<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 15, 1999
REGISTRATION NO. 333-85283
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
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)
<TABLE>
<S> <C>
DELAWARE 13-2625764
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
<TABLE>
<S> <C>
RACHEL F. ROBBINS
GENERAL COUNSEL AND SECRETARY
J.P. MORGAN & CO. INCORPORATED
60 WALL STREET, NEW YORK, NEW YORK 10260-0060 60 WALL STREET, NEW YORK, NEW YORK 10260-0060
(212) 483-2323 (212) 648-3535
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING INCLUDING AREA CODE, OF AGENT FOR SERVICE)
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
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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.
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]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Debt Securities, Warrants to Purchase
Debt Securities, Series Preferred
Stock, Depositary Shares, Series
Preferred Stock and Depositary Share
Warrants and Universal Warrants....... $6,000,000,000(1)(3)(5) 100%(2) $6,000,000,000(2)(3) $1,668,000(5)
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Depositary Shares....................... (4) None None None
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</TABLE>
(1) Or, if any securities are issued at original issue discount, such greater
amount as shall result in an initial aggregate offering price of
$6,000,000,000 to the Issuer. There are being registered hereunder such
indeterminate number of shares of Series Preferred Stock, as may from time
to time (including shares of Series Preferred Stock which may be issued upon
exercise of Preferred Stock Warrants) be issued at indeterminate prices, but
with an aggregate initial offering price not to exceed $6,000,000,000.
(2) Estimated pursuant to Rule 457 under the Securities Act of 1933, as amended,
solely for the purpose of calculating the registration fee.
(3) In U.S. dollars or equivalent thereof in foreign denominated coin or
currency or currency units.
(4) There are also being registered hereunder such indeterminate number of
Depositary Shares to be evidenced by Depositary Receipts to be issued
pursuant to a Deposit Agreement. In the event the Issuer elects to offer to
the public fractional interests in shares of the Series Preferred Stock
registered hereunder, Depositary Receipts will be distributed to these
persons purchasing such fractional interests and the shares of the Series
Preferred Stock will be issued to the Depositary under the Deposit
Agreement.
(5) Pursuant to Rule 429 under the Securities Act of 1933, as amended, these
securities are being registered in addition to total remaining securities of
(1) $3,989,659,950 being carried forward from Registration Statement No.
333-51961 (a filing fee of $1,176,949.68 was previously paid and applies to
the securities carried forward); (2) $7,031,173 being carried forward from
Registration Statement No. 333-47753 (a filing fee of $2,074.20 was
previously paid and applies to the securities carried forward); (3)
$252,000,000 being carried forward from Registration Statement No. 333-40447
(a filing fee of $76,363.64 was previously paid and applies to the
securities carried forward); and (4) $2,800,000 being carried forward from
Registration Statement No. 333-64193 (a filing fee of $560.00 was previously
paid and applies to the securities carried forward). This registration
statement constitutes a post-effective amendment to each such prior
Registration Statement.
------------------------
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.
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<PAGE> 2
PROSPECTUS
J.P. MORGAN & CO. INCORPORATED
60 WALL STREET
NEW YORK, NY 10260-0060
(1-212) 483-2323
DEBT SECURITIES
SERIES PREFERRED STOCK
DEPOSITARY SHARES
WARRANTS TO PURCHASE SECURITIES
UNIVERSAL WARRANTS
We will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any supplement carefully before
you invest.
These securities are not deposits or other obligations of a bank and are not
insured by the Federal Deposit Insurance Corporation or any other federal
agency.
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES
COMMISSION NOR HAVE THESE ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This prospectus is dated September , 1999.
<PAGE> 3
ABOUT THIS PROSPECTUS
THIS PROSPECTUS IS PART OF A REGISTRATION STATEMENT THAT WE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") UTILIZING A "SHELF"
REGISTRATION PROCESS. UNDER THIS SHELF PROCESS, WE MAY, FROM TIME TO TIME OVER
APPROXIMATELY THE NEXT TWO YEARS, SELL ANY COMBINATION OF THE SECURITIES
DESCRIBED IN THE PROSPECTUS IN ONE OR MORE OFFERINGS UP TO A TOTAL DOLLAR AMOUNT
OF $10,251,491,123 OR THE EQUIVALENT OF THIS AMOUNT IN FOREIGN CURRENCIES OR
FOREIGN CURRENCY UNITS.
THIS PROSPECTUS PROVIDES YOU WITH A GENERAL DESCRIPTION OF THE SECURITIES
WE MAY OFFER. EACH TIME WE SELL SECURITIES, WE WILL PROVIDE A PROSPECTUS
SUPPLEMENT THAT WILL CONTAIN SPECIFIC INFORMATION ABOUT THE TERMS OF THE
OFFERING. THE PROSPECTUS SUPPLEMENT MAY ALSO ADD, UPDATE OR CHANGE INFORMATION
CONTAINED IN THIS PROSPECTUS. YOU SHOULD READ BOTH THIS PROSPECTUS AND ANY
PROSPECTUS SUPPLEMENT TOGETHER WITH ADDITIONAL INFORMATION DESCRIBED UNDER THE
HEADING "WHERE YOU CAN FIND MORE INFORMATION ABOUT J.P. MORGAN & CO.
INCORPORATED" BEGINNING ON PAGE 3 OF THIS PROSPECTUS.
YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED IN THIS PROSPECTUS AND IN
ANY PROSPECTUS SUPPLEMENT INCLUDING THE INFORMATION INCORPORATED BY REFERENCE.
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE
NOT OFFERING THE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU
SHOULD NOT ASSUME THAT THE INFORMATION IN THE PROSPECTUS, ANY SUPPLEMENT TO THIS
PROSPECTUS, OR ANY INCORPORATED DOCUMENT IS ACCURATE AT ANY DATE OTHER THAN THE
DATE INDICATED ON THE COVER PAGE OF THAT DOCUMENT.
2
<PAGE> 4
WHERE YOU CAN FIND MORE INFORMATION
ABOUT J.P. MORGAN & CO. INCORPORATED
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy these documents at the SEC's
public reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's regional offices 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 this material can also be obtained from the
Public Reference Room of the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Please call the SEC at
1-800-SEC-0330 for further information about the Public Reference Room. The SEC
also maintains an Internet website that contains reports, proxy and information
statements and other materials that are filed through the SEC's Electronic Data
Gathering, Analysis and Retrieval (EDGAR) System. This website can be accessed
at http:/www.sec.gov. You can find information we have filed with the SEC by
reference to file number 1-5885. In addition, you may inspect our reports, proxy
statements and other information at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with the SEC. This means that we can disclose important
information to you by directing you to those documents. The information
incorporated by reference is considered to be a part of this prospectus, and
later information filed with the SEC after the date of this prospectus will
update and supersede this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until our offering is
completed:
(a) our Annual Report on Form 10-K for the year ended December 31, 1998;
(b) our Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999 and June 30, 1999; and
(c) our Reports on Form 8-K dated January 19, 1999, April 14, 1999, July
19, 1999, September 1, 1999 and September 8, 1999.
You may request, at no cost to you, a copy of these documents (other than
exhibits to such documents) by writing or telephoning us at: Office of the
Secretary, J.P. Morgan & Co. Incorporated, 60 Wall Street, New York, New York
10260-0060 (Telephone: (212) 648-3380).
3
<PAGE> 5
J.P. MORGAN & CO. INCORPORATED
J.P. Morgan & Co. Incorporated ("J.P. Morgan", "Morgan", "the Company", "we", or
"us"), 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.
Our activities are summarized in eight segments and grouped into three sectors
as follows:
GLOBAL FINANCE SECTOR
Our Global Finance sector comprises the highly integrated advisory, capital
raising, and market making activities we undertake for clients worldwide. This
sector comprises the following segments: Investment Banking, Equities, Interest
Rate and Foreign Exchange Markets, Credit Markets, and Credit Portfolio.
The Investment Banking segment includes corporate and institutional client
relationship management, which is conducted through our global network of client
bankers. Bankers coordinate marketing and origination activities for our full
range of products. This segment includes revenues from advisory services; in
partnership with clients, our advisory professionals analyze and implement
strategic alternatives including mergers, acquisitions, privatizations, and
changes in clients' capital structure.
Our Equities activities comprise underwriting, market making, research, equity
derivatives, and American depositary receipt (ADR) services. We help clients
execute their strategies by raising equity capital in the public and private
markets and structure derivative transactions to provide hedges or enhanced
returns. As a market maker, we act as both principal and agent to facilitate
clients' transactions in exchange-listed and over-the-counter securities. Equity
research supports both underwriting and market making.
The Interest Rate Markets/Foreign Exchange segment encompasses market making and
risk management activities across interest rate markets, as well as foreign
exchange spot, short-term interest rate instruments, and currency derivatives
sales and trading. Within interest rate markets, J.P. Morgan acts as a dealer
and market maker in all the G-10 government bond markets, in the U.S. government
agency and municipal bond markets, as well as in the local currency government
bond markets of various Eastern European and Asian countries. Also within this
segment J.P. Morgan makes markets in swaps and other interest rate derivatives
and provides futures and options brokerage to help clients manage their
long-term exposures to interest rates and currencies.
Credit Markets provides underwriting, market making, and research related to
investment-grade, high-yield, and hard-currency emerging market debt securities.
We also act as a dealer and market maker in the currencies and local currency
government securities of Latin American countries. In addition, this segment
includes global loan syndications, structured finance, and credit derivatives
activities.
Credit Portfolio includes results from managing our principal extensions of
credit, including loans, commitments to lend, standby letters of credit, and
guarantees. In addition, this segment is responsible for managing our credit
risk arising from both traditional credit activities and derivatives trading
activities. As part of this responsibility, Credit Portfolio is compensated by
other business segments, and its revenues are reduced by an estimate of our
portfolio's potential credit loss and any costs associated with hedging our
credit risk.
ASSET MANAGEMENT AND SERVICING SECTOR
J.P. Morgan's Asset Management and Servicing sector provides: global asset
management for pension plans, governments, endowments, and foundations;
integrated financial services for high-net-worth individuals; with American
Century, fully bundled services for defined contribution pension plans; and
mutual fund distribution to intermediaries. This sector also operates, under
contract, the Euroclear System, the world's largest clearance and settlement
system for internationally traded securities. We provide credit and deposit
services to Euroclear participants.
The Asset Management and Servicing sector provides portfolio management across
asset classes and markets to institutional and individual investors in both
discretionary account and mutual fund form. Portfolio management is supported by
dedicated global research capabilities.
4
<PAGE> 6
J.P. Morgan also offers high-net-worth clients an advice-based, integrated array
of financial services that include 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 selective
expansion into the growing market for personal financial services.
In January 1998 we completed the purchase of a 45% economic interest in American
Century Companies, the fifth-largest U.S. no-load direct distribution mutual
fund company. With this investment J.P. Morgan has gained scale and expertise in
the technology and operations for distributing and servicing mutual funds, as
well as complementary investment capabilities that broaden its product offerings
significantly. With American Century, we are jointly pursuing the growing
retirement market, distribution of mutual funds to third parties such as
financial advisors, and other opportunities in integrated personal financial
services.
Building on the firm's leadership in pension asset management, J.P. Morgan
continues to expand its global channels for gathering assets. In Japan we
entered into a joint venture with Dai-Ichi Kangyo Bank to offer investment
trusts (mutual funds) to Japanese clients. In France we entered into an
agreement with Banques Populaires to offer international mutual funds through
its branch network. We also broadened its product offerings with a full range of
real estate investment and private equity capabilities.
PROPRIETARY INVESTMENTS SECTOR
Our Proprietary Investments sector complements the firm's client-focused
activities. It represents a diversified set of risk-taking activities ranging
from short-term trading risk to multiyear equity investment risk. Within
Proprietary Investments are the Equity Investments and Proprietary Investing and
Trading segments.
Equity Investments invests our capital in private equity investments worldwide,
seeking significant capital appreciation. Professionals in the group actively
leverage our global network and client relationships. This interaction generates
unique investment opportunities. We invest 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. On average, we hold investments
three to five years and typically exit through a public offering of securities
or a sale of the company.
J.P. Morgan's Proprietary Investing and Trading segment takes market and credit
risk positions for our own account. In addition to the activities of our
dedicated proprietary positioning group, this segment also includes the
following separately managed investments: a credit investment securities
portfolio, and our investment in Long-Term Capital Management, L.P. Experienced
market professionals across several segments manage these investments, employing
many currencies and types of instruments, including fixed income securities,
foreign exchange, equity securities, commodity products, and related
derivatives. Positions may be held for various lengths of time, depending on the
strategy and actual market performance. Longer-term investments are made in
government, mortgage-backed, and corporate debt securities. This segment also
manages our liquidity and capital profile to ensure that we have access to
funding at a reasonable cost, under all market conditions, to support all our
business activities.
REGULATION
J.P. Morgan is subject to regulation under the Bank Holding Company Act of 1956
(the "Bank Act"). Under the Bank Act, we are required to file reports with the
Board of Governors of the Federal Reserve System (the "Board"). We are also
subject to examination by the Board. The Bank Act prevents us and our
subsidiaries from engaging in activities not related to banking, and limits the
amount of securities we 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 we 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.
5
<PAGE> 7
Our 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 us, or involving our 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. As used in this prospectus, unless the context otherwise
requires, the terms "J.P. Morgan", "Morgan", "the Company", "we", or "us" refer
to J.P. Morgan & Co. Incorporated and its consolidated and unconsolidated
subsidiaries.
6
<PAGE> 8
CONSOLIDATED RATIOS
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX
MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, --------------------
1999 1998 1997 1996 1995 1994
-------- ------ ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Excluding Interest on Deposits................... 1.47 1.16(a) 1.27 1.35 1.35 1.40
Including Interest on Deposits................... 1.35 1.12(a) 1.20 1.26 1.24 1.28
</TABLE>
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(a) For twelve months ended December 31, 1998, the ratio of earnings to fixed
charges, excluding the fourth quarter 1998 after tax charge of $86 million ($143
million before tax) related to cost reduction programs; excluding the third
quarter 1998 after tax gain of $34 million ($56 million before tax) related to
the sale of the firm's investment management business in Australia; excluding
the second quarter 1998 after tax gain of $79 million ($131 million before tax)
related to the sale of the firm's global trust and agency service business; and
excluding the first quarter 1998 after tax charge of $129 million ($215 million
before tax) related to restructuring of business activities, was 1.17 excluding
interest on deposits and 1.13 including interest on deposits.
CONSOLIDATED RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
<TABLE>
<CAPTION>
SIX
MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, --------------------
1999 1998 1997 1996 1995 1994
-------- ------ ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Excluding Interest on Deposits................... 1.47 1.16(a) 1.26 1.34 1.34 1.39
Including Interest on Deposits................... 1.35 1.12(a) 1.20 1.25 1.23 1.27
</TABLE>
- -------------------------
(a) For twelve months ended December 31, 1998, the ratio of earnings to combined
fixed charges and preferred stock dividends, excluding the fourth quarter 1998
after tax charge of $86 million ($143 million before tax) related to cost
reduction programs; excluding the third quarter 1998 after tax gain of $34
million ($56 million before tax) related to the sale of the firm's investment
management business in Australia; excluding the second quarter 1998 after tax
gain of $79 million ($131 million before tax) related to the sale of the firm's
global trust and agency service business; and excluding the first quarter 1998
after tax charge of $129 million ($215 million before tax) related to
restructuring of business activities, was 1.17 excluding interest on deposits
and 1.13 including interest on deposits.
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<PAGE> 9
USE OF PROCEEDS
Unless otherwise indicated in the applicable prospectus supplement, the net
proceeds we receive from the sale of the securities offered by this prospectus
and the accompanying prospectus supplement will be used for general corporate
purposes. General corporate purposes may include repayment of debt, investments
in or extensions of credit to our subsidiaries, or redemption or repurchases of
our stock. We may temporarily invest the net proceeds or use them to repay
short-term debt until they are used for their stated purpose.
DESCRIPTION OF J.P. MORGAN DEBT SECURITIES
GENERAL
The following description of the terms of the Debt Securities contains certain
general terms that may apply to the Debt Securities. The specific terms of any
Debt Securities will be described in the prospectus supplement relating to those
Debt Securities.
The Debt Securities will be either our senior debt securities (the "Senior
Securities") or our subordinated debt securities (the "Subordinated
Securities"). The Senior Securities will be issued under an Indenture dated as
of August 15, 1982 and related supplemental indentures, including the First
Supplemental Indenture dated as of May 5, 1986, the Second Supplemental
Indenture dated as of February 27, 1996, and the Third Supplemental Indenture
dated as of January 30, 1997 (together these indentures are referred to as the
"Senior Indenture"), between J.P. Morgan and U.S. Bank Trust National
Association ("U.S. Bank Trust"), successor to Chemical Bank, as Trustee. The
Subordinated Securities will be issued under an Indenture dated as of March 1,
1993, and any related supplemental indentures (together these indentures are
referred to as the "Subordinated Indenture"), between J.P. Morgan and U.S. Bank
Trust, successor to Citibank, N.A., as Trustee. The Senior Indenture and the
Subordinated Indenture are sometimes together referred to as the "Indentures".
The following summary of certain provisions of the Indentures is not complete.
You should refer to the Indentures, copies of which are filed as exhibits to the
Registration Statement of which this prospectus is a part. Section references
below are to the sections or articles of the applicable Indenture. Capitalized
terms have the meanings assigned to them in the applicable Indenture. Wherever
we refer to particular provisions of the Indentures, such provisions are
included within this prospectus and are part of the statements made and such
statements are wholly qualified by such reference.
Neither Indenture limits the amount of Debt Securities that we may issue. Each
Indenture provides that Debt Securities may be issued up to the principal amount
authorized by us from time to time. The Senior Securities will have the same
rank in liquidation as all of our other unsecured unsubordinated debt. Payments
of principal and interest on Subordinated Securities may only be made when we
are current on all payment obligations on our Senior Indebtedness. In addition,
under certain circumstances relating to our insolvency or a similar event, the
Subordinated Securities will be entitled to payment only after the payment of
claims relating to Derivative Obligations.
We are a holding company and conduct substantially all of our operations through
subsidiaries. As a result, claims of holders of the Debt Securities will
generally have a junior position to claims of creditors of our subsidiaries,
except to the extent that we may be recognized as a creditor of those
subsidiaries. In addition, our right to participate as a shareholder in any
distribution of assets of any subsidiary (and thus the ability of holders of the
Debt Securities to benefit as creditors of the Company from such distribution)
is junior to creditors of that subsidiary. Claims of creditors of our
subsidiaries include:
- - substantial amounts for long-term debt;
- - deposit liabilities;
- - federal funds purchased;
- - securities sold under repurchase agreements; and
- - short-term borrowings.
Other restrictions may exist which could prohibit our subsidiaries from paying
dividends or supplying funds to us.
The Debt Securities may be issued in one or more separate series of Senior
and/or Subordinated Securities. The prospectus supplement relating to the
particular series of Debt Securities being offered will specify the particular
amounts, prices,
8
<PAGE> 10
and terms of those Debt Securities. These terms may include:
- - the title and type of Debt Securities;
- - any limit on the aggregate principal amount and authorized denominations of
the Debt Securities;
- - the purchase price of the Debt Securities (expressed as a percentage of the
principal amount thereof);
- - the date or dates on which the principal of the Debt Securities will be
payable;
- - the interest rate or rates (including any interest rates applicable to overdue
payments) on the Debt Securities, or the method for determining those rates;
- - if other than U.S. dollars, the currency or currencies (including composite
currencies or currency units) in which the Debt Securities may be purchased
and in which payments on the Debt Securities will be made (which currencies
may be different for principal, premium and interest payments);
- - the dates on which any interest will be payable;
- - the terms of any mandatory or optional redemption (including any sinking
fund);
- - any currencies, currency units, composite currencies, commodity prices,
financial or non-financial indices, securities, baskets of securities,
indices, baskets of indices, interest rates, swap rates, baskets of swap rates
or factors, to which the principal, any premium, or interest of the Debt
Securities will be indexed;
- - any conversion or exchange provisions applicable to the Debt Securities;
- - whether the Debt Securities will be issued in registered form without coupons,
or in bearer form with coupons; and
- - any other specific terms of the Debt Securities.
Payments on Debt Securities will generally be made at the office of U.S. Bank
Trust; interest on Debt Securities in registered form may be made at our option
by check mailed to the registered holders.
Some of the Debt Securities may be issued as original issue discount Debt
Securities (the "Original Issue Discount Securities"). Original Issue Discount
Securities bear no interest or bear interest at below-market rates and will be
sold at a discount below their stated principal amount. The prospectus
supplement relating to an issue of Original Issue Discount Securities will
contain information relating to Federal income tax, accounting, and other
special considerations applicable to Original Issue Discount Securities.
The applicable Indenture, the Debt Securities, and the prospectus supplement
tell you how and where you may exchange a Debt Security you own for Debt
Securities of the same series but in smaller allowed denominations, exchange
several Debt Securities of a single series you own into a single Debt Security
with a larger denomination, or transfer a Debt Security you own to a new owner.
Debt Securities in bearer form will normally be transferred by delivery.
Although we do not charge a fee for transfers or exchanges of Debt Securities,
we may require you to pay any tax or government-imposed charge on a transfer or
exchange of Debt Securities. (Sections 2.8 of the Indentures.)
We will generally have no obligation to repurchase, redeem, or change the terms
of Debt Securities upon any event (including a change in control) that might
have an adverse effect on our credit quality.
SUBORDINATED DEBT SECURITIES
Subordination. The Subordinated Securities will be direct, unsecured general
obligations of the Company. The Subordinated Securities will be subordinate in
right of payment to all Senior Indebtedness and, in certain circumstances
relating to our bankruptcy or insolvency, Derivative Obligations.
The Subordinated Securities will be subordinate in right of payment to all
Senior Indebtedness. Under the Subordinated Indenture, we are not permitted to
pay amounts due on Subordinated Securities and holders of Subordinated
Securities are not entitled to demand or receive any such payment, if:
- - we have not paid or duly provided for all amounts of principal, any premium,
and interest then due to the holders of all Senior Indebtedness; or
- - an event has occurred which permits, or after the giving notice or the lapse
of time will permit, the holders of Senior Indebtedness to accelerate the
maturity of the Senior Indebted-
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ness. (Section 10.2 of the Subordinated Indenture.)
Upon our dissolution, winding up, liquidation or reorganization:
- - the holders of Senior Indebtedness will be paid the full amounts of principal,
any premium, and any interest before any payment or distribution is made on
the Subordinated Securities; and
- - if, after such payments on the Senior Indebtedness have been made, there are
amounts available for payment on the Subordinated Securities ("Excess
Proceeds") and creditors in respect of Derivative Obligations have not
received their full payments, then the Excess Proceeds will first be used to
pay in full of all such Derivative Obligations before any payment will be made
on the Subordinated Securities. (Sections 10.3 and 10.12 of the Subordinated
Indenture.)
As a result, in the event of our dissolution, winding up, liquidation, or
reorganization, holders of Senior Indebtedness and Derivative Obligations may
receive more, ratably, and holders of the Subordinated Securities may receive
less, ratably, than the other creditors of the Company. No series of our
Subordinated Securities will be subordinated to any other series of our
Subordinated Securities. However, because Excess Proceeds will first be used to
pay Derivative Obligations before any payment will be made on the Subordinated
Securities, upon our dissolution, winding up, liquidation, or reorganization,
the holders of the Subordinated Securities may receive less, ratably, than
holders of our Subordinated Indebtedness issued prior to March 1, 1993. Such
subordination will not prevent the occurrence of any Event of Default in respect
of the Subordinated Securities. The Subordinated Indenture does not limit the
amount of Senior Indebtedness we may incur.
Senior Indebtedness means the principal of, any premium and interest on all
indebtedness for money borrowed by us, whether outstanding on the date the
Subordinated Indenture became effective or created, assumed or incurred after
that date (including all indebtedness for money borrowed by another person that
we guarantee). However, Senior Indebtedness does not include:
- - Subordinated Securities issued under the Subordinated Indenture;
- - Subordinated Indebtedness that was issued prior to March 1, 1993; and
- - other debt of ours which is expressly stated to rank equal or junior to the
Subordinated Securities in right of payment. (Section 1.1 of the Subordinated
Indenture.)
Derivative Obligations means all indebtedness of the Company for claims in
respect of derivative products, such as interest and foreign exchange rate
contracts, commodity contracts, and similar arrangements. Derivative Obligations
exclude Senior Indebtedness and obligations that are expressly stated not to
have the same rank as or to be junior to the Subordinated Securities. (Section
1.1 of the Subordinated Indenture.)
Limited Right of Acceleration. There will be no right of acceleration of the
payment of principal of the Subordinated Securities upon a default in the
payment of principal or interest or in the performance of any covenant or
agreement in the Subordinated Securities or the Subordinated Indenture. In the
event of a default in the payment of principal, any premium or interest, or in
the performance of any covenant or agreement in the Subordinated Securities or
the Subordinated Indenture, the Trustee may, subject to certain limitations and
conditions, seek to enforce that payment or the performance of that covenant or
agreement. (Sections 5.2 and 5.4 of the Subordinated Indenture.)
If a default due to certain events of bankruptcy or reorganization occurs and is
continuing, either the Subordinated Trustee or the holders of at least 25% in
principal amount of all Subordinated Securities then outstanding, voting as one
class may declare the principal of all outstanding Subordinated Securities and
any interest accrued thereon to be due and payable immediately. In the case of
original issue discount Subordinated Securities, a specified portion of the
principal amount may be accelerated. Subject to certain conditions the
declaration may be annulled and past defaults, except for uncured payment
defaults on the Subordinated Securities, may be waived by the holders of a
majority in principal amount of the outstanding Subordinated Securities of all
series. (Sections 5.1 and 5.10 of the Subordinated Indenture.)
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SENIOR DEBT SECURITIES
Seniority. The Senior Securities will be our direct, unsecured general
obligations. The Senior Securities will have the same rank in liquidation as all
of our other unsecured and unsubordinated debt.
Right of Acceleration. If a default in the payment of principal, any premium or
interest, or any sinking fund installment, with respect to one or more series of
Senior Securities occurs and is continuing, either the Senior Trustee or the
holders of at least 25% in principal amount of the Senior Securities of such
series then outstanding, each series voting as a separate class, may declare the
principal of all outstanding Senior Securities of such series and any interest
accrued thereon, to be due and payable immediately. In the case of original
issue discount Senior Securities, only a specified portion of the principal
amount may be accelerated. If a default in the performance of any covenant or
agreement with respect to one or more series of Senior Securities occurs and is
continuing, either the Senior Trustee or the holders of at least 25% in
principal amount of the Senior Securities of such series then outstanding, all
affected series voting as a single class, may declare the principal of all
outstanding Senior Securities of such series and any interest accrued thereon,
to be due and payable immediately. In the case of original issue discount Senior
Securities, only a specified portion of the principal amount may be accelerated.
If a default due to certain events of bankruptcy or reorganization occurs and is
continuing, either the Senior Trustee or the holders of at least 25% in
principal amount of all Senior Securities then outstanding, voting as one class,
may declare the principal of all outstanding Senior Securities of such series
and any interest accrued thereon to be due and payable immediately. In the case
of original issue discount Senior Securities, only a specified portion of the
principal amount may be accelerated. Subject to certain conditions such
declarations may be annulled and past defaults, except for uncured payment
defaults on the Senior Securities, may be waived by the holders of a majority in
principal amount of the outstanding Senior Securities of the series affected.
(Sections 5.1 and 5.10 of the Senior Indenture.)
EVENTS OF DEFAULT, WAIVER, DEBT SECURITIES IN FOREIGN CURRENCIES
An Event of Default with respect to a series of Debt Securities is defined in
the Indentures as:
- - default for 30 days in the payment of interest on any Debt Securities of that
series;
- - default in payment of principal of or any premium on any Debt Securities of
that series when due, at maturity, upon redemption, by declaration, or
otherwise;
- - default in the payment of any sinking fund installment on the Debt Securities
of that series;
- - failure by the Company for 90 days after notice to perform any other covenants
or warranties contained in the Indenture applicable to that series; and
- - certain events of bankruptcy or reorganization of the Company. (Sections 5.1
of the Indentures.)
An Event of Default with respect to one series of Debt Securities does not
necessarily constitute an Event of Default with respect to any other series of
Debt Securities. Each Indenture provides that the Trustee may withhold notice to
the holders of the Debt Securities of any default if the Trustee considers it in
the interest of the holders of Debt Securities to do so. The Trustee may not
withhold notice of a default in the payment of principal of or interest or any
premium, on such Debt Securities or in the making of any sinking fund payment
with respect to Debt Securities. (Sections 5.11 of the Indentures.)
The Indentures provide that the holders of a majority in principal amount of
outstanding Debt Securities of any series may direct the time, method, and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or other power conferred on the Trustee. The Trustee may
decline to act if the direction is contrary to law and in certain other
circumstances set forth in the Indentures. (Sections 5.9 of the Indentures.)The
Trustee is not obligated to exercise any of its rights or powers under the
Indentures at the request or direction of the holders of Debt Securities unless
the holders offer the Trustee reasonable indemnity against expenses and
liabilities. (Sections 6.2(d) of the Indentures.)
The Indentures require us to file annually with the Trustee a written statement
of no default, or
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specifying any default that exists. (Sections 3.5 of the Indentures.)
Whenever either Indenture provides for an action by, or the determination of any
of the rights of, or any distribution to, holders of J.P. Morgan Debt
Securities, in the absence of any provision to the contrary in the form of J.P.
Morgan Debt Security, any amount in respect of any Debt Security denominated in
a currency or currency unit other than U.S. dollars may be treated as the amount
of U.S. dollars that could reasonably be exchanged for such non-U.S. dollar
amount. This amount will be calculated as of a date that we specify to the
Trustee or, if we fail to specify a date, on a date that the Trustee may
determine. (Section 12.11 of the Subordinated Indenture and Section 11.11 of the
Senior Indenture.)
MODIFICATION OF THE INDENTURES; WAIVER OF COMPLIANCE
Each of the Indentures contains provisions permitting us and the Trustee to
modify that Indenture or the rights of the holders of Debt Securities with the
consent of the holders of not less than a majority in principal amount of each
outstanding series of Debt Securities affected by the modification. Each holder
of an affected Debt Security must consent to a modification that would:
- - change the stated maturity date of the principal of, or of any installment of
principal of or interest on any Debt Security;
- - reduce the principal amount of or any premium, or interest, on any Debt
Security;
- - change the currency or currency unit of payment of any Debt Security;
- - change the method in which amounts of payments of principal or interest are
determined on any Debt Security;
- - reduce the portion of the principal amount of an original issue discount Debt
Security payable upon acceleration of the maturity thereof;
- - reduce any amount payable upon redemption of any Debt Security;
- - impair the right of a holder to institute suit for the payment of or, if the
Debt Securities provide, any right of repayment at the option of the holder of
a Debt Security; or
- - reduce the percentage of Debt Securities of any series, the consent of the
holders of which is required for any modification. (Sections 8.2 and 8.6 of
the Indentures.)
The Indentures also permit us and the Trustee to amend such Indenture in certain
circumstances without the consent of the holders of Debt Securities to evidence
our merger, the replacement of the Trustee, to effect changes which do not
affect any outstanding series of Debt Security, and for certain other purposes.
(Sections 8.1 of the Indentures.)
CONSOLIDATIONS, MERGERS AND SALES OF ASSETS
We may not merge or consolidate with any other corporation or sell or convey all
or substantially all of our assets to any other corporation, unless either:
- - we are the continuing corporation or the successor corporation is a United
States corporation which expressly assumes the payment of the principal of,
any premium and interest on the Debt Securities and the performance and
observance of all the covenants and conditions of the Indentures binding upon
us, and
- - we or the successor corporation shall not, immediately after the merger or
consolidation, sale or conveyance, be in default in the performance of any
covenant or condition. (Articles Nine of the Indentures.)
CONCERNING THE TRUSTEE, PAYING AGENT,
REGISTRAR AND TRANSFER AGENT
Our subsidiaries and we have normal banking relationships with the Trustee, U.S.
Bank Trust. U.S. Bank Trust will also be the paying agent, registrar and
transfer agent for the Debt Securities.
GLOBAL DEBT SECURITIES
Any series of Debt Securities may be issued in the form of one or more global
certificates (the "Global Debt Security") registered in the name of a depository
or a nominee of a depository. The depository will generally be the Depository
Trust Company ("DTC").
Each Global Debt Security deposited with DTC, as depository, will be registered
in the name of DTC or a nominee of DTC, which will be the only holder of the
Global Debt Security. Except under limited circumstances described below, Global
Debt Securities are not exchangeable for definitive Debt Securities. If you wish
to invest in
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Debt Securities issued in global form, you will be able to do so only by owning
a beneficial interest in the Global Debt Security through an institution that
has an account with DTC or its nominee (a "participant"), or through DTC or its
nominee if you are a participant.
DTC is a specialized company subject to regulation by the Federal Reserve and
the SEC, and under the New York Banking Law, the New York Uniform Commercial
Code, and the 1934 Act. DTC was created to hold securities of its participants
and to facilitate the clearance and settlement of securities transactions among
its participants through electronic book-entry, thereby eliminating the need for
physical movement of certificates. DTC's participants include securities brokers
and dealers, banks, trust companies, clearing corporations, and certain other
organizations.
Persons who are not participants but desire to purchase, sell, or otherwise
transfer beneficial ownership of, or other beneficial interests in, Debt
Securities issued in global form may do so only through participants. Because
DTC can only act on behalf of participants, and on behalf of certain banks,
trust companies, and other persons approved by it, the ability of an owner of a
beneficial interest in Debt Securities in global form to pledge his interest to
persons who do not participate in the DTC system, or otherwise to act with
respect to his interest, may be limited due to the absence of physical
certificates. Owners of beneficial interests in Debt Securities issued in global
form may experience some delay in their receipt of payments, since those
payments will be forwarded by our agent to DTC or its nominee. DTC or its
nominee will then forward them to its participants, who will forward them to the
ultimate beneficial owners.
Under rules governing DTC and its operations, DTC will be required to make
book-entry transfers of Debt Securities among participants and to receive and
transmit payments to participants. Each participant similarly is required to
make book-entry transfers and receive and transmit such payments on behalf of
persons holding beneficial interests in the Debt Securities through the
participant.
DTC has advised us that it will take any action permitted to be taken by a
holder under the relevant Indenture only at the direction of one or more
participants to whose accounts the Debt Securities are credited. The Global Debt
Security may be exchanged for definitive Debt Securities registered in the names
of persons other than DTC or its nominee only if (i) DTC notifies us that it is
unwilling or unable to continue as depository or if DTC ceases to be a
registered clearing agency (and registration is required by law) or (ii) we
issue a Company Order that such Global Debt Security may be exchanged. Any
Global Debt Security that may be exchanged under either of those circumstances
shall be exchanged for Debt Securities registered in such names as DTC shall
direct.
Upon the occurrence of any event described in the immediately preceding
paragraph, DTC is generally required to notify all participants of the
availability through DTC of definitive Debt Securities. Upon surrender by DTC of
the Global Debt Security representing the Debt Securities and instructions for
registration, the Trustee will reissue the Debt Securities as definitive
securities, and thereafter the Trustee will recognize the holders of such
definitive securities as the registered holders of the Debt Securities entitled
to the benefits of the applicable Indenture.
Neither DTC nor its nominee may transfer the Global Debt Security except as a
whole, and then only to DTC, a nominee of DTC or to a successor Depository
appointed by us. DTC may not sell, assign, transfer or otherwise convey any
beneficial interest in a Global Debt Security unless such beneficial interest is
an amount equal to an authorized denomination for the Debt Securities.
GOVERNING LAW AND JUDGMENTS
The Debt Securities will be governed by and interpreted under the laws of the
State of New York. In an action involving Debt Securities denominated in a
currency other than U.S. dollars, it is likely that any judgment granted by a
U.S. court would be made only in U.S. dollars. However, a New York court should
enter a judgment in the denominated currency. Such judgment should then be
converted into U.S. dollars at the rate of exchange prevailing on the date of
entry of the judgment.
DESCRIPTION OF SERIES PREFERRED STOCK
We are authorized to issue up to 10,000,000 shares of preferred stock without
par value (the "Series Preferred Stock"), from time to time in one or more
series, without stockholder action.
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Our Board of Directors will determine the number of shares of each series, and
the rights, preferences, and limitations of each series. All shares of Series
Preferred Stock, regardless of series, constitute a single class. See
"Description of Capital Stock". The following description of the terms of the
Series Preferred Stock sets forth certain general terms that may apply to the
Series Preferred Stock. The specific terms of any series of Series Preferred
Stock will be described in the prospectus supplement relating to that series.
Those terms will generally include:
- - the number of shares in the series;
- - the dividend rate or the method of calculation of the dividend, and whether
dividends are cumulative;
- - whether or not the shares of the series will be redeemable and the applicable
terms;
- - the terms and amount of any sinking fund;
- - whether or not the shares of the series are convertible or exchangeable for
cash, shares of any other series, or other securities and the applicable
terms;
- - the amount per share payable upon our liquidation;
- - any voting rights;
- - any restrictions on the issue or reissue of additional preferred stock of the
same or higher rank in liquidation or as to dividends; and
- - other rights and privileges, and limitations on those rights or privileges.
In the event we liquidate, dissolve, or wind-up our business, each series of
Series Preferred Stock will generally have the same rank as to dividends and
distributions as our currently outstanding Series Preferred Stock and each other
series of Series Preferred Stock we may issue in the future.
Since we are a holding company, our right to participate as a shareholder in any
distribution of assets of any of our subsidiaries upon its liquidation or
reorganization or otherwise (and thus the ability of our creditors and
stockholders to benefit from such distribution) is junior to creditors of that
subsidiary, except to the extent that our claims as a creditor of the subsidiary
are recognized.
The following summary of the principal provisions of the Series Preferred Stock
is not complete. You should refer to the prospectus supplement and the
Certificate of Designation creating the series of Series Preferred Stock for a
more complete description.
DIVIDEND RIGHTS
Holders of the Series Preferred Stock will be entitled to receive, when, as and
if declared by the Board, cash dividends at the rates and on the quarterly dates
stated in the prospectus supplement (each, a "Dividend Payment Date"). Dividend
rates may be fixed or variable. Different series of the Series Preferred Stock
may be entitled to dividends at different dividend rates or based upon different
methods of determination. Each dividend will be payable to the holders of record
as they appear on the stock books of the Company (or, if applicable, the records
of the Depositary referred to below under "Depositary Shares") on record dates
determined by our Board.
Dividends payable on the Series Preferred Stock for a period that is less than a
full quarter will be determined on the basis of the actual number of days
elapsed over a 360-day year. Dividends payable for a period of a full calendar
quarter will be computed on the basis of a 360-day year consisting of twelve
30-day months.
Dividends shall be payable from, and shall be cumulative from, the date of
original issue of each share. Thus, if in any quarter dividends at the rate set
forth in the prospectus supplement have not been paid, for such quarter and all
preceding quarters, then the full deficiency must be paid without interest on
the deficiency, before any dividends may be declared or paid on our Common
Stock. This cutting-off of dividends on Common Stock, and any voting rights set
forth in the prospectus supplement relating to a series of Series Preferred
Stock will be the only consequences of the failure to pay dividends on the
Series Preferred Stock. After payment in full of all dividend arrearages on the
Series Preferred Stock, dividends on the Common Stock may be declared and paid
as our Board may determine.
OPTIONAL REDEMPTION
We may, at our option redeem one or more series of the Series Preferred Stock in
whole or in part. At least 30 and not more than 60 days notice will be required.
The redemption provisions that apply to a series of Series Preferred Stock,
including the redemption dates and the redemption prices for
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that series will be detailed in the prospectus supplement.
We must obtain any required approval of the appropriate bank regulatory
authorities before we exercise our option to redeem any Series Preferred Stock.
Presently, approval by the Federal Reserve Board is required.
If less than all the outstanding shares of a series of the Series Preferred
Stock are to be redeemed, the Board will determine the method for selecting the
shares to be redeemed. Shares may be selected by lot, on a pro rata basis or by
any other method determined to be fair. From and after the redemption date,
dividends will not accrue on the shares of Series Preferred Stock called for
redemption. Holders will have no rights other than the right to receive the
redemption price.
Shares of Series Preferred Stock that we redeem or otherwise acquire may be
restored to the status of authorized but unissued shares of Series Preferred
Stock.
CONVERSION OR EXCHANGE
The prospectus supplement will state any terms on which shares of the Series
Preferred Stock are convertible into cash, shares of Common Stock, shares of
another series of Series Preferred Stock, or other securities.
VOTING RIGHTS
Except as indicated below or in the prospectus supplement, or except as
expressly required by applicable law, the holders of the Series Preferred Stock
will not be entitled to vote. In the event we issue full shares of any series of
Series Preferred Stock, each share will be entitled to one vote on matters on
which holders of that series are entitled to vote. However, as more fully
described under "Depositary Shares" below, if we issue Depositary Shares
representing a fraction of a share of a series of Series Preferred Stock, each
Depositary Share will, in effect, be entitled to that fraction of a vote rather
than a full vote.
If, at the time of any annual meeting of our stockholders, the equivalent of six
quarterly dividends, whether or not consecutive, payable on any series of Series
Preferred Stock are in default, the number of directors on our Board will be
increased by two. The holders of record of all outstanding series of Series
Preferred Stock, voting as a single class, will be entitled to elect those two
additional directors until all dividends in default have been paid.
The approval of at least two-thirds of the outstanding shares of Series
Preferred Stock will normally be required to change the provisions of the Series
Preferred Stock in a way that is adverse to the holders. If a change will not
adversely affect all series of outstanding Series Preferred Stock, then the
change need only be approved by those holders of at least two-thirds of the
shares of the series adversely affected. No vote will be necessary to make any
change if we provide for the redemption or retirement of all outstanding Series
Preferred Stock.
No vote of holders of Series Preferred Stock will be necessary to authorize an
increase in the amount of the authorized Series Preferred Stock or the creation
and issuance of other series of Series Preferred Stock. Holders of all series of
Series Preferred Stock which are entitled to vote will vote as a single class,
except as specifically provided otherwise.
Under regulations adopted by the Federal Reserve Board, if the holders of a
series of Series Preferred Stock become entitled to vote for the election of
directors because dividends on such series are in arrears, such series may be a
"class of voting securities" and a holder of 25% or more of such series, or a
holder of 5% or more if it otherwise exercises a "controlling influence" over
the Company, may then be subject to regulation as a bank holding company. In
addition, at any time:
- - a bank holding company may be required to obtain the approval of the Federal
Reserve Board to acquire or retain 5% or more of any series of Series
Preferred Stock; and
- - a person other than a bank holding company may be required to obtain the
approval of the Federal Reserve Board to acquire 10% or more of such series of
Series Preferred Stock.
LIQUIDATION RIGHTS
If we liquidate, dissolve, or wind-up our affairs, either voluntarily or
involuntarily, the holders of each series of Series Preferred Stock will be
entitled to receive liquidating distributions in the amount stated in the
prospectus supplement relating to each series of Series Preferred Stock before
any distribution of assets is made to holders of Common Stock. If there are
insufficient assets to
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make the full liquidating payment on a series of Series Preferred Stock and any
other stock having the same rank, including outstanding shares of other series
of Series Preferred Stock, then holders of those series shall share ratably in
accordance with the respective amounts which would be payable on all stock
having the same rank if all such liquidating amounts were paid in full. After
the holders of each series of Series Preferred Stock are paid in full, they will
have no right or claim to any of our remaining assets. Neither a sale of all or
substantially all of our property or business, nor our consolidation or merger
with any other company will be considered a liquidation, dissolution or winding
up of our business or affairs.
MISCELLANEOUS
First Chicago Trust Company, a division of EquiServe, will serve as transfer
agent, dividend disbursing agent and registrar for the Series Preferred Stock.
The holders of any series of Series Preferred Stock will not have any preemptive
rights to purchase or subscribe for any shares of any class or other securities
of any type of the Company. When issued, each series of the Series Preferred
Stock will be fully paid and nonassessable. The Certificate of Designation for a
series of Series Preferred Stock will become effective after the date of the
prospectus supplement, but on or before issuance of such series of Series
Preferred Stock.
DEPOSITARY SHARES
General. We may offer fractional shares of Series Preferred Stock rather than
full shares. If we do, we will issue to the public receipts for Depositary
Shares, and each of those Depositary Shares will represent a fraction to be set
forth in the prospectus supplement of a share of a particular series of Series
Preferred Stock.
The shares of any series of Series Preferred Stock underlying the Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement")
between us and a bank or trust company selected by us (the "Depositary"). The
Depositary will have its principal office in the United States and a combined
capital and surplus of at least $50,000,000. Under the Deposit Agreement, each
owner of a Depositary Share will be entitled, in proportion to the applicable
fraction of a share of Series Preferred Stock underlying such Depositary Share,
to all the rights and preferences of the Series Preferred Stock underlying that
Depositary Share. Those rights include dividend, voting, redemption, and
liquidation rights.
The Deposit Agreement provides that a holder will receive a receipt for
Depositary Shares ("Depositary Receipts"). Depositary Receipts will be issued to
those persons who purchase the fractional shares of the particular series of
Series Preferred Stock underlying the Depositary Shares, in accordance with the
terms of the offering. Copies of the forms of the Deposit Agreement and
Depositary Receipt are filed as exhibits to the Registration Statement. The
following summary of the Deposit Agreement, the Depositary Shares, and the
Depositary Receipt is not complete. You should refer to the forms of the Deposit
Agreement and Depositary Receipt that are filed as exhibits to the Registration
Statement.
The Depositary may, at our written order, issue temporary Depositary Receipts
substantially identical to the definitive Depositary Receipts but not in
definitive form, while the definitive engraved Deposit Receipts are being
prepared. The temporary Depositary Receipts will be exchangeable for definitive
Depositary Receipts at our expense.
Dividends and Other Distributions. The Depositary will distribute all cash
dividends or other cash distributions received on the Series Preferred Stock to
the record holders of Depositary Shares relating to that Series Preferred Stock
in proportion to the number of such Depositary Shares owned by those holders.
If there is a distribution other than in cash, the Depositary will distribute
property received by it to the record holders of Depositary Shares that are
entitled to receive the distribution, unless the Depositary determines that it
is not feasible to make the distribution. If this occurs, the Depositary may,
with our approval, sell the property and distribute the net proceeds from such
sale to the holders.
Redemption of Depositary Shares. If a series of Series Preferred Stock
underlying the Depositary Shares is subject to redemption, the Depositary Shares
will be redeemed from the proceeds received by the Depositary resulting from the
redemption, in whole or in part, of that series of Series Preferred Stock held
by the Depositary. The redemption price per Depositary Share will be equal to
the applicable fraction of the redemption
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price per share payable with respect to that series of the Series Preferred
Stock. Whenever we redeem shares of Series Preferred Stock held by the
Depositary, the Depositary will redeem, as of the same redemption date, the
number of Depositary Shares representing shares of the Series Preferred Stock so
redeemed. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as
determined by the Depositary.
Voting the Series Preferred Stock. Upon receipt of notice of any meeting at
which the holders of Series Preferred Stock are entitled to vote, the Depositary
will mail the information contained in the notice of meeting to the record
holders of the Depositary Shares relating to the Series Preferred Stock. Each
record holder of those Depositary Shares on the record date, which will be the
same date as the record date for the Series Preferred Stock, will be entitled to
instruct the Depositary as to the exercise of the voting rights pertaining to
the amount of the Series Preferred Stock represented by that holder's Depositary
Shares. The Depositary will try, as far as practicable, to vote the number of
shares of the Series Preferred Stock underlying those Depositary Shares in
accordance with such instructions, and we will agree to take all action
requested deemed necessary by the Depositary in order to enable the Depositary
to do so. The Depositary will not vote shares of the Series Preferred Stock to
the extent it does not receive specific instructions from the holders of
Depositary Shares relating to such Series Preferred Stock.
Amendment and Termination of the Deposit Agreement. The form of Depositary
Receipt evidencing the Depositary Shares and any provision of the Deposit
Agreement may be amended at any time by agreement between the Depositary and us.
However, any amendment that materially and adversely alters the rights of the
holders of Depositary Shares will not be effective unless such amendment has
been approved by the holders of at least a majority of the Depositary Shares
then outstanding. The Deposit Agreement may be terminated by us or the
Depositary only if:
- - all outstanding Depositary Shares have been redeemed; or
- - there has been a final distribution in respect of the Series Preferred Stock
in connection with any liquidation, dissolution or winding up of the Company,
and such distribution has been distributed to the holders of Depositary
Receipts.
Charges of Depositary. We will pay all transfer and other taxes and
governmental charges arising solely from the existence of the depositary
arrangements. We will also pay charges of the Depositary in connection with the
initial deposit of the Series Preferred Stock and any redemption of the Series
Preferred Stock. Holders of Depositary Receipts will pay transfer and other
taxes and governmental charges and any other charges as are expressly provided
in the Deposit Agreement to be for their accounts.
Resignation and Removal of Depositary. The Depositary may resign at any time by
delivering a notice to us of its election to do so. We may remove the Depositary
at any time. Any resignation or removal will take effect upon the appointment of
a successor Depositary and its acceptance of its appointment. The successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50 million.
Miscellaneous. The Depositary will forward to holders of Depositary Receipts
all reports and communications from us that we deliver to the Depositary and we
are required to furnish to the holders of the Series Preferred Stock.
Neither the Depositary nor we will be liable if either of us is prevented or
delayed by law or any circumstance beyond our control in performing our
respective obligations under the Deposit Agreement. Our obligations and those of
the Depositary under the Deposit Agreement will be limited to the performance in
good faith of our respective duties under the Deposit Agreement. Neither the
Depositary nor we will be obligated to prosecute or defend any legal proceeding
in respect of any Depositary Shares or Series Preferred Stock unless
satisfactory indemnity is furnished. We and the Depositary may rely upon written
advice of counsel or accountants, or upon information provided by persons
presenting Series Preferred Stock for deposit, holders of Depositary Receipts or
other persons believed to be competent, and on documents believed to be genuine.
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<PAGE> 19
DESCRIPTION OF SECURITIES WARRANTS
We may issue Securities Warrants for the purchase of Debt Securities, Series
Preferred Stock, or Depositary Shares. The Securities Warrants are to be issued
under warrant agreements (each a "Securities Warrant Agreement") to be entered
into between us and Morgan Guaranty, as warrant agent (the "Warrant Agent"), all
as set forth in the prospectus supplement relating to the particular issue of
Securities Warrants (the "Offered Warrants"). A copy of each of the Debt Warrant
Agreement, including the form of warrant certificate (the "Debt Warrant
Certificate") representing the Debt Warrants, and the Preferred Stock Warrant
Agreement, including the form of preferred stock warrant certificate (the
"Preferred Stock Warrant Certificate") representing the Preferred Stock
Warrants, each substantially in the form in which it will be executed, is filed
as an exhibit to the Registration Statement. The following brief summary of the
Warrant Agreements and the Warrant Certificates is not complete. You should
refer to the Warrant Agreements filed with the Registration Statement.
The prospectus supplement for a series of Securities Warrants describes:
- - the principal amount of Debt Securities or the number of shares of Series
Preferred Stock or Depositary Shares that a holder is entitled to purchase;
- - the exercise price or method of determining the exercise price;
- - whether the exercise price is subject to adjustment upon the occurrence of
certain events;
- - the expiration date; and
- - the place or places where, and the manner in which, Securities Warrants may be
exercised.
Offered Securities Warrants may be exercised at any time up to the close of
business on the expiration date. After the close of business on the expiration
date, unexercised Securities Warrants will become void.
Prior to the exercise of any Securities Warrants to purchase Debt Securities,
Series Preferred Stock or Depositary Shares, holders of the Securities Warrants
will not have any rights of holders of the Debt Securities, Series Preferred
Stock, or Depositary Shares, as the case may be, purchasable upon such exercise.
Specifically Securities Warrants for the purchase of Debt Securities shall have
the right to receive payments of principal of, any premium, or interest on the
Debt Securities purchasable upon such exercise or to enforce covenants in the
applicable Indenture. No holder of Securities Warrants for the purchase of
Series Preferred Stock or Depositary Shares shall have the right to receive
payments of dividends on the Series Preferred Stock or Depositary Shares
purchasable upon such exercise or to exercise any applicable right to vote.
DESCRIPTION OF UNIVERSAL WARRANTS
The following description of the terms of the Universal Warrants sets forth
certain general terms and provisions of the Universal Warrants that we may
offer. The particular terms of the Universal Warrants and the extent, if any, to
which the general provisions described below do not apply to the Universal
Warrants offered will be described in the prospectus supplement.
Universal Warrants will be issued under a warrant agreement (a "Universal
Warrant Agreement") between Morgan Guaranty, as warrant agent, (the "Universal
Warrant Agent") and us, as described in the prospectus supplement. A copy of the
form of Universal Warrant Agreement, including the form of Universal Warrant
certificate (the "Universal Warrant Certificate"), substantially in the form in
which it will be executed, will be filed as an exhibit to the Registration
Statement. The following summary of the principal provisions of the Universal
Warrants and the Universal Warrant Agreement is not complete. You should refer
to the Universal Warrant Agreement and the Universal Warrant Certificate
relating to the Universal Warrants being offered for the complete terms of those
Universal Warrants.
We may issue Universal Warrants:
- - to purchase or sell securities of any entity not affiliated with us,
securities based on the performance of such entity, securities based on the
performance of such entity but excluding the performance of a particular
subsidiary or subsidiaries of such entity, a basket of securities, an index or
indices of securities, a basket of indices, or any combination of the above;
- - to purchase or sell currencies or currency units or composite currencies;
- - to purchase or sell commodities; or
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<PAGE> 20
- - entitling the holders thereof to receive an amount in cash determined by
reference to increases or decreases in the yield or closing price of one or
more debt instruments, interest rates, interest swap rates, or other rates; or
any combination of the above.
We may satisfy our obligations under Universal Warrants by delivering the
underlying securities, currencies or commodities (if applicable) or the cash
value of the Universal Warrant, as set forth in the applicable prospectus
supplement.
You should be aware of special United States Federal income tax considerations
applicable to instruments such as the Universal Warrants. The prospectus
supplement relating to each issue of Universal Warrants will describe special
tax considerations.
Universal Warrants will be issued in the form of a single global Universal
Warrant Certificate, registered in the name of a depositary or its nominee.
Holders will not be entitled to receive definitive certificates representing
Universal Warrants. A holder's ownership of a Universal Warrant will be recorded
on or through the records of the brokerage firm or other entity that maintains
the holder's account. In turn, the total number of Universal Warrants held by an
individual brokerage firm for its clients will be maintained on the records of
the depositary in the name of that brokerage firm or its agent. Transfer of
ownership of any Universal Warrant will be effected only through the selling
holder's brokerage firm.
Listing on a national securities exchange, subject only to official notice of
issuance and exchange approval, may be a condition of sale to some series of the
Universal Warrants. If we seek listing, there can be no assurance that the
exchange will grant approval. In the event that the Universal Warrants are
delisted from, or permanently suspended from trading on, an exchange, the
expiration date for such Universal Warrants will be the date such delisting or
trading suspension becomes effective and Universal Warrants not previously
exercised will be deemed automatically exercised on such date. The applicable
Universal Warrant agreement will contain a covenant from us that we will not
seek delisting of or suspension of trading in the Universal Warrants, on the
exchange unless we have, at the same time, arranged for listing on another
national securities exchange.
Universal Warrants involve a high degree of risk, including the risk of expiring
worthless. Prospective purchasers should be prepared to sustain a loss of some
or all of the purchase price of their Universal Warrants. You should be
experienced with respect to options and option transactions and should reach an
investment decision only after careful consideration with your advisers of the
suitability of the Universal Warrants in light of your particular financial
circumstances, the information set forth under "Description of Universal
Warrants" in this prospectus and the risk factors and information regarding the
Universal Warrants set forth in the prospectus supplement relating to such
Universal Warrants.
DESCRIPTION OF CAPITAL STOCK
We are authorized to issue 500,000,000 shares of our Common Stock, $2.50 par
value, and 10,000,000 shares of our Series Preferred Stock, no par value. At
June 30, 1999, we had outstanding:
- - 175,949,606 shares of Common Stock;
- - 2,444,300 shares of Series A Adjustable Rate Cumulative Preferred Stock;
- - 50,000 shares of each of Series B, C, D, E, and F Variable Cumulative
Preferred Stock; and
- - 400,000 shares of Series H Fixed Cumulative Preferred Stock.
The following brief summary is not complete. You should refer to the provisions
of our Restated Certificate of Incorporation and the Certificates of Designation
creating the outstanding series of Series Preferred Stock for a more complete
description.
COMMON STOCK
General. Subject to the rights of holders of the Series Preferred Stock,
holders of our Common Stock are entitled to receive dividends, when, as, and if
declared by the Board out of funds legally available for their payment. If we
liquidate, dissolve, or wind-up our affairs, either voluntarily or
involuntarily, the holders of Common Stock will be entitled to receive pro rata
all of our assets remaining after we have paid all of our creditors and have
made the required liquidating distributions to holders of the Series Preferred
Stock.
Federal banking laws limit the amount of dividends that Morgan Guaranty Trust
Company of
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<PAGE> 21
New York, our bank subsidiary, can declare. The greatest restriction requires
approval of the Board of Governors of the Federal Reserve System (the
"Governors") if dividends declared exceed the net profits for the most recent
three years. At December 31, 1998, approximately $502 million is available for
distribution as dividends by the bank in 1999 without approval of the Governors.
In addition, if the Governors determine that the bank's payment of dividends
would be an unsafe or unsound practice, they may prohibit the bank from doing
so.
Voting Rights. Each holder of Common Stock is entitled to one vote per share.
Subject to the voting rights of the holders of the Series Preferred Stock, all
voting rights are vested in the holders of shares of our Common Stock.
Preemptive Rights. Holders of our Common Stock do not have any preemptive
rights to subscribe to any additional securities that we may issue.
SERIES PREFERRED STOCK
The Series Preferred Stock has been described above under the caption
"Description of Series Preferred Stock." The following summaries describe the
Series Preferred Stock that we have issued in the past and are currently
outstanding.
Adjustable Rate Cumulative Preferred Stock, Series A. In March 1983, we issued
2,500,000 shares of Adjustable Rate Cumulative Preferred Stock, Series A (the
"Series A Preferred Stock"). Currently 2,444,300 shares are outstanding.
Dividends on the Series A Preferred Stock are cumulative. If we have not paid
six full quarterly dividends on the Series A Preferred Stock, then the number of
directors on our Board will be increased by two and the holders of the Series A
Preferred Stock, voting together as a single class with holders of shares of any
other Series Preferred Stock with the same rights, will be entitled to elect two
additional directors until all unpaid dividends are paid. Each share of the
Series A Preferred Stock will be entitled to 1/10 of one vote. If we liquidate
or dissolve the Company, the holders of shares of Series A Preferred Stock are
entitled to receive a distribution of $100 per share, plus accrued and unpaid
dividends to the date of final distribution. 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, subject to a minimum rate of
5.00% and a maximum rate of 11.50% per annum. Since February 29, 1988, shares of
Series A Preferred Stock have been redeemable at our option, in whole or in
part, at $100 per share, plus any unpaid dividends thereon to the redemption
date.
Variable Cumulative Preferred Stock, Series B, C, D, E, and F. In January 1990,
we issued $250 million, or 250,000 shares, of Variable Cumulative Preferred
Stock, Series B, C, D, E and F (the "Variable Cumulative Preferred Stock"). Each
of the five series is composed of 50,000 shares and is identical except that the
dividend rates and payment dates vary and separate auctions are held by each
series. These issues were priced at $1,000 per share and have contingent voting
rights similar to the Series A Preferred Stock discussed above. If we liquidate
or dissolve the Company, the holders of shares of Variable Cumulative Preferred
Stock are entitled to receive a distribution of $1,000 per share, plus 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 are determined either by an auction conducted on
each series on the business day before a new dividend period or by a
remarketing. The rate for any dividend period is subject to a maximum rate based
upon the "AA" Composite Commercial Paper Rate and the credit ratings of the
Variable Cumulative Preferred Stock on the auction date. Except under certain
circumstances, shares of each series of Variable Cumulative Preferred Stock are
redeemable, at our option, in whole or in part (in units of 100 shares), at
$1,000 per share plus accrued and unpaid dividends.
Fixed Cumulative Preferred Stock, Series H. In February 1996, we issued $200
million, or 400,000 shares, of 6 5/8% Cumulative Preferred Stock, Series H (the
"Series H Preferred Stock"). Each share of the Series H Preferred Stock has a
stated value of $500. Dividends on this Series H Preferred Stock are cumulative
at a rate of 6 5/8% per annum on the stated value of the shares. Dividends are
payable generally on March 31, June 30, September 30, and December 31 of each
year. We may not redeem shares of this Series H Preferred Stock before March 31,
2006. After that, we may, at our option (with the approval of bank regulators,
if required), redeem the Series H
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<PAGE> 22
Preferred Stock, in whole or in part, at $500 per share plus accrued and unpaid
dividends.
PLAN OF DISTRIBUTION
We may sell the Debt Securities, Series Preferred Stock, Depositary Shares,
Securities Warrants, or Universal Warrants:
- - through agents;
- - through underwriters;
- - through dealers; and
- - directly to purchasers, any of whom may be customers of, engage in
transactions with, or perform services for, the Company in the ordinary course
of business.
If we offer and sell Securities through an agent, that agent will be named, and
any commissions payable to that agent by us, will be set forth in the prospectus
supplement. Any agent will be acting on a best efforts basis for the period of
its appointment which will usually be five business days or less. An agent may
be deemed to be an underwriter under the federal securities laws.
If underwriters are used in the sale of the Securities, we will sign an
underwriting agreement with them. The underwriting agreement will provide that
the obligations of the underwriters are subject to certain conditions and that
the underwriters will be obligated to purchase all of the Securities if any are
purchased. Underwriters will buy the Securities for their own account and may
resell them from time to time in one or more transactions, including negotiated
transactions, at fixed public offering prices or at varying prices determined at
the time of sale. Securities may be offered to the public either through
underwriting syndicates represented by managing underwriters, or directly by the
managing underwriters. The name of the managing underwriter or underwriters, as
well as any other underwriters, and the terms of the transaction, including
compensation of the underwriters and dealers, if any, will be set forth in the
prospectus supplement. The underwriters named in the prospectus supplement will
be the only underwriters for the Securities offered by that prospectus
supplement.
If a dealer is utilized in the sale of Securities, we will sell those Securities
to the dealer, as principal. The dealer may resell those Securities to the
public at varying prices to be determined by the dealer at the time of resale. A
dealer may be deemed to be an underwriter of those Securities under the
securities laws. The name of the dealer and the terms of the transaction will be
set forth in the prospectus supplement.
We may agree to indemnify agents, underwriters, or dealers against certain
liabilities, including liabilities under the securities laws, or to contribute
to payments that agents, underwriters, or dealers may be required to make.
We may directly solicit offers to purchase Securities, and we may sell
Securities directly to institutional investors or others, who may be deemed to
be underwriters within the meaning of the securities laws. The terms of any such
sales will be described in the prospectus supplement.
We may authorize agents, underwriters, and dealers to solicit offers by certain
institutions to purchase Securities pursuant to Delayed Delivery Contracts
("Contracts") providing for payment and delivery on a future date and on terms
described in the prospectus supplement. Institutions with whom Contracts may be
made include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions, and other
institutions but shall in all cases be institutions which we have approved.
These contracts will be subject only to the conditions that:
- - the underwriters purchase the Securities at the time of the Contract; and
- - the purchase is not prohibited under the laws of any jurisdiction in the
United States to which the purchase is subject.
We will pay a commission, as indicated in the prospectus supplement, to agents
and dealers soliciting purchases of Securities pursuant to Contracts that we
have accepted.
This prospectus and related prospectus supplement may be used by direct or
indirect wholly-owned subsidiaries of ours in connection with offers and sales
related to secondary market transactions in the Securities. Those subsidiaries
may act as principal or agent in those transactions. Secondary market sales will
be made at prices related to prevailing market prices at the time of sale.
The offer and sale of the Securities by an affiliate of ours will comply with
the requirements of Rule 2720 of the Rules of Conduct of the National
Association of Securities Dealers, Inc. (the "NASD") regarding underwriting of
securi-
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<PAGE> 23
ties of an affiliate and will comply with any restrictions imposed on the
underwriter by the Governors. Accordingly, an affiliate of ours that is a member
of the NASD may participate in a public offering and sale of our Debt
Securities, Series Preferred Stock, or Depositary Shares if the offering is of a
class of securities rated investment grade by a nationally recognized
statistical rating organization. In addition, an affiliate of ours that is a
member of the NASD may participate in any public offering and sale of the
Securities, including without limitation Securities Warrants and Universal
Warrants, if the price at which an equity issue is distributed to the public is
no higher or the yield at which a debt issue is distributed to the public is no
lower than that recommended by a "qualified independent underwriter" (determined
to be so qualified by the NASD prior to commencement of such offering), in each
case in compliance with the Conduct Rules of the NASD.
No NASD member participating in offers and sales of the Securities will execute
a transaction in the Securities in a discretionary account without the prior
written specific approval of the member's customer.
EXPERTS
The audited financial statements contained in our Annual Report on Form 10-K for
the year ended December 31, 1998, (included in our Annual Report to
Stockholders) are incorporated by reference in this prospectus in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of that firm as experts in auditing and accounting.
LEGAL OPINIONS
The validity of the Securities will be passed upon by Gene A. Capello, Vice
President and Assistant General Counsel of J.P. Morgan, and by Cravath, Swaine &
Moore, New York, New York, counsel for any underwriters, selling agents and
certain other purchasers.
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<PAGE> 24
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of securities
being registered, other than underwriting compensation and related hedging
costs, are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration............. $1,668,000
Legal Fees and Expenses..................................... 25,000*
NASD Fees................................................... 30,500
Accounting Fees and Expenses................................ 50,000*
Trustees fees and expenses (including counsel fees)......... 20,000*
Rating Agency Fees.......................................... 65,000*
Printing and Engraving Fees................................. 60,000*
Miscellaneous............................................... 26,000*
----------
Total..................................................... $1,944,500
==========
</TABLE>
- -------------------------
* Estimated
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Article Seventh of the Restated Certificate of Incorporation of J.P. Morgan
& Co. Incorporated (the "Registrant") provides, in effect, that, to the extent
and under the circumstances permitted by Section 145 of the General Corporation
Law of Delaware, the Registrant shall indemnify directors, officers, employees
and agents of the Registrant, or persons serving at the written request of the
Registrant as directors, officers, employees or agents of another corporation or
enterprise, including Morgan Guaranty, against loss and expenses. Subsection (a)
of Section 145 of the General Corporation Law of Delaware empowers a corporation
to indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or 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
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<PAGE> 25
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.
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.
<TABLE>
<C> <S> <C>
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.
</TABLE>
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<PAGE> 26
<TABLE>
<C> <S> <C>
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).
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.
</TABLE>
II-3
<PAGE> 27
<TABLE>
<C> <S> <C>
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 herein by reference to J.P.
Morgan's Annual Report on Form 10-K for the year ended December 31, 1998, and to J.P. Morgan's
Form 8-K dated July 19, 1999, filed pursuant to Section 13 of the Act).
23(a)# Consent of PricewaterhouseCoopers LLP.
(b)# Consent of Gene A. Capello (included in Exhibit 5).
24# Power of Attorney.
25.1# Statement of Eligibility of Subordinated Debt Trustee on Form T-1.
25.2# Statement of Eligibility of Debt Trustee on Form T-1.
</TABLE>
- -------------------------
* 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.
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
II-4
<PAGE> 28
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.
II-5
<PAGE> 29
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in The City of New York and State of New York, on this 15th day of
September, 1999.
J.P. MORGAN & CO. INCORPORATED
By: /s/ JAMES C.P. BERRY
------------------------------------
(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 Registration Statement has been signed below by the following persons in
the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ DOUGLAS A. WARNER III* Chairman of the Board, President and September 15, 1999
- --------------------------------------------- Director (Principal Executive
(Douglas A. Warner III) Officer)
/s/ PAUL A. ALLAIRE* Director September 15, 1999
- ---------------------------------------------
(Paul A. Allaire)
/s/ RILEY P. BECHTEL* Director September 15, 1999
- ---------------------------------------------
(Riley P. Bechtel)
/s/ LAWRENCE A. BOSSIDY* Director September 15, 1999
- ---------------------------------------------
(Lawrence A. Bossidy)
/s/ MARTIN FELDSTEIN* Director September 15, 1999
- ---------------------------------------------
(Martin Feldstein)
/s/ ELLEN V. FUTTER* Director September 15, 1999
- ---------------------------------------------
(Ellen V. Futter)
/s/ HANNA H. GRAY* Director September 15, 1999
- ---------------------------------------------
(Hanna H. Gray)
/s/ WALTER A. GUBERT* Vice Chairman of the Board and September 15, 1999
- --------------------------------------------- Director
(Walter A. Gubert)
/s/ JAMES R. HOUGHTON* Director September 15, 1999
- ---------------------------------------------
(James R. Houghton)
/s/ JAMES L. KETELSEN* Director September 15, 1999
- ---------------------------------------------
(James L. Ketelsen)
/s/ JOHN A. KROL* Director September 15, 1999
- ---------------------------------------------
(John A. Krol)
/s/ ROBERTO G. MENDOZA* Vice Chairman of the Board and September 15, 1999
- --------------------------------------------- Director
(Roberto G. Mendoza)
/s/ MICHAEL E. PATTERSON* Vice Chairman of the Board and September 15, 1999
- --------------------------------------------- Director
(Michael E. Patterson)
</TABLE>
II-6
<PAGE> 30
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ LEE R. RAYMOND* Director September 15, 1999
- ---------------------------------------------
(Lee R. Raymond)
/s/ RICHARD D. SIMMONS* Director September 15, 1999
- ---------------------------------------------
(Richard D. Simmons)
/s/ KURT F. VIERMETZ* Retired Vice Chairman of the Board September 15, 1999
- --------------------------------------------- and Director
(Kurt F. Viermetz)
Director September 15, 1999
- ---------------------------------------------
(Lloyd D. Ward)
/s/ DOUGLAS C. YEARLEY* Director September 15, 1999
- ---------------------------------------------
(Douglas C. Yearley)
/s/ PETER D. HANCOCK* Chief Financial Officer (Principal September 15, 1999
- --------------------------------------------- Financial
(Peter D. Hancock) and Accounting Officer)
/s/ DAVID H. SIDWELL* Managing Director and Controller September 15, 1999
- --------------------------------------------- (Principal Accounting Officer)
(David H. Sidwell)
*By: /s/ JAMES C.P. BERRY September 15, 1999
---------------------------------------
(James C.P. Berry, Attorney-in-Fact)
</TABLE>
II-7
