Registration No. 333-51961
Post-Effective Amendment No. 9 to
Registration Statement No. 33-49775
Post-Effective Amendment No. 7 to
Registration Statement No. 33-15763
Post-Effective Amendment No. 8 to
Registration Statement No. 33-10810
Post-Effective Amendment No. 7 to
Registration Statement No. 2-10807
Post-Effective Amendment No. 5 to
Registration Statement No. 33-55851
Post-Effective Amendment No. 8 to
Registration Statement No. 33-45651
Post-Effective Amendment No. 7 to
Registration Statement No. 33-41006
Post-Effective Amendment No. 7 to
Registration Statement No. 33-28320
Post-Effective Amendment No. 7 to
Registration Statement No. 2-49280
Post-Effective Amendment No. 2 to
Registration Statement No. 33-64193
Post-Effective Amendment No. 1 to
Registration Statement No. 333-01723
Post-Effective Amendment No. 1 to
Registration Statement No. 333-37315
Post-Effective Amendment No. 1 to
Registration Statement No. 333-40447
Post-Effective Amendment No. 1 to
Registration Statement No. 333-47753
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_____________
J.P. MORGAN & CO. INCORPORATED
(Exact name of Registrant as specified in its charter)
DELAWARE 13-2625764
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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
General Counsel and Secretary
J.P. Morgan & Co. Incorporated
60 Wall Street, New York, New York 10260-0060
(212) 648-3535
(Name, address, including zip code, and telephone number,
including
area code, of agent for service)
__________________
Copies to:
GENE A. CAPELLO, ESQ.
Vice President and Assistant General Counsel
J.P. MORGAN & CO. INCORPORATED
60 Wall Street
New York, New York 10260-0060
__________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE
PUBLIC:
From time to time after the effective date of this
Registration Statement as determined by market conditions.
__________________
<PAGE>
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, please 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,
please 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 /
The Registrant hereby amends this Registration Statement
on such date or dates as may be necessary to delay its
effective date until the Registrant 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, as amended,
or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section
8(a), may determine.
EXPLANATORY NOTE
The prospectus filed with this Post-Effective Amendment
contains a form of market maker prospectus intended for use
by direct or indirect wholly-owned subsidiaries of J.P.
Morgan & Co. Incorporated, including J.P. Morgan Securities
Inc., in connection with offers and sales related to
secondary market transactions in debt securities that have
been previously registered by J.P. Morgan & Co. Incorporated
under the Securities Act of 1933 pursuant to the
above-referenced registration statements on file with the
Securities and Exchange Commission and in certain debt
securities that are initially offered and sold by or on
behalf of J.P. Morgan & Co. Incorporated after the effective
date of this Post-Effective Amendment. The market maker
prospectus is in addition to, and not in substitution for,
the prospectuses relating to the referenced registration
statements currently on file with the Securities and Exchange
Commission. This Post-Effective Amendment also constitutes a
Post-Effective Amendment to each of the Registration
Statements referred to above.
<PAGE 1>
Prospectus
J.P. Morgan & Co. Incorporated
Debt Securities
J.P. Morgan & Co. Incorporated ("J.P. Morgan") has issued one
series of 1973 Debt Securities (as defined herein) pursuant
to an indenture, dated as of November 11, 1973, between J.P.
Morgan and The Bank of New York, as Trustee (the "1973
Indenture"). The following 1973 Debt Securities have been
issued pursuant to the 1973 Indenture:
$150,000,000 aggregate principal amount of 4 3/4%
Convertible Debentures due November 1, 1998.
J.P. Morgan has issued from time to time one or more series
of 1982 Debt Securities (as defined herein) pursuant to an
indenture, dated as of August 15, 1982, between J.P. Morgan
and U.S. Bank Trust National Association (formerly First
Trust of New York, National Association), as Successor
Trustee to Chemical Bank (formerly Manufacturers Hanover
Trust Company), as amended by the First Supplemental
Indenture dated as of May 5, 1986, the Second Supplemental
Indenture dated as February 27, 1996 and the Third
Supplemental Indenture dated as of January 30, 1997
(collectively referred to as the "1982 Indenture"). The
following 1982 Debt Securities have been issued pursuant to
the 1982 Indenture:
174,607 MEDS, 2.85% Exchangeable Notes due August 18,
1998; 715,100 MEDS, 5.00% Exchangeable Notes due
January 22, 1999; $500,000,000 aggregate principal
amount of Floating Rate Notes due April 5, 1999; and
$500,000,000 aggregate principal amount of Floating Rate
Notes due April 6, 2000.
J.P. Morgan has issued from time to time one or more series
of 1986 Debt Securities (as defined herein) pursuant to an
indenture, dated as of December 1, 1986, between J.P. Morgan
and U.S. Bank Trust National Association (formerly First
Trust of New York, National Association), as Successor
Trustee to Citibank, N.A., as amended by the First
Supplemental Indenture dated as of May 12, 1992 (the "1986
Indenture"). The following 1986 Debt Securities have been
issued pursuant to the 1986 Indenture:
$250,000,000 aggregate principal amount of 7 5/8%
Subordinated Notes due November 15, 1998; $200,000,000
aggregate principal amount of 7 1/4% Subordinated Notes
due January 15, 2002; and $150,000,000 aggregate
principal amount of 8 1/2% Subordinated Notes due August
15, 2003.
J.P. Morgan has issued from time to time one or more series
of 1993 Debt Securities (as defined herein) pursuant to an
indenture, dated as of March 1, 1993, between J.P. Morgan and
U.S. Bank Trust National Association (formerly First Trust of
New York, National Association), as Successor Trustee to
Citibank, N.A., (the "1993 Indenture"). The following 1993
Debt Securities have been issued pursuant to the 1993
Indenture:
$200,000,000 aggregate principal amount of Subordinated
Constant Maturity Treasury Floating Rate Notes due March
13, 2000; $500,000,000 aggregate principal amount of 7
5/8% Subordinated Notes due September 15, 2004;
$300,000,000 aggregate principal amount of 6 1/4%
Subordinated Notes due December 15, 2005; $300,000,000
aggregate principal amount of 6.875% Subordinated Notes
due January 15, 2007; $350,000,000 aggregate principal
amount of 6.70% Subordinated Notes due November 1, 2007;
$150,000,000 aggregate principal amount of 5 3/4%
Subordinated Notes due October 15, 2008;
$300,000,000 aggregate principal amount of 6 1/4%
Subordinated Notes due January 15, 2009;
$100,000,000 aggregate principal amount of 7 1/4%
Subordinated Notes due October 1, 2010;
$100,000,000 aggregate principal amount of 6.61%
Subordinated Notes due December 15, 2010; $100,000,000
aggregate principal amount of 6 1/4% Subordinated Notes
due February 15, 2011; and $45,000,000 aggregate
principal amount of Fixed to Floating Rate Subordinated
Notes due December 24, 2012.
THE DEBT 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 NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is June ____, 1998.
<PAGE 2>
This Prospectus has been prepared in connection with the
securities (the "Debt Securities") previously issued pursuant
to the 1973 Indenture, the 1982 Indenture, the 1986 Indenture
and the 1993 Indenture (which are collectively referred to
herein as the "Indentures"). (The trustees and successor
trustees under the Indentures are hereinafter referred to as
the "Trustees" and individually as a "Trustee".) This
prospectus is to be used by J.P. Morgan Securities Inc.
("JPMSI"), a broker-dealer and an indirect wholly-owned
subsidiary of J.P. Morgan, in connection with offers and
sales of the Debt Securities in the course of its business as
a broker-dealer. The participation of JPMSI in the offer and
sale of the Debt Securities complies 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 and complies with any
restrictions imposed on JPMSI by the Board of Governors of
the Federal Reserve System. JPMSI may act as principal or
agent in such transactions. The Debt Securities may be
offered or sold on the New York Stock Exchange in the event
the particular series of Debt Securities has been listed
thereon, or another stock exchange, or off any exchange in
negotiated transactions, or otherwise. Sales will be made at
prices related to prices prevailing at the time of sale.
Available Information
J.P. Morgan is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "1934
Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning J.P. Morgan may
be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices located at Northeast Regional
Office, Seven World Trade Center, Suite 1300, New York, New
York 10048 and Midwest Regional Office, Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can also be obtained from the Public
Reference Section of the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Commission maintains a website that contains
reports, proxy and information statements and other materials
that are filed through the Commission's Electronic Data
Gathering, Analysis and Retrieval (EDGAR) System. This
website can be accessed at http:/www.sec.gov. Information
provided to or filed with the Commission by J.P. Morgan
pursuant to the 1934 Act can be located by reference to the
Commission file number 1-5885. In addition, reports, proxy
statements and other information concerning J.P. Morgan may
be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.
J.P. Morgan has filed with the Commission registration
statement numbers 2-49280, 33-10810, 33-28320,
33-41006, 33-10807, 33-15763, 33-45651, 33-49775, 33-55851,
33-64193, 33-01723, 333-37315, 333-40447, 333-47753,
and 333-51961 (herein, together with all amendments and
exhibits, referred to as the "Registration Statements")
under the Securities Act of 1933, as amended
(the "Securities Act"), relating to the Debt Securities.
This Prospectus does not contain all of the information set
forth in the Registration Statements, certain parts of which
are omitted in accordance with the rules and regulations of
the Commission. For further information, reference is hereby
made to the Registration Statements.
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, 1997 (included in its
Annual Report to Stockholders), J.P. Morgan's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1998, and
J.P. Morgan's Reports on Form 8-K dated January 15, 1998,
February 19, 1998, March 27, 1998, April 14, 1998 and May 5,
1998, 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 a copy of this
Prospectus is delivered, on the written or oral request of
any such person, a copy of any or all of the documents
incorporated herein by reference, except the exhibits to such
documents (unless such exhibits are specifically incorporated
by reference in such documents). Written requests should be
directed to the Office of the Corporate Secretary, J.P.
Morgan & Co. Incorporated, 60 Wall Street, New York, New York
10260. Telephone requests for such copies should be directed
to the Corporate Secretary at (212) 648-3380.
<PAGE 3>
J.P. MORGAN & CO. INCORPORATED
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 activities are summarized as follows:
Finance and Advisory
The Finance and Advisory sector encompasses the sophisticated
advisory, capital raising, and financing work that J.P.
Morgan does for its broad base of clients around the world --
including corporations, financial institutions, governments,
municipalities, and individuals. J.P. Morgan's expertise is
based on an in-depth knowledge of its clients' needs and of
the industries and financial markets in which they operate.
In partnership with clients, J.P. Morgan's advisory
professionals analyze the risks and rewards of such strategic
alternatives as merger, acquisition, divestiture,
privatization, and recapitalization. J.P. Morgan also looks
for ways to unlock value when analyzing a client's capital
structure. J.P. Morgan's debt and equities underwriting
business provides clients with the capability to raise the
capital necessary to execute their strategies. High-quality
research is an integral part of this business.
J.P. Morgan's credit activities include meeting clients'
financing needs by arranging and syndicating loans and other
credit facilities. They also include the responsibility for
managing the firm's credit risk arising from traditional
credit activities as well as J.P. Morgan's derivatives
trading activities.
Market Making
J.P. Morgan's market making activities provide clients with
around-the-clock access to global markets. J.P. Morgan makes
markets in fixed income, equities, foreign exchange,
commodity instruments, and derivatives in both developed and
emerging markets. J.P. Morgan also develops customized
transactions to assist clients in managing risk and enhancing
returns. J.P. Morgan provides research to help clients assess
opportunities and track performance. J.P. Morgan takes
positions to facilitate client transactions and to benefit
from its role as a market maker.
J.P. Morgan's clients include banks, other nonbanks,
financial institutions, corporations, governments and their
agencies, leveraged funds, pension funds, mutual funds, and
individuals.
J.P. Morgan's fixed income activities include acting as a
primary dealer in U.S. and foreign government securities;
making markets in money market instruments, U.S. government
agency securities, corporate debt securities, swaps and other
derivatives; and helping clients manage their exposure to
interest rate and foreign exchange risk.
J.P. Morgan's emerging markets activities include acting as a
dealer and market maker in securities and derivatives from
non-G-10 countries in Latin America, Eastern Europe, Asia,
and Africa. While many of J.P. Morgan's emerging market
activities involve fixed income securities, J.P. Morgan deals
in many other markets and instruments.
<PAGE 4>
J.P. Morgan's equities market making activities include
acting as both agent and principal to facilitate clients'
transactions in exchange-listed and over-the-counter
securities. J.P. Morgan also structures equity derivatives
for clients.
J.P. Morgan's foreign exchange capabilities include making
markets in spot, options, and short-term interest rate
products, in order to help clients manage their foreign
currency exposures.
J.P. Morgan's commodities activities include advising clients
on developing hedging, investment, and commodity-linked
financing strategies. J.P. Morgan also provides commodity
services which may include the settlement of physical trades
in various metal and oil markets and metal borrowing and
lending services.
Asset Management and Servicing
J.P. Morgan provides a wide range of investment-related
services, including: global asset management for pension
plans, governments, endowments, and foundations; integrated
financial services for high-net worth individuals; fully
bundled services for defined contribution pension plans
through American Century Companies; and mutual fund
distribution to intermediaries.
J.P. Morgan's global dedicated research capabilities support
portfolio management across all asset classes and markets.
With the acquisition of O'Connor Realty Advisors, a real
estate investment firm, J.P. Morgan has further broadened its
expertise and ability to bring a full range of investment
options to its clients. This spectrum of capabilities is
delivered to institutional and individual investors in both
discretionary account and mutual fund form.
In July 1997, J.P. Morgan agreed to purchase a 45% interest
in American Century Companies, the fourth largest U.S. no-
load direct mutual fund company. With this investment, which
was concluded in January 1998, J.P. Morgan has gained scale
expertise in technology and operations for distribution and
servicing, as well as complementary investment capabilities
that broaden its product offerings significantly. J.P. Morgan
has formed a business partnership with American Century to
pursue jointly the growing retirement plan market,
distribution of mutual funds to third parties such as
financial advisors, and other opportunities in integrated
personal financial services.
J.P. Morgan offers ultra high-net worth clients an advice-
based integrated array of financial services that includes
tax-advantaged asset structures; a wide range of investment
options, including managed portfolios and brokerage; and
credit and liquidity services. These capabilities form the
foundation for an expansion of services to investors that
will be pursued selectively.
J.P. Morgan's futures and options brokerage group provides
institutional clients with worldwide access to major
exchanges by acting as brokers in executing and clearing
contracts. Currently, J.P. Morgan has dealers on 51 exchanges
around the world. J.P. Morgan operates, under contract, the
Euroclear System, the world's largest clearance and
settlement system for internationally traded securities. J.P.
Morgan provides credit and deposit services to Euroclear
participants. In addition, J.P. Morgan provides certain
operational services such as the administration of American
depository receipt (ADR) programs.
Equity Investments
J.P. Morgan invests for its own account on a global basis in
private equity and equity-related securities in leveraged and
unleveraged acquisitions, privatizations, recapitalizations,
rapidly growing companies, expansion financings, turnaround
situations, and other special equity situations. These
investments are made with the objective of maximizing total
return, which is a measure of both long-term appreciation and
net recognized gains.
The Equity Investments group works closely with other areas
of J.P. Morgan to capture the competitive advantage of J.P.
Morgan's global presence and expertise in sourcing,
evaluating, managing, and exiting investments. Opportunities
often develop through relationships with clients. J.P.
Morgan has also managed initial public offerings and high-
yield debt issues, arranged credit facilities, and provided
mergers and acquisitions advice to portfolio companies at
later stages of their development.
<PAGE 5>
Proprietary Investing and Trading
J.P. Morgan takes market and credit risk positions for our
own account using both relative value and directional risk-
taking strategies to enhance the value of the firm. J.P.
Morgan uses a relative value strategy when they anticipate
changes in relationships between markets and classes of
instruments (e.g., a change in prices between bonds and
swaps) or when they believe certain assets are fundamentally
mispriced by the market. J.P. Morgan uses directional
strategies in an attempt to profit from its anticipation of
how it believes a market will move (e.g., absolute rates or
prices will go up or down). Experienced market professionals
manage these strategies and use them over many currencies and
types of instruments, including fixed income securities,
foreign exchange, equity securities, commodity products, and
related derivatives.
Positions may be held for long or short periods of time,
depending on the strategy and actual market performance.
Certain longer-term strategies are considered to be
investment activities and tend to utilize government,
mortgage-backed, and corporate debt securities.
J.P. Morgan also manages its liquidity and capital profile to
ensure it has access to funding at a reasonable cost, even
under adverse circumstances, to support all the business
activities of the firm. A strong capital position is an
integral part of J.P. Morgan's liquidity management because
it enables the firm 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 "Bank Act"). Under the Bank Act,
J.P. Morgan is required to file reports with the Board of
Governors of the Federal Reserve System (the "Board"). J.P.
Morgan is also subject to examination by the Board. The Bank
Act prevents J.P. Morgan and its subsidiaries from engaging
in activities not related to banking, and limits the amount
of securities it can acquire of a company engaging in
nonbanking activities. An exception may be made if the Board
determines that the company's activities are closely related
to banking. Federal law and Board interpretations limit the
extent to which J.P. Morgan can engage in certain aspects of
the securities business. The Glass-Steagall Act prohibits
bank affiliates that are members of the Federal Reserve
System -- including J.P. Morgan Securities Inc. ("JPMSI"), a
"Section 20" subsidiary, -- from being engaged principally in
bank-ineligible underwriting and dealing activities (mainly
corporate debt and equity securities). This prohibition
restricts JPMSI's gross revenues from these activities to a
maximum of 25% of total gross revenues.
J.P. Morgan's largest subsidiary, Morgan Guaranty Trust
Company of New York ("Morgan Guaranty"), 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. It is examined and regulated
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. It is also restricted on some other types of
transactions with J.P. Morgan, or involving J.P. Morgan's
securities.
Among other wholly owned subsidiaries:
JPMSI is a broker-dealer registered with and subject to
regulation by 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 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 advisor 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.
<PAGE 6>
As used in this Prospectus, unless the context otherwise
requires, the term "J.P. Morgan" refers to J.P. Morgan & Co.
Incorporated and its consolidated and unconsolidated
subsidiaries.
<TABLE>
Consolidated Ratios
<CAPTION>
Consolidated Ratio of Earnings to Fixed Charges
Three Months
Ended Year ended December 31,
March 31, 1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Excluding Interest
on Deposits ..... 1.17(a) 1.27 1.35 1.35 1.40 1.70(b)
Including Interest
on Deposits...... 1.12(a) 1.20 1.26 1.24 1.28 1.46(b)
_______________
</TABLE>
[FN]
(a) For the three months ended March 31, 1998, the ratio of
earnings to fixed charges, excluding the after tax charge of
$129 million ($215 million before tax) related to
restructuring of business activities, was 1.23 excluding
interest on deposits and 1.17 including interest on deposits.
(b) 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.
</FN>
<TABLE>
Consolidated Ratios
<CAPTION>
Consolidated Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
Three Months
Ended Year ended December 31,
March 31, 1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Excluding Interest
on Deposits.... 1.16(a) 1.26 1.34 1.34 1.39 1.69(b)
Including Interest
on Deposits.... 1.12(a) 1.20 1.25 1.23 1.27 1.46(b)
_______________
</TABLE>
[FN]
(a) For the three months ended March 31, 1998, the ratio of
earnings to combined fixed charges and preferred stock
dividends, excluding the after tax charge of $129 million
($215 million before tax) related to restructuring of
business activities, was 1.22 excluding interest on deposits
and 1.16 including interest on deposits.
(b) 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.
</FN>
<PAGE 7>
DESCRIPTION OF DEBT SECURITIES
UNDER THE 1973 INDENTURE
The brief summary of the principal provisions of the 1973
Indenture and the Debt Securities issued thereunder (the
"1973 Debt Securities") does not purport to be complete.
Certain capitalized terms used herein are defined in the 1973
Indenture. References in italics are to sections or articles
of the 1973 Indenture. Where any particular sections or
defined terms of the 1973 Indenture are referred to, such
sections or defined terms are incorporated herein by
reference as a part of the statement made, and the statement
is qualified in its entirety by such reference.
Terms and Provisions of the 4 3/4% Convertible Debentures due
November 1, 1998
The 4 3/4% Convertible Debentures due November 1, 1998 (the
"Convertible Debentures") were issued under the 1973
Indenture and interest is payable semi-annually on May 1 and
November 1 of each year to registered holders of record at
the close of business on the April 15 or October 15 next
preceding such May 1 or November 1. Interest is paid by
checks mailed to such registered holders.
Since J.P. Morgan is a holding company, the rights of
creditors of J.P. Morgan, including the holders of the
Convertible Debentures, to participate in any distribution of
assets of any subsidiary upon the liquidation or
reorganization of such subsidiary are subject to the prior
claims of creditors of the subsidiary.
Terms of the 1973 Indenture
Conversion Rights. The 1973 Debt Securities are convertible
at their principal amount into shares of J.P. Morgan common
stock at any time prior to November 1, 1998 (unless the 1973
Debt Securities or a portion thereof is called for
redemption, in which case to and including but not after the
date fixed for redemption in respect of such 1973 Debt
Securities or portion thereof called for redemption) at $80 a
share (the "Conversion Price"), subject to adjustment in
certain events. (Section 4.01.) Notice of redemption will be
given to holders of the 1973 Debt Securities to be redeemed
by first class mail at their last addresses on the registry
books of J.P. Morgan. (Section 3.02.)
The Conversion Price is subject to adjustment upon certain
events, including the issuance of common stock of J.P. Morgan
as a dividend or distribution; subdivisions, combinations or
reclassifications of common stock of J.P. Morgan; the
issuance to holders of J.P. Morgan common stock of rights or
warrants (expiring 45 days after the record date for
determining stockholders entitled to receive them) to
subscribe for J.P. Morgan common stock at less than the then
current market price (as defined); or the distribution to the
holders of J.P. Morgan common stock of evidences of
indebtedness, assets (excluding dividends in cash out of
retained earnings) or rights or warrants to subscribe other
than those mentioned above. Upon conversion no adjustments
will be made for accrued interest or dividends and,
therefore, 1973 Debt Securities surrendered for conversion
after April 15 or October 15 next preceding an interest
payment date and prior to such interest payment date must be
accompanied by payment of an amount equal to the interest
thereon which is to be paid on such interest payment date. No
adjustment of the Conversion Price will be required to be
made in any case until cumulative adjustments amount to $0.50
per share or more. J.P. Morgan reserves the right to make
such reductions in the Conversion Price in addition to those
required in the foregoing provisions as J.P. Morgan in its
discretion shall determine to be advisable in order that
certain stock-related distributions hereafter made by J.P.
Morgan to its stockholders shall not be taxable. (Sections
4.02 and 4.04.)
Conversion of the 1973 Debt Securities may be effected by
delivering them at the office or agency to be maintained by
J.P. Morgan for that purpose in New York City. (Section
4.02.)
Fractional shares of common stock will not be delivered upon
conversion, but a cash adjustment will be paid in respect of
such fractional interests, based on the then current market
price of J.P. Morgan common stock. (Section 4.03.)
Redemption. The 1973 Debt Securities may be redeemed on at
least 30 and not more than 60 days' notice at the option of
J.P. Morgan, as a whole or in part, at any time, at 100% of
the principal amount thereof, in each case with accrued
interest to the date fixed for redemption. (Sections 3.01 and
3.02.)
<PAGE 8>
Events of Default. Events of default are defined in the 1973
Indenture as being: default for 30 days in payment of any
interest installment when due; default in payment of
principal or premium, if any, when due; default for 90 days
after notice to J.P. Morgan by the Trustee or to J.P. Morgan
and the Trustee by the holders of 25% in principal amount of
the outstanding 1973 Debt Securities in performance of any
other covenant in the 1973 Indenture; and certain events of
bankruptcy, insolvency and reorganization of J.P. Morgan.
(Section 7.01.)
The Trustee shall be entitled, subject to the duty of the
Trustee during default to act within the required standard of
care, to be indemnified by the holders of the 1973 Debt
Securities before proceeding to exercise any right or power
under the 1973 Indenture at the request of holders of the
1973 Debt Securities. (Section 8.02.) The holders of a
majority in principal amount of the outstanding 1973 Debt
Securities may 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. (Section 7.07.)
J.P. Morgan will file annually with the Trustee a certificate
of no default or a certificate specifying any default that
exists. (Section 11.02.)
Modification of the 1973 Indenture. The 1973 Indenture
contains provisions permitting J.P. Morgan and the Trustee,
with the consent of the holders of 66 2/3% in principal
amount of the outstanding 1973 Debt Securities, to execute
supplemental indentures adding any provisions to or changing
or eliminating any of the provisions of the 1973 Indenture or
modifying the rights of the holders of 1973 Debt Securities,
except that no such supplemental indenture may (i) extend the
fixed maturity of any 1973 Debt Security, or reduce the rate
or extend the time of payment of interest thereon, or reduce
the principal amount thereof or premium thereon, or change
the currency of payment, or impair the right to convert the
1973 Debt Securities, without the consent of the holder of
each 1973 Debt Security so affected, or (ii) reduce the
aforesaid percentage of 1973 Debt Securities, the holders of
which are required to consent to any such supplemental
indenture, without the consent of the holders of all
outstanding 1973 Debt Securities. (Section 11.02.)
See "Description of Capital Securities" below.
DESCRIPTION OF DEBT SECURITIES
UNDER THE 1982 INDENTURE
The brief summary of the principal provisions of the 1982
Indenture and the Debt Securities issued thereunder (the
"1982 Debt Securities") does not purport to be complete.
Certain capitalized terms used herein are defined in the 1982
Indenture. References in italics are to sections or articles
of the 1982 Indenture. Where any particular sections or
defined terms of the 1982 Indenture are referred to, such
sections or defined terms are incorporated herein by
reference as a part of the statement made, and the statement
is qualified in its entirety by such reference.
Terms and Provisions of the 174,607 Mandatorily Exchangeable
Debt Securities ("MEDS"), 2.85% Exchangeable Notes due August
18, 1998
The 2.85% Exchangeable Notes due August 18, 1998 (the "2.85%
MEDS") were issued under the 1982 Indenture and interest is
payable quarterly in arrears on November 18, February 18, May
18 and August 18 of each year (each a "2.85% MEDS Interest
Payment Date") to the persons in whose names the 2.85% MEDS
are registered at the close of business on the last day of
the calendar month immediately preceding such 2.85% MEDS
Interest Payment Date. The initial principal amount of each
of the 2.85% MEDS is $40.09 (the "Initial Price"). The 2.85%
MEDS are unsecured debt obligations of J.P. Morgan and rank
on a parity with all other unsecured and unsobordinated
indebtedness of J.P. Morgan. The 2.85% MEDS may not be
redeemed prior to stated maturity and are not entitled to any
sinking fund. At maturity, the principal amount of the
2.85% MEDS will be mandatorily exchanged by J.P. Morgan into
a number of shares of Samsonite Common Stock at an Exchange
Rate (as defined below), and accordingly, holders of the
2.85% MEDS will not necessarily receive an amount equal to
the Initial Price thereof. The "Exchange Rate" is equal to,
subject to adjustment as a result of certain dilution events
(a) if the Maturity Price (as defined below) per share of
Samsonite Common Stock is less than or equal to $62.54 per
share of Samsonite Common Stock (the "Capped Participation
Price"), one share of Samsonite Common Stock per 2.85% MEDS
and (b) if the Maturity Price is greater than the Capped
Participation Price, a fractional share of Samsonite Common
Stock per 2.85% MEDS so that the value of such fractional
share (determined at the Maturity Price) is equal to the
Capped Participation Price. No fractional shares of
Samsonite Common Stock will be issued at Maturity if J.P.
Morgan exchanges the 2.85% MEDS for shares of Samsonite
Common Stock. In lieu of any fractional share otherwise
issuable in respect of all 2.85% MEDS of any holder which are
exchanged at Maturity, such holder shall be entitled to
receive an amount in cash equal to the value of such
fractional share at the Maturity Price. Notwithstanding the
foregoing, J.P. Morgan may, at its option in lieu of
delivering shares of Samsonite Common Stock, deliver cash in
an amount equal to the value at the Maturity Price of such
number of shares of Samsonite Common Stock.
<PAGE 9>
The "Maturity Price" is defined as the average Closing Price
per share of Samsonite Common Stock on the five Trading Days
beginning August 10, 1998 and ending August 14, 1998. The
Closing Price is defined as the NASDAQ final quoted bid price
of such security at the closing time on the NASDAQ on such
date. If such bid price is not available, the Closing Price
shall mean the market value of such security on such date as
determined by a nationally recognized independent investment
banking firm retained for such purpose by J.P. Morgan. A
"Trading Day" is defined as a day on which the security the
Closing Price of which is being determined (A) is not
suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the
close of business and (B) has traded at least once on the
national or regional securities exchange or association or
over-the-counter market that is the primary market for the
trading of such security.
The 2.85% MEDS are not represented by notes in definitive
form but are represented by one or more global securities
(the "2.85% Global Securities") registered in the name of the
nominee of The Depository Trust Company (the "Depository").
Interests in the 2.85% MEDS represented by the 2.85% Global
Securities are shown on, and transfers thereof are effected
only through, records maintained by the Depository and its
direct and indirect participants. Except as described below
under "Same-Day Funds Settlement System", 2.85% Global
Securities in definitive form will not be issued. Settlement
for the 2.85% Global Securities will be made in immediately
available funds. The 2.85% Global Securities trade in the
Depository's Same-Day Funds Settlement System until maturity,
and secondary market trading activity therefore settles in
immediately available funds. All payments of principal and
interest made by J.P. Morgan are in immediately available
funds or the equivalent so long as the Depository continues
to make its Same-Day Funds Settlement System available to
J.P. Morgan. See "Same-Day Funds Settlement System" below.
The 2.85% Global Securities are issued in fully registered
form, in denominations of $1,000 and any integral multiple
thereof. The paying agent, registrar and transfer agent for
the 2.85% Global Securities is U.S. Bank Trust National
Association (formerly First Trust of New York, National
Association), 100 Wall Street, Suite 1600, New York, New York
10005.
Terms and Provisions of the 715,100 Mandatorily Exchangeable
Debt Securities ("MEDS"), 5.00% Exchangeable Notes due
January 22, 1999
The 5.00% Exchangeable Notes due January 22, 1999 (the "5.00%
MEDS") were issued under the 1982 Indenture and interest is
payable quarterly in arrears on January 22, April 22, July 22
and October 22 of each year (each a "5.00% MEDS Interest
Payment Date") to the persons in whose names the 5.00% MEDS
are registered at the close of business on the last day of
the calendar month immediately preceding such 5.00% MEDS
Interest Payment Date. The initial principal amount of each
of the 5.00% MEDS is $22.375 (the "Initial Price"). The
5.00% MEDS are unsecured debt obligations of J.P. Morgan and
rank on a parity with all other unsecured and unsobordinated
indebtedness of J.P. Morgan. The 5.00% MEDS may not be
redeemed prior to stated maturity and are not entitled to any
sinking fund. At maturity, the principal amount of the
5.00% MEDS will be mandatorily exchanged by J.P. Morgan into
a number of shares of Autozone Common Stock at an Exchange
Rate (as defined below), and accordingly holders of the 5.00%
MEDS will not necessarily receive an amount equal to the
Initial Price thereof. The "Exchange Rate" is equal to ,
subject to adjustment as a result of certain dilution events
(a) if the Maturity Price (as defined below) per share of
Autozone Common Stock is less than or equal to $32.45 (the
"Capped Participation Price"), one share of Autozone Common
Stock per 5.00% MEDS and (b) if the Maturity Price is greater
than the Capped Participation Price, a fractional share of
Autozone Common Stock per 5.00% MEDS so that the value of
such fractional share (determined at the Maturity Price) is
equal to the Capped Participation Price. No fractional
shares of Autozone Common Stock will be issued at Maturity.
In lieu of any fractional share otherwise issuable in respect
of all 5.00% MEDS of any holder which are exchanged at
Maturity, such holder shall be entitled to receive an amount
in cash equal to the value of such fractional share at the
Maturity Price. Notwithstanding the foregoing, J.P. Morgan
may, at its option in lieu of delivering shares of Autozone
Common Stock, deliver cash in an amount equal to the value at
the Maturity Price of such number of shares of Autozone
Common Stock.
<PAGE 10>
The "Maturity Price" is defined as the average Closing Price
per share of Autozone Common Stock on the 3 Trading Days
ending on the third Trading Day immediately prior to (but not
including ) the Maturity Date. The "Closing Price" of any
security on any date of determination means the closing sale
price (or, if no closing price is reported, the last reported
sale price) of such security on the NYSE on such date or, if
such security is not listed for trading on the NYSE on any
such date, as reported in the composite transactions for the
principal Unites States securities exchange on which such
security is so listed, or if such security is not so listed
on a United States national or regional securities exchange,
as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System, or if such security
is not so reported, the last quoted bid price for such
security in the over-the-counter market as reported by the
National Quotation Bureau or similar organization, or if such
bid price is not available, the market value of such security
on such date as determined by a nationally recognized
independent investment banking firm retained for such purpose
by J.P. Morgan. A "Trading Day" is defined as a day on which
the security the Closing Price of which is being determined
(A) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market
at the close of business and (B) has traded at least once on
the national or regional securities exchange or association
or over-the-counter market that is the primary market for the
trading of such security.
The 5.00% MEDS are not represented by notes in definitive
form but are represented by one or more global securities
(the "5.00% Global Securities") registered in the name of the
nominee of The Depository Trust Company (the "Depository").
Interests in the 5.00% MEDS represented by the 5.00% Global
Securities are shown on, and transfers thereof are effected
only through, records maintained by the Depository and its
direct and indirect participants. Except as described below
under "Same-Day Funds Settlement System", 5.00% Global
Securities in definitive form will not be issued. Settlement
for the 5.00% Global Securities will be made in immediately
available funds. The 5.00% Global Securities trade in the
Depository's Same-Day Funds Settlement System until maturity,
and secondary market trading activity therefore settles in
immediately available funds. All payments of principal and
interest made by J.P. Morgan are in immediately available
funds or the equivalent so long as the Depository continues
to make its Same-Day Funds Settlement System available to
J.P. Morgan. See "Same-Day Funds Settlement System" below.
The 5.00% Global Securities are issued in fully registered
form, in denominations of $1,000 and any integral multiple
thereof. The paying agent, registrar and transfer agent for
the 5.00% Global Securities is U.S. Bank Trust National
Association (formerly First Trust of New York, National
Association), 100 Wall Street, Suite 1600, New York, New York
10005.
Terms and Provisions of the Floating Rate Notes due April 5,
1999
The Floating Rate Notes due April 5, 1999 (the "1999 Notes")
were issued under the 1982 Indenture. The 1999 Notes will
bear interest from April 3, 1998 and is payable quarterly in
arrears on July 5, 1998, October 5, 1998, January 5, 1999 and
April 5, 1999 (each a "1999 Notes Interest Payment Date") to
the persons in whose names the 1999 Notes are registered at
the close of business on the fifteenth calendar day prior to
each 1999 Notes Interest Payment Date. The 1999 Notes may not
be redeemed prior to stated maturity and are not entitled to
any sinking fund.
The "Interest Period" with respect to the 1999 Notes is each
successive period from and including a 1999 Notes Interest
Payment Date in respect of such 1999 Notes up to but
excluding the next succeeding 1999 Notes Interest Payment
Date, except that the initial Interest Period commences April
3, 1998. The interest rate for each Interest Period will be
determined by the Calculation Agent in accordance with the
following provisions:
The per annum rate of interest for each Interest Period will
be three-month LIBOR on the second London Banking Day
preceding the Interest Reset Date for such Interest Period
(the "Interest Determination Date") minus 10.0 basis points
(0.10%). The Interest Determination Date for the first
coupon will be April 1, 1998. Interest on the 1999 Notes will
be calculated on the basis of a 360-day year and the actual
number of days in the applicable Interest Period. "LIBOR"
for each Interest Period will be determined by the
Calculation Agent
<PAGE 11>
in accordance with the following provisions:
(1) On each Interest Determination Date, the Calculation
Agent will ascertain the offered rate for three-month
deposits in U.S. dollars in the London interbank market,
which appears on the Telerate page 3750 as of 11:00 a.m.
(London time) on such Interest Determination Date.
(2) If such rate does not appear on the Telerate Page
3750, or the Telerate Page 3750 is unavailable, the
Calculation Agent will request each of four major banks
in the London interbank market (the "Reference Banks")
to provide the Calculation Agent with its offered
quotation (expressed as a rate per annum) for three-
month deposits in U.S. dollars to leading banks in the
London interbank market at approximately 11:00 a.m.
(London time) on the Interest Determination Date. If at
least two such quotations are provided, LIBOR in respect
of that Interest Determination Date will be the
arithmetic mean of such quotations.
(3) If less than two of the Reference Banks provide the
Calculation Agent with such offered quotations, LIBOR in
respect of that Interest Determination Date will be the
arithmetic mean of the rates quoted by three major banks
in The City of New York (selected by the Calculation
Agent) at approximately 11:00 a.m., New York City time,
on that Interest Determination Date for three-month
loans in U.S. dollars to leading European banks, in a
principal amount equal to an amount of not less than $1
million that is representative for a single transaction
in such market at such time; provided, however, that if
the banks selected as aforesaid by the Calculation Agent
are not quoting as mentioned in this sentence, LIBOR
will be LIBOR in effect on such Interest Determination
Date.
"Telerate Page 3750 " means the display designated as page
"3750" on the Dow Jones Telerate Service (or such other pages
as may replace those pages on that service for the purpose of
displaying the LIBOR Index on a quarterly basis). All
percentages resulting from any calculation on the 1999 Notes
will be rounded, if necessary, to the nearest one hundred-
thousandth of a percentage point, with five one-millionths of
a percentage point rounded upward (e.g., 9.876545% (or
.09876545) being rounded to 9.87655% (or .0987655)), and
dollar amounts used in or resulting from such calculations
will be rounded to the nearest cent (with one-half cent being
rounded upward).
J.P. Morgan has agreed that, so long as the 1999 Notes remain
outstanding, it will maintain under appointment an agent (the
"Calculation Agent"), initially the New York branch of Morgan
Guaranty Trust Company of New York, to determine the rate of
interest payable on the 1999 Notes in respect of each
Interest Period. If the Calculation Agent is unable or
unwilling to continue to act as such, or if the Calculation
Agent fails to establish the applicable interest rate for any
Interest Period, or if J.P. Morgan removes the Calculation
Agent, J.P. Morgan will appoint the office of another bank to
act as the Calculation Agent.
The 1999 Notes are represented by Global Securities (the
"1999 Global Securities") registered in the name of The
Depository Trust Company (the "Depository"). Interests in the
1999 Notes represented by the 1999 Global Securities are
shown on, and transfers thereof are effected only through,
records maintained by the Depository and its direct and
indirect participants. Except as described below under "Same-
Day Funds Settlement System", 1999 Notes in definitive form
will not be issued. Settlement for the 1999 Notes will be
made in immediately available funds. The 1999 Notes will
trade in the Depository's Same-Day Funds Settlement System
and secondary market trading activity will be made by J.P.
Morgan in immediately available funds or the equivalent. See
"Same-Day Funds Settlement System" below.
The 1999 Notes are issued in fully registered form, in
denominations of $250,000 with $50,000 integral multiples
thereafter. The paying agent and registrar for the 1999 Notes
is U.S. Bank Trust National Association (formerly First Trust
of New York, National Association), 100 Wall Street, Suite
1600, New York, New York 10005.
Terms and Provisions of the Floating Rate Notes due April 6,
2000
The Floating Rate Notes due April 6, 2000 (the "2000 Notes")
were issued under the 1982 Indenture. The 2000 Notes will
bear interest from April 6, 1998 and is payable quarterly in
arrears on July 6, October 6, January 6 and April 6 of each
year, commencing July 6, 1998 (each a "2000 Notes Interest
Payment Date") to the persons in whose names the 2000 Notes
are registered at the close of business on the fifteenth
calendar day prior to each 2000 Notes Interest Payment Date.
The 2000 Notes may not be redeemed prior to stated maturity
and are not entitled to any sinking fund.
<PAGE 12>
The "Interest Period" with respect to the 2000 Notes is each
successive period from and including a 2000 Notes Interest
Payment Date in respect of such 2000 Notes up to but
excluding the next succeeding 2000 Notes Interest Payment
Date, except that the initial Interest Period commences April
6, 1998. The interest rate for each Interest Period will be
determined by the Calculation Agent in accordance with the
following provisions:
The per annum rate of interest for each Interest Period will
be three-month LIBOR on the second London Banking Day
preceding the Interest Reset Date for such Interest Period
(the "Interest Determination Date") minus 5.0 basis points
(0.05%). The Interest Determination Date for the first
coupon will be April 2, 1998. Interest on the 2000 Notes will
be calculated on the basis of a 360-day year and the actual
number of days in the applicable Interest Period. "LIBOR"
for each Interest Period will be determined by the
Calculation Agent in accordance with the following
provisions:
(1) On each Interest Determination Date, the Calculation
Agent will ascertain the offered rate for three-month
deposits in U.S. dollars in the London interbank market,
which appears on the Telerate page 3750 as of 11:00 a.m.
(London time) on such Interest Determination Date.
(2) If such rate does not appear on the Telerate Page
3750, or the Telerate Page 3750 is unavailable, the
Calculation Agent will request each of four major banks
in the London interbank market (the "Reference Banks")
to provide the Calculation Agent with its offered
quotation (expressed as a rate per annum) for three-
month deposits in U.S. dollars to leading banks in the
London interbank market at approximately 11:00 a.m.
(London time) on the Interest Determination Date. If at
least two such quotations are provided, LIBOR in respect
of that Interest Determination Date will be the
arithmetic mean of such quotations.
(3) If less than two of the Reference Banks provide the
Calculation Agent with such offered quotations, LIBOR in
respect of that Interest Determination Date will be the
arithmetic mean of the rates quoted by three major banks
in The City of New York (selected by the Calculation
Agent) at approximately 11:00 a.m., New York City time,
on that Interest Determination Date for three-month
loans in U.S. dollars to leading European banks, in a
principal amount equal to an amount of not less than $1
million that is representative for a single transaction
in such market at such time; provided, however, that if
the banks selected as aforesaid by the Calculation Agent
are not quoting as mentioned in this sentence, LIBOR
will be LIBOR in effect on such Interest Determination
Date.
"Telerate Page 3750 " means the display designated as page
"3750" on the Dow Jones Telerate Service (or such other pages
as may replace those pages on that service for the purpose of
displaying the LIBOR Index on a quarterly basis). All
percentages resulting from any calculation on the 2000 Notes
will be rounded, if necessary, to the nearest one hundred-
thousandth of a percentage point, with five one-millionths of
a percentage point rounded upward (e.g., 9.876545% (or
.09876545) being rounded to 9.87655% (or .0987655)), and
dollar amounts used in or resulting from such calculations
will be rounded to the nearest cent (with one-half cent being
rounded upward).
J.P. Morgan has agreed that, so long as the 2000 Notes remain
outstanding, it will maintain under appointment an agent (the
"Calculation Agent"), initially the New York branch of Morgan
Guaranty Trust Company of New York, to determine the rate of
interest payable on the 2000 Notes in respect of each
Interest Period. If the Calculation Agent is unable or
unwilling to continue to act as such, or if the Calculation
Agent fails to establish the applicable interest rate for any
Interest Period, or if J.P. Morgan removes the Calculation
Agent, J.P. Morgan will appoint the office of another bank to
act as the Calculation Agent.
The 2000 Notes are represented by Global Securities (the
"2000 Global Securities") registered in the name of The
Depository Trust Company (the "Depository"). Interests in the
2000 Notes represented by the 2000 Global Securities are
shown on, and transfers thereof are effected only through,
records maintained by the Depository and its direct and
indirect participants. Except as described below under "Same-
Day Funds Settlement System", 2000 Notes in definitive form
will not be issued. Settlement for the 2000 Notes will be
made in immediately available funds. The 2000 Notes will
trade in the Depository's Same-Day Funds Settlement System
and secondary market trading activity will be made by J.P.
Morgan in immediately available funds or the equivalent. See
"Same-Day Funds Settlement System" below.
<PAGE 13>
The 2000 Notes are issued in fully registered form, in
denominations of $250,000 with $50,000 integral multiples
thereafter. The paying agent and registrar for the 2000 Notes
is U.S. Bank Trust National Association (formerly First Trust
of New York, National Association), 100 Wall Street, Suite
1600, New York, New York 10005.
Terms of the 1982 Indenture
Events of Default, Waiver, Notice, 1982 Debt Securities in
Foreign Currencies. An Event of Default is defined as (i)
default for 30 days in payment of any interest; (ii) default
in payment of principal of or premium, if any, when due
either at maturity, upon redemption, by declaration or
otherwise; (iii) default by J.P. Morgan in the performance of
any other covenant or warranty contained in the 1982
Indenture which shall not have been remedied for a period of
90 days after notice given as specified in the 1982
Indenture; and (iv) certain events of bankruptcy, insolvency
and reorganization of J.P. Morgan. (Section 5.1.) The 1982
Indenture provides that the Trustee may withhold notice to
the holders of the 1982 Debt Securities of any series of any
default (except in payment of principal of or interest or
premium, if any, on such 1982 Debt Securities) if the Trustee
considers it in the interest of the holders of 1982 Debt
Securities to do so. (Section 5.11)
If an Event of Default as described in clause (i), (ii) or
(iii) above shall have occurred and be continuing, either the
Trustee or the holders of at least 25% in principal amount of
the 1982 Debt Securities then outstanding may declare the
principal of all outstanding 1982 Debt Securities and the
interest accrued thereon, if any, to be due and payable
immediately and if an Event of Default described in clause
(iii) or (iv) above shall have occurred and be continuing,
either the Trustee or the holders of at least 25% in
principal amount of all 1982 Debt Securities then outstanding
may declare the principal 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,) may be waived
by the holders of a majority in principal amount of the 1982
Debt Securities then outstanding. (Sections 5.1 and 5.10.)
The holders of a majority in principal amount of the
outstanding 1982 Debt Securities affected shall have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee under the
1982 Indenture, subject to certain limitations specified in
the 1982 Indenture, provided that the holders of the 1982
Debt Securities shall have offered to the Trustee reasonable
indemnity against expenses and liabilities. (Sections 5.9 and
6.2(d).)
Each year J.P. Morgan shall deliver to the Trustee a written
statement as to the absence of certain defaults under the
1982 Indenture. (Section 3.5.)
Modification of the 1982 Indenture. The 1982 Indenture
contains provisions permitting J.P. Morgan and the Trustee,
with the consent of not less than 66 2/3% in principal amount
of the 1982 Debt Securities at the time outstanding, to
modify the 1982 Indenture or any supplemental indenture or
the rights of the holders of the 1982 Debt Securities;
provided that no such modification shall (i) extend the final
maturity, 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
1982 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 1982 Debt Security, or impair or
affect the right of a holder to institute suit for the
payment thereof or, if the 1982 Debt Securities provide
therefor, any right of repayment at the option of the holder
of a 1982 Debt Security, without the consent of the holder of
each 1982 Debt Security so affected or (ii) reduce the
aforesaid percentage of 1982 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 1982
Debt Security so affected. (Section 8.2.)
The 1982 Indenture permits J.P. Morgan and the Trustee to
amend the 1982 Indenture in certain circumstances without the
consent of the holders of the 1982 Debt Securities to
evidence the merger of J.P. Morgan or the replacement of the
Trustee 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 1982 Debt Securities and
the performance and observance of all the covenants and
conditions of the 1982 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.)
<PAGE 14>
DESCRIPTION OF DEBT SECURITIES
UNDER THE 1986 INDENTURE
Brief summaries of the principal provisions of the 1986
Indenture and the Debt Securities issued thereunder (the
"1986 Debt Securities") do not purport to be complete.
Certain capitalized terms used herein are defined in the 1986
Indenture. References in italics are to sections or articles
of the 1986 Indenture. Where any particular sections or
defined terms of the 1986 Indenture are referred to, such
sections or defined terms are incorporated herein by
reference as a part of the statement made, and the statement
is qualified in its entirety by such reference.
Terms and Provisions of the 7 5/8% Subordinated Notes due
November 15, 1998
The 7 5/8% Subordinated Notes due November 15, 1998 (the "7
5/8% Notes") were issued under the 1986 Indenture and
interest is payable semi-annually on May 15 and November 15
of each year to the persons in whose names the 7 5/8% Notes
are registered at the close of business on May 1 or November
1, as the case may be, preceding such May 15 and November 15.
The 7 5/8% Notes are unsecured debt obligations of J.P.
Morgan and are subordinate in right of payment to all Senior
Indebtedness of J.P. Morgan to the extent set forth herein.
The 7 5/8% Notes may not be redeemed prior to stated maturity
and are not entitled to any sinking fund. The 7 5/8% Notes
are not represented by notes in definitive form but are
represented by one or more global securities (the "7 5/8%
Global Securities") registered in the name of the nominee of
The Depository Trust Company (the "Depository"). Interests in
the 7 5/8% Notes represented by the 7 5/8% Global Securities
are shown on, and transfers thereof are effected only
through, records maintained by the Depository and its direct
and indirect participants. Except as described below under
"Same-Day Funds Settlement System", 7 5/8% Notes in
definitive form will not be issued. Settlement for the 7 5/8%
Notes will be made in immediately available funds. The 7 5/8%
Notes trade in the Depository's Same-Day Funds Settlement
System until maturity, and secondary market trading activity
therefore settles in immediately available funds. All
payments of principal and interest made by J.P. Morgan are in
immediately available funds or the equivalent so long as the
Depository continues to make its Same-Day Funds Settlement
System available to J.P. Morgan. See "Same-Day Funds
Settlement System" below.
The 7 5/8% Notes are issued in fully registered form, in
denominations of $1,000 and any integral multiple thereof.
The paying agent, registrar and transfer agent for the 7 5/8%
Notes is U.S. Bank Trust National Association (formerly First
Trust of New York, National Association), 100 Wall Street,
Suite 1600, New York, New York 10005.
Terms and Provisions of the 7 1/4% Subordinated Notes due
January 15, 2002
The 7 1/4% Subordinated Notes due January 15, 2002 (the "7
1/4% Notes") were issued under the 1986 Indenture and
interest is payable semi-annually on January 15 and July 15
of each year to the persons in whose names the 7 1/4% Notes
are registered at the close of business on January 1 or July
1, as the case may be, preceding such January 15 and July 15.
The 7 1/4% Notes may not be redeemed prior to stated maturity
and are not entitled to any sinking fund. The 7 1/4% Notes
are not represented by notes in definitive form but are
represented by one or more global securities (the "7 1/4%
Global Securities") registered in the name of the nominee of
The Depository Trust Company (the "Depository"). Interests in
the 7 1/4% Notes represented by the 7 1/4% Global Securities
are shown on, and transfers thereof are effected only
through, records maintained by the Depository and its direct
and indirect participants. Except as described below under
"Same-Day Funds Settlement System", 7 1/4% Notes in
definitive form will not be issued. Settlements for the 7
1/4% Notes will be made in immediately available funds. The 7
1/4% Notes trade in the Depository's Same-Day Funds
Settlement System until maturity, and secondary market
trading activity therefore settles in immediately available
funds. All payments of principal and interest made by J.P.
Morgan are in immediately available funds or the equivalent
so long as the Depository continues to make its Same-Day
Funds Settlement System available to J.P. Morgan. See "Same-
Day Funds Settlement System" below.
The 7 1/4% Notes are issued in fully registered form, in
denominations of $1,000 and any integral multiple thereof.
The paying agent, registrar and transfer agent for the 7 1/4%
Notes is U.S. Bank Trust National Association (formerly First
Trust of New York, National Association), 100 Wall Street,
Suite 1600, New York, New York 10005.
<PAGE 15>
Terms and Provisions of the 8 1/2% Subordinated Notes due
August 15, 2003
The 8 1/2% Subordinated Notes due August 15, 2003 (the "8
1/2% Notes") were issued under the 1986 Indenture and
interest is payable semi-annually on February 15 and August
15 of each year to the persons in whose names the 8 1/2%
Notes are registered at the close of business on February 1
or August 1, as the case may be, preceding such February 15
and August 15. The 8 1/2% Notes may not be redeemed prior to
stated maturity and are not entitled to any sinking fund. The
8 1/2% Notes are not represented by notes in definitive form
but are represented by one or more global securities (the "8
1/2% Global Securities") registered in the name of the
nominee of The Depository Trust Company (the "Depository").
Interests in the 8 1/2% Notes represented by the 8 1/2%
Global Securities are shown on, and transfers thereof are
effected only through, records maintained by the Depository
and its direct and indirect participants. Except as described
below under "Same-Day Funds Settlement System", 8 1/2% Notes
in definitive form will not be issued. Settlements for the 8
1/2% Notes will be made in immediately available funds. The 8
1/2% Notes trade in the Depository's Same-Day Funds
Settlement System until maturity, and secondary market
trading activity therefore settles in immediately available
funds. All payments of principal and interest made by J.P.
Morgan are in immediately available funds or the equivalent
so long as the Depository continues to make its Same-Day
Funds Settlement System available to J.P. Morgan. See "Same-
Day Funds Settlement System" below.
The 8 1/2% Notes are issued in fully registered form, in
denominations of $1,000 and any integral multiple thereof.
The paying agent, registrar and transfer agent for the 8 1/2%
Notes is U.S. Bank Trust National Association (formerly First
Trust of New York, National Association), 100 Wall Street,
Suite 1600, New York, New York 10005.
Terms of the 1986 Indenture
General. The 1986 Indenture does not limit the amount of
1986 Debt Securities which may be issued thereunder. The 1986
Debt Securities are unsecured and subordinate in right of
payment to all Senior Indebtedness of J.P. Morgan as
discussed under "Subordination" below. 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 1986 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 1986 Debt Securities may be presented for exchange, and
registered 1986 Debt Securities may be presented for
transfer, in the manner, at the places and subject to the
restrictions set forth in the 1986 Indenture and the 1986
Debt Securities. The 1986 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 1986 Debt Securities or transfer of 1986 Debt
Securities in registered form, but J.P. Morgan may require
payment of a sum sufficient to cover any tax or governmental
charge payable in connection therewith. (Section 2.8.)
Subordination. The 1986 Debt Securities are subordinate in
right of payment as provided in the 1986 Indenture to all
Senior Indebtedness of J.P. Morgan. No payment pursuant to
the 1986 Debt Securities may be made and no holder of the
1986 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.) Upon any
distribution of the assets of J.P. Morgan upon dissolution,
winding up, liquidation or reorganization, 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 1986 Debt
Securities. (Section 10.3.) By reason of such subordination,
in the event of the insolvency of J.P. Morgan, holders of
Senior Indebtedness of J.P. Morgan may receive more, ratably,
and holders of the 1986 Debt Securities or coupon
appertaining thereto 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 1986 Debt Securities. The 1986 Indenture does not limit
the amount of Senior Indebtedness J.P. Morgan may incur.
<PAGE 16>
Senior Indebtedness of J.P. Morgan for purposes of this
description of 1986 Debt Securities 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 1986 Indenture or
thereafter created, assumed or incurred, except such
indebtedness as is by its terms expressly stated to be not
superior in right of payment to the 1986 Debt Securities or
to rank pari passu with the 1986 Debt Securities and (b) any
deferrals, renewals or extensions of any such Senior
Indebtedness. The term "pari passu" as used herein shall mean
ranking equally in right of payment in the event of J.P.
Morgan's bankruptcy.
Events of Default, Waiver, Notice, 1986 Debt Securities in
Foreign Currencies. As to any series of 1986 Debt
Securities, an Event of Default is defined in the 1986
Indenture as (a) default for 30 days payment of any interest
on the 1986 Debt Securities of such series; (b) default in
payment of principal of or premium, if any, on the 1986 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 1986
Debt Securities of such series; (d) default by J.P. Morgan in
the performance of any other covenant or warranty contained
in the 1986 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 1986 Indenture; and (e)
certain events of bankruptcy, insolvency and reorganization
of J.P. Morgan. (Section 5.1.) An Event of Default with
respect to a particular series of 1986 Debt Securities issued
under the 1986 Indenture does not necessarily constitute an
Event of Default with respect to any other series of 1986
Debt Securities issued thereunder. The 1986 Indenture
provides that the Trustee may withhold notice to the holders
of 1986 Debt Securities of any series of any default (except
in payment of principal of or interest or premium, if any, on
such 1986 Debt Securities or in the making of any sinking
fund payment with respect to such 1986 Debt Securities) if
the Trustee considers it in the interest of the holders of
1986 Debt Securities of such series to do so. (Section 5.11.)
If an Event of Default described in clause (e) above shall
have occurred and be continuing, either the Trustee or the
holders of not less than 25% in principal amount of all 1986
Debt Securities then outstanding (treated as one class) by
notice in writing to J.P. Morgan (and to the Trustee if given
by the holders of 1986 Debt Securities), may declare the
entire principal (or, in the case of original issue discount
1986 Debt Securities, the portion thereof specified in the
terms thereof) of all 1986 Debt Securities then outstanding
and the interest accrued thereon, if any, to be due and
payable immediately, and upon such declaration the same shall
become immediately due and payable. Prior to the declaration
of the acceleration of the maturity of the 1986 Debt
Securities of any series, the holders thereof of a majority
in principal amount thereof then outstanding (voting as one
class) may waive any such default or Event of Default, and
its consequences except a default in respect of a covenant or
provision hereof which cannot be modified or amended without
the consent of the holders of each series of 1986 Debt
Securities so affected. In the case of any such waiver, J.P.
Morgan, the Trustee and the holders of 1986 Debt 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. (Sections 5.1 and 5.10.)
The holders of a majority in principal amount of the
outstanding 1986 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
1986 Indenture, subject to certain limitations specified in
the 1986 Indenture, provided that the holders of 1986 Debt
Securities shall have offered to the Trustee reasonable
indemnity against expenses and liabilities. (Sections 5.9 and
6.2(d).) The 1986 Indenture requires the annual delivery by
J.P. Morgan to the Trustee of a written statement as to the
absence of certain defaults under the 1986 Indenture.
(Section 3.5.) Whenever the 1986 Indenture provides for an
action by, or the determination of any of the rights of, or
any distribution to, holders of 1986 Debt Securities, any
amount in respect of any 1986 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.)
<PAGE 17>
Modification of the 1986 Indenture; Waiver of Compliance.
The 1986 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 1986 Debt
Securities of all series affected by such modification or
waiver at the time outstanding (voting as one class), to
modify the 1986 Indenture or any supplemental indenture or
the right of the holders of the 1986 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 1986 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
1986 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 1986 Debt Security, or impair or
affect the right of a holder to institute suit for the
payment thereof or, if the 1986 Debt Securities provide
therefor, any right of repayment at the option of the holder
of a 1986 Debt Security, without the consent of the holder of
each 1986 Debt Security so affected or (ii) reduce the
aforesaid percentage of 1986 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 1986
Debt Security so affected. (Sections 8.2 and 8.6.)
The 1986 Indenture also permits J.P. Morgan and the Trustee
to amend the 1986 Indenture in certain circumstances without
the consent of the holders of 1986 Debt Securities to
evidence the merger of J.P. Morgan or the replacement of the
Trustee 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 1986 Debt Securities and
the performance and observance of all the covenants and
conditions of the 1986 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.)
DESCRIPTION OF DEBT SECURITIES
UNDER THE 1993 INDENTURE
Brief summaries of certain provisions of the 1993 Indenture
and the Debt Securities issued thereunder (the "1993 Debt
Securities") do not purport to be complete. Certain
capitalized terms used herein are defined in the 1993
Indenture. References in italics are to sections or articles
of the 1993 Indenture. Where any particular sections or
defined terms of the 1993 Indenture are referred to, such
sections or defined terms are incorporated herein by
reference as a part of the statement made, and the statement
is qualified in its entirety by such reference.
Terms and Provisions of the Subordinated Constant Maturity
Treasury Floating Rate Notes due March 13, 2000
General. The Subordinated Constant Maturity Treasury
Floating Rate Notes due March 13, 2000 (the "CMT Notes") were
issued under the 1993 Indenture and interest is payable
quarterly on the thirteenth day of each March, June,
September and December (the "CMT Interest Payment Date"), to
the persons in whose names the CMT Notes are registered at
the close of business on the fifteenth calendar day prior to
each CMT Interest Payment Date. The interest rate on the CMT
Notes for each CMT Interest Period will be at a floating rate
equal to 2.25% per annum plus the product of 0.4 times the
Ten Year Constant Maturity Treasury Rate (the "Ten Year CMT
Rate"), determined as described below under "Interest",
subject to a minimum rate for each CMT Interest Period of
5.30% per annum. Interest will be computed on the basis of a
365 or 366 day year and the actual number of days in the
applicable CMT Interest Period. The CMT Notes are not
redeemable prior to their stated maturity.
The CMT Notes are issued in fully registered form, in
denominations of $250,000 and any integral multiple thereof.
The paying agent, registrar and transfer agent for the CMT
Notes is U.S. Bank Trust National Association (formerly First
Trust of New York, National Association), 100 Wall Street,
Suite 1600, New York, New York 10005.
<PAGE 18>
The CMT Notes are unsecured debt obligations of J.P. Morgan
and are subordinate in right of payment to all Senior
Indebtedness of J.P. Morgan and, in certain circumstances, to
the Derivative Obligations (as defined) of J.P. Morgan to the
extent set forth below under "Subordination". Payment of
principal of the CMT Notes 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 the default
in the payment of interest on the CMT Notes, or the
performance of any other covenant of J.P. Morgan.
The CMT Notes are represented by global securities (the "CMT
Global Securities") registered in the name of the nominee of
The Depository Trust Company, acting as the depository (the
"Depository"). Interests in the CMT Notes represented by the
CMT Global Securities are shown on, and transfers thereof are
effected only through, records maintained by the Depository
and its direct and indirect participants. Except as described
below under "Same-Day Funds Settlement System", CMT Notes in
definitive form will not be issued. Settlement for the CMT
Notes will be made in immediately available funds. The CMT
Notes trade in the Depository's Same-Day Funds Settlement
System and Secondary market trading activity for the CMT
Notes will therefore settle in immediately available funds.
All payments of principal and interest will be made by J.P.
Morgan in immediately available funds or the equivalent so
long as the Depository continues to make its Same-Day Funds
Settlement System available to J.P. Morgan. See "Same-Day
Funds Settlement System" below.
Interest. The "CMT Interest Period" is each period from and
including a CMT Interest Payment Date in respect of the CMT
Notes up to but excluding the next succeeding CMT Interest
Payment Date.
The Ten Year CMT Rate will be determined by the New York
branch of Morgan Guaranty Trust Company of New York, as
Calculation Agent (the "CMT Calculation Agent") (or, if the
CMT Calculation Agent fails to establish the applicable rate
of interest for any CMT Interest Period, or if J.P. Morgan
removes the CMT Calculation Agent, J.P. Morgan will appoint
the office of another bank to act as the CMT Calculation
Agent) for each CMT Interest Period in accordance with the
following provisions:
For each CMT Interest Period, except as provided below in
this paragraph, the Ten Year CMT Rate will be the respective
daily rate set forth for the last New York Business Day
contained in the weekly Federal Reserve Statistical Release
H.15(519) (or any successor publication) of the Board of
Governors of the Federal Reserve System most recently during
the Calendar Period immediately prior to the second New York
Business Day (the "CMT Interest Determination Date")
preceding the first day of the applicable CMT Interest Period
(such first day shall be the "CMT Reset Date") opposite the
caption "U.S. Government Securities/Treasury Constant
Maturities/ 10-Year" or any replacement caption. In the event
that a per annum Ten Year CMT Rate shall not be available as
described above, then the Ten Year CMT Rate for such CMT
Interest Period shall be the Fall Back Rate (hereinafter
defined). The Fall Back Rate will be the daily per annum
yield to maturity of the current ("on the run") U.S. Treasury
Note with a ten year maturity based on the mid-market yield
displayed on Telerate Page 7690 by Cantor Fitzgerald at 12:00
noon, New York time, on the CMT Interest Determination Date.
Telerate Page 7690 shall mean the page 7690 or its
replacement as provided by the Telerate News Service. In the
event that the CMT Calculation Agent determines in good faith
that for any reason the CMT Calculation Agent cannot
determine the Fall Back Rate for any CMT Interest Period as
provided above in this paragraph, the Fall Back Rate for such
CMT Interest Period shall be the arithmetic average of the
per annum average yields to maturity based upon the closing
bids on the CMT Interest Determination Date of the actively
traded U.S. Treasury fixed interest rate securities (other
than Special Securities (as defined below)) with a final
maturity date not less than eight nor more than twelve years
from the date of each such quotation, as chosen and quoted on
such CMT Interest Determination Date to the CMT Calculation
Agent by at least three recognized dealers in U.S. Government
securities selected by the CMT Calculation Agent.
All percentages resulting from any calculations on the CMT
Notes will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-
millionths of a percentage point rounded upward (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or
.0987655)), and all dollar amounts used in or resulting from
such calculation will be rounded to the nearest cent (with
one-half cent being rounded upward).
<PAGE 19>
As used herein, the term "Calendar Period" means a period of
ten calendar days; the term "New York Business Day" means any
day on which commercial banks are open for business
(including dealings in foreign exchange and foreign currency
deposits) in New York City, New York; and the term "Special
Securities" means securities which can, at the option of the
holder, be surrendered at face value in payment of any
Federal estate tax or which provide tax benefits to the
holder and are priced to reflect such tax benefits or which
were originally issued at a deep or substantial discount.
J.P. Morgan has agreed that, so long as the CMT Notes remain
outstanding, it will maintain under appointment an agent (the
"CMT Calculation Agent"), initially the New York branch of
Morgan Guaranty Trust Company of New York, to calculate the
rate of interest payable on the CMT Notes in respect of each
CMT Interest Period subsequent to the CMT Initial Interest
Period. If the CMT Calculation Agent fails to establish the
applicable rate of interest for any CMT Interest Period, or
if J.P. Morgan removes the CMT Calculation Agent, J.P. Morgan
will appoint the office of another bank to act as the CMT
Calculation Agent.
Terms and Provisions of the 7 5/8% Subordinated Notes due
September 15, 2004
The 7 5/8% Subordinated Notes due September 15, 2004 (the
"2004 Notes") were issued under the 1993 Indenture and
interest is payable semi-annually on March 15 and September
15 of each year to the persons in whose names the 2004 Notes
are registered at the close of business on March 1 or
September 1, as the case may be, preceding such March 15 and
September 15. The 2004 Notes may not be redeemed prior to
stated maturity and are not entitled to any sinking fund. The
2004 Notes are represented by Global Securities (the "2004
Global Securities") registered in the name of The Depository
Trust Company (the "Depository"). Interests in the 2004 Notes
represented by the 2004 Global Securities are shown on, and
transfers thereof are effected only through, records
maintained by the Depository and its direct and indirect
participants. Except as described below under "Same-Day Funds
Settlement System", 2004 Notes in definitive form will not be
issued. Settlement for the 2004 Notes will be made in
immediately available funds. The 2004 Notes will trade in the
Depository's Same-Day Funds Settlement System and secondary
market trading activity will be made by J.P. Morgan in
immediately available funds or the equivalent. See "Same-Day
Funds Settlement System" below.
The 2004 Notes are issued in fully registered form, in
denominations of $1,000 and any integral multiple thereof.
The paying agent, registrar and transfer agent for the 2004
Notes is U.S. Bank Trust National Association (formerly First
Trust of New York, National Association), 100 Wall Street,
Suite 1600, New York, New York 10005.
Terms and Provisions of the 6 1/4% Subordinated Notes due
December 15, 2005
The 6 1/4% Subordinated Notes due December 15, 2005 (the "6
14% Notes") were issued under the 1993 Indenture and interest
is payable semi-annually on June 15 and December 15 of each
year to the persons in whose names the 6 1/4% Notes are
registered at the close of business on the fifteenth calendar
day preceding such June 15 and December 15. The 6 1/4% Notes
may not be redeemed prior to stated maturity and are not
entitled to any sinking fund. Interest on the 6 1/4% Notes
will be calculated on the basis of a 360-day year consisting
of twelve 30-day months. The 6 1/4% Notes are represented by
Global Securities (the "6 1/4% Global Securities") registered
in the name of The Depository Trust Company (the
"Depository"). Interests in the 6 1/4% Notes represented by
the 6 1/4% Global Securities are shown on, and transfers
thereof are effected only through, records maintained by the
Depository and its direct and indirect participants. Except
as described below under "Same-Day Funds Settlement System",
6 1/4% Notes in definitive form will not be issued.
Settlement for the 6 1/4% Notes will be made in immediately
available funds. The 6 1/4% Notes will trade in the
Depository's Same-Day Funds Settlement System and secondary
market trading activity will be made by J.P. Morgan in
immediately available funds or the equivalent. See "Same-Day
Funds Settlement System" below.
The 6 1/4% Notes are issued in fully registered form, in
denominations of $1,000 and any integral multiple thereof.
The paying agent and registrar for the 6 1/4% Notes is U.S.
Bank Trust National Association (formerly First Trust of New
York, National Association), 100 Wall Street, Suite 1600, New
York, New York 10005.
<PAGE 20>
Terms and Provisions of the 6.875% Subordinated Notes due
January 15, 2007
The 6.875% Subordinated Notes due January 15, 2007 (the "2007
Notes") were issued under the 1993 Indenture and interest is
payable semi-annually on July 15 and January 15 of each year
to the persons in whose names the 2007 Notes are registered
at the close of business on the fifteenth calendar day
preceding such July 15 and January 15. The 2007 Notes may
not be redeemed prior to stated maturity and are not entitled
to any sinking fund. The 2007 Notes are represented by
Global Securities (the "2007 Global Securities") registered
in the name of The Depository Trust Company (the
"Depository"). Interests in the 2007 Notes represented by the
2007 Global Securities are shown on, and transfers thereof
are effected only through, records maintained by the
Depository and its direct and indirect participants. Except
as described below under "Same-Day Funds Settlement System",
2007 Notes in definitive form will not be issued. Settlement
for the 2007 Notes will be made in immediately available
funds. The 2007 Notes will trade in the Depository's Same-Day
Funds Settlement System and secondary market trading activity
will be made by J.P. Morgan in immediately available funds or
the equivalent. See "Same-Day Funds Settlement System" below.
The 2007 Notes are issued in fully registered form, in
denominations of $250,000 with $1,000 integral multiple
thereof. The paying agent and registrar for the 2007 Notes
is U.S. Bank Trust National Association (formerly First Trust
of New York, National Association), 100 Wall Street, Suite
1600, New York, New York 10005.
Terms and Provisions of the 6.70% Subordinated Notes due
November 1, 2007
The 6.70% Subordinated Notes due November 1, 2007 (the "6.70%
Notes") were issued under the 1993 Indenture and interest is
payable semi-annually on May 1 and November 1 of each year to
the persons in whose names the 6.70% Notes are registered at
the close of business on the fifteenth calendar day preceding
such May 1 and November 1. The 6.70% Notes may not be
redeemed prior to stated maturity and are not entitled to any
sinking fund. The 6.70% Notes are represented by Global
Securities (the "6.70% Global Securities") registered in the
name of The Depository Trust Company (the "Depository").
Interests in the 6.70% Notes represented by the 6.70% Global
Securities are shown on, and transfers thereof are effected
only through, records maintained by the Depository and its
direct and indirect participants. Except as described below
under "Same-Day Funds Settlement System", 6.70% Notes in
definitive form will not be issued. Settlement for the 6.70%
Notes will be made in immediately available funds. The 6.70%
Notes will trade in the Depository's Same-Day Funds
Settlement System and secondary market trading activity will
be made by J.P. Morgan in immediately available funds or the
equivalent. See "Same-Day Funds Settlement System" below.
The 6.70% Notes are issued in fully registered form, in
denominations of $1,000 and any integral multiple thereof.
The paying agent, registrar and transfer agent for the 6.70%
Notes is U.S. Bank Trust National Association (formerly First
Trust of New York, National Association), 100 Wall Street,
Suite 1600, New York, New York 10005.
Terms and Provisions of the 5 3/4% Subordinated Notes due
October 15, 2008
The 5 3/4% Subordinated Notes due October 15, 2008 (the "5
3/4% Notes") were issued under the 1993 Indenture and
interest is payable semi-annually on April 15 and October 15
of each year to the persons in whose names the 5 3/4% Notes
are registered at the close of business on April 1 or October
1, as the case may be, preceding such April 15 and October
15. The 5 3/4% Notes may not be redeemed prior to stated
maturity and are not entitled to any sinking fund. The 5 3/4%
Notes are represented by Global Securities (the "5 3/4%
Global Securities") registered in the name of The Depository
Trust Company (the "Depository"). Interests in the 5 3/4%
Notes represented by the 5 3/4% Global Securities are shown
on, and transfers thereof are effected only through, records
maintained by the Depository and its direct and indirect
participants. Except as described below under "Same-Day Funds
Settlement System", 5 3/4% Notes in definitive form will not
be issued. Settlement for the 5 3/4% Notes will be made in
immediately available funds. The 5 3/4% Notes will trade in
the Depository's Same-Day Funds Settlement System and
secondary market trading activity will be made by J.P. Morgan
in immediately available funds or the equivalent. See "Same-
Day Funds Settlement System" below.
The 5 3/4% Notes are issued in fully registered form, in
denominations of $1,000 and any integral multiple thereof.
The paying agent, registrar and transfer agent for the 5 3/4%
Notes is U.S. Bank Trust National Association (formerly First
Trust of New York, National Association), 100 Wall Street,
Suite 1600, New York, New York 10005.
<PAGE 21>
Terms and Provisions of the 6 1/4% Subordinated Notes due
January 15, 2009
The 6 1/4% Subordinated Notes due January 15, 2009 (the "2009
Notes") were issued under the 1993 Indenture and interest is
payable semi-annually on July 15 and January 15 of each year
to the persons in whose names the 2009 Notes are registered
at the close of business on July 1 or January 1, as the case
may be, preceding such July 15 and January 15. The 2009 Notes
may not be redeemed prior to stated maturity and are not
entitled to any sinking fund. The 2009 Notes are represented
by Global Securities (the "2009 Global Securities")
registered in the name of The Depository Trust Company (the
"Depository"). Interests in the 2009 Notes represented by the
2009 Global Securities are shown on, and transfers thereof
are effected only through, records maintained by the
Depository and its direct and indirect participants. Except
as described below under "Same-Day Funds Settlement System",
2009 Notes in definitive form will not be issued. Settlement
for the 2009 Notes will be made in immediately available
funds. The 2009 Notes will trade in the Depository's Same-Day
Funds Settlement System and secondary market trading activity
will be made by J.P. Morgan in immediately available funds or
the equivalent. See "Same-Day Funds Settlement System" below.
The 2009 Notes are issued in fully registered form, in
denominations of $1,000 and any integral multiple thereof.
The paying agent, registrar and transfer agent for the 2009
Notes is U.S. Bank Trust National Association (formerly First
Trust of New York, National Association), 100 Wall Street,
Suite 1600, New York, New York 10005.
Terms and Provisions of the 7 1/4% Subordinated Notes due
October 1, 2010
The 7 1/4% Subordinated Notes due October 1, 2010 (the "2010
Notes") were issued under the 1993 Indenture and interest is
payable semi-annually on April 1 and October 1 of each year
(each a "2010 Notes Interest Payment Date") to the persons in
whose names the 2010 Notes are registered at the close of
business on the fifteenth calendar day prior to each 2010
Notes Interest Payment Date. The 2010 Notes may not be
redeemed prior to October 1, 2000. Thereafter, they may be
redeemed at the option of J.P. Morgan upon at least 15
calendar days notice, in whole but not in part, on any 2010
Notes Interest Payment Date at 100% of the principal amount
thereof, together with accrued interest to the date fixed for
redemption. The 2010 Notes are not entitled to any sinking
fund. Interest on the 2010 Notes will be calculated on the
basis of a 360-day year consisting of twelve 30-day months.
The 2010 Notes are represented by Global Securities (the
"2010 Global Securities") registered in the name of The
Depository Trust Company (the "Depository"). Interests in the
2010 Notes represented by the 2010 Global Securities are
shown on, and transfers thereof are effected only through,
records maintained by the Depository and its direct and
indirect participants. Except as described below under "Same-
Day Funds Settlement System", 2010 Notes in definitive form
will not be issued. Settlement for the 2010 Notes will be
made in immediately available funds. The 2010 Notes will
trade in the Depository's Same-Day Funds Settlement System
and secondary market trading activity will be made by J.P.
Morgan in immediately available funds or the equivalent. See
"Same-Day Funds Settlement System" below.
The 2010 Notes are issued in fully registered form, in
denominations of $1,000 and any integral multiple thereof.
The paying agent and registrar for the 2010 Notes is U.S.
Bank Trust National Association (formerly First Trust of New
York, National Association), 100 Wall Street, Suite 1600, New
York, New York 10005.
Terms and Provisions of the 6.61% Subordinated Notes due
December 15, 2010
The 6.61% Subordinated Notes due December 15, 2010 (the
"6.61% Notes") were issued under the 1993 Indenture and
interest is payable semi-annually on the 15th of each month
of each year to the persons in whose names the 6.61% Notes
are registered at the close of business on the first day of
each such month. The 6.61 % Notes may not be redeemed prior
to December 15, 2000. Thereafter, they may be redeemed at the
option of J.P. Morgan upon at least 30 calendar days notice,
in whole but not in part, semi-annually on each June 15 and
December 15 at 100% of the principal amount thereof, together
with accrued interest to the date fixed for redemption. The
6.61% Notes are not entitled to any sinking fund. Interest on
the 6.61% Notes will be calculated on the basis of a 360-day
year consisting of twelve 30-day months. The 6.61% Notes are
represented by Global Securities (the "6.61% Global
Securities") registered in the name of The Depository Trust
Company (the "Depository"). Interests in the 6.61% Notes
represented by the 6.61% Global Securities are shown on, and
transfers thereof are effected only through, records
maintained by the Depository and its direct and indirect
participants. Except as described below under "Same-Day Funds
Settlement System", 6.61% Notes in definitive form will not
be issued. Settlement for the 6.61% Notes will be made in
immediately available funds. The 6.61% Notes will trade in
the Depository's Same-Day Funds Settlement System and
secondary market trading activity will be made by J.P. Morgan
in immediately available funds or the equivalent. See "Same-
Day Funds Settlement System" below.
The 6.61% Notes are issued in fully registered form, in
denominations of $1,000 and any integral multiple thereof.
The paying agent and registrar for the 6.61% Notes is U.S.
Bank Trust National Association (formerly First Trust of New
York, National Association), 100 Wall Street, Suite 1600, New
York, New York 10005.
<PAGE 22>
Terms and Provisions of the 6 1/4% Subordinated Notes due
February 15, 2011
The 6 1/4% Subordinated Notes due February 15, 2011 (the
"2011 Notes") were issued under the 1993 Indenture and
interest is payable semi-annually on August 15 and February
15 of each year (each a "2011 Notes Interest Payment Date")
to the persons in whose names the 6 1/4% Notes are registered
at the close of business on the fifteenth calendar day prior
to each 2011 Notes Interest Payment Date. The 2011 Notes may
not be redeemed prior to stated maturity and are not entitled
to any sinking fund. Interest on the 2011 Notes will be
calculated on the basis of a 360-day year consisting of
twelve 30-day months. The 2011 Notes are represented by
Global Securities (the "2011 Global Securities") registered
in the name of The Depository Trust Company (the
"Depository"). Interests in the 2011 Notes represented by the
2011 Global Securities are shown on, and transfers thereof
are effected only through, records maintained by the
Depository and its direct and indirect participants. Except
as described below under "Same-Day Funds Settlement System",
2011 Notes in definitive form will not be issued. Settlement
for the 2011 Notes will be made in immediately available
funds. The 2011 Notes will trade in the Depository's Same-Day
Funds Settlement System and secondary market trading activity
will be made by J.P. Morgan in immediately available funds or
the equivalent. See "Same-Day Funds Settlement System" below.
The 2011 Notes are issued in fully registered form, in
denominations of $250,000 with $1,000 integral multiples
thereafter. The paying agent and registrar for the 2011 Notes
is U.S. Bank Trust National Association (formerly First Trust
of New York, National Association), 100 Wall Street, Suite
1600, New York, New York 10005.
Terms and Provisions of the Subordinated Notes due December
24, 2012
The Subordinated Notes due December 24, 2012 (the "2012
Notes") were issued under the 1993 Indenture and interest is
payable semi-annually on June 24 and December 24 of each year
(each a "2012 Notes Interest Payment Date") to the persons in
whose names the 2012 Notes are registered at the close of
business on the fifteenth calendar day prior to each 2012
Notes Interest Payment Date. The 2012 Notes may not be
redeemed prior to stated maturity and are not entitled to any
sinking fund.
The 2012 Notes will bear interest at the rate of 6.3865% per
annum, for the period from, and including, November 24, 1997
to, but excluding, December 24, 1997. For the period from,
and including, December 24, 1997 to, but excluding, December
24, 2012 the interest rate will be determined by the
Calculation Agent in accordance with the following: if the 10-
year Treasury rate is greater than or equal to 5.838% on
December 17, 1997, the interest rate will be 12.773%; if the
10-year Treasury rate is less than 5.838% on December 17,
1997, the interest rate will be 0%. The reference for the
10-year Treasury rate will be Telerate Screen Page 7690,
under the 12 p.m. column heading on December 17, 1997. If
the 10-year Treasury rate is not so set forth on Telerate
Screen Page 7690, the Calculation Agent, in its sole
discretion, shall determine the applicable 10-year Treasury
rate and this determination shall be binding on all parties
except in the case of manifest error. Interest on the 2012
Notes will be calculated on the basis of a 360-day year
consisting of twelve 30-day months.
"Telerate Screen Page 7690" means the display designated as
page "7690" on the Dow Jones Telerate Service (or such other
page as may replace that page on that service for the purpose
of displaying the 10-year Treasury rate.
J.P. Morgan has agreed that, so long as the 2012 Notes remain
outstanding, it will maintain under appointment an agent (the
"Calculation Agent"), initially the New York branch of Morgan
Guaranty Trust Company of New York, to determine the 10-year
Treasury rate. If the Calculation Agent is unable or
unwilling to continue to act as such, or if the Calculation
Agent fails to establish the applicable 10-year Treasury
rate, or if J.P. Morgan removes the Calculation Agent, J.P.
Morgan will appoint the office of another bank to act as the
Calculation Agent.
<PAGE 23>
The 2012 Notes are represented by Global Securities (the
"2012 Global Securities") registered in the name of The
Depository Trust Company (the "Depository"). Interests in the
2012 Notes represented by the 2012 Global Securities are
shown on, and transfers thereof are effected only through,
records maintained by the Depository and its direct and
indirect participants. Except as described below under "Same-
Day Funds Settlement System", 2012 Notes in definitive form
will not be issued. Settlement for the 2012 Notes will be
made in immediately available funds. The 2012 Notes will
trade in the Depository's Same-Day Funds Settlement System
and secondary market trading activity will be made by J.P.
Morgan in immediately available funds or the equivalent. See
"Same-Day Funds Settlement System" below.
The 2012 Notes are issued in fully registered form, in
denominations of $1,000,000 with $1,000 integral multiples
thereafter. The paying agent and registrar for the 2012 Notes
is U.S. Bank Trust National Association (formerly First Trust
of New York, National Association), 100 Wall Street, Suite
1600, New York, New York 10005.
Terms of the 1993 Indenture
General. The 1993 Indenture does not limit the amount of
1993 Debt Securities which may be issued thereunder and
provides that 1993 Debt Securities may be issued in series
thereunder up to the aggregate principal amount which may be
authorized from time to time by J.P. Morgan.
The 1993 Debt Securities are unsecured and subordinate in
right of payment to all Senior Indebtedness of J.P. Morgan
and, in certain circumstances relating to bankruptcy or
insolvency of J.P. Morgan, the Derivative Obligations (as
defined below), whether outstanding as of this date or
hereafter incurred, as discussed under "Subordination" below.
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 1993 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.
Subordination. The 1993 Debt Securities are subordinate in
right of payment as provided in the 1993 Indenture to all
Senior Indebtedness of J.P. Morgan. No payment pursuant to
the 1993 Debt Securities may be made and no holder of the
1993 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.)
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 1993
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 1993 Debt
Securities (any such remaining amount being defined in the
1993 Indenture 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 1993 Debt Securities.
(Sections 10.3 and 10.12.) By reason of such subordination,
in the event of 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
1993 Debt Securities or coupon appertaining thereto may
receive less, ratably, than the other creditors of J.P.
Morgan. No series of subordinated debt is subordinate to any
other series of subordinated debt. However, by reason of the
obligation of the holders of the 1993 Debt Securities to pay
over any Excess Proceeds to creditors in respect of
Derivative Obligations, in the event of bankruptcy or
insolvency of J.P. Morgan, the holders of the 1993 Debt
Securities may receive less, ratably, than holders of
Antecedent Subordinated Indebtedness (as defined below). Such
subordination will not prevent the occurrence of an Event of
Default in respect of the 1993 Debt Securities. The 1993
Indenture does not limit the amount of Senior Indebtedness
J.P. Morgan may incur.
<PAGE 24>
Senior Indebtedness of J.P. Morgan for purposes of this
description of 1993 Debt Securities is defined as principal
of, premium, if any, and interest on all indebtedness of J.P.
Morgan for money borrowed, whether outstanding on the date of
execution of the 1993 Indenture or thereafter created,
assumed or incurred and such indebtedness as is by its terms
expressly stated to be not superior in right of payment to
the 1993 Debt Securities or to rank pari passu with the 1993
Debt Securities and 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 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 1993
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 1993 Debt Securities or to rank pari passu with the 1993
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 1993 Indenture. Antecedent Subordinated
Indebtedness of J.P. Morgan is defined in the 1993 Indenture
as all indebtedness and other obligations outstanding on the
date of the 1993 Indenture. (Section 1.1.)
Events of Default, Waiver, Notice, 1993 Debt Securities in
Foreign Currencies. As to any series of 1993 Debt
Securities, an Event of Default is defined in the 1993
Indenture as (a) default for 30 days in payment of any
interest on the 1993 Debt Securities of such series; (b)
default in payment of principal of or premium, if any, on the
1993 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 1993 Debt Securities of such series; (d) default by
J.P. Morgan in the performance of any other covenant or
warranty contained in the 1993 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 1993
Indenture; and (e) certain events of bankruptcy or
reorganization of J.P. Morgan. (Section 5.1.) An Event of
Default with respect to a particular series of 1993 Debt
Securities issued under the 1993 Indenture does not
necessarily constitute an Event of Default with respect to
any other series of 1993 Debt Securities issued thereunder.
The 1993 Indenture provides that the Trustee may withhold
notice to the holders of 1993 Debt Securities of any series
of any default (except in payment of principal of or interest
or premium, if any, on such 1993 Debt Securities or in the
making of any sinking fund payment with respect to such 1993
Debt Securities) if the Trustee considers it in the interest
of the holders of 1993 Debt Securities of such series to do
so. (Section 5.11.)
The 1993 Indenture provides that if an Event of Default
described in clause (e) above shall have occurred and be
continuing, either the Trustee or the holders of at least 25%
in principal amount of all 1993
Debt Securities then outstanding (voting as one class) may
declare the principal (or, in the case of original issue
discount 1993 Debt Securities, the portion thereof specified
in the terms thereof) of all 1993 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 premium, or interest, if any, on
such 1993 Debt Securities) may be waived by the holders of a
majority in principal amount of the 1993 Debt Securities of
all series then outstanding. (Sections 5.1 and 5.10.)
The holders of a majority in principal amount of the
outstanding 1993 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
1993 Indenture, subject to certain limitations specified in
the 1993 Indenture, provided that the holders of 1993 Debt
Securities shall have offered to the Trustee reasonable
indemnity against expense and liabilities. (Sections 5.9 and
6.2(d).) The 1993 Indenture requires the annual delivery by
J.P. Morgan to the Trustee of a written statement as to the
absence of certain defaults under the 1993 Indenture.
Whenever the 1993 Indenture provides for an action by, or the
determination of any of the rights of, or any distribution
to, holders of 1993 Debt Securities, in the absence of any
provision to the contrary in the form of 1993 Debt Security,
any amount in respect of any 1993 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.)
<PAGE 25>
Modification of the 1993 Indenture; Waiver of Compliance.
The 1993 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 1993 Debt
Securities of all series affected by such modification or
waiver at the time outstanding (voting as one class), to
modify the 1993 Indenture or any supplemental indenture or
the rights of the holders of the 1993 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 1993 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
1993 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 1993 Debt Security, or impair or
affect the right of a holder to institute suit for the
payment thereof or, if the 1993 Debt Security provide
therefor, any right of repayment at the option of the holder
of a 1993 Debt Security, without the consent of the holder of
each 1993 Debt Security so affected or (ii) reduce the
aforesaid percentage of 1993 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 1993
Debt Security so affected. (Sections 8.2 and 8.6.)
The 1993 Indenture also permits J.P. Morgan and the Trustee
to amend the 1993 Indenture in certain circumstances without
the consent of the holders of 1993 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 1993 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 1993 Debt Securities and
the performance and observance of all the covenants and
conditions of the 1993 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.)
SAME-DAY FUNDS SETTLEMENT SYSTEM
The Same-Day Funds Settlement System is applicable to the
2.85% MEDS, the 5.00% MEDS, the 1999 Notes, the 2000 Notes,
the 7.5/8% Notes, the 7 1/4% Notes, the 8 1/2% Notes, the
CMT Notes, the 2004 Notes, the 6 1/4% Notes, the 2007 Notes,
the 6.70% Notes, the 5 3/4% Notes, the 2009 Notes, the 2010
Notes, the 6.61% Notes, the 2011 Notes and the 2012 Notes
(each referred to herein as the "Notes") which are
represented by the 2.85% Global Securities, the 5.00% Global
Securities, the 1999 Global Securities, the 2000 Global
Securities, the 7.5/8% Global Securities, the 7 1/4% Global
Securities, the 8 1/2% Global Securities CMT Global
Securities, the 2004 Global Securities, the 2005 Global
Securities, the 6 1/4% Global Securities, the 2007 Global
Securities, the 6.70% Global Securities, the 5 3/4% Global
Securities, the 2009 Global Securities, the 2010 Global
Securities, the 6.61% Global Securities, the 2011 Global
Securities and the 2012 Global Securities, respectively,
(each referred to herein as the "Global Securities") which
are registered in the name of the nominee of The Depository
Trust Company ("DTC"), which acts as the Depository (the
"Depository") for the Global Securities. The following is a
summary of DTC's Same-Day Funds Settlement System.
Book-Entry System. The Notes are represented by one or more
global securities deposited with the Depository and
registered in the name of a nominee of DTC. Except as set
forth below, the Notes will be available for purchase in
denominations of $1,000 and integral multiples thereof
(except for the 1999 Notes which are available for purchase
in denominations of $250,0000 with $50,000 integral multiples
thereafter, the 2000 Notes which are available for purchase
in denominations of $250,0000 with $50,000 integral multiples
thereafter, the CMT Notes which are available for purchase in
denominations of $250,000 and integral multiples thereof, the
2007 Notes which are available for purchase in denominations
of $250,000 with $1,000 integral multiples thereafter, the
2011 Notes which are available for purchase in denominations
of $250,000 with $1,000 integral multiples thereafter, and
the 2012 Notes which are available for purchase in
denominations of $1,000,000 with $1,000 integral multiples
thereafter) in book-entry form only. The term "Depository"
refers to DTC or any successor depository.
<PAGE 26>
DTC has advised J.P. Morgan and JPMSI as follows: DTC is a
limited-purpose trust company organized under the laws of the
State of New York, 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 was created to hold securities of
persons who have accounts with DTC ("participants") and to
facilitate the clearance and settlement of securities
transactions among its participants in such securities
through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical
movement of securities certificates. DTC's participants
include securities brokers and dealers (including JPMSI),
banks, trust companies and clearing corporations. Indirect
access to DTC's book-entry system is also 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.
Upon issuance by J.P. Morgan of the Notes represented by the
Global Securities, the Depository or its nominee will credit,
on its book-entry registration and transfer system, the
respective principal amounts of the Notes represented by such
Global Securities to the accounts of participants. The
accounts to be credited shall be designated by JPMSI.
Ownership of beneficial interests in the Notes represented by
the Global Securities will be limited to participants or
persons that hold interests through participants. Ownership
of such beneficial interests in the Notes will be shown on,
and the transfer of that ownership will be effected only
through, records maintained by the Depository (with respect
to interests of participants in the Depository), or by
participants in the Depository or persons that may hold
interests through such participants (with respect to persons
other than participants in the Depository). The laws of some
states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer
beneficial interests in the Notes represented by the Global
Securities.
So long as the Depository for the Global Securities, or its
nominee, is the registered owner of such Global Securities,
the Depository or its nominee, as the case may be, will be
considered the sole owner or holder of the Notes represented
by such Global Securities for all purposes under the
Indentures. Except as provided below, owners of beneficial
interests in the Notes represented by the Global Securities
will not be entitled to have the Notes represented by such
Global Securities registered in their names, will not receive
or be entitled to receive physical delivery of the Notes in
definitive form and will not be considered the owners or
holders thereof under the Indentures. Accordingly, each
person owning a beneficial interest in a Note must rely on
the procedures of DTC for such Global Security, and if such
person is not a participant, on the procedures of the
participant through which such person owns its interest, to
exercise any rights of a holder under the Indenture.
Payments of principal of and interest on the Notes
represented by the Global Securities registered in the name
of the Depository or its nominee will be made by J.P. Morgan
through the Paying Agent to the Depository or its nominee, as
the case may be, as the registered owner of the Notes
represented by such Global Securities.
J.P. Morgan has been advised that the Depository or its
nominee, upon receipt of any payment of principal or interest
in respect of the Notes represented by the Global Securities,
will credit immediately the accounts of the related
participants with payment in amounts proportionate to their
respective beneficial interests in the Notes represented by
the Global Securities as shown on the records of the
Depository. J.P. Morgan expects that payments by participants
to owners of beneficial interests in the Notes represented by
the Global Securities will be governed by standing customer
instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form
or registered in "street name." Such payments will be the
responsibility of such participants.
<PAGE 27>
If the Depository is at any time unwilling or unable to
continue as Depository and a successor Depository is not
appointed by J.P. Morgan within 90 days, J.P. Morgan will
issue individual Notes in definitive form in exchange for the
Global Securities. In addition, J.P. Morgan may at any time
and in its sole discretion determine not to have Global
Securities, and, in such event, will issue individual Notes
in definitive form in exchange for the Global Securities. In
either instance, J.P. Morgan will issue Notes in definitive
form, equal in aggregate principal amount to the Global
Securities, in such names and in such principal amounts as
the Depository shall request. Notes so issued in definitive
form will be issued in denominations of $1,000 and integral
multiples thereof (except for the 1999 Notes which will be
issued in denominations of $250,0000 with $50,000 integral
multiples thereafter, the 2000 Notes which will be issued in
denominations of $250,0000 with $50,000 integral multiples
thereafter, the CMT Notes which will be issued in
denominations of $250,000 and integral multiples thereof, the
2007 Notes which will be issued in denominations of $250,000
with $1,000 integral multiples thereafter, the 2011 Notes
which will be issued in denominations of $250,000 with $1,000
integral multiples thereafter, and the 2012 Notes which will
be issued in denominations of $1,000,000 with $1,000 integral
multiples thereafter and will be in registered form only,
without coupons.
Neither J.P. Morgan, the Trustees, and any Paying Agents nor
the registrar for the Notes will have any responsibility or
liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in
the Notes represented by such Global Securities or for
maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Same-Day Settlement and Payment. Settlement for the Notes
will be made by JPMSI in immediately available funds. All
payments of principal and interest will be made by J.P.
Morgan in immediately available funds or the equivalent, so
long as the Depository continues to make its Same-Day Funds
Settlement System available to J.P. Morgan.
Secondary trading in long-term notes and debentures of
corporate issuers is generally settled in clearinghouse or
next-day funds. In contrast, the Notes will trade in the
Depository's Same-Day Funds Settlement System, and secondary
market trading activity in the Notes will therefore be
required by the Depository to settle in immediately available
funds. No assurance can be given as to the effect, if any, of
settlement in immediately available funds on trading activity
in the Notes.
DESCRIPTION OF CAPITAL SECURITIES
The authorized capital stock of J.P. Morgan consists of
500,000,000 shares of Common Stock, $2.50 par value, and
10,000,000 shares of Preferred Stock, no par value. At March
31, 1998, there were 177,933,414 shares of Common Stock
outstanding and 2,444,300 shares of Series A Adjustable Rate
Cumulative Preferred Stock, 50,000 shares each of Series B,
C, D, E and F Variable Cumulative Preferred Stock and 400,000
shares of Series H Fixed Cumulative Preferred Stock
outstanding.
The brief summary of the principal provisions contained in
J.P. Morgan's Restated Certificate of Incorporation does not
purport to be complete.
Common Stock
Subject to the prior rights of the Preferred Stock, holders
of J.P. Morgan Common Stock are entitled to receive dividends
when, as and if declared by the Board of Directors out of any
fund legally available therefor and upon liquidation,
dissolution or winding up to receive pro rata all of J.P.
Morgan remaining after provision has been made for the
payments of creditors.
Under the Federal Reserve Act, there are legal restrictions
that limit the amount of dividends that Morgan Guaranty Trust
Company of New York ("Morgan Guaranty"), a subsidiary of J.P.
Morgan and a state member bank, can declare. The most
restrictive test requires approval of the Board of Governors
of the Federal Reserve System if dividends declared exceed
the net profits for that year as defined, combined with the
net profits for the preceding two years. The calculation of
the amount available for payment of dividends is based on net
profits determined in accordance with bank regulatory
accounting principles reduced by the amount of dividends
declared. At December 31, 1997, the cumulative retained net
profits for the years 1997 and 1996 available for
distribution as dividends by Morgan Guaranty in 1998 without
approval of the Federal Reserve Board amounted to
approximately $1,679 million.
The Federal Reserve Board may prohibit the payment of
dividends if it determines that circumstances relating to the
financial condition of a bank are such that the payment of
dividends would be an unsafe and unsound practice.
Voting Rights. Subject to the voting rights of the Preferred
Stock, all voting rights are vested in the holders of shares
of J.P. Morgan Common Stock, each share being entitled to one
vote.
<PAGE 28>
Preemptive Rights. Holders of J.P. Morgan Common Stock do not
have any preemptive rights to subscribe to any additional
securities that J.P. Morgan may issue.
Non-Assessability. Under Delaware law J.P. Morgan Common
Stock is validly issued, fully paid and non-assessable.
Preferred Stock
General. The Preferred Stock, of which 10,000,000 shares have
been authorized, upon issuance has preference over the Common
Stock with respect to the payment of dividends and the
distribution of assets in the event of liquidation,
dissolution or winding up of J.P. Morgan and such other
rights, preferences and limitations as may be fixed by the
Board of Directors. Dividend provisions, liquidation
preferences, voting rights, if any, sinking fund and
redemption provisions, if any, and conversion and exchange
provisions, if any, also will be fixed by the Board of
Directors. The shares of Series Preferred Stock referred to
in this Prospectus, when issued and paid for, will be validly
issued, fully paid and non-assessable.
Series A Preferred Stock. Adjustable Rate Cumulative
Preferred Stock, Series A. In March 1983, J.P. Morgan issued
2,500,000 shares of Adjustable Rate Cumulative Preferred
Stock, Series A (the "Series A Preferred Stock") of which
2,444,300 shares are currently outstanding. Dividends on the
Series A Preferred Stock are cumulative. If the equivalent of
six quarterly dividends payable on the Series A Preferred
Stock are in arrears in an amount equivalent to dividends for
six full dividend periods (whether or not consecutive), the
number of directors of J.P. Morgan will be increased by two
and the holders of the outstanding Series A Preferred Stock,
voting together as a single class with holders of shares of
any other series preferred stock then outstanding upon which
like voting rights have been conferred and are then
exercisable, will be entitled to elect two additional
directors (the holders of record of Series A Preferred Stock
being entitled to cast 1/10 of one vote) until all dividends
in arrears have been declared and paid or set apart for
payment in full. In the event of liquidation or dissolution,
the holders of shares of Series A Preferred Stock are
entitled to receive a distribution of $100 per share, plus,
in each case, accrued and unpaid dividends to the date of
final distribution.
Except under certain circumstances, shares of Series A
Preferred Stock were not redeemable prior to March 1, 1986.
On or after such date and prior to February 29, 1988, shares
of Series A Preferred Stock were redeemable at the option of
J.P. Morgan, as a whole or in part, at a redemption price per
share of $103.00 and thereafter at $100 per share. The
redemption price set forth above with respect to Series A
Preferred Stock will be increased, in each case, by the
amount of accrued and unpaid dividends thereon to the date
fixed for redemption.
Dividends on the Series A Preferred Stock are established
quarterly by a formula based on the interest rates of certain
actively traded U.S. Treasury obligations. In no event will
the quarterly dividends payable on the Series A Preferred
Stock be less than 5.00% or greater than 11.50% per annum.
Series B, C, D, E and F Preferred Stock. Variable Cumulative
Preferred Stock, Series B, C, D, E and F. In January 1990, as
another series of series preferred stock, J.P. Morgan issued
$250 million, or 250,000 shares, of Variable Cumulative
Preferred Stock, Series B, C, D, E and F (the "Variable
Cumulative Preferred Stock") in five series of 50,000 shares
each - Series B, Series C, Series D, Series E and Series F.
These issues, priced at $1,000 per share, have contingent
voting rights and a liquidation preference of $1,000 per
share, plus accrued and unpaid dividends. Each of the five
series is identical except that the dividend rates and
dividend payment dates vary and separate auctions on
different auction dates are held by each series.
The shares of each of these series of Variable Cumulative
Preferred Stock are redeemable as a whole or in part (in
units of 100 shares), except under certain conditions, at the
option of J.P. Morgan, at a redemption price of $1,000 per
share plus an amount equal to accrued and unpaid dividends.
Dividends on each series of Variable Cumulative Preferred
Stock are cumulative and are payable generally every 49 days,
subject to certain conditions. The dividend rates determined
by either the Auction Procedures or the Remarketing
Procedures for any Subsequent Dividend Period will not exceed
the Maximum Rate, which is the product of a percentage
ranging from 110% to 200% and the Federal Funds Rate, the
Effective Composite Commercial Paper Rate, the Effective
LIBOR Rate or the U.S. Treasury Rate, depending upon the
prevailing rating of the Shares of Variable Preferred Stock
at such time and the duration of such Subsequent Dividend
Period.
Series H Preferred Stock. Fixed Cumulative Preferred Stock,
Series H. In February 1996, as another series of preferred
stock, J.P. Morgan issued $200 million, or 400,000 shares, of
6 5/8% Cumulative Preferred Stock, Series H (the "Series H
Preferred Stock"). Shares of the Series H Preferred Stock
have a stated value of $500 per share.
The shares of this Series H Preferred Stock are not
redeemable prior to March 31, 2006. On or after March
31, 2006, J.P. Morgan, at its option, with prior approval of
the appropriate bank regulators, if so required, may redeem
the Series H Preferred stock, as a whole or in part, at any
time or from time to time out of funds legally available
therefor, at a redemption price of $500 per share plus an
amount equal to accrued and unpaid dividends thereon to the
date fixed for redemption.
Dividends on this Series H Preferred Stock shall be declared
by the Board of Directors of J.P. Morgan at a
rate of 6 5/8% per annum on the stated value thereof. Such
dividends shall be cumulative and payable generally on March
31, June 30, September 30 and December 31 of each year.
<PAGE 29>
ERISA MATTERS
J.P. Morgan and JPMSI 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 Code) with respect to employee benefit plans ("Plans")
that are subject to ERISA. The purchase of Debt 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 J.P. Morgan, JPMSI or
any of their affiliates 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 Debt Securities are
acquired pursuant to and in accordance with an applicable
exemption, such as Prohibited Transaction Class Exemption
("PTCE") 84-14 (an exemption for certain transactions
determined by an independent qualified professional asset
manager), PTCE 91-38 (an exemption for certain transaction
involving bank collective investment funds) or PTCE 90-1 (an
exemption for certain transaction involving insurance company
pooled separate accounts).
Additionally, ERISA and the Code may place restrictions on
the purchase of Debt Securities by certain investors that are
not Plans. The United States Supreme Court recently held, in
the case of John Hancock Mutual Life Ins. Co. v. Harris Trust
and Savings Bank, 114 S.Ct. 517 (1993), that under certain
circumstances the assets of an insurance company's general
account may be treated as the assets of an ERISA Plan for
purposes of the fiduciary responsibility provisions of ERISA.
Based on the reasoning of the John Hancock case, it could be
argued that if J.P. Morgan or JPMSI is a party in interest or
a disqualified person with respect to a Plan that has assets
invested in the general account of an insurance company that
acquires, holds or invests in Debt Securities using such
general account funds, such acquisition of, or holding of, or
investment in such Debt Securities might constitute a
prohibited transaction for purposes of Section 4975 of the
Code or Section 406 of ERISA.
By its purchase of a Debt Security, each holder will be
deemed to have represented and warranted that the acquisition
and ownership of such Debt Security by such holder will not
constitute a prohibited transaction under ERISA or the Code.
ANY PLANS OR OTHER ENTITIES WHOSE ASSETS INCLUDE PLAN ASSETS
SUBJECT TO ERISA SHOULD CONSULT THEIR ERISA ADVISORS.
EXPERTS
The audited financial statements contained in J.P. Morgan's
Annual Report on Form 10-K for the year ended December 31,
1997, (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.
No dealer, salesman or DEBT SECURITIES
any other person has been
authorized to give any
representations other
than those contained or
incorporated by reference
in this Prospectus in
connection with the offer
contained in this
Prospectus, and, if given
or made, such information
or representations must
not be relied upon as
having been authorized by
J.P. Morgan or by JPMSI.
This Prospectus shall not
constitute an offer to
sell or a solicitation of
an offer to buy any of
the securities offered
hereby in any
jurisdiction to any
person to whom it is
unlawful to make such
offer or solicitation in
such jurisdiction. The
delivery of this
Prospectus at any time
does not imply that the
information herein is
correct as of any time
subsequent to the date
hereof.
J.P. MORGAN & CO.
INCORPORATED
_____________________________
TABLE OF CONTENTS
Page
Available Information 2
Incorporation of Certain
Documents by Reference 2
J.P. Morgan & Co. Incorporated 3
Description of Debt Securities
Under the 1973 Indenture 6
Description of Debt Securities
Under the 1982 Indenture 8
Description of Debt Securities
Under the 1986 Indenture 13 J.P. MORGAN & CO.
Description of Debt Securities
Under the 1993 Indenture 17
Same-Day Funds Settlement
System 25
Description of Capital Securities 27
ERISA Matters 28
Experts 29
<PAGE 31>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
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
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) 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.
<PAGE 32>
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
purchased 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 the three-year policy
term. 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. In addition, the Registrant has
purchased catastrophic loss insurance which provides, among
other things, excess insurance coverage , over the
$90,000,000 officer and director policy. Subject to certain
exclusions from the coverage, the insurance provides for
payment of loss, in the case of the officer and director
excess coverage, to an aggregate limit of $400,000,000 for
the three-year policy term.
Item 16. Exhibits.
1(a)(1)* Form of Underwriting Agreement (including
form of Delayed Delivery Contract) for Subordinated Debt
Securities.
1(a)(2)** Form of Underwriting Agreement (including
form of Delayed Delivery Contract) for Debt Securities.
1(a)(3)+ Form of Underwriting Agreement for Series
Preferred Stock, Depositary Shares and Preferred Stock
Warrants.
1(a)(4)+ Form of Underwriting Agreement for
Currency Warrants.
1(b)(1)* Form of Purchase Agreement for
Subordinated Debt Securities.
1(b)(2)** Form of Purchase Agreement for Debt
Securities.
1(c)(1)* Form of Selling Agent Agreement for
Subordinated Debt Securities.
1(c)(2)** Form of Selling Agent Agreement for Debt
Securities.
1(d)(1)++ Form of Distribution Agreement for Medium-
Term Notes.
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 April 11, 1996. (Incorporated
by reference to J.P. Morgan's Report on Form 8-K dated April
11, 1996 filed pursuant to Section 13 of the Securities and
Exchange Act of 1934 (the "Act")).
4(a)(1)* Indenture dated as of March 1, 1993,
between J.P. Morgan & Co. Incorporated and Citibank, N.A., as
Trustee , (now U.S. Bank Trust National Association, formerly
First Trust of New York, National Association, as Successor
Trustee).
4(a)(2)** Indenture dated as of August 15, 1982,
between J.P. Morgan & Co. Incorporated and Chemical Bank
(formerly Manufacturers Hanover Trust Company),as Trustee
(now U.S. Bank Trust National Association, formerly 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 Act).
<PAGE 33>
4(a)(3)** 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 U.S. Bank Trust
National Association, formerly 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)(4)+ Form of Certificate of Designations for
Series Preferred Stock.
4(a)(5)+ Form of Certificate for Shares of Series
Preferred Stock.
4(a)(6)+ Form of Deposit Agreement.
4(a)(7)+ Form of Depositary Receipt of Depositary
Shares (contained as Exhibit A to Form of Deposit Agreement).
4(a) (8) Form of Second Supplemental Indenture
dated as of February 27, 1996 between J.P. Morgan & Co.
Incorporated and U.S. Bank Trust National Association
(formerly 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 27, 1996, filed
pursuant to Section 13 of the Act).
4(a)(9) Form of Third Supplemental Indenture dated
as of January 30, 1997 between J.P. Morgan & Co. Incorporated
and U.S. Bank Trust National Association (formerly 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 January 30, 1997, 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).
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)* Form of Debt Warrant Agreement.
4(h)* Form of Debt Warrant (included as Exhibit
A to form of Warrant Agreement).
4(i)+ Form of Preferred Stock Warrant
Agreement.
4(j)+ Form of Preferred Stock Warrant
(included as Exhibit A to form of Preferred Stock Warrant
Agreement).
4(k)+ Form of Currency Warrant Agreement.
4(l)+ Form of Currency Warrant (included as
Exhibit A to form of Currency Warrant Agreement).
5++++ Opinion of Gene A. Capello
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 Form 8-K dated
May 5, 1998, filed pursuant to Section 13 of the Act)
23(a) Consent of Price Waterhouse LLP.
(b)++++ Consent of Gene A. Capello (included in
Exhibit 5).
24 ++++ Power of Attorney.
25.1++++ Statement of Eligibility of Debt Trustee
on Form T-1.
25.2++++ Statement of Eligibility of Subordinated
Debt Trustee on Form T-1.
________________________________
* 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.
++++ Previously filed as an exhibit to Registration Statement
No. 333-51961 and incorporated by reference herein.
<PAGE 34>
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.
(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 35>
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 Post-Effective
Amendment No. 1 to 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 30th
day of June, 1998.
J.P. Morgan & Co. Incorporated
By: James C.P. Berry/s/
---------------------------
(James C.P. Berry
Vice President, Assistant
General Counsel
and Assistant Secretary)
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Post-Effective Amendment No. 1 to this
Registration Statement has been signed below by the following
persons in the capacities indicated.
Signature Title Date
- -------------- ----- _____
Douglas A. Warner III*
(Douglas A. Warner III) Chairman of the Board, June 30, 1998
President and Director
(Principal Executive Officer)
Paul A. Allaire*
(Paul A. Allaire) Director June 30, 1998
Riley P. Bechtel*
(Riley P. Bechtel) Director June 30, 1998
Lawrence A. Bossidy*
(Lawrence A. Bossidy) Director June 30, 1998
Martin Feldstein*
(Martin Feldstein) Director June 30, 1998
Ellen V. Futter*
(Ellen V. Futter) Director June 30, 1998
Hanna H. Gray*
(Hanna H. Gray) Director June 30, 1998
<PAGE 36>
Walter A. Gubert*
(Walter A. Gubert) Vice Chairman of the June 30, 1998
Board and Director
James R. Houghton*
(James R. Houghton) Director June 30, 1998
James L. Ketelsen*
(James L. Ketelsen) Director June 30, 1998
John A. Krol*
(John A. Krol) Director June 30, 1998
Roberto G. Mendoza*
(Roberto G. Mendoza) Vice Chairman of the June 30, 1998
Board and Director
Michael E. Patterson*
(Michael E. Patterson) Vice Chairman of the June 30, 1998
Board and Director
Lee R. Raymond*
(Lee R. Raymond) Director June 30, 1998
Richard D. Simmons*
(Richard D. Simmons) Director June 30, 1998
Kurt F. Viermetz*
(Kurt F. Viermetz) Retired Vice Chairman June 30, 1998
of the Board and Director
Douglas C. Yearley*
(Douglas C. Yearley) Director June 30, 1998
John A. Mayer, Jr.*
(John A. Mayer, Jr.) Chief Financial Officer June 30, 1998
(Principal Financial and
Accounting Officer)
David H. Sidwell* Managing Director and June 30, 1998
(David H. Sidwell) Controller
(Principal Accounting Officer)
*By: James C.P. Berry/s/ June 30, 1998
-------------------------------------
(James C.P. Berry, Attorney-in-Fact)
Exhibit 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting part of this Post-Effective
Amendment No.1 to the Registration Statement on Form S-3 of
J.P. Morgan & Co. Incorporated (No. 333-51961) of our report
dated January 14, 1998 appearing on page 41 of the J.P.
Morgan & Co. Incorporated's 1997 Annual Report on Form 10-K
for the year ended December 31, 1997 (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.
PRICE WATERHOUSE LLP/s/
New York, New York
June 30, 1998
