.
(d) The GUARANTEE Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the holders of the Preferred Securities, as their names and
addresses appear upon the register, notice of all Events of Default known to
the GUARANTEE Trustee, unless such defaults shall have been cured before the
giving of such notice; provided, that, the GUARANTEE Trustee shall be protected
in withholding such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors and/or Responsible
Officers, of the GUARANTEE Trustee in good faith determine that the withholding
of such notice is in the interests of the Holders of the Preferred Securities.
The GUARANTEE Trustee shall not be deemed to have knowledge of any default
except any default as to which the GUARANTEE Trustee shall have received
written notice or a Responsible Officer charged with the administration of the
GUARANTEE Agreement shall have obtained written notice.
(e) The GUARANTEE Trustee shall not resign as a Trustee
unless a Successor GUARANTEE Trustee has been appointed and accepted that
appointment in accordance with Article IV.
SECTION 3.02. Certain Rights and Duties of the GUARANTEE
Trustee. (a) The GUARANTEE Trustee, before the occurrence of an Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically
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set forth in this GUARANTEE Agreement, and no implied covenants shall be read
into this GUARANTEE Agreement against the GUARANTEE Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section
2.06(a)), the GUARANTEE Trustee shall exercise such of the rights and powers
vested in it by this GUARANTEE Agreement, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in this conduct of his or her own affairs.
(b) No provision of this GUARANTEE Agreement shall be
construed to relieve the GUARANTEE Trustee from liability for its own negligent
action, its own negligent failure to act or its own wilful misconduct, except
that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred;
(A) the duties and obligations of the GUARANTEE
Trustee shall be determined solely by the express provisions
of this GUARANTEE Agreement, and the GUARANTEE Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this GUARANTEE
Agreement, and no implied covenants or obligations shall be
read into this GUARANTEE Agreement against the GUARANTEE
Trustee; and
(B) in the absence of bad faith on the part of the
GUARANTEE Trustee, the GUARANTEE Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the GUARANTEE Trustee and conforming to
the requirements of this GUARANTEE Agreement; but in the case
of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
GUARANTEE Trustee, the GUARANTEE Trustee shall be under a duty
to examine the same to determine whether or not they conform
to the requirements of this GUARANTEE Agreement;
(ii) the GUARANTEE Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
GUARANTEE Trustee, unless it
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shall be proved that the GUARANTEE Trustee was negligent in
ascertaining the pertinent facts;
(iii) the GUARANTEE Trustee shall not be liable with respect
to any action take or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Preferred Securities
as provided herein relating to the time, method and place of
conducting any proceeding for any remedy available to the GUARANTEE
Trustee, or exercising any trust or power conferred upon the GUARANTEE
Trustee under this GUARANTEE Agreement; and
(iv) no provision of this GUARANTEE Agreement shall require
the GUARANTEE Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
GUARANTEE Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.02(a) and (b):
(i) whenever in the administration of this GUARANTEE
Agreement, the GUARANTEE Trustee shall deem it desirable that a matter
proved or established prior to taking, suffering or omitting any
action hereunder, the GUARANTEE Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon a certificate, which shall comply with
the provisions of Section 314(e) of the Trust Indenture Act, signed by
any authorized officer of the Guarantor;
(ii) the GUARANTEE Trustee (A) may consult with counsel (which
may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees) selected by it in good faith and with
due care and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon and in accordance with
such advice and opinion and (B) shall have the right at
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any time to seek instructions concerning the administration of this
GUARANTEE Agreement from any court of competent jurisdiction;
(iii) the GUARANTEE Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the GUARANTEE Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed by it in good faith and with due care;
(iv) the GUARANTEE Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this GUARANTEE
Agreement at the request or direction of any Holders of Preferred
Securities, unless such Holders shall have offered to the GUARANTEE
Trustee reasonable security and indemnity against the costs, expenses
(including its attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or direction;
provided that nothing contained in this clause (iv) shall relieve the
GUARANTEE Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured or waived) to exercise such of
the rights and powers vested in it by this GUARANTEE Agreement, and to
use the same degree of care and skill in this exercise, as a prudent
person would exercise or use under the circumstances in the conduct of
his or her own affairs; and
(v) any action taken by the GUARANTEE Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities and the
signature of the GUARANTEE Trustee or its agents alone shall be
sufficient and effective to perform any such action; and no third
party shall be required to inquire as to the authority of the
GUARANTEE Trustee to so act, or as to its compliance with any of the
terms and provisions of this GUARANTEE Agreement, both of which shall
be conclusively evidenced by the GUARANTEE Trustee's or its agent's
taking such action.
SECTION 3.03. Not Responsible for Recitals or Issuance of
Guarantee. The recitals contained in this GUARANTEE shall be taken as the
statements of the Guarantor and the GUARANTEE Trustee does not assume any
responsibility for their correctness. The GUARANTEE Trustee makes no
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representations as to the validity or sufficiency of this GUARANTEE Agreement.
ARTICLE IV
Guarantee Trustee
SECTION 4.01. Qualifications. (a) There shall at all times
be a GUARANTEE Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted
by the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000,
and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred
to above, then for the purposes of this Section 4.01(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent
report of condition so published.
If at any time the GUARANTEE Trustee shall cease to satisfy
the requirements of clauses (i)-(ii) above, the GUARANTEE Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02.
If the GUARANTEE Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the GUARANTEE Trustee
and the Guarantor shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
SECTION 4.02. Appointment, Removal and Resignation of
GUARANTEE Trustee. (a) Subject to Section 4.02(b), the GUARANTEE Trustee may
be appointed or removed without cause at any time by the Guarantor.
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(b) The GUARANTEE Trustee shall not be removed in accordance
with Section 4.02(a) until a Successor GUARANTEE Trustee possessing the
qualifications to act as GUARANTEE Trustee under Section 4.01(a) has been
appointed and has accepted such appointment by written instrument executed by
such Successor GUARANTEE Trustee and delivered to the Guarantor and the
GUARANTEE Trustee being removed.
(c) The GUARANTEE Trustee appointed to office shall hold
office until his successor shall have been appointed or until its removal or
resignation.
(d) The GUARANTEE Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument (a "Resignation
Request") in writing signed by the Guarantee Trustee and delivered to the
Guarantor, which resignation shall take effect upon such delivery or upon such
later date as is specified therein; provided, however, that no such resignation
of the GUARANTEE Trustee shall be effective until a Successor GUARANTEE Trustee
possessing the qualifications to act as GUARANTEE Trustee under Section 4.01(a)
has been appointed and has accepted such appointment by instrument executed by
such Successor GUARANTEE Trustee and delivered to Guarantor and the resigning
GUARANTEE Trustee.
(e) If no Successor GUARANTEE Trustee shall have been
appointed and accepted appointed as provided in this Section 4.02 within 60
days after delivery to the Guarantor of a Resignation Request, the resigning
GUARANTEE Trustee may petition any court of competent jurisdiction for
appointment of a Successor GUARANTEE Trustee. Such court may thereupon after
such notice, if any, as it may deem proper and prescribe, appoint a Successor
GUARANTEE Trustee.
ARTICLE V
Guarantee
SECTION 5.01. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the GUARANTEE Payments
(without duplication of amounts theretofore paid by the Issuer) regardless of
any defense, right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a GUARANTEE Payment may be
satisfied by direct payment of the
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required amounts by the Guarantor to the Holders or by causing the Issuer to
pay such amounts to the Holders.
SECTION 5.02. Waiver of Notice. The Guarantor hereby waives
notice of acceptance of this GUARANTEE Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require
a proceeding first against the Issuer or any other Person before proceeding
against the Guarantor, protect, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
SECTION 5.03. Obligations Not Affected. The obligations,
covenants, agreements and duties of the Guarantor under this GUARANTEE
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the
Preferred Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions (other than an extension of time
for payment of Distributions that results from the extension of any
interest payment period on the Debentures), Redemption Price,
Liquidation Distribution (as defined in the Declaration) or any other
sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
<PAGE> 16
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affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstances whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. Enforcement of Guarantee. The Guarantor and
the GUARANTEE Trustee expressly acknowledge that (i) this Guarantee Agreement
will be deposited with the GUARANTEE Trustee to be held for the benefit of the
Holders; (ii) the GUARANTEE Trustee has the right to enforce this GUARANTEE
Agreement on behalf of the Holders; (iii) Holders representing not less than a
Majority in liquidation amount of the Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available in respect of this GUARANTEE Agreement including the giving of
directions to the GUARANTEE Trustee, or exercising any trust or other power
conferred upon the GUARANTEE Trustee under this GUARANTEE Agreement, and (iv)
if the GUARANTEE Trustee fails to enforce this GUARANTEE Agreement, any Holder
of Preferred Securities may institute a legal proceeding directly against the
Guarantor to enforce its rights under this GUARANTEE Agreement, without first
instituting a legal proceeding against the Issuer, the GUARANTEE Trustee, or
any other Person.
SECTION 5.05. GUARANTEE of Payment. This GUARANTEE Agreement
creates a GUARANTEE of payment and not merely of collection. This GUARANTEE
Agreement will not be discharged except by payment of the GUARANTEE Payments in
full (without duplication of amounts theretofore paid by the Issuer).
<PAGE> 17
17
SECTION 5.06. Subrogation. The Guarantor shall be subrogated
to all (if any) rights of the Holders against the Issuer in respect of any
amounts paid to the Holders by the Guarantor under this GUARANTEE Agreement;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this GUARANTEE
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this GUARANTEE Agreement. If any amount shall be paid to the Guarantor
in violation of the preceding sentence, the Guarantor agrees to hold such
amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.07. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Preferred Securities and that the Guarantor
shall be liable as principal and as debtor hereunder to make GUARANTEE Payments
pursuant to the terms of this GUARANTEE Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 5.03 hereof.
ARTICLE VI
Limitation of Transactions; Subordination
SECTION 6.01. Limitation of Transactions. So long as any
Preferred Securities remain outstanding, the Guarantor will not declare or pay
dividends on, or redeem, purchase, acquire or make a distribution or
liquidation payment with respect to, any of its common stock or preferred stock
or make any GUARANTEE payment with respect thereto if at such time (i) the
Guarantor shall be in default with respect to its GUARANTEE Payments or other
payment obligations hereunder, (ii) there shall have occurred any event of
default under the Declaration or (iii) the Guarantor shall have given notice of
its selection of a Deferral Period (as defined in the Indenture) and such
period, or any extension thereof, is continuing; provided, however, that the
foregoing restrictions shall not apply to (i) dividends, redemptions,
purchases, acquisitions, distributions or payments made by the Guarantor by way
of issuance of shares of its capital stock, (ii) payments of
<PAGE> 18
18
accrued dividends by the Guarantor upon the redemption, exchange or conversion
of any preferred stock of the Guarantor as may be outstanding from time to time
in accordance with the terms of such preferred stock, (iii) cash payments made
by the Guarantor in lieu of delivering fractional shares upon the redemption,
exchange or conversion of any preferred stock of the Guarantor as may be
outstanding from time to time in accordance with the terms of such preferred
stock, (iv) repurchases, redemptions or other acquisitions of shares of capital
stock of the Guarantor in connection with any employment contract, benefit plan
or other similar arrangement with or for the benefit of employees, officers,
directors of consultants, or (v) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of
stock under any such plan in the future, or the redemption or repurchase of
such rights pursuant thereto. In addition, so long as any Preferred Securities
remain outstanding, the Guarantor (i) will remain the sole direct or indirect
owner of all of the outstanding Common Securities and shall not cause or permit
the Common Securities to be transferred except to the extent such transfer is
permitted under Section 9.01(c) of the Declaration; provided that any permitted
successor of the Guarantor under the Indenture may succeed to the Guarantor's
ownership of the Common Securities and (ii) will use reasonable efforts to
cause the Issuer to continue to be treated as a grantor trust for United States
Federal income tax purposes except in connection with a distribution of
Debentures as provided in the Declaration.
SECTION 6.02. Subordination. This GUARANTEE Agreement will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Guarantor, including the Debentures, except those made pari passu or
subordinate by their terms, and (ii) senior to all capital stock now or
hereafter issued by the Guarantor and to any GUARANTEE now or hereafter entered
into by the Guarantor in respect of any of its capital stock. The Guarantor's
obligations under this GUARANTEE Agreement will rank pari passu with respect to
obligations under other GUARANTEE agreements which it may enter into from time
to time to the extent that such agreements shall be entered into in
substantially the form hereof and provided for comparable guarantees by the
Guarantor of payment on preferred securities issued by other JPM Capital
Trusts.
<PAGE> 19
19
ARTICLE VII
Termination
SECTION 7.01. This GUARANTEE Agreement shall terminate and be
of no further force and effect upon full payment of the Redemption Price of all
Preferred Securities, or upon the distribution of Debentures to Holders of
Preferred Securities and Common Securities in exchange for all of the Preferred
Securities and Common Securities, or upon full payment of the amounts payable
in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, the GUARANTEE Agreement will continue to be
executive or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to the Preferred Securities
or this GUARANTEE Agreement.
ARTICLE VIII
Limitation of Liability; Indemnification
SECTION 8.01. Exculpation. (a) No Indemnified Person shall
be liable, responsible or accountable in damages or otherwise to the Guarantor
or any Covered Person for any loss, damage or claim incurred by reason of any
act or omission performed or omitted by such Indemnified Person in good faith
and in a manner such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this GUARANTEE
Agreement or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or wilful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amounts of assets from which
<PAGE> 20
20
Distributions to Holders of Preferred Securities might properly be paid.
SECTION 8.02. Indemnification. (a) To the fullest extent
permitted by applicable law, the Guarantor shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission performed or omitted
by such Indemnified Person in good faith and in a manner such Indemnified
Person reasonably believed to be within the scope of authority conferred on
such Indemnified Person by this GUARANTEE Agreement, except that no Indemnified
Person shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by such Indemnified Person by reason of negligence or wilful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Guarantor of an undertaking by
or on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 8.02(a).
ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns. All guarantees and
agreements contained in this GUARANTEE Agreement shall bind the successors,
assignees, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article Ten of the Indenture,
the Guarantor shall not assign its obligations hereunder.
SECTION 9.02. Amendments. Except with respect to any changes
which do not adversely affect the rights of Holders (in which case no consent
of Holders will be required), this GUARANTEE Agreement may only be amended with
the prior approval of the Holders of not less than 66- 2/3% in
<PAGE> 21
21
liquidation amount of the Preferred Securities. The provisions of Section
12.02 of the Declaration concerning meetings of Holders shall apply to the
giving of such approval.
SECTION 9.03 Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be in writing,
duly signed by the party giving such notice, and delivered, telecopied or
mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the
Holders:
J.P. Morgan & Co. Incorporated
60 Wall Street
New York, New York 10260-0060
Facsimile No.: (212) [ ]
Attention: [ ]
(b) if given to the GUARANTEE Trustee, to the address set
forth below or such other address as the GUARANTEE Trustee may give
notice to the Holders:
First Trust of New York, National Association
100 Wall Street
Suite 2000
New York, New York 10005
Facsimile No.: (212) [ ]
Attention: [ ]
(c) if given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.04. Genders. The masculine, feminine and neuter
genders used herein shall include the masculine, feminine and neuter genders.
<PAGE> 22
22
SECTION 9.05. Benefit. This GUARANTEE Agreement is solely
for the benefit of the Holders and subject to Section 3.01(a) is not separately
transferable from the Preferred Securities.
SECTION 9.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).
SECTION 9.07. Counterparts. This GUARANTEE Agreement may be
executed in counterparts, each of which shall be an original; but such
counterparts shall together constitute one and the same instrument.
SECTION 9.08. Exercise of Overallotment Option. If and to
the extent that Preferred Securities are issued by the Issuer upon exercise of
the overallotment option referred to the second WHEREAS clause, the Guarantor
agrees to give prompt notice thereof to the GUARANTEE Trustee but the failure
to give such notice shall not relieve the Guarantor of any of its obligations
hereunder.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
J.P. MORGAN & CO. INCORPORATED,
by
-----------------------------------
Name:
Title:
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION, as
GUARANTEE Trustee,
by
-----------------------------------
Name:
Title:
<PAGE> 23
23
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of , 199 ,
personally appeared of J.P. Morgan & Co. Incorporated, known to
me (or proved to me by introduction upon the oath of a person known to me) to
be the person and officer whose name is subscribed to the foregoing instrument,
and acknowledged to me that he/she executed the same as the act of such trust
for the purposes and consideration herein expressed and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL THIS DAY OF , 199 .
{SEAL}
----------------------------------------
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:
-----------------------------
Commission Expires:
---------------------
<PAGE> 24
24
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of ,
199 , personally appeared of First Trust of New York,
National Association, known to me (or proved to me by introduction upon the
oath of a person known to me) to be the person and officer whose name is
subscribed to the foregoing instrument, and acknowledged to me that he/she
executed the same as the act of such trust for the purposes and consideration
herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS DAY OF , 199 .
{SEAL}
----------------------------------------
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:
-----------------------------
Commission Expires:
---------------------
<PAGE> 1
EXHIBIT 4(l)(3)
================================================================================
FORM OF
GUARANTEE AGREEMENT
OF
JPM CAPITAL TRUST III
________________
DATED AS OF , 199
================================================================================
<PAGE> 2
2
This GUARANTEE AGREEMENT, dated as of
, 199 , is executed and delivered by J.P.
Morgan & Co. Incorporated, a Delaware corporation
(the "Guarantor"), and First Trust of New York,
National Association, as the initial GUARANTEE
Trustee (as defined herein) for the benefit of the
Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of JPM
Capital Trust III, a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of , 199 among the trustees of
the Issuer named therein, J.P. Morgan & Co. Incorporated, as Sponsor, and the
Holders from time to time of undivided beneficial interests in the assets of
the Issuer, the Issuer may issue up to aggregate liquidation
amount of its % Preferred Trust Securities (the "Preferred Securities")
representing undivided beneficial interests in the assets of the Issuer and
having the terms set forth in Exhibit B to the Declaration, of which $
liquidation amount of the Preferred Securities are being issued as of the date
hereof. Up to the remaining $ liquidation amount of Preferred
Securities may be issued by the Issuer if and to the extent that the
over-allotment option granted by the Guarantor and the Issuer pursuant to the
Underwriting Agreement (as defined in the Declaration) is exercised by the
Underwriters named in the Underwriting Agreement.
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
the GUARANTEE Payments (as defined herein) and to make certain other payments
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by the
initial purchasers thereof of Preferred Securities, which purchase the
Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and
delivers this GUARANTEE Agreement for the benefit of the Holders from time to
time of the Preferred Securities.
<PAGE> 3
3
ARTICLE I
Definitions
(a) Capitalized terms used in this GUARANTEE Agreement but
not defined in the preamble above have the respective meanings assigned to them
in this Section 1.01.
(b) A term defined anywhere in this GUARANTEE Agreement has
the same meaning throughout.
(c) All references to "the GUARANTEE Agreement" or "this
GUARANTEE Agreement" are to this GUARANTEE Agreement as modified, supplemented
or amended from time to time.
(d) All references in this GUARANTEE Agreement to Articles
and Sections are to Articles and Sections of this GUARANTEE Agreement unless
otherwise specified.
(e) A term defined in the Trust Indenture Act as the same
meaning when used in this GUARANTEE Agreement unless otherwise defined in this
GUARANTEE Agreement or unless the context otherwise requires.
(f) A reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing
undivided beneficial interests in the assets of the Issuer, having the terms
set forth in Exhibit C to the Declaration.
"Covered Person" means any Holder of Preferred Securities.
"Debentures" means the series of Junior Subordinated
Debentures issued by the Guarantor under the Indenture to the Property Trustee
and entitled the " % Junior Subordinated Debentures due ".
<PAGE> 4
4
"Distributions" means the periodic distributions and other
payments payable to Holders of Preferred Securities in accordance with the
terms of the Preferred Securities set forth in Exhibit B to the Declaration.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this GUARANTEE Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions and the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price"), with respect
to the Preferred Securities called for redemption by the Issuer but only if and
to the extent that in each case the Guarantor has made a payment to the
Property Trustee of interest or principal on the Debentures and (ii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Debentures to Holders or the
redemption of all the Preferred Securities upon the maturity or redemption of
the Debentures as provided in the Declaration), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, to the extent the Issuer has funds
available therefor, or (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution").
"Guarantee Trustee" means First Trust of New York, National
Association until a Successor GUARANTEE Trustee has been appointed and accepted
such appointment pursuant to the terms of this GUARANTEE Agreement and
thereafter means each such Successor GUARANTEE Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any entity directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Guarantor.
<PAGE> 5
5
"Indemnified Person" means the GUARANTEE Trustee, any
Affiliate of the GUARANTEE Trustee, and any officers, directors, shareholders,
members, partners, employees, representatives or agents of the GUARANTEE
Trustee.
"Indenture" means the Junior Subordinated Indenture dated as
of November , 1996 between the Guarantor and First Trust of New York,
National Association, as trustee, as supplemented by the [ ] Supplemental
Indenture thereto dated as of 199 , pursuant to which the Debentures are to be
issued.
"Majority in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class, who are the
record owners of Preferred Securities whose liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) represents more than 50% of the liquidation amount of all
outstanding Preferred Securities.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning set forth in the first
WHEREAS clause above.
"Property Trustee" means the Person acting as Property Trustee
under the Declaration.
"Redemption Price" means the amount payable on redemption of
the Preferred Securities in accordance with the terms of the Preferred
Securities.
"Responsible Officer" means, with respect to the GUARANTEE
Trustee, the chairman of the board of directors, the president, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the GUARANTEE Trustee
customarily performing functions similar to those performed by any of the above
designated officers
<PAGE> 6
6
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"66- 2/3% in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class who are the
record owners of Preferred Securities whose liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) represents 66- 2/3% or more of the liquidation amount of all
Preferred Securities.
"Successor GUARANTEE Trustee" means a successor GUARANTEE
Trustee possessing the qualifications to act as a GUARANTEE Trustee under
Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This
GUARANTEE Agreement is subject to the provisions of the Trust Indenture Act
that are required to be part of this GUARANTEE Agreement and shall, to the
extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this GUARANTEE
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(c) The application of the Trust Indenture Act to this
GUARANTEE Agreement shall not affect the nature of the Preferred Securities as
equity securities representing undivided beneficial interests in the assets of
the Issuer.
<PAGE> 7
7
SECTION 2.02. Lists of Holders of Preferred Securities. (a)
The Guarantor shall provide the GUARANTEE Trustee with such information as is
required under Section 312(a) of the Trust Indenture Act at the times and in
the manner provided in Section 312(a).
(b) The GUARANTEE Trustee shall comply with its obligations
under Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the GUARANTEE Trustee. Within 60
days after May 15 of each year, the GUARANTEE Trustee shall provide to the
Holders of the Preferred Securities such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form, in the manner and at the times
provided by Section 313 of the Trust Indenture Act. The GUARANTEE Trustee
shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.04. Periodic Reports to the GUARANTEE Trustee. The
Guarantor shall provide to the GUARANTEE Trustee, the Commission and the
Holders of the Preferred Securities, as applicable, such documents, reports and
information as required by Section 314(a)(1)-(3) (if any) of the Trust
Indenture Act and the compliance certificates required by Section 314(a)(4) and
(c) of the Trust Indenture Act, any such certificates to be provided in the
form, in the manner and at the times required by Section 314(a)(4) and (c) of
the Trust Indenture Act (provided that any certificate to be provided pursuant
to Section 314(a)(4) of the Trust Indenture Act shall be provided within 120
days of the end of each fiscal year of the Issuer).
SECTION 2.05. Evidence of Compliance with Conditions
Precedent. The Guarantor shall provide the GUARANTEE Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
GUARANTEE Agreement which relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given pursuant to Section 314(c) shall comply with Section 314(e) of the Trust
Indenture Act.
SECTION 2.06. Events of Default; Waiver. (a) Subject to
Section 2.06(b), Holders of Preferred Securities may by vote of at least a
Majority in liquidation amount of the Preferred Securities, (A) direct the
time, method and place of conducting any proceeding for any remedy
<PAGE> 8
8
available to the GUARANTEE Trustee, or exercising any trust or power conferred
upon by the GUARANTEE Trustee or (B) on behalf of the Holders of all Preferred
Securities waive any past Event of Default and its consequences. Upon such
waiver, any such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
GUARANTEE Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
(b) The right of any Holder of Preferred Securities to
receive payment of the GUARANTEE Payments in accordance with this GUARANTEE
Agreement, or to institute suit for the enforcement of any such payment, shall
not be impaired without the consent of each such Holder.
SECTION 2.07. Disclosure of Information. The disclosure of
information as to the names and addresses of the Holders of the Preferred
Securities in accordance with Sections 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, shall not be
deemed to be a violation of any existing law, or any law hereafter enacted
which does not specifically refer to Section 312 of the Trust Indenture Act,
nor shall the GUARANTEE Trustee be held accountable by reason of mailing any
material pursuant to a request made under Section 312(b) of the Trust Indenture
Act.
SECTION 2.08. Conflicting Interest. The Declaration shall be
deemed to be specifically described in this GUARANTEE Agreement for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III
Powers, Duties and Rights of Guarantee Trustee
SECTION 3.01. Powers and Duties of the GUARANTEE Trustee.
(a) This GUARANTEE Agreement shall be held by the GUARANTEE Trustee in trust
for the benefit of the Holders of the Preferred Securities. The GUARANTEE
Trustee shall not transfer its right, title and interest in the GUARANTEE
Agreement to any Person except a Successor GUARANTEE Trustee on acceptance by
such Successor GUARANTEE Trustee of its appointment to act as GUARANTEE Trustee
or to a Holder of Preferred Securities exercising his or her rights pursuant
<PAGE> 9
9
to Section 5.04. The right, title and interest of the GUARANTEE Trustee to the
GUARANTEE Agreement shall vest automatically in each Person who may hereafter
be appointed as GUARANTEE Trustee in accordance with Article IV. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered.
(b) If an Event of Default occurs and is continuing, the
GUARANTEE Trustee shall enforce this GUARANTEE Agreement for the benefit of the
Holders of the Preferred Securities.
(c) This GUARANTEE Agreement and all moneys received by the
Property Trustee hereunder in respect of the GUARANTEE Payments will not be
subject to any right, charge, security interest, lien or claim of any kind in
favor of, or for the benefit of the GUARANTEE Trustee or its agents or their
creditors.
(d) The GUARANTEE Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the holders of the Preferred Securities, as their names and
addresses appear upon the register, notice of all Events of Default known to
the GUARANTEE Trustee, unless such defaults shall have been cured before the
giving of such notice; provided, that, the GUARANTEE Trustee shall be protected
in withholding such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors and/or Responsible
Officers, of the GUARANTEE Trustee in good faith determine that the withholding
of such notice is in the interests of the Holders of the Preferred Securities.
The GUARANTEE Trustee shall not be deemed to have knowledge of any default
except any default as to which the GUARANTEE Trustee shall have received
written notice or a Responsible Officer charged with the administration of the
GUARANTEE Agreement shall have obtained written notice.
(e) The GUARANTEE Trustee shall not resign as a Trustee
unless a Successor GUARANTEE Trustee has been appointed and accepted that
appointment in accordance with Article IV.
SECTION 3.02. Certain Rights and Duties of the GUARANTEE
Trustee. (a) The GUARANTEE Trustee, before the occurrence of an Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically
<PAGE> 10
10
set forth in this GUARANTEE Agreement, and no implied covenants shall be read
into this GUARANTEE Agreement against the GUARANTEE Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section
2.06(a)), the GUARANTEE Trustee shall exercise such of the rights and powers
vested in it by this GUARANTEE Agreement, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in this conduct of his or her own affairs.
(b) No provision of this GUARANTEE Agreement shall be
construed to relieve the GUARANTEE Trustee from liability for its own negligent
action, its own negligent failure to act or its own wilful misconduct, except
that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred;
(A) the duties and obligations of the GUARANTEE
Trustee shall be determined solely by the express provisions
of this GUARANTEE Agreement, and the GUARANTEE Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this GUARANTEE
Agreement, and no implied covenants or obligations shall be
read into this GUARANTEE Agreement against the GUARANTEE
Trustee; and
(B) in the absence of bad faith on the part of the
GUARANTEE Trustee, the GUARANTEE Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the GUARANTEE Trustee and conforming to
the requirements of this GUARANTEE Agreement; but in the case
of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
GUARANTEE Trustee, the GUARANTEE Trustee shall be under a duty
to examine the same to determine whether or not they conform
to the requirements of this GUARANTEE Agreement;
(ii) the GUARANTEE Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
GUARANTEE Trustee, unless it
<PAGE> 11
11
shall be proved that the GUARANTEE Trustee was negligent in
ascertaining the pertinent facts;
(iii) the GUARANTEE Trustee shall not be liable with respect
to any action take or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Preferred Securities
as provided herein relating to the time, method and place of
conducting any proceeding for any remedy available to the GUARANTEE
Trustee, or exercising any trust or power conferred upon the GUARANTEE
Trustee under this GUARANTEE Agreement; and
(iv) no provision of this GUARANTEE Agreement shall require
the GUARANTEE Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
GUARANTEE Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.02(a) and (b):
(i) whenever in the administration of this GUARANTEE
Agreement, the GUARANTEE Trustee shall deem it desirable that a matter
proved or established prior to taking, suffering or omitting any
action hereunder, the GUARANTEE Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon a certificate, which shall comply with
the provisions of Section 314(e) of the Trust Indenture Act, signed by
any authorized officer of the Guarantor;
(ii) the GUARANTEE Trustee (A) may consult with counsel (which
may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees) selected by it in good faith and with
due care and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon and in accordance with
such advice and opinion and (B) shall have the right at
<PAGE> 12
12
any time to seek instructions concerning the administration of this
GUARANTEE Agreement from any court of competent jurisdiction;
(iii) the GUARANTEE Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the GUARANTEE Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed by it in good faith and with due care;
(iv) the GUARANTEE Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this GUARANTEE
Agreement at the request or direction of any Holders of Preferred
Securities, unless such Holders shall have offered to the GUARANTEE
Trustee reasonable security and indemnity against the costs, expenses
(including its attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or direction;
provided that nothing contained in this clause (iv) shall relieve the
GUARANTEE Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured or waived) to exercise such of
the rights and powers vested in it by this GUARANTEE Agreement, and to
use the same degree of care and skill in this exercise, as a prudent
person would exercise or use under the circumstances in the conduct of
his or her own affairs; and
(v) any action taken by the GUARANTEE Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities and the
signature of the GUARANTEE Trustee or its agents alone shall be
sufficient and effective to perform any such action; and no third
party shall be required to inquire as to the authority of the
GUARANTEE Trustee to so act, or as to its compliance with any of the
terms and provisions of this GUARANTEE Agreement, both of which shall
be conclusively evidenced by the GUARANTEE Trustee's or its agent's
taking such action.
SECTION 3.03. Not Responsible for Recitals or Issuance of
Guarantee. The recitals contained in this GUARANTEE shall be taken as the
statements of the Guarantor and the GUARANTEE Trustee does not assume any
responsibility for their correctness. The GUARANTEE Trustee makes no
<PAGE> 13
13
representations as to the validity or sufficiency of this GUARANTEE Agreement.
ARTICLE IV
Guarantee Trustee
SECTION 4.01. Qualifications. (a) There shall at all times
be a GUARANTEE Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted
by the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000,
and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred
to above, then for the purposes of this Section 4.01(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent
report of condition so published.
If at any time the GUARANTEE Trustee shall cease to satisfy
the requirements of clauses (i)-(ii) above, the GUARANTEE Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02.
If the GUARANTEE Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the GUARANTEE Trustee
and the Guarantor shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
SECTION 4.02. Appointment, Removal and Resignation of
GUARANTEE Trustee. (a) Subject to Section 4.02(b), the GUARANTEE Trustee may
be appointed or removed without cause at any time by the Guarantor.
<PAGE> 14
14
(b) The GUARANTEE Trustee shall not be removed in accordance
with Section 4.02(a) until a Successor GUARANTEE Trustee possessing the
qualifications to act as GUARANTEE Trustee under Section 4.01(a) has been
appointed and has accepted such appointment by written instrument executed by
such Successor GUARANTEE Trustee and delivered to the Guarantor and the
GUARANTEE Trustee being removed.
(c) The GUARANTEE Trustee appointed to office shall hold
office until his successor shall have been appointed or until its removal or
resignation.
(d) The GUARANTEE Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument (a "Resignation
Request") in writing signed by the Guarantee Trustee and delivered to the
Guarantor, which resignation shall take effect upon such delivery or upon such
later date as is specified therein; provided, however, that no such resignation
of the GUARANTEE Trustee shall be effective until a Successor GUARANTEE Trustee
possessing the qualifications to act as GUARANTEE Trustee under Section 4.01(a)
has been appointed and has accepted such appointment by instrument executed by
such Successor GUARANTEE Trustee and delivered to Guarantor and the resigning
GUARANTEE Trustee.
(e) If no Successor GUARANTEE Trustee shall have been
appointed and accepted appointed as provided in this Section 4.02 within 60
days after delivery to the Guarantor of a Resignation Request, the resigning
GUARANTEE Trustee may petition any court of competent jurisdiction for
appointment of a Successor GUARANTEE Trustee. Such court may thereupon after
such notice, if any, as it may deem proper and prescribe, appoint a Successor
GUARANTEE Trustee.
ARTICLE V
Guarantee
SECTION 5.01. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the GUARANTEE Payments
(without duplication of amounts theretofore paid by the Issuer) regardless of
any defense, right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a GUARANTEE Payment may be
satisfied by direct payment of the
<PAGE> 15
15
required amounts by the Guarantor to the Holders or by causing the Issuer to
pay such amounts to the Holders.
SECTION 5.02. Waiver of Notice. The Guarantor hereby waives
notice of acceptance of this GUARANTEE Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require
a proceeding first against the Issuer or any other Person before proceeding
against the Guarantor, protect, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
SECTION 5.03. Obligations Not Affected. The obligations,
covenants, agreements and duties of the Guarantor under this GUARANTEE
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the
Preferred Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions (other than an extension of time
for payment of Distributions that results from the extension of any
interest payment period on the Debentures), Redemption Price,
Liquidation Distribution (as defined in the Declaration) or any other
sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
<PAGE> 16
16
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstances whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. Enforcement of Guarantee. The Guarantor and
the GUARANTEE Trustee expressly acknowledge that (i) this Guarantee Agreement
will be deposited with the GUARANTEE Trustee to be held for the benefit of the
Holders; (ii) the GUARANTEE Trustee has the right to enforce this GUARANTEE
Agreement on behalf of the Holders; (iii) Holders representing not less than a
Majority in liquidation amount of the Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available in respect of this GUARANTEE Agreement including the giving of
directions to the GUARANTEE Trustee, or exercising any trust or other power
conferred upon the GUARANTEE Trustee under this GUARANTEE Agreement, and (iv)
if the GUARANTEE Trustee fails to enforce this GUARANTEE Agreement, any Holder
of Preferred Securities may institute a legal proceeding directly against the
Guarantor to enforce its rights under this GUARANTEE Agreement, without first
instituting a legal proceeding against the Issuer, the GUARANTEE Trustee, or
any other Person.
SECTION 5.05. GUARANTEE of Payment. This GUARANTEE Agreement
creates a GUARANTEE of payment and not merely of collection. This GUARANTEE
Agreement will not be discharged except by payment of the GUARANTEE Payments in
full (without duplication of amounts theretofore paid by the Issuer).
<PAGE> 17
17
SECTION 5.06. Subrogation. The Guarantor shall be subrogated
to all (if any) rights of the Holders against the Issuer in respect of any
amounts paid to the Holders by the Guarantor under this GUARANTEE Agreement;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this GUARANTEE
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this GUARANTEE Agreement. If any amount shall be paid to the Guarantor
in violation of the preceding sentence, the Guarantor agrees to hold such
amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.07. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Preferred Securities and that the Guarantor
shall be liable as principal and as debtor hereunder to make GUARANTEE Payments
pursuant to the terms of this GUARANTEE Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 5.03 hereof.
ARTICLE VI
Limitation of Transactions; Subordination
SECTION 6.01. Limitation of Transactions. So long as any
Preferred Securities remain outstanding, the Guarantor will not declare or pay
dividends on, or redeem, purchase, acquire or make a distribution or
liquidation payment with respect to, any of its common stock or preferred stock
or make any GUARANTEE payment with respect thereto if at such time (i) the
Guarantor shall be in default with respect to its GUARANTEE Payments or other
payment obligations hereunder, (ii) there shall have occurred any event of
default under the Declaration or (iii) the Guarantor shall have given notice of
its selection of a Deferral Period (as defined in the Indenture) and such
period, or any extension thereof, is continuing; provided, however, that the
foregoing restrictions shall not apply to (i) dividends, redemptions,
purchases, acquisitions, distributions or payments made by the Guarantor by way
of issuance of shares of its capital stock, (ii) payments of
<PAGE> 18
18
accrued dividends by the Guarantor upon the redemption, exchange or conversion
of any preferred stock of the Guarantor as may be outstanding from time to time
in accordance with the terms of such preferred stock, (iii) cash payments made
by the Guarantor in lieu of delivering fractional shares upon the redemption,
exchange or conversion of any preferred stock of the Guarantor as may be
outstanding from time to time in accordance with the terms of such preferred
stock, (iv) repurchases, redemptions or other acquisitions of shares of capital
stock of the Guarantor in connection with any employment contract, benefit plan
or other similar arrangement with or for the benefit of employees, officers,
directors of consultants, or (v) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of
stock under any such plan in the future, or the redemption or repurchase of
such rights pursuant thereto. In addition, so long as any Preferred Securities
remain outstanding, the Guarantor (i) will remain the sole direct or indirect
owner of all of the outstanding Common Securities and shall not cause or permit
the Common Securities to be transferred except to the extent such transfer is
permitted under Section 9.01(c) of the Declaration; provided that any permitted
successor of the Guarantor under the Indenture may succeed to the Guarantor's
ownership of the Common Securities and (ii) will use reasonable efforts to
cause the Issuer to continue to be treated as a grantor trust for United States
Federal income tax purposes except in connection with a distribution of
Debentures as provided in the Declaration.
SECTION 6.02. Subordination. This GUARANTEE Agreement will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Guarantor, including the Debentures, except those made pari passu or
subordinate by their terms, and (ii) senior to all capital stock now or
hereafter issued by the Guarantor and to any GUARANTEE now or hereafter entered
into by the Guarantor in respect of any of its capital stock. The Guarantor's
obligations under this GUARANTEE Agreement will rank pari passu with respect to
obligations under other GUARANTEE agreements which it may enter into from time
to time to the extent that such agreements shall be entered into in
substantially the form hereof and provided for comparable guarantees by the
Guarantor of payment on preferred securities issued by other JPM Capital
Trusts.
<PAGE> 19
19
ARTICLE VII
Termination
SECTION 7.01. This GUARANTEE Agreement shall terminate and be
of no further force and effect upon full payment of the Redemption Price of all
Preferred Securities, or upon the distribution of Debentures to Holders of
Preferred Securities and Common Securities in exchange for all of the Preferred
Securities and Common Securities, or upon full payment of the amounts payable
in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, the GUARANTEE Agreement will continue to be
executive or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to the Preferred Securities
or this GUARANTEE Agreement.
ARTICLE VIII
Limitation of Liability; Indemnification
SECTION 8.01. Exculpation. (a) No Indemnified Person shall
be liable, responsible or accountable in damages or otherwise to the Guarantor
or any Covered Person for any loss, damage or claim incurred by reason of any
act or omission performed or omitted by such Indemnified Person in good faith
and in a manner such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this GUARANTEE
Agreement or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or wilful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amounts of assets from which
<PAGE> 20
20
Distributions to Holders of Preferred Securities might properly be paid.
SECTION 8.02. Indemnification. (a) To the fullest extent
permitted by applicable law, the Guarantor shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission performed or omitted
by such Indemnified Person in good faith and in a manner such Indemnified
Person reasonably believed to be within the scope of authority conferred on
such Indemnified Person by this GUARANTEE Agreement, except that no Indemnified
Person shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by such Indemnified Person by reason of negligence or wilful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Guarantor of an undertaking by
or on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 8.02(a).
ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns. All guarantees and
agreements contained in this GUARANTEE Agreement shall bind the successors,
assignees, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article Ten of the Indenture,
the Guarantor shall not assign its obligations hereunder.
SECTION 9.02. Amendments. Except with respect to any changes
which do not adversely affect the rights of Holders (in which case no consent
of Holders will be required), this GUARANTEE Agreement may only be amended with
the prior approval of the Holders of not less than 66- 2/3% in
<PAGE> 21
21
liquidation amount of the Preferred Securities. The provisions of Section
12.02 of the Declaration concerning meetings of Holders shall apply to the
giving of such approval.
SECTION 9.03 Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be in writing,
duly signed by the party giving such notice, and delivered, telecopied or
mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the
Holders:
J.P. Morgan & Co. Incorporated
60 Wall Street
New York, New York 10260-0060
Facsimile No.: (212) [ ]
Attention: [ ]
(b) if given to the GUARANTEE Trustee, to the address set
forth below or such other address as the GUARANTEE Trustee may give
notice to the Holders:
First Trust of New York, National Association
100 Wall Street
Suite 2000
New York, New York 10005
Facsimile No.: (212) [ ]
Attention: [ ]
(c) if given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.04. Genders. The masculine, feminine and neuter
genders used herein shall include the masculine, feminine and neuter genders.
<PAGE> 22
22
SECTION 9.05. Benefit. This GUARANTEE Agreement is solely
for the benefit of the Holders and subject to Section 3.01(a) is not separately
transferable from the Preferred Securities.
SECTION 9.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).
SECTION 9.07. Counterparts. This GUARANTEE Agreement may be
executed in counterparts, each of which shall be an original; but such
counterparts shall together constitute one and the same instrument.
SECTION 9.08. Exercise of Overallotment Option. If and to
the extent that Preferred Securities are issued by the Issuer upon exercise of
the overallotment option referred to the second WHEREAS clause, the Guarantor
agrees to give prompt notice thereof to the GUARANTEE Trustee but the failure
to give such notice shall not relieve the Guarantor of any of its obligations
hereunder.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
J.P. MORGAN & CO. INCORPORATED,
by
------------------------------------
Name:
Title:
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION, as
GUARANTEE Trustee,
by
------------------------------------
Name:
Title:
<PAGE> 23
23
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of , 199 ,
personally appeared of J.P. Morgan & Co. Incorporated,
known to me (or proved to me by introduction upon the oath of a person known to
me) to be the person and officer whose name is subscribed to the foregoing
instrument, and acknowledged to me that he/she executed the same as the act of
such trust for the purposes and consideration herein expressed and in the
capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS DAY OF , 199 .
{SEAL}
----------------------------------------
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:
-----------------------------
Commission Expires:
---------------------
<PAGE> 24
24
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of ,
199 , personally appeared of First Trust of New York,
National Association, known to me (or proved to me by introduction upon the
oath of a person known to me) to be the person and officer whose name is
subscribed to the foregoing instrument, and acknowledged to me that he/she
executed the same as the act of such trust for the purposes and consideration
herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS DAY OF , 199 .
{SEAL}
----------------------------------------
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:
-----------------------------
Commission Expires:
---------------------
<PAGE> 1
EXHIBIT 4(l)(4)
================================================================================
FORM OF
GUARANTEE AGREEMENT
OF
JPM CAPITAL TRUST IV
________________
DATED AS OF , 199
================================================================================
<PAGE> 2
2
This GUARANTEE AGREEMENT, dated as of
, 199 , is executed and delivered by J.P.
Morgan & Co. Incorporated, a Delaware corporation
(the "Guarantor"), and First Trust of New York,
National Association, as the initial GUARANTEE
Trustee (as defined herein) for the benefit of the
Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of JPM
Capital Trust IV, a Delaware statutory business trust
(the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of , 199 among the trustees of
the Issuer named therein, J.P. Morgan & Co. Incorporated, as Sponsor, and the
Holders from time to time of undivided beneficial interests in the assets of
the Issuer, the Issuer may issue up to aggregate liquidation
amount of its % Preferred Trust Securities (the "Preferred Securities")
representing undivided beneficial interests in the assets of the Issuer and
having the terms set forth in Exhibit B to the Declaration, of which $
liquidation amount of the Preferred Securities are being issued as of the date
hereof. Up to the remaining $ liquidation amount of Preferred
Securities may be issued by the Issuer if and to the extent that the
over-allotment option granted by the Guarantor and the Issuer pursuant to the
Underwriting Agreement (as defined in the Declaration) is exercised by the
Underwriters named in the Underwriting Agreement.
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
the GUARANTEE Payments (as defined herein) and to make certain other payments
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by the
initial purchasers thereof of Preferred Securities, which purchase the
Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and
delivers this GUARANTEE Agreement for the benefit of the Holders from time to
time of the Preferred Securities.
<PAGE> 3
3
ARTICLE I
Definitions
(a) Capitalized terms used in this GUARANTEE Agreement but
not defined in the preamble above have the respective meanings assigned to them
in this Section 1.01.
(b) A term defined anywhere in this GUARANTEE Agreement has
the same meaning throughout.
(c) All references to "the GUARANTEE Agreement" or "this
GUARANTEE Agreement" are to this GUARANTEE Agreement as modified, supplemented
or amended from time to time.
(d) All references in this GUARANTEE Agreement to Articles
and Sections are to Articles and Sections of this GUARANTEE Agreement unless
otherwise specified.
(e) A term defined in the Trust Indenture Act as the same
meaning when used in this GUARANTEE Agreement unless otherwise defined in this
GUARANTEE Agreement or unless the context otherwise requires.
(f) A reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing
undivided beneficial interests in the assets of the Issuer, having the terms
set forth in Exhibit C to the Declaration.
"Covered Person" means any Holder of Preferred Securities.
"Debentures" means the series of Junior Subordinated
Debentures issued by the Guarantor under the Indenture to the Property Trustee
and entitled the " % Junior Subordinated Debentures due ".
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"Distributions" means the periodic distributions and other
payments payable to Holders of Preferred Securities in accordance with the
terms of the Preferred Securities set forth in Exhibit B to the Declaration.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this GUARANTEE Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions and the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price"), with respect
to the Preferred Securities called for redemption by the Issuer but only if and
to the extent that in each case the Guarantor has made a payment to the
Property Trustee of interest or principal on the Debentures and (ii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Debentures to Holders or the
redemption of all the Preferred Securities upon the maturity or redemption of
the Debentures as provided in the Declaration), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, to the extent the Issuer has funds
available therefor, or (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution").
"Guarantee Trustee" means First Trust of New York, National
Association until a Successor GUARANTEE Trustee has been appointed and accepted
such appointment pursuant to the terms of this GUARANTEE Agreement and
thereafter means each such Successor GUARANTEE Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any entity directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Guarantor.
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"Indemnified Person" means the GUARANTEE Trustee, any
Affiliate of the GUARANTEE Trustee, and any officers, directors, shareholders,
members, partners, employees, representatives or agents of the GUARANTEE
Trustee.
"Indenture" means the Junior Subordinated Indenture dated as
of November , 1996 between the Guarantor and First Trust of New York,
National Association, as trustee, as supplemented by the [ ] Supplemental
Indenture thereto dated as of 199 , pursuant to which the Debentures are
to be issued.
"Majority in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class, who are the
record owners of Preferred Securities whose liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) represents more than 50% of the liquidation amount of all
outstanding Preferred Securities.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning set forth in the first
WHEREAS clause above.
"Property Trustee" means the Person acting as Property Trustee
under the Declaration.
"Redemption Price" means the amount payable on redemption of
the Preferred Securities in accordance with the terms of the Preferred
Securities.
"Responsible Officer" means, with respect to the GUARANTEE
Trustee, the chairman of the board of directors, the president, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the GUARANTEE Trustee
customarily performing functions similar to those performed by any of the above
designated officers
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and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"66- 2/3% in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class who are the
record owners of Preferred Securities whose liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) represents 66- 2/3% or more of the liquidation amount of all
Preferred Securities.
"Successor GUARANTEE Trustee" means a successor GUARANTEE
Trustee possessing the qualifications to act as a GUARANTEE Trustee under
Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This
GUARANTEE Agreement is subject to the provisions of the Trust Indenture Act
that are required to be part of this GUARANTEE Agreement and shall, to the
extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this GUARANTEE
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(c) The application of the Trust Indenture Act to this
GUARANTEE Agreement shall not affect the nature of the Preferred Securities as
equity securities representing undivided beneficial interests in the assets of
the Issuer.
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SECTION 2.02. Lists of Holders of Preferred Securities. (a)
The Guarantor shall provide the GUARANTEE Trustee with such information as is
required under Section 312(a) of the Trust Indenture Act at the times and in
the manner provided in Section 312(a).
(b) The GUARANTEE Trustee shall comply with its obligations
under Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the GUARANTEE Trustee. Within 60
days after May 15 of each year, the GUARANTEE Trustee shall provide to the
Holders of the Preferred Securities such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form, in the manner and at the times
provided by Section 313 of the Trust Indenture Act. The GUARANTEE Trustee
shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.04. Periodic Reports to the GUARANTEE Trustee. The
Guarantor shall provide to the GUARANTEE Trustee, the Commission and the
Holders of the Preferred Securities, as applicable, such documents, reports and
information as required by Section 314(a)(1)-(3) (if any) of the Trust
Indenture Act and the compliance certificates required by Section 314(a)(4) and
(c) of the Trust Indenture Act, any such certificates to be provided in the
form, in the manner and at the times required by Section 314(a)(4) and (c) of
the Trust Indenture Act (provided that any certificate to be provided pursuant
to Section 314(a)(4) of the Trust Indenture Act shall be provided within 120
days of the end of each fiscal year of the Issuer).
SECTION 2.05. Evidence of Compliance with Conditions
Precedent. The Guarantor shall provide the GUARANTEE Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
GUARANTEE Agreement which relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given pursuant to Section 314(c) shall comply with Section 314(e) of the Trust
Indenture Act.
SECTION 2.06. Events of Default; Waiver. (a) Subject to
Section 2.06(b), Holders of Preferred Securities may by vote of at least a
Majority in liquidation amount of the Preferred Securities, (A) direct the
time, method and place of conducting any proceeding for any remedy
<PAGE> 8
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available to the GUARANTEE Trustee, or exercising any trust or power conferred
upon by the GUARANTEE Trustee or (B) on behalf of the Holders of all Preferred
Securities waive any past Event of Default and its consequences. Upon such
waiver, any such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
GUARANTEE Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
(b) The right of any Holder of Preferred Securities to
receive payment of the GUARANTEE Payments in accordance with this GUARANTEE
Agreement, or to institute suit for the enforcement of any such payment, shall
not be impaired without the consent of each such Holder.
SECTION 2.07. Disclosure of Information. The disclosure of
information as to the names and addresses of the Holders of the Preferred
Securities in accordance with Sections 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, shall not be
deemed to be a violation of any existing law, or any law hereafter enacted
which does not specifically refer to Section 312 of the Trust Indenture Act,
nor shall the GUARANTEE Trustee be held accountable by reason of mailing any
material pursuant to a request made under Section 312(b) of the Trust Indenture
Act.
SECTION 2.08. Conflicting Interest. The Declaration shall be
deemed to be specifically described in this GUARANTEE Agreement for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III
Powers, Duties and Rights of Guarantee Trustee
SECTION 3.01. Powers and Duties of the GUARANTEE Trustee.
(a) This GUARANTEE Agreement shall be held by the GUARANTEE Trustee in trust
for the benefit of the Holders of the Preferred Securities. The GUARANTEE
Trustee shall not transfer its right, title and interest in the GUARANTEE
Agreement to any Person except a Successor GUARANTEE Trustee on acceptance by
such Successor GUARANTEE Trustee of its appointment to act as GUARANTEE Trustee
or to a Holder of Preferred Securities exercising his or her rights pursuant
<PAGE> 9
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to Section 5.04. The right, title and interest of the GUARANTEE Trustee to the
GUARANTEE Agreement shall vest automatically in each Person who may hereafter
be appointed as GUARANTEE Trustee in accordance with Article IV. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered.
(b) If an Event of Default occurs and is continuing, the
GUARANTEE Trustee shall enforce this GUARANTEE Agreement for the benefit of the
Holders of the Preferred Securities.
(c) This GUARANTEE Agreement and all moneys received by the
Property Trustee hereunder in respect of the GUARANTEE Payments will not be
subject to any right, charge, security interest, lien or claim of any kind in
favor of, or for the benefit of the GUARANTEE Trustee or its agents or their
creditors.
(d) The GUARANTEE Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the holders of the Preferred Securities, as their names and
addresses appear upon the register, notice of all Events of Default known to
the GUARANTEE Trustee, unless such defaults shall have been cured before the
giving of such notice; provided, that, the GUARANTEE Trustee shall be protected
in withholding such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors and/or Responsible
Officers, of the GUARANTEE Trustee in good faith determine that the withholding
of such notice is in the interests of the Holders of the Preferred Securities.
The GUARANTEE Trustee shall not be deemed to have knowledge of any default
except any default as to which the GUARANTEE Trustee shall have received
written notice or a Responsible Officer charged with the administration of the
GUARANTEE Agreement shall have obtained written notice.
(e) The GUARANTEE Trustee shall not resign as a Trustee
unless a Successor GUARANTEE Trustee has been appointed and accepted that
appointment in accordance with Article IV.
SECTION 3.02. Certain Rights and Duties of the GUARANTEE
Trustee. (a) The GUARANTEE Trustee, before the occurrence of an Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically
<PAGE> 10
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set forth in this GUARANTEE Agreement, and no implied covenants shall be read
into this GUARANTEE Agreement against the GUARANTEE Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section
2.06(a)), the GUARANTEE Trustee shall exercise such of the rights and powers
vested in it by this GUARANTEE Agreement, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in this conduct of his or her own affairs.
(b) No provision of this GUARANTEE Agreement shall be
construed to relieve the GUARANTEE Trustee from liability for its own negligent
action, its own negligent failure to act or its own wilful misconduct, except
that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred;
(A) the duties and obligations of the GUARANTEE
Trustee shall be determined solely by the express provisions
of this GUARANTEE Agreement, and the GUARANTEE Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this GUARANTEE
Agreement, and no implied covenants or obligations shall be
read into this GUARANTEE Agreement against the GUARANTEE
Trustee; and
(B) in the absence of bad faith on the part of the
GUARANTEE Trustee, the GUARANTEE Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the GUARANTEE Trustee and conforming to
the requirements of this GUARANTEE Agreement; but in the case
of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
GUARANTEE Trustee, the GUARANTEE Trustee shall be under a duty
to examine the same to determine whether or not they conform
to the requirements of this GUARANTEE Agreement;
(ii) the GUARANTEE Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
GUARANTEE Trustee, unless it
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shall be proved that the GUARANTEE Trustee was negligent in
ascertaining the pertinent facts;
(iii) the GUARANTEE Trustee shall not be liable with respect
to any action take or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Preferred Securities
as provided herein relating to the time, method and place of
conducting any proceeding for any remedy available to the GUARANTEE
Trustee, or exercising any trust or power conferred upon the GUARANTEE
Trustee under this GUARANTEE Agreement; and
(iv) no provision of this GUARANTEE Agreement shall require
the GUARANTEE Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
GUARANTEE Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.02(a) and (b):
(i) whenever in the administration of this GUARANTEE
Agreement, the GUARANTEE Trustee shall deem it desirable that a matter
proved or established prior to taking, suffering or omitting any
action hereunder, the GUARANTEE Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon a certificate, which shall comply with
the provisions of Section 314(e) of the Trust Indenture Act, signed by
any authorized officer of the Guarantor;
(ii) the GUARANTEE Trustee (A) may consult with counsel (which
may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees) selected by it in good faith and with
due care and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon and in accordance with
such advice and opinion and (B) shall have the right at
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any time to seek instructions concerning the administration of this
GUARANTEE Agreement from any court of competent jurisdiction;
(iii) the GUARANTEE Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the GUARANTEE Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed by it in good faith and with due care;
(iv) the GUARANTEE Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this GUARANTEE
Agreement at the request or direction of any Holders of Preferred
Securities, unless such Holders shall have offered to the GUARANTEE
Trustee reasonable security and indemnity against the costs, expenses
(including its attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or direction;
provided that nothing contained in this clause (iv) shall relieve the
GUARANTEE Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured or waived) to exercise such of
the rights and powers vested in it by this GUARANTEE Agreement, and to
use the same degree of care and skill in this exercise, as a prudent
person would exercise or use under the circumstances in the conduct of
his or her own affairs; and
(v) any action taken by the GUARANTEE Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities and the
signature of the GUARANTEE Trustee or its agents alone shall be
sufficient and effective to perform any such action; and no third
party shall be required to inquire as to the authority of the
GUARANTEE Trustee to so act, or as to its compliance with any of the
terms and provisions of this GUARANTEE Agreement, both of which shall
be conclusively evidenced by the GUARANTEE Trustee's or its agent's
taking such action.
SECTION 3.03. Not Responsible for Recitals or Issuance of
Guarantee. The recitals contained in this GUARANTEE shall be taken as the
statements of the Guarantor and the GUARANTEE Trustee does not assume any
responsibility for their correctness. The GUARANTEE Trustee makes no
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representations as to the validity or sufficiency of this GUARANTEE Agreement.
ARTICLE IV
Guarantee Trustee
SECTION 4.01. Qualifications. (a) There shall at all times
be a GUARANTEE Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted
by the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000,
and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred
to above, then for the purposes of this Section 4.01(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent
report of condition so published.
If at any time the GUARANTEE Trustee shall cease to satisfy
the requirements of clauses (i)-(ii) above, the GUARANTEE Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02.
If the GUARANTEE Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the GUARANTEE Trustee
and the Guarantor shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
SECTION 4.02. Appointment, Removal and Resignation of
GUARANTEE Trustee. (a) Subject to Section 4.02(b), the GUARANTEE Trustee may
be appointed or removed without cause at any time by the Guarantor.
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(b) The GUARANTEE Trustee shall not be removed in accordance
with Section 4.02(a) until a Successor GUARANTEE Trustee possessing the
qualifications to act as GUARANTEE Trustee under Section 4.01(a) has been
appointed and has accepted such appointment by written instrument executed by
such Successor GUARANTEE Trustee and delivered to the Guarantor and the
GUARANTEE Trustee being removed.
(c) The GUARANTEE Trustee appointed to office shall hold
office until his successor shall have been appointed or until its removal or
resignation.
(d) The GUARANTEE Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument (a "Resignation
Request") in writing signed by the Guarantee Trustee and delivered to the
Guarantor, which resignation shall take effect upon such delivery or upon such
later date as is specified therein; provided, however, that no such resignation
of the GUARANTEE Trustee shall be effective until a Successor GUARANTEE Trustee
possessing the qualifications to act as GUARANTEE Trustee under Section 4.01(a)
has been appointed and has accepted such appointment by instrument executed by
such Successor GUARANTEE Trustee and delivered to Guarantor and the resigning
GUARANTEE Trustee.
(e) If no Successor GUARANTEE Trustee shall have been
appointed and accepted appointed as provided in this Section 4.02 within 60
days after delivery to the Guarantor of a Resignation Request, the resigning
GUARANTEE Trustee may petition any court of competent jurisdiction for
appointment of a Successor GUARANTEE Trustee. Such court may thereupon after
such notice, if any, as it may deem proper and prescribe, appoint a Successor
GUARANTEE Trustee.
ARTICLE V
Guarantee
SECTION 5.01. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the GUARANTEE Payments
(without duplication of amounts theretofore paid by the Issuer) regardless of
any defense, right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a GUARANTEE Payment may be
satisfied by direct payment of the
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required amounts by the Guarantor to the Holders or by causing the Issuer to
pay such amounts to the Holders.
SECTION 5.02. Waiver of Notice. The Guarantor hereby waives
notice of acceptance of this GUARANTEE Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require
a proceeding first against the Issuer or any other Person before proceeding
against the Guarantor, protect, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
SECTION 5.03. Obligations Not Affected. The obligations,
covenants, agreements and duties of the Guarantor under this GUARANTEE
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the
Preferred Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions (other than an extension of time
for payment of Distributions that results from the extension of any
interest payment period on the Debentures), Redemption Price,
Liquidation Distribution (as defined in the Declaration) or any other
sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
<PAGE> 16
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affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstances whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. Enforcement of Guarantee. The Guarantor and
the GUARANTEE Trustee expressly acknowledge that (i) this Guarantee Agreement
will be deposited with the GUARANTEE Trustee to be held for the benefit of the
Holders; (ii) the GUARANTEE Trustee has the right to enforce this GUARANTEE
Agreement on behalf of the Holders; (iii) Holders representing not less than a
Majority in liquidation amount of the Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available in respect of this GUARANTEE Agreement including the giving of
directions to the GUARANTEE Trustee, or exercising any trust or other power
conferred upon the GUARANTEE Trustee under this GUARANTEE Agreement, and (iv)
if the GUARANTEE Trustee fails to enforce this GUARANTEE Agreement, any Holder
of Preferred Securities may institute a legal proceeding directly against the
Guarantor to enforce its rights under this GUARANTEE Agreement, without first
instituting a legal proceeding against the Issuer, the GUARANTEE Trustee, or
any other Person.
SECTION 5.05. GUARANTEE of Payment. This GUARANTEE Agreement
creates a GUARANTEE of payment and not merely of collection. This GUARANTEE
Agreement will not be discharged except by payment of the GUARANTEE Payments in
full (without duplication of amounts theretofore paid by the Issuer).
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SECTION 5.06. Subrogation. The Guarantor shall be subrogated
to all (if any) rights of the Holders against the Issuer in respect of any
amounts paid to the Holders by the Guarantor under this GUARANTEE Agreement;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this GUARANTEE
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this GUARANTEE Agreement. If any amount shall be paid to the Guarantor
in violation of the preceding sentence, the Guarantor agrees to hold such
amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.07. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Preferred Securities and that the Guarantor
shall be liable as principal and as debtor hereunder to make GUARANTEE Payments
pursuant to the terms of this GUARANTEE Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 5.03 hereof.
ARTICLE VI
Limitation of Transactions; Subordination
SECTION 6.01. Limitation of Transactions. So long as any
Preferred Securities remain outstanding, the Guarantor will not declare or pay
dividends on, or redeem, purchase, acquire or make a distribution or
liquidation payment with respect to, any of its common stock or preferred stock
or make any GUARANTEE payment with respect thereto if at such time (i) the
Guarantor shall be in default with respect to its GUARANTEE Payments or other
payment obligations hereunder, (ii) there shall have occurred any event of
default under the Declaration or (iii) the Guarantor shall have given notice of
its selection of a Deferral Period (as defined in the Indenture) and such
period, or any extension thereof, is continuing; provided, however, that the
foregoing restrictions shall not apply to (i) dividends, redemptions,
purchases, acquisitions, distributions or payments made by the Guarantor by way
of issuance of shares of its capital stock, (ii) payments of
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accrued dividends by the Guarantor upon the redemption, exchange or conversion
of any preferred stock of the Guarantor as may be outstanding from time to time
in accordance with the terms of such preferred stock, (iii) cash payments made
by the Guarantor in lieu of delivering fractional shares upon the redemption,
exchange or conversion of any preferred stock of the Guarantor as may be
outstanding from time to time in accordance with the terms of such preferred
stock, (iv) repurchases, redemptions or other acquisitions of shares of capital
stock of the Guarantor in connection with any employment contract, benefit plan
or other similar arrangement with or for the benefit of employees, officers,
directors of consultants, or (v) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of
stock under any such plan in the future, or the redemption or repurchase of
such rights pursuant thereto. In addition, so long as any Preferred Securities
remain outstanding, the Guarantor (i) will remain the sole direct or indirect
owner of all of the outstanding Common Securities and shall not cause or permit
the Common Securities to be transferred except to the extent such transfer is
permitted under Section 9.01(c) of the Declaration; provided that any permitted
successor of the Guarantor under the Indenture may succeed to the Guarantor's
ownership of the Common Securities and (ii) will use reasonable efforts to
cause the Issuer to continue to be treated as a grantor trust for United States
Federal income tax purposes except in connection with a distribution of
Debentures as provided in the Declaration.
SECTION 6.02. Subordination. This GUARANTEE Agreement will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Guarantor, including the Debentures, except those made pari passu or
subordinate by their terms, and (ii) senior to all capital stock now or
hereafter issued by the Guarantor and to any GUARANTEE now or hereafter entered
into by the Guarantor in respect of any of its capital stock. The Guarantor's
obligations under this GUARANTEE Agreement will rank pari passu with respect to
obligations under other GUARANTEE agreements which it may enter into from time
to time to the extent that such agreements shall be entered into in
substantially the form hereof and provided for comparable guarantees by the
Guarantor of payment on preferred securities issued by other JPM Capital
Trusts.
<PAGE> 19
19
ARTICLE VII
Termination
SECTION 7.01. This GUARANTEE Agreement shall terminate and be
of no further force and effect upon full payment of the Redemption Price of all
Preferred Securities, or upon the distribution of Debentures to Holders of
Preferred Securities and Common Securities in exchange for all of the Preferred
Securities and Common Securities, or upon full payment of the amounts payable
in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, the GUARANTEE Agreement will continue to be
executive or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to the Preferred Securities
or this GUARANTEE Agreement.
ARTICLE VIII
Limitation of Liability; Indemnification
SECTION 8.01. Exculpation. (a) No Indemnified Person shall
be liable, responsible or accountable in damages or otherwise to the Guarantor
or any Covered Person for any loss, damage or claim incurred by reason of any
act or omission performed or omitted by such Indemnified Person in good faith
and in a manner such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this GUARANTEE
Agreement or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or wilful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amounts of assets from which
<PAGE> 20
20
Distributions to Holders of Preferred Securities might properly be paid.
SECTION 8.02. Indemnification. (a) To the fullest extent
permitted by applicable law, the Guarantor shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission performed or omitted
by such Indemnified Person in good faith and in a manner such Indemnified
Person reasonably believed to be within the scope of authority conferred on
such Indemnified Person by this GUARANTEE Agreement, except that no Indemnified
Person shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by such Indemnified Person by reason of negligence or wilful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Guarantor of an undertaking by
or on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 8.02(a).
ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns. All guarantees and
agreements contained in this GUARANTEE Agreement shall bind the successors,
assignees, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article Ten of the Indenture,
the Guarantor shall not assign its obligations hereunder.
SECTION 9.02. Amendments. Except with respect to any changes
which do not adversely affect the rights of Holders (in which case no consent
of Holders will be required), this GUARANTEE Agreement may only be amended with
the prior approval of the Holders of not less than 66- 2/3% in
<PAGE> 21
21
liquidation amount of the Preferred Securities. The provisions of Section
12.02 of the Declaration concerning meetings of Holders shall apply to the
giving of such approval.
SECTION 9.03 Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be in writing,
duly signed by the party giving such notice, and delivered, telecopied or
mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the
Holders:
J.P. Morgan & Co. Incorporated
60 Wall Street
New York, New York 10260-0060
Facsimile No.: (212) [ ]
Attention: [ ]
(b) if given to the GUARANTEE Trustee, to the address set
forth below or such other address as the GUARANTEE Trustee may give
notice to the Holders:
First Trust of New York, National Association
100 Wall Street
Suite 2000
New York, New York 10005
Facsimile No.: (212) [ ]
Attention: [ ]
(c) if given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.04. Genders. The masculine, feminine and neuter
genders used herein shall include the masculine, feminine and neuter genders.
<PAGE> 22
22
SECTION 9.05. Benefit. This GUARANTEE Agreement is solely
for the benefit of the Holders and subject to Section 3.01(a) is not separately
transferable from the Preferred Securities.
SECTION 9.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).
SECTION 9.07. Counterparts. This GUARANTEE Agreement may be
executed in counterparts, each of which shall be an original; but such
counterparts shall together constitute one and the same instrument.
SECTION 9.08. Exercise of Overallotment Option. If and to
the extent that Preferred Securities are issued by the Issuer upon exercise of
the overallotment option referred to the second WHEREAS clause, the Guarantor
agrees to give prompt notice thereof to the GUARANTEE Trustee but the failure
to give such notice shall not relieve the Guarantor of any of its obligations
hereunder.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
J.P. MORGAN & CO. INCORPORATED,
by
------------------------------------------
Name:
Title:
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION, as
GUARANTEE Trustee,
by
------------------------------------------
Name:
Title:
<PAGE> 23
23
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of
, 199 , personally appeared of J.P. Morgan & Co. Incorporated,
known to me (or proved to me by introduction upon the oath of a person known to
me) to be the person and officer whose name is subscribed to the foregoing
instrument, and acknowledged to me that he/she executed the same as the act of
such trust for the purposes and consideration herein expressed and in the
capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS DAY OF , 199 .
{SEAL}
----------------------------------------
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:
-----------------------------
Commission Expires:
---------------------
<PAGE> 24
24
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of
, 199 , personally appeared of First Trust of New York,
National Association, known to me (or proved to me by introduction upon the
oath of a person known to me) to be the person and officer whose name is
subscribed to the foregoing instrument, and acknowledged to me that he/she
executed the same as the act of such trust for the purposes and consideration
herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS DAY OF , 199 .
{SEAL}
----------------------------------------
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:
-----------------------------
Commission Expires:
---------------------
<PAGE> 1
Exhibit 5.1
[Letterhead of J.P. Morgan & Co. Incorporated]
November 25, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: J. P. Morgan & Co. Incorporated
Amendment No. 2 to the
JPM Capital Trust I-IV
Registration Statement on Form S-3
File Nos. 333-15079-0--333-15079-4
Dear Sir or Madame:
I am a Vice President and Assistant General Counsel of J. P. Morgan & Co.
Incorporated, a Delaware corporation ("J. P. Morgan") and in such capacity am
acting as counsel in connection with J. P. Morgan's Amendment No. 1 to the
Registration Statement on Form S-3 (the "Registration Statement") being filed
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "act") with respect to $1,000,000,000 aggregate amount of Senior
Debt Securities, Subordinated Debt Securities and Junior Subordinated Debt
Securities along with Guarantees to be issued in connection with Preferred
Securities to be issued by JPM Capital Trusts I-IV (the "Registration
Statement"). Capitalized terms not defined herein have the meaning given to them
in the Registration Statement.
I have examined such documents and made such other investigations as I
have deemed necessary or advisable for purposes of this opinion. Based
thereon, I am of the opinion that:
1. J. P. Morgan is a corporation duly organized and validity
existing under the laws of the State of Delaware.
<PAGE> 2
2. The Senior Debt Securities, Subordinated Debt Securities and
Junior Subordinated Securities, when duly authorized, executed,
authenticated and delivered against payment therefor, and the
Guarantees of the Preferred Securities to be issued by JPM
Capital Trusts I-IV, when such Preferred Securities have been
duly authorized, executed, authenticated and delivered against
payment therefor, will be legally issued and will constitute
binding obligations of J. P. Morgan in accordance with their
terms.
I hereby consent to the filing of their opinion as an exhibit to the
Registration Statement. I also consent to the use of my name under the caption
"Legal Opinion's" in the Prospectus contained in the Registration Statement
Very truly yours,
/s/ Gene A. Capello
Gene A. Capello
Vice President and
Assistant General Counsel
<PAGE> 1
EXHIBIT 5.2
[Letterhead of Morris, Nichols, Arsht & Tunnell]
November 25, 1996
JPM Capital Trust I
JPM Capital Trust II
JPM Capital Trust III
JPM Capital Trust IV
c/o J.P. Morgan & Co. Incorporated
60 Wall Street
New York, New York 10260
Re: The JPM Capital Trusts (as defined below)
Ladies and Gentlemen:
We have acted as special Delaware counsel to JPM Capital Trust I, JPM
Capital Trust II, JPM Capital Trust III and JPM Capital Trust IV, each a
Delaware statutory business trust (collectively referred to herein as the "JPM
Capital Trusts" and each individually as a "JPM Capital Trust"), in connection
with certain matters relating to the creation of the JPM Capital Trusts and the
proposed issuance of Preferred Securities therein to beneficial owners pursuant
to Registration Statement No. 333-15079 (and the Prospectus forming a part
thereof) on Form S-3 filed with the Securities and Exchange Commission on
October 30, 1996, as amended by Pre-effective Amendments No. 1 and No. 2 thereto
(as so amended. the "Registration Statement"). Capitalized terms used herein
and not otherwise herein defined are used as defined in the form of Amended and
Restated Declaration of Trust attached as an exhibit to the Registration
Statement.
In rendering this opinion, we have examined copies of the following
documents in the forms provided to us; the Certificate of Trust of each JPM
Capital Trust, each as filed in the Office of the Secretary of State of the
State of Delaware (the "State Office") on October 29, 1996 (each a
"Certificate"); the Declaration of Trust of each JPM Capital Trust, each dated
as of October 29, 1996 (each an "Original Governing Instrument"); the form of
Indenture to be entered into between J.P. Morgan & Co. Incorporated and First
Trust of New York, National Association, as Trustee, and the form of
Supplemental Indenture to be entered into in connection therewith; the form of
Preferred Guarantee to be made
<PAGE> 2
JPM Capital Trust I
JPM Capital Trust II
JPM Capital Trust III
JPM Capital Trust IV
November 25, 1996
Page 2
by J.P. Morgan & Co. Incorporated with respect to each JPM Capital Trust; and
the Registration Statement; and a certification of good standing of each of the
JPM Capital Trusts obtained as of a recent date from the State Office. In such
examinations, we have assumed the genuineness of all signatures, the conformity
to original documents of all documents submitted to us as drafts or copies or
forms of documents to be executed and the legal capacity of natural persons to
complete the execution of documents. We have further assumed for purposes of
this opinion: (i) the due formation or organization, valid existence and good
standing of each entity (other than the JPM Capital Trusts) that is a party to
any of the documents reviewed by us under the laws of the jurisdiction of its
respective formation or organization; (ii) the due authorization, execution and
delivery by, or on behalf of, each of the parties thereto of the
above-referenced documents with respect to each JPM Capital Trust; (iii) that
J.P. Morgan & Co. Incorporated, First Trust of New York, National Association,
and the appropriate Regular Trustees will duly authorize, execute and deliver
an amended and restated declaration of trust for each JPM Capital Trust in the
form of the Amended and Restated Declaration of Trust attached as an exhibit to
the Registration Statement (each a "Governing Instrument") and all other
documents contemplated thereby or by the Registration Statement to be executed
in connection with the creation or each JPM Capital Trust and the issuance by
each such JPM Capital Trust of Preferred Securities, in each case prior to the
first issuance of Preferred Securities; (iv) that the Preferred Securities of
each JPM Capital Trust will be offered and sold pursuant to the Registration
Statement and a prospectus supplement that will be consistent with, and
accurately describe, the terms of the applicable Governing Instrument and the
Preferred Guarantee relating to each such JPM Capital Trust and all other
relevant documents; (v) that no event has or will occur subsequent to the
filing of any Certificate that would cause a dissolution or liquidation of any
JPM Capital Trust under the applicable Original Governing Instrument or the
applicable Governing Instrument; (vi) that the activities of each JPM Capital
Trust have been and will be conducted in accordance with its Original Governing
Instrument or Governing Instrument, as applicable, and the Delaware Business
Trust Act, 12 Del. C. Sections 3801 et seq. (the "Delaware Act"); (vii) that
each Holder of Preferred Securities of each JPM Capital Trust will make payment
of the required consideration therefor and receive a Preferred Securities
Certificate in consideration thereof in accordance with the terms and
conditions of the Registration Statement and the Prospectus forming a part
thereof, the applicable Governing Instrument and the applicable prospectus
supplement, and that the Preferred Securities of each JPM Capital Trust are
otherwise issued and sold to the
<PAGE> 3
JPM Capital Trust I
JPM Capital Trust II
JPM Capital Trust III
JPM Capital Trust IV
November 25, 1996
Page 3
Preferred Securities Holders of such JPM Capital Trust in accordance with the
terms, conditions, requirements and procedures set forth in the Registration
Statement and the Prospectus forming a part thereof, the applicable Governing
Instrument and the applicable prospectus supplement; and (viii) that the
documents examined by us, or contemplated hereby, express the entire
understanding of the parties thereto with respect to the subject matter thereof
and have not been, and, prior to the issuance of Preferred Securities by each
JPM Capital Trust, will not be, modified, supplemented or otherwise amended,
except as herein referenced. No opinion is expressed with respect to the
requirements or, or compliance with, federal or state securities or blue sky
laws. Further, we express no opinion with respect to the Registration
Statement or any other offering materials relating to the Preferred Securities
offered by any JPM Capital Trust and we assume no responsibility for their
contents. As to any fact material to our opinion, other than those assumed, we
have relied without independent investigation on the above-referenced documents
and on the accuracy, as of the date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:
1. Each JPM Capital Trust is a duly created and validly existing
business trust in good standing under the laws of the State of Delaware.
2. Upon issuance, the Preferred Securities of each JPM Capital Trust
will constitute validly issued and, subject to the terms of the applicable
Governing Instrument, fully paid and non-assessable beneficial interest in the
assets of such JPM Capital Trust. We note that pursuant to Section 11.04 of
the Governing Instrument, each JPM Capital Trust may withhold amounts otherwise
distributable to a Holder of Securities in such JPM Capital Trust and pay over
such amounts to the applicable jurisdictions in accordance with federal, state
and local law and any amounts withheld will be deemed to have been distributed
to such Holder and that, pursuant to the Governing Instrument, the Preferred
Security Holders of each JPM Capital Trust may be obligated to make payments or
provide indemnity or security under the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Opinions" in the Prospectus forming a part thereof. In giving this consent, we
do not thereby admit that we
<PAGE> 4
JPM Capital Trust I
JPM Capital Trust II
JPM Capital Trust III
JPM Capital Trust IV
November 25, 1996
Page 4
come within the category of persons whose consent is required under Section 7
of the Securities Act or 1993, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. This opinion speaks only as of
the date hereof and is based on our understandings and assumptions as to
present facts, and our review of the above-referenced documents and the
application of Delaware law as the same exist on the date hereof, and we
undertake no obligation to update or supplement this opinion after the date
hereof for the benefit of any person or entity with respect to any facts or
circumstances that may hereafter come to our attention or any changes in facts
or law that may hereafter occur or take effect. This opinion is intended
solely for the benefit of the addressees hereof in connection with the matters
contemplated hereby and may not be relied upon by any other person or entity or
for any other purpose without our prior written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/ MORRIS, NICHOLS, ARSHT & TUNNELL
------------------------------------
<PAGE> 1
EXHIBIT 5.3
[LETTERHEAD OF CRAVATH, SWAINE & MOORE]
November 25, 1996
J.P. Morgan & Co. Incorporated
JPM Capital Trusts I-IV
Preferred Securities
Dear Sirs:
We have acted as special Federal tax counsel to J.P. Morgan &
Co. Incorporated, a Delaware corporation and JPM Capital Trusts I-IV, each a
Delaware trust (collectively, the "Registrants"), in connection with the filing
by the Registrants with the Securities and Exchange Commission of a
Registration Statement on Form S-3 (the "Registration Statement") registering
Debt Securities and Guarantees of J.P. Morgan & Co. Incorporated and Preferred
Securities of JPM Capital Trusts I-IV (the "Securities").
We hereby confirm that the statements set forth in the form of
prospectus supplement (the "Prospectus Supplement") forming a part of the
Registration Statement under the heading "Taxation", accurately describe the
material Federal income tax consequences to holders of the Preferred Securities
issued pursuant to the Prospectus Supplement.
<PAGE> 2
2
We know that we are referred to under the headings "Taxation"
in the Prospectus Supplement forming a part of the Registration Statement, and
we hereby consent to such use of our name therein and to the use of this
opinion for filing with the Registration Statement as Exhibits 5.3 and 23(d)
thereto.
Very truly yours,
/s/ Cravath, Swaine & Moore
J.P. Morgan & Co. Incorporated
60 Wall Street
New York, NY 10260-0260
JPM Capital Trusts I-IV
c/o J.P. Morgan & Co. Incorporated
60 Wall Street
New York, NY 10260-0260
120A
O
<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 10, 1996, which appears on page 40 of J.P. Morgan & Co. Incorporated's
1995 Annual Report on Form 10-K for the year ended December 31, 1995 (included
in J.P. Morgan & Co. Incorporated's Annual Report to Stockholders). We also
consent to the reference to us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
- -----------------------------
Price Waterhouse LLP
New York, New York
November 25, 1996
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
--------------------
FORM T - 1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
--------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305 (b) (2) _________
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
13-3781471
(I. R. S. Employer
Identification No.)
100 Wall Street, New York, New York 10005
(Address of principal executive offices) (Zip Code)
--------------------
FOR INFORMATION, CONTACT:
Dennis J. Calabrese, President
First Trust of New York, National Association
100 Wall Street, 16th Floor
New York, NY 10005
Telephone: (212) 361-2506
--------------------
J.P. MORGAN & CO. INCORPORATED
(Exact name of obligor as specified in its charter)
Delaware 13-2625764
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
J.P. Morgan & Co. Incorporated
60 Wall Street
New York, New York 10260
(Address of principal executive offices) (Zip Code)
--------------------
DEBT SECURITIES, PREFERRED SECURITIES, GUARANTEES
<PAGE> 2
Item 1. GENERAL INFORMATION.
Furnish the following information as to the trustee - -
(a) Name and address of each examining or supervising authority to
which it is subject.
Name Address
---- -------
Comptroller of the Currency Washington, D. C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. LIST OF EXHIBITS.
Exhibit 1. Articles of Association of First Trust of New York,
National Association, incorporated herein by
reference to Exhibit 1 of Form T-1, Registration
No. 33-83774.
Exhibit 2. Certificate of Authority to Commence Business for
First Trust of New York, National Association,
incorporated herein by reference to Exhibit 2 of
Form T-1, Registration No. 33-83774.
Exhibit 3. Authorization of the Trustee to exercise corporate
trust powers for First Trust of New York, National
Association, incorporated herein by reference to
Exhibit 3 of Form T-1, Registration No. 33-83774.
Exhibit 4. By-Laws of First Trust of New York, National
Association, Incorporated herein by reference to
Exhibit 4 of Form T-1, Registration No. 33-55851.
Exhibit 5. Not applicable.
Exhibit 6. Consent of First Trust of New York, National
Association, required by Section 321(b) of the
Act, incorporated herein by reference to Exhibit 6 of
Form T-1, Registration No. 33-83774.
<PAGE> 3
Exhibit 7. Report of Condition of First Trust of New York,
National Association, as of the close of business
on September 30, 1996, published pursuant to law
or the requirements of its supervising or examining
authority.
Exhibit 8. Not applicable.
Exhibit 9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, as amended, the trustee, First Trust of New York, National Association, a
national banking association organized and existing under the laws of the
United States, has duly caused this statement of eligibility to be signed on
its behalf by the undersigned, thereunto duly authorized, all in the City of
New York, and State of New York, on the 22nd day of November, 1996.
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION
By: /S/David K. Leverich
------------------------------
David K. Leverich
Vice President
