Exhibit 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
DATED AS OF SEPTEMBER 12, 2000
BETWEEN
THE CHASE MANHATTAN CORPORATION
AND
J.P. MORGAN & CO. INCORPORATED
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TABLE OF CONTENTS
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ARTICLE I THE MERGER............................................................................................. 8
1.1. Effective Time of the Merger................................................................... 8
1.2. Closing........................................................................................ 8
1.3. Effects of the Merger.......................................................................... 8
1.4. Certificate of Incorporation and By-Laws....................................................... 8
1.5. Alternative Transaction Structures............................................................. 8
ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES... 9
2.1. Effect on Capital Stock........................................................................ 9
(a) Cancellation of Treasury Stock and Chase-Owned Stock, etc............................. 9
(b) Conversion of Morgan Common Stock..................................................... 9
(c) Conversion of Morgan Preferred Stock.................................................. 10
(d) Chase Capital Stock................................................................... 11
(e) Appraisal Rights...................................................................... 11
2.2. Exchange of Certificates....................................................................... 12
(a) Exchange Agent........................................................................ 12
(b) Exchange Procedures................................................................... 12
(c) Distributions with Respect to Unexchanged Shares...................................... 13
(d) No Further Ownership Rights in Morgan Common Stock or Morgan Preferred Stock.......... 13
(e) No Fractional Shares.................................................................. 13
(f) Termination of Exchange Fund.......................................................... 14
(g) No Liability.......................................................................... 15
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(h) Withholding........................................................................... 15
ARTICLE III REPRESENTATIONS AND WARRANTIES....................................................................... 15
3.1. Representations and Warranties of Morgan....................................................... 15
(a) Organization, Standing and Power...................................................... 15
(b) Capital Structure..................................................................... 16
(c) Authority............................................................................. 17
(d) SEC Documents; Undisclosed Liabilities................................................ 19
(e) Information Supplied.................................................................. 19
(f) Compliance with Applicable Laws....................................................... 20
(g) Legal Proceedings..................................................................... 20
(h) Taxes................................................................................. 20
(i) Certain Agreements.................................................................... 21
(j) Benefit Plans......................................................................... 21
(k) Subsidiaries.......................................................................... 22
(l) Agreements with Regulators............................................................ 22
(m) Absence of Certain Changes or Events.................................................. 22
(n) Board Approval........................................................................ 23
(o) Vote Required......................................................................... 23
(p) Accounting Matters.................................................................... 23
(q) Properties............................................................................ 23
(r) Interest Rate Risk Management Instruments............................................. 23
(s) Intellectual Property................................................................. 24
(t) Brokers or Finders.................................................................... 24
(u) Opinion of Morgan Financial Advisor................................................... 24
3.2. Representations and Warranties of Chase........................................................ 24
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(a) Organization, Standing and Power...................................................... 24
(b) Capital Structure..................................................................... 25
(c) Authority............................................................................. 26
(d) SEC Documents; Undisclosed Liabilities................................................ 27
(e) Information Supplied.................................................................. 28
(f) Compliance with Applicable Laws....................................................... 28
(g) Legal Proceedings..................................................................... 29
(h) Taxes................................................................................. 29
(i) Certain Agreements.................................................................... 29
(j) Benefit Plans......................................................................... 30
(k) Subsidiaries.......................................................................... 30
(l) Agreements with Regulators............................................................ 31
(m) Absence of Certain Changes or Events.................................................. 31
(n) Board Approval........................................................................ 31
(o) Vote Required......................................................................... 31
(p) Accounting Matters.................................................................... 31
(q) Properties............................................................................ 32
(r) Interest Rate Risk Management Instruments............................................. 32
(s) Intellectual Property................................................................. 32
(t) Brokers or Finders.................................................................... 33
(u) Opinion of Chase Financial Advisor.................................................... 33
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS............................................................. 33
4.1. Covenants of Morgan............................................................................ 33
(a) Ordinary Course....................................................................... 33
(b) Dividends; Changes in Stock........................................................... 33
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(c) Issuance of Securities................................................................ 34
(d) Governing Documents, Etc.............................................................. 34
(e) No Acquisitions....................................................................... 34
(f) No Dispositions....................................................................... 35
(g) Indebtedness.......................................................................... 35
(h) Other Actions......................................................................... 35
(i) Accounting Methods.................................................................... 35
(j) Pooling and Tax-Free Reorganization Treatment......................................... 35
(k) Compensation and Benefit Plans........................................................ 35
(l) Tax Elections......................................................................... 36
(m) Investment Portfolio.................................................................. 36
(n) No Liquidation........................................................................ 36
(o) Other Agreements...................................................................... 36
4.2. Covenants of Chase............................................................................. 36
(a) Ordinary Course....................................................................... 36
(b) Dividends; Changes in Stock........................................................... 37
(c) Issuance of Securities................................................................ 37
(d) Governing Documents................................................................... 37
(e) No Acquisitions....................................................................... 38
(f) No Dispositions....................................................................... 38
(g) Indebtedness.......................................................................... 38
(h) Other Actions......................................................................... 39
(i) Accounting Methods.................................................................... 39
(j) Pooling and Tax-Free Reorganization Treatment......................................... 39
(k) No Liquidation........................................................................ 39
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(l) Other Agreements...................................................................... 39
4.3. Transition..................................................................................... 39
4.4. Advice of Changes; Government Filings.......................................................... 40
4.5. Control of Other Party's Business.............................................................. 40
ARTICLE V ADDITIONAL AGREEMENTS.................................................................................. 40
5.1. Preparation of Proxy Statement; Stockholders Meetings.......................................... 40
5.2. Access to Information.......................................................................... 42
5.3. Reasonable Best Efforts........................................................................ 43
5.4. Acquisition Proposals.......................................................................... 43
5.5. Affiliates..................................................................................... 46
5.6. Stock Exchange Listing......................................................................... 46
5.7. Employee Benefit Plans......................................................................... 46
5.8. Stock Options, SARs and Restricted Stock Units................................................. 47
5.9. Fees and Expenses.............................................................................. 48
5.10. Governance; Name............................................................................... 48
5.11. Indemnification; Directors' and Officers' Insurance............................................ 48
5.12. Dividends...................................................................................... 49
5.13. Public Announcements........................................................................... 50
5.14. Additional Agreements.......................................................................... 50
ARTICLE VI CONDITIONS PRECEDENT.................................................................................. 50
6.1. Conditions to Each Party's Obligation To Effect the Merger..................................... 50
(a) Stockholder Approval.................................................................. 50
(b) NYSE Listing.......................................................................... 50
(c) Other Approvals....................................................................... 50
(d) Form S-4.............................................................................. 51
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(e) No Injunctions or Restraints; Illegality.............................................. 51
(f) Pooling............................................................................... 51
(g) Burdensome Condition.................................................................. 51
6.2. Conditions to Obligations of Chase............................................................. 51
(a) Representations and Warranties........................................................ 51
(b) Performance of Obligations of Morgan.................................................. 51
(c) Tax Opinion........................................................................... 51
6.3. Conditions to Obligations of Morgan............................................................ 52
(a) Representations and Warranties........................................................ 52
(b) Performance of Obligations of Chase................................................... 52
(c) Tax Opinion........................................................................... 52
ARTICLE VII TERMINATION AND AMENDMENT............................................................................ 52
7.1. Termination.................................................................................... 52
7.2. Effect of Termination.......................................................................... 53
7.3. Amendment...................................................................................... 55
7.4. Extension; Waiver.............................................................................. 55
ARTICLE VIII GENERAL PROVISIONS.................................................................................. 55
8.1. Non-survival of Representations, Warranties and Agreements..................................... 55
8.2. Notices........................................................................................ 55
8.3. Interpretation................................................................................. 56
8.4. Counterparts................................................................................... 57
8.5. Entire Agreement; No Third Party Beneficiaries................................................. 57
8.6. Governing Law.................................................................................. 57
8.7. Severability................................................................................... 57
8.8. Assignment..................................................................................... 57
8.9. Enforcement.................................................................................... 57
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AGREEMENT AND PLAN OF MERGER dated as of September 12, 2000
(this "Agreement") between THE CHASE MANHATTAN CORPORATION, a Delaware
corporation ("Chase"), and J.P. MORGAN & CO. INCORPORATED, a Delaware
corporation ("Morgan").
WHEREAS, the Boards of Directors of Chase and Morgan have
approved, and deem it advisable and in the best interests of their respective
stockholders to consummate, the business combination transaction provided for
herein in which Morgan would merge with and into Chase (the "Merger");
WHEREAS, the Boards of Directors of Chase and Morgan have each
determined that the Merger and the other transactions contemplated hereby are
consistent with, and in furtherance of, their respective business strategies and
goals;
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) as a condition and inducement to Chase's willingness to enter
into this Agreement and the Chase Stock Option Agreement referred to below,
Chase and Morgan are entering into a Stock Option Agreement dated as of the date
hereof in the form of Exhibit 1.1(a) (the "Morgan Stock Option Agreement")
pursuant to which Morgan is granting to Chase an option to purchase shares of
Common Stock, par value $2.50 per share, of Morgan (the "Morgan Common Stock");
and (ii) as a condition and inducement to Morgan's willingness to enter into
this Agreement and the Morgan Stock Option Agreement, Morgan and Chase are
entering into a Stock Option Agreement dated as of the date hereof in the form
of Exhibit 1.1(b) (the "Chase Stock Option Agreement"), pursuant to which Chase
is granting to Morgan an option to purchase shares of Common Stock, par value
$1.00 per share, of Chase (the "Chase Common Stock");
WHEREAS, Chase and Morgan desire to make certain
representations, warranties and agreements in connection with the Merger and
also to prescribe various conditions to the Merger;
WHEREAS, for Federal income tax purposes, it is intended that
the Merger shall qualify as a reorganization under the provisions of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and the
parties intend, by executing this Agreement, to adopt a plan of reorganization
within the meaning of Section 368(a) of the Code; and
WHEREAS, for financial accounting purposes, it is intended
that the Merger shall be accounted for as a "pooling of interests";
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein and in the Stock Option Agreements, the parties hereto agree as follows:
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ARTICLE I
THE MERGER
1.1. Effective Time of the Merger. Subject to the provisions of this
Agreement, a certificate of merger (the "Certificate of Merger") shall be duly
prepared, executed by Chase on behalf of the Surviving Corporation (as defined
in Section 1.3) and thereafter delivered to the Secretary of State of the State
of Delaware for filing, as provided in the Delaware General Corporation Law (the
"DGCL"), on the Closing Date (as defined in Section 1.2). The Merger shall
become effective upon the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware or at such time thereafter as is provided in
the Certificate of Merger (the "Effective Time").
1.2. Closing. The closing of the Merger (the "Closing") will take place
at 10:00 a.m. on the date (the "Closing Date") that is the second business day
after the satisfaction or waiver (subject to applicable law) of the conditions
set forth in Article VI (excluding conditions that, by their terms, are to be
satisfied on the Closing Date), unless another time or date is agreed to in
writing by the parties hereto. The Closing shall be held at the offices of
Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017,
unless another place is agreed to in writing by the parties hereto.
1.3. Effects of the Merger. At the Effective Time Morgan shall be
merged with and into Chase and the separate existence of Morgan shall cease. The
Merger will have the effects set forth in the DGCL. As used in this Agreement,
"Constituent Corporations" shall mean each of Chase and Morgan, and "Surviving
Corporation" shall mean Chase, at and after the Effective Time, as the surviving
corporation in the Merger.
1.4. Certificate of Incorporation and By-Laws. The Certificate of
Incorporation of Chase as in effect immediately prior to the Effective Time (as
amended to (i) designate and establish the terms of the Chase Merger Preferred
Stock (as defined in Section 2.1(c)) and (ii) change the name of Chase as
provided in Section 5.10(b), all as contemplated by this Agreement, and with
such other amendments thereto as may be contemplated by this Agreement) shall be
the Certificate of Incorporation of the Surviving Corporation. The By-laws of
Chase as in effect immediately prior to the Effective Time shall be the By-laws
of the Surviving Corporation.
1.5. Alternative Transaction Structures. The parties agree that Chase
may change the method of effecting the business combination with Morgan,
including, without limitation, by merging Morgan into a wholly-owned direct or
indirect Subsidiary (as defined in Section 2.1(a)) of Chase or by merging a
wholly-owned direct or indirect Subsidiary of Chase into Morgan, and Morgan
shall cooperate in such efforts, including by entering into an appropriate
amendment to this Agreement (to the extent such amendment only changes the
method of effecting the business combination and does not substantively affect
this Agreement or the rights and obligations of the parties or their respective
stockholders hereunder); provided, however, that any such other Subsidiary shall
become a party to, and shall agree to be bound by, the terms of this Agreement
and that any actions taken pursuant to this Section 1.5 shall not (i) alter or
change the kind or amount of consideration to be issued to holders of Morgan
Common Stock or Morgan Preferred Stock as provided for in this Agreement, (ii)
adversely affect the tax consequences of the transaction to the holders of
Morgan Common Stock or Morgan Preferred Stock, (iii) cause the transaction not
to qualify as a pooling of interests for financial accounting purposes, (iv)
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materially delay receipt of any Requisite Regulatory Approval (as defined in
Section 6.1(c)), or (v) otherwise cause any closing condition not to be capable
of being fulfilled (unless duly waived by the party entitled to the benefits
thereof).
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1. Effect on Capital Stock. As of the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of
Morgan Common Stock or Morgan Preferred Stock (as defined in Section 2.1(a)):
(a) Cancellation of Treasury Stock and Chase-Owned Stock, etc.
All shares of Morgan Common Stock and Preferred Stock, no par value, of Morgan
("Morgan Preferred Stock") that are owned by Morgan as treasury stock and all
shares of Morgan Common Stock or Morgan Preferred Stock that are owned by Morgan
or Chase, other than (i) shares of Morgan Common Stock or Morgan Preferred Stock
held by Morgan or Chase in connection with any market making activities or
proprietary trading activities ("trading account shares"), (ii) shares held in
trust, managed, custodial or nominee accounts and the like, or held by mutual
funds or merchant banking entities for which a Subsidiary of Chase or Morgan
acts as investment advisor or in a similar capacity (any such shares, "trust
account shares"), and (iii) shares acquired in respect of debts previously
contracted (any such shares, "DPC shares")), shall be cancelled and retired and
shall cease to exist and no stock of Chase or other consideration shall be
delivered in exchange therefor. All shares of Chase Common Stock and Preferred
Stock, par value $1.00 per share, of Chase ("Chase Preferred Stock") that are
owned by Morgan (other than trading account shares, trust account shares and DPC
shares) shall become treasury stock, except as otherwise provided in Chase's
Certificate of Incorporation. As used in this Agreement, the word "Subsidiary"
when used with respect to any party means any corporation or other organization,
whether incorporated or unincorporated, (i) of which such party or any other
Subsidiary of such party is a general partner (excluding partnerships, the
general partnership interests of which held by such party or any Subsidiary of
such party do not have a majority of the voting interests in such partnership),
or (ii) at least a majority of the securities or other interests of which having
by their terms ordinary voting power to elect a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such party or by any one or more of its Subsidiaries, or by such party and
one or more of its Subsidiaries.
(b) Conversion of Morgan Common Stock. Subject to Section
2.2(e), each share of Morgan Common Stock issued and outstanding immediately
prior to the Effective Time (other than shares to be cancelled in accordance
with Section 2.1(a)) shall be converted into 3.7 (the "Exchange Ratio") fully
paid and nonassessable shares of Chase Common Stock. All such shares of Morgan
Common Stock shall no longer be outstanding and shall automatically be cancelled
and retired and shall cease to exist, and each certificate previously
representing any such shares shall thereafter represent the shares of Chase
Common Stock into which such Morgan Common Stock has been converted.
Certificates previously representing shares of Morgan Common Stock shall be
exchanged for certificates representing whole shares of Chase Common Stock
issued in consideration therefor upon the surrender of such certificates in
accordance with Section 2.2, without interest.
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(c) Conversion of Morgan Preferred Stock. Each share of the
following series of Morgan Preferred Stock issued and outstanding immediately
prior to the Effective Time (other than Dissenting Shares (as defined in Section
2.1(e)) and shares to be cancelled in accordance with Section 2.1(a)) shall be
converted into shares of Chase Preferred Stock (such shares to be so issued upon
conversion, collectively, the "Chase Merger Preferred Stock"), as follows:
(i) Each such share of Adjustable Rate Cumulative Preferred
Stock, Series A, stated value $100 per share, of Morgan (the "Morgan Series A
Preferred Stock") shall be converted into one share of Chase Preferred Stock
having substantially the same terms as the Morgan Series A Preferred Stock.
(ii) Each such share of Variable Cumulative Preferred Stock,
Series B, stated value $1,000 per share, of Morgan (the "Morgan Series B
Preferred Stock") shall be converted into one share of Chase Preferred Stock
having substantially the same terms as the Morgan Series B Preferred Stock.
(iii) Each such share of Variable Cumulative Preferred Stock,
Series C, stated value $1,000 per share, of Morgan (the "Morgan Series C
Preferred Stock") shall be converted into one share of Chase Preferred Stock
having substantially the same terms as the Morgan Series C Preferred Stock.
(iv) Each such share of Variable Cumulative Preferred Stock,
Series D, stated value $1,000 per share, of Morgan (the "Morgan Series D
Preferred Stock") shall be converted into one share of Chase Preferred Stock
having substantially the same terms as the Morgan Series D Preferred Stock.
(v) Each such share of Variable Cumulative Preferred Stock,
Series E, stated value $1,000 per share, of Morgan (the "Morgan Series E
Preferred Stock") shall be converted into one share of Chase Preferred Stock
having substantially the same terms as the Morgan Series E Preferred Stock.
(vi) Each such share of Variable Cumulative Preferred Stock,
Series F, stated value $1,000 per share, of Morgan (the "Morgan Series F
Preferred Stock") shall be converted into one share of Chase Preferred Stock
having substantially the same terms as the Morgan Series F Preferred Stock.
(vii) Each such share of 6.63% Cumulative Preferred Stock,
Series H, stated value $500 per share, of Morgan (the "Morgan Series H Preferred
Stock") shall be converted into one share of Chase Preferred Stock having
substantially the same terms as the Morgan Series H Preferred Stock.
All of the shares of Morgan Preferred Stock converted into
Chase Merger Preferred Stock pursuant to this Article II shall no longer be
outstanding and shall automatically be cancelled and shall cease to exist, and
each certificate previously representing any such shares of Morgan Preferred
Stock shall thereafter represent the shares of Chase Merger Preferred Stock into
which such Morgan Preferred Stock has been converted. Certificates previously
representing shares of Morgan Preferred Stock shall be exchanged for
certificates representing
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whole shares of corresponding Chase Merger Preferred Stock issued in
consideration therefor upon the surrender of such certificates in accordance
with Section 2.2 hereof, without interest.
(d) Chase Capital Stock. Each share of Chase Common Stock and
each share of Chase Preferred Stock (other than Dissenting Shares (as defined in
Section 2.1(e)) shall remain outstanding following the Effective Time as shares
of the Surviving Corporation.
(e) Appraisal Rights. (i) Notwithstanding anything in this
Agreement to the contrary, shares of (A) Morgan Preferred Stock (other than the
Morgan Series A Preferred Stock and the Morgan Series H Preferred Stock) and (B)
Fixed/Adjustable Noncumulative Chase Preferred Stock that are issued and
outstanding immediately prior to the Effective Time and that are owned by
stockholders that have properly perfected their right of appraisal within the
meaning of Section 262 of the DGCL (the "Dissenting Shares") shall not be
converted into the Chase Merger Preferred Stock or remain outstanding, as the
case may be, unless and until such stockholders shall have failed to perfect any
available right of appraisal under applicable law, but, instead, the holders
thereof shall be entitled to payment of the appraised value of such Dissenting
Shares in accordance with Section 262 of the DGCL. If any such holder shall have
failed to perfect or shall have effectively withdrawn or lost such right of
appraisal, each share of Morgan Preferred Stock held by such stockholder shall
thereupon be deemed to have been converted into shares of the applicable Chase
Merger Preferred Stock at the Effective Time in accordance with Section 2.1(c)
and each share of such series of Chase Preferred Stock held by such stockholder
shall remain outstanding in accordance with Section 2.1(d).
(ii) Morgan shall give Chase (i) prompt notice of any demands
for appraisal filed pursuant to Section 262 of the DGCL received by Morgan,
withdrawals of such objections and any other instruments served or delivered in
connection with such demands pursuant to the DGCL and received by Morgan and
(ii) the opportunity to participate in all negotiations and proceedings with
respect to demands under the DGCL consistent with the obligations of Morgan
thereunder. Morgan shall not, except with the prior written consent of Chase,
(x) make any payment with respect to any such demand, (y) offer to settle or
settle any such demand or (z) waive any failure to timely deliver a written
demand for appraisal or timely take any other action to perfect appraisal rights
in accordance with the DGCL.
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2.2. Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, Chase shall
deposit, or shall cause to be deposited, with ChaseMellon Shareholder Services
LLC or a bank or trust company designated by Chase and reasonably acceptable to
Morgan (the "Exchange Agent"), for the benefit of the holders of certificates or
evidence of shares in book entry form which immediately prior to the Effective
Time evidenced shares of Morgan Common Stock and Morgan Preferred Stock
(collectively, the "Morgan Certificates"), for exchange in accordance with this
Article II, certificates or, at Chase's option, evidence of shares in book entry
form (collectively "certificates") representing the shares of Chase Common Stock
and Chase Merger Preferred Stock issuable pursuant to Section 2.1 (disregarding
Section 2.2(e) if Chase elects to issue and sell Excess Shares (as defined
therein)) in exchange for such shares of Morgan Common Stock and Morgan
Preferred Stock. Such certificates for shares of Chase Common Stock and Chase
Merger Preferred Stock so deposited, together with any dividends or
distributions with respect thereto, are hereinafter referred to as the "Exchange
Fund".
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, the Exchange Agent shall mail to each holder of record
of shares of Morgan Common Stock or Morgan Preferred Stock immediately prior to
the Effective Time whose shares were converted into shares of Chase Common Stock
or Chase Merger Preferred Stock pursuant to Section 2.1, (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Morgan Certificates shall pass, only upon delivery of the
Morgan Certificates to the Exchange Agent, and which shall be in such form and
have such other provisions as Chase and Morgan may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Morgan Certificates in
exchange for certificates representing shares of Chase Common Stock and Chase
Merger Preferred Stock, as the case may be. Upon surrender of a Morgan
Certificate for cancellation to the Exchange Agent together with such letter of
transmittal, duly executed, and such other documents as the Exchange Agent may
reasonably require, the holder of such Morgan Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of whole
shares of Chase Common Stock or Chase Merger Preferred Stock which such holder
has the right to receive in respect of the Morgan Certificate surrendered
pursuant to the provisions of this Article II (after taking into account all
shares of Morgan Common Stock then held by such holder), and the Morgan
Certificate so surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of Morgan Common Stock or Morgan Preferred Stock which is
not registered in the transfer records of Morgan, a certificate representing the
proper number of shares of Chase Common Stock or Chase Merger Preferred Stock
may be issued to a transferee if the Morgan Certificate representing such Morgan
Common Stock or Morgan Preferred Stock is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer and
by evidence that any applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section 2.2, each Morgan Certificate shall
be deemed at any time after the Effective Time to represent only the Chase
Common Stock or Chase Merger Preferred Stock into which the shares of Morgan
Common Stock or Morgan Preferred Stock represented by such Morgan Certificate
have been converted as provided in this Article II and the right to receive upon
such surrender cash in lieu of any fractional shares of Chase Common Stock as
contemplated by this Section 2.2.
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(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made with respect to Chase Common
Stock or Chase Merger Preferred Stock with a record date after the Effective
Time shall be paid to the holder of any unsurrendered Morgan Certificate with
respect to the shares of Chase Common Stock or Chase Merger Preferred Stock
represented thereby, and no cash payment in lieu of fractional shares shall be
paid to any such holder pursuant to Section 2.2(e), until the holder of such
Morgan Certificate shall surrender such Morgan Certificate. Subject to the
effect of applicable laws, following surrender of any such Morgan Certificate,
there shall be paid to the holder of the certificates representing whole shares
of Chase Common Stock or Chase Merger Preferred Stock issued in exchange
therefor, without interest, (A) at the time of such surrender or as promptly
after the sale, if applicable, of the Excess Shares (as defined in Section
2.2(e)) as practicable, the amount of any cash payable with respect to a
fractional share of Chase Common Stock to which such holder is entitled pursuant
to Section 2.2(e) and the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid (but withheld pursuant to
the immediately preceding sentence) with respect to such whole shares of Chase
Common Stock or Chase Merger Preferred Stock, and (B) at the appropriate payment
date, the amount of dividends or other distributions with a record date after
the Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of Chase Common Stock or
Chase Merger Preferred Stock.
(d) No Further Ownership Rights in Morgan Common Stock or
Morgan Preferred Stock. All shares of Chase Common Stock or Chase Merger
Preferred Stock issued upon conversion of shares of Morgan Common Stock or
Morgan Preferred Stock in accordance with the terms hereof (including any cash
paid pursuant to Section 2.2(c) or 2.2(e)) shall be deemed to have been issued
in full satisfaction of all rights pertaining to such shares of Morgan Common
Stock or Morgan Preferred Stock; subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which may have been declared or
made by Morgan on such shares of Morgan Common Stock or Morgan Preferred Stock
in accordance with the terms of this Agreement on or prior to the Effective Time
and which remain unpaid at the Effective Time, and there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Morgan Common Stock or Morgan Preferred Stock which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Morgan Certificates are presented to the Surviving Corporation
for any reason, they shall be cancelled and exchanged as provided in this
Article II.
(e) No Fractional Shares. (i) No certificates or scrip
representing fractional shares of Chase Common Stock shall be issued upon the
surrender for exchange of Morgan Certificates evidencing Morgan Common Stock,
and such fractional share interests will not entitle the owner thereof to vote
or to any rights of a stockholder of the Surviving Corporation.
(ii) As promptly as practicable following the Effective Time,
the Exchange Agent shall determine the excess of (x) the number of full shares
of Chase Common Stock delivered to the Exchange Agent by Chase pursuant to
Section 2.2(a) over (y) the aggregate number of full shares of Chase Common
Stock to be distributed to holders of Morgan Common Stock pursuant to Section
2.2(b) (such excess being herein called the "Excess Shares"). Following the
Effective Time, the Exchange Agent, as agent for the holders of Morgan Common
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Stock, shall sell the Excess Shares at then prevailing prices on the New York
Stock Exchange, Inc. (the "NYSE"), all in the manner provided in paragraph (iii)
of this Section.
(iii) The sale of the Excess Shares by the Exchange Agent
shall be executed on the NYSE through one or more member firms of the NYSE and
shall be executed in round lots to the extent practicable. The Exchange Agent
shall use all reasonable efforts to complete the sale of the Excess Shares as
promptly following the Effective Time as, in the Exchange Agent's reasonable
judgment, is practicable consistent with obtaining the best execution of such
sales in light of prevailing market conditions. Until the net proceeds of such
sale or sales have been distributed to the holders of Morgan Common Stock, the
Exchange Agent will hold such proceeds in trust for the holders of Morgan Common
Stock (the "Common Shares Trust"). The Surviving Corporation shall pay all
commissions, transfer taxes and other out-of-pocket transaction costs, including
the expenses and compensation, of the Exchange Agent incurred in connection with
such sale of the Excess Shares. The Exchange Agent shall determine the portion
of the Common Shares Trust to which each holder of Morgan Common Stock shall be
entitled, if any, by multiplying the amount of the aggregate net proceeds
comprising the Common Shares Trust by a fraction the numerator of which is the
amount of the fractional share interest to which such holder of Morgan Common
Stock is entitled (after taking into account all shares of Morgan Common Stock
held at the Effective Time by such holder) and the denominator of which is the
aggregate amount of fractional share interests to which all holders of Morgan
Common Stock are entitled.
(iv) Notwithstanding the provisions of clauses (ii) and (iii),
above, Chase may elect, at its option, exercised prior to the Effective Time, in
lieu of the issuance and sale of Excess Shares and the making of the payments
contemplated in said clauses, to pay each holder of Morgan Common Stock an
amount in cash equal to the product obtained by multiplying (a) the fractional
share interest to which such holder (after taking into account all shares of
Morgan Common Stock held at the Effective Time by such holder) would otherwise
be entitled by (b) the closing price on the NYSE, as reported on the
Consolidated Tape at the close of the NYSE regular session of trading, for a
share of Chase Common Stock on the last business day immediately preceding the
Effective Time, and, in such case, all references herein to the cash proceeds of
the sale of the Excess Shares and similar references shall be deemed to mean and
refer to the payments calculated as set forth in this clause (iv).
(v) As soon as practicable after the determination of the
amount of cash, if any, to be paid to holders of Morgan Common Stock with
respect to any fractional share interests, the Exchange Agent shall make
available such amounts to such holders of Morgan Common Stock subject to and in
accordance with the terms of Section 2.2(c).
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund and Common Shares Trust which remains undistributed to the stockholders of
Morgan for six months after the Effective Time shall be delivered to the
Surviving Corporation, upon demand, and any stockholders of Morgan who have not
theretofore complied with this Article II shall thereafter look only to the
Surviving Corporation for payment of their claim for Chase Common Stock or Chase
Merger Preferred Stock, as the case may be, any cash in lieu of fractional
shares of Chase Common Stock and any dividends or distributions with respect to
Chase Common Stock or Chase Merger Preferred Stock.
<PAGE>
(g) No Liability. Neither Chase nor Morgan nor the Surviving
Corporation shall be liable to any holder of shares of Morgan Common Stock,
Morgan Preferred Stock, Chase Common Stock or Chase Merger Preferred Stock, as
the case may be, for such shares (or dividends or distributions with respect
thereto) or cash from the Common Shares Trust delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(h) Withholding. Chase shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of shares of Morgan Common Stock, Morgan Preferred Stock or Chase
Preferred Stock such amounts as it is required to deduct and withhold with
respect to the making of such payment under the Code and the rules and
regulations promulgated thereunder, or any provision of state, local or foreign
tax law. To the extent that amounts are so withheld by Chase, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the shares of Morgan Common Stock, Morgan Preferred Stock or
Chase Preferred Stock in respect of which such deduction and withholding was
made by Chase.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of Morgan. Morgan represents and
warrants to Chase as follows:
(a) Organization, Standing and Power. Morgan is a bank holding
company registered under the Bank Holding Company Act of 1956, as amended (the
"BHC Act"), which has duly elected to become, and meets the applicable
requirements for qualification as, a financial holding company pursuant to
Section 4(l) of the BHC Act. Morgan Guaranty Trust Company of New York ("Morgan
Bank") is a wholly-owned Subsidiary of Morgan and a banking corporation
organized under the laws of New York. Each of Morgan and its Significant
Subsidiaries (as defined below) is a bank, corporation or partnership duly
organized, validly existing and, in the case of banks or corporations, in good
standing under the laws of its jurisdiction of incorporation or organization,
has all requisite power and authority to own, lease and operate its properties
and to carry on its business as now being conducted and is duly qualified and in
good standing to do business in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such qualification
necessary, other than in such jurisdictions where the failure so to qualify
would not, either individually or in the aggregate, reasonably be expected to
have a material adverse effect on Morgan. The Certificate of Incorporation and
By-laws of Morgan, copies of which were previously furnished to Chase, are true,
complete and correct copies of such documents as in effect on the date of this
Agreement. As used in this Agreement, (i) a "Significant Subsidiary" means any
Subsidiary of Morgan or Chase, as the case may be, that would constitute a
Significant Subsidiary of such party within the meaning of Rule 1-02 of
Regulation S-X of the Securities and Exchange Commission (the "SEC"); (ii) any
reference to any event, change or effect being "material" with respect to any
entity means an event, change or effect which is material in relation to the
condition (financial or otherwise), properties, assets, liabilities or
businesses of such entity and its Subsidiaries taken as a whole; and (iii) the
term "material adverse effect" means, with respect to any entity, a material
adverse effect on the condition (financial or otherwise), properties, assets,
liabilities or businesses of such entity and its Subsidiaries taken as a whole
or on the ability of such entity to perform its obligations hereunder or under
the applicable Stock Option
<PAGE>
Agreement on a timely basis; provided that, in any such case referred to in
clause (ii) or (iii) the following shall not be deemed "material" or to have a
"material adverse effect": any change or event caused by or resulting from (A)
changes in prevailing interest rates, currency exchange rates or other economic
or monetary conditions in the United States or elsewhere, (B) changes in United
States or foreign securities markets, including changes in price levels or
trading volumes, (C) changes or events affecting the financial services industry
generally and not specifically relating to Morgan or Chase or their respective
Subsidiaries, as the case may be, or (D) this Agreement or the transactions
contemplated hereby or the announcement thereof; and provided, further, that in
no event shall a change in the trading prices of a party's capital stock, by
itself, be considered material or constitute a material adverse effect.
(b) Capital Structure. (i) The authorized capital stock of
Morgan consists of 500,000,000 shares of Morgan Common Stock and 10,000,000
shares of Morgan Preferred Stock. As of the close of business on August 31, 2000
(A) 200,998,455 shares of Morgan Common Stock were issued (including shares held
in treasury), 44,121,182 shares of Morgan Common Stock were reserved for
issuance upon the exercise or payment of outstanding stock options, stock units
or other awards or pursuant to Morgan's dividend reinvestment and stock purchase
plan, Morgan's 1987 Stock Incentive Plan, 1989 Stock Incentive Plan, 1992 Stock
Incentive Plan, Director Stock Plan (1992), Deferred Compensation Plan for
Director's Fees, Stock Option Award, dated January 16, 1995, for 150,000 shares
of Morgan Common Stock, 1995 Stock Incentive Plan, Stock Bonus Plan, Incentive
Compensation Plan, 1995 Executive Officer Performance Plan, and 1998 Performance
Plan, in each case as amended through the date hereof (such stock options, units
and other awards and plans collectively, the "Morgan Stock Plans"), and
42,221,306 shares of Morgan Common Stock were held by Morgan in its treasury or
by its Subsidiaries (other than as trading account shares, trust account shares
or DPC shares); and (B) 3,094,300 shares of Morgan Preferred Stock were
outstanding, consisting of 2,444,300 shares of Morgan Series A Preferred, 50,000
shares of Morgan Series B Preferred, 50,000 shares of Morgan Series C Preferred,
50,000 shares of Morgan Series D Preferred, 50,000 shares of Morgan Series E
Preferred, 50,000 shares of Morgan Series F Preferred, and 400,000 shares of
Morgan Series H Preferred. All outstanding shares of Morgan Common Stock and
Morgan Preferred Stock have been duly authorized and validly issued and are
fully paid and non-assessable and not subject to preemptive rights. The shares
of Morgan Common Stock which may be issued pursuant to the Morgan Stock Option
Agreement have been duly authorized and, if and when issued pursuant to the
terms thereof, will be validly issued, fully paid and non-assessable and not
subject to preemptive rights.
(ii) No bonds, debentures, notes or other indebtedness having
the right to vote on any matters on which stockholders may vote ("Voting Debt")
of Morgan are issued or outstanding.
(iii) Except for (A) this Agreement, (B) Morgan Stock Options,
Morgan SARs and Morgan Units (each as defined in Section 5.8(a)) which
represented, as of August 31, 2000, the right to acquire up to an aggregate of
44,121,182 shares of Morgan Common Stock, (C) the Morgan Stock Option Agreement,
(D) as set forth in the disclosure schedule delivered by Morgan to Chase
concurrently herewith (the "Morgan Disclosure Schedule"), and (E) agreements
entered into and securities and other instruments issued after the date of this
Agreement as permitted by Section 4.1, there are no options, warrants, calls,
rights,
<PAGE>
commitments or agreements of any character to which Morgan or any Subsidiary of
Morgan is a party or by which it or any such Subsidiary is bound obligating
Morgan or any Subsidiary of Morgan to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or any Voting Debt
of Morgan or of any Subsidiary of Morgan or obligating Morgan or any Subsidiary
of Morgan to grant, extend or enter into any such option, warrant, call, right,
commitment or agreement. There are no outstanding contractual obligations of
Morgan or any of its Subsidiaries (A) to repurchase, redeem or otherwise acquire
any shares of capital stock of Morgan or any of its Subsidiaries, other than the
Morgan Stock Option Agreement or (B) pursuant to which Morgan or any of its
Subsidiaries is or could be required to register shares of Morgan Common Stock
or other securities under the Securities Act of 1933, as amended (the
"Securities Act"), except the Morgan Stock Option Agreement and any such
contractual obligations entered into after the date hereof as permitted by
Section 4.1.
(iv) Since August 31, 2000, except as set forth in the Morgan
Disclosure Schedule and except as permitted by Section 4.1, Morgan has not (A)
issued or permitted to be issued any shares of capital stock, or securities
exercisable or exchangeable for or convertible into shares of capital stock, of
Morgan or any of its Subsidiaries, other than pursuant to and as required by the
terms of the Morgan Stock Option Agreement, the dividend reinvestment and stock
purchase plan referred to above, and any employee stock options and other awards
issued prior to the date hereof under the Morgan Stock Plans (or issued after
the date hereof in the ordinary course of business consistent with past practice
as permitted by such plans or, in the case of options and other equity-based
awards issued after the date of this Agreement, Sections 4.1(c), 4.1(j) and
4.1(k)); (B) repurchased, redeemed or otherwise acquired, directly or indirectly
through one or more Morgan Subsidiaries, any shares of capital stock of Morgan
or any of its Subsidiaries (other than the acquisition of trading account
shares, trust account shares and DPC shares in the ordinary course of business
consistent with past practice); or (C) declared, set aside, made or paid to the
stockholders of Morgan dividends or other distributions on the outstanding
shares of capital stock of Morgan, other than (x) regular quarterly cash
dividends on the Morgan Common Stock at a rate not in excess of the regular
quarterly cash dividends most recently declared by Morgan prior to the date of
this Agreement and (y) cash dividends on the Morgan Preferred Stock as required
by the terms thereof as in effect on the date hereof.
(v) Morgan has terminated its dividend reinvestment and stock
purchase plan effective as of the date of this Agreement.
(c) Authority. (i) Morgan has all requisite corporate power
and authority to enter into this Agreement and the Stock Option Agreements and,
subject to adoption of this Agreement by the requisite vote of the holders of
Morgan Common Stock, to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Stock Option
Agreements and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of Morgan, subject in the case of the consummation of the Merger to the adoption
of this Agreement by the stockholders of Morgan. This Agreement and the Stock
Option Agreements have been duly executed and delivered by Morgan and each
constitutes a valid and binding obligation of Morgan, enforceable against Morgan
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equitable principles.
<PAGE>
(ii) The execution and delivery of this Agreement and the Stock Option
Agreements do not, and the consummation of the transactions contemplated hereby
and thereby will not, conflict with, or result in any violation of, or
constitute a default (with or without notice or lapse of time, or both) under,
or give rise to a right of termination, cancellation or acceleration of any
obligation or the loss of a material benefit under, or the creation of a lien,
pledge, security interest, charge or other encumbrance on any assets (any such
conflict, violation, default, right of termination, cancellation or
acceleration, loss or creation, a "Violation") pursuant to, (A) any provision of
the Certificate of Incorporation or By-laws of Morgan or any Subsidiary of
Morgan, or (B) except as disclosed in the Morgan Disclosure Schedule and subject
to obtaining or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in paragraph (iii) below,
result in any Violation of any loan or credit agreement, note, mortgage,
indenture, lease, Morgan Benefit Plan (as defined in Section 3.1(j)) or other
agreement, obligation, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Morgan or any Subsidiary of Morgan or their respective properties or assets,
which Violation, individually or in the aggregate, would reasonably be expected
to have a material adverse effect on Morgan.
(iii) No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality, domestic or foreign, or
industry self-regulatory organization (a "Governmental Entity"), is required by
or with respect to Morgan or any Subsidiary of Morgan in connection with the
execution and delivery of this Agreement and the Stock Option Agreements by
Morgan or the consummation by Morgan of the transactions contemplated hereby and
thereby, the failure to make or obtain which would have a material adverse
effect on Morgan, except for (A) the filing of applications and notices with the
Board of Governors of the Federal Reserve System (the "Federal Reserve") under
the BHC Act and the Federal Reserve Act (the "FRA") and approval of same, (B)
the filing with the SEC of (1) the Joint Proxy Statement/Prospectus (as defined
in Section 5.1(a)) and (2) such reports under Sections 13(a), 13(d), 13(g) and
16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as may be required in connection with this Agreement, the Stock Option
Agreements and the transactions contemplated hereby and thereby and the
obtaining from the SEC of such orders as may be required in connection
therewith, (C) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware, (D) the filing of an application with the
Superintendent of Banks and the Banking Board of the State of New York and such
other applications, filings, authorizations, orders and approvals as may be
required under the banking laws of other states, and approval thereof
(collectively, the "State Banking Approvals"), (E) consents, authorizations,
approvals, filings or exemptions in connection with compliance with the
applicable provisions of federal or state securities laws relating to the
regulation of broker-dealers, investment companies and investment advisors and
federal commodities laws relating to the regulation of futures commission
merchants and the rules and regulations of the SEC and the Commodity Futures
Trading Commission (the "CFTC") thereunder and of any applicable industry
self-regulatory organization and the rules of the NYSE, or which are required
under consumer finance, mortgage banking and other similar laws of the various
states in which Morgan or any of its Subsidiaries is licensed or regulated, (F)
notices or filings under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), (G) confirmation by way of a decision from the
Commission of the European Union under
<PAGE>
Regulation 4064/89 (the "EU Clearance"), (H) such other filings, authorizations,
orders and approvals as may be required under foreign banking and similar laws
with respect to bank Subsidiaries of Morgan that are chartered or licensed under
the laws of foreign jurisdictions, and (I) such filings, notifications and
approvals as are required under the Small Business Investment Act of 1958
("SBIA") and the rules and regulations of the Small Business Administration
("SBA") thereunder.
(d) SEC Documents; Undisclosed Liabilities. (i) Morgan has filed all
required reports, schedules, registration statements and other documents with
the SEC since December 31, 1997 (the "Morgan SEC Documents"). As of their
respective dates of filing with the SEC (or, if amended or superseded by a
filing prior to the date hereof, as of the date of such filing), the Morgan SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Morgan SEC Documents, and
none of the Morgan SEC Documents when filed contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of Morgan
included in the Morgan SEC Documents complied as to form, as of their respective
dates of filing with the SEC, in all material respects with all applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC), have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be disclosed therein) and fairly present in all material
respects the consolidated financial position of Morgan and its consolidated
Subsidiaries and the consolidated results of operations, changes in
stockholders' equity and cash flows of such companies as of the dates and for
the periods shown.
(ii) Except for (A) those liabilities that are fully reflected or
reserved for in the consolidated financial statements of Morgan included in its
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2000, as
filed with the SEC, (B) liabilities incurred since June 30, 2000 in the ordinary
course of business consistent with past practice, and (C) liabilities which
would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on Morgan, Morgan and its Subsidiaries do not have, and
since June 30, 2000 Morgan and its Subsidiaries have not incurred (except as
permitted by Section 4.1), any liabilities or obligations of any nature
whatsoever (whether accrued, absolute, contingent or otherwise and whether or
not required to be reflected in Morgan's financial statements in accordance with
generally accepted accounting principles).
(e) Information Supplied. None of the information supplied or to be
supplied by Morgan for inclusion or incorporation by reference in (i) the Form
S-4 (as defined in Section 5.1(a)) will, at the time the Form S-4 is filed with
the SEC and at the time it becomes effective under the Securities Act, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (ii) the Joint Proxy Statement/Prospectus will, at the date of
mailing to stockholders and at the times of the meetings of stockholders to be
held in connection with the Merger, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
<PAGE>
circumstances under which they were made, not misleading. The Joint Proxy
Statement/ Prospectus will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
thereunder, except that no representation or warranty is made by Morgan with
respect to statements made or incorporated by reference therein based on
information supplied by Chase for inclusion or incorporation by reference in the
Joint Proxy Statement/Prospectus.
(f) Compliance with Applicable Laws. Morgan and its Subsidiaries hold
all permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities which are material to the operation of the businesses of
Morgan and its Subsidiaries, taken as a whole (the "Morgan Permits"), and Morgan
and its Subsidiaries are in compliance with the terms of the Morgan Permits,
except where the failure so to hold or comply, individually or in the aggregate,
would not reasonably be expected to have a material adverse effect on Morgan.
Except as disclosed in the Morgan SEC Documents filed prior to the date of this
Agreement or as set forth in the Morgan Disclosure Schedule, the businesses of
Morgan and its Subsidiaries are not being conducted in violation of any law,
ordinance or regulation of any Governmental Entity, except for possible
violations which, individually or in the aggregate, do not have, and would not
reasonably be expected to have, a material adverse effect on Morgan. To the
knowledge of Morgan, no investigation by any Governmental Entity with respect to
Morgan or any of its Subsidiaries is pending or threatened, other than, in each
case, those the outcome of which, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect on Morgan.
(g) Legal Proceedings. Except as disclosed in the Morgan SEC Documents
filed prior to the date of this Agreement or as set forth in the Morgan
Disclosure Schedule, there is no suit, action, investigation or proceeding
(whether judicial, arbitral, administrative or other) pending or, to the
knowledge of Morgan, threatened, against or affecting Morgan or any Subsidiary
of Morgan as to which there is a significant possibility of an adverse outcome
which would, individually or in the aggregate, have a material adverse effect on
Morgan, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Morgan or any Subsidiary
of Morgan having, individually or in the aggregate, a material adverse effect on
Morgan or on the Surviving Corporation.
(h) Taxes. Morgan and each of its Subsidiaries have filed all tax
returns required to be filed by any of them and have paid (or Morgan has paid on
their behalf), or have set up an adequate reserve for the payment of, all taxes
required to be paid as shown on such returns, and the most recent financial
statements contained in the Morgan SEC Documents reflect an adequate reserve for
all taxes payable by Morgan and its Subsidiaries accrued through the date of
such financial statements. No material deficiencies for any taxes have been
proposed, asserted or assessed against Morgan or any of its Subsidiaries that
are not adequately reserved for. For the purpose of this Agreement, the term
"tax" (including, with correlative meaning, the terms "taxes" and "taxable")
shall include, except where the context otherwise requires, all Federal, state,
local and foreign income, profits, franchise, gross receipts, payroll, sales,
employment, use, property, withholding, excise, occupancy and other taxes,
duties or assessments of any nature whatsoever, together with all interest,
penalties and additions imposed with respect to such amounts. Neither Morgan nor
any of its Subsidiaries has taken any action or knows of any fact, agreement,
plan or other circumstance that is reasonably likely to prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the Code.
<PAGE>
(i) Certain Agreements. Except as disclosed in or filed as exhibits to
the Morgan SEC Documents filed prior to the date of this Agreement or as
disclosed in the Morgan Disclosure Schedule and except for this Agreement and
the Stock Option Agreements, neither Morgan nor any of its Subsidiaries is a
party to or bound by any contract, arrangement, commitment or understanding (i)
with respect to the employment of any directors, executive officers or key
employees, or with consultants that are natural persons, involving the payment
of $10,000,000 or more per annum, (ii) which is a "material contract" (as such
term is defined in Item 601(b)(10) of Regulation S-K of the SEC) that has not
been filed as an exhibit to or incorporated by reference in the Morgan SEC
Reports, (iii) which limits in any material way the ability of Morgan or any of
its Subsidiaries to compete in any line of business, in any geographic area or
with any person, or which requires referrals of any material business or
requires Morgan or any of its affiliates to make available material investment
opportunities to any person on a priority, equal or exclusive basis, (iv) with
or to a labor union or guild (including any collective bargaining agreement),
(v) in the case of a Morgan Benefit Plan (as defined in Section 3.1(j)), any of
the benefits of which will be increased, or the vesting of the benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the Stock Option Agreements, or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement or the Stock Option Agreements, or (vi) which
would prohibit or delay the consummation of any of the transactions contemplated
by this Agreement or the Stock Option Agreements. Morgan has previously made
available to Chase complete and accurate copies of each contract, arrangement,
commitment or understanding of the type described in this Section 3.1(i)
(collectively referred to herein as the "Morgan Contracts"). All of the Morgan
Contracts are valid and in full force and effect, except to the extent they have
previously expired in accordance with their terms or if the failure to be in
full force and effect, individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on Morgan. Neither Morgan nor any of
its Subsidiaries has, and to the best knowledge of Morgan, none of the other
parties thereto have, violated any provision of, or committed or failed to
perform any act which with or without notice, lapse of time or both would
constitute a default under the provisions of, any Morgan Contract, except in
each case for those violations and defaults which, individually or in the
aggregate, would not reasonably be expected to result in a material adverse
effect on Morgan.
(j) Benefit Plans. (i) With respect to each employee benefit plan
(including, without limitation, any "employee benefit plan", as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), including, without limitation, multiemployer plans within the meaning
of ERISA Section 3(37)) and all stock purchase, stock option, severance,
employment, change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation and other employee benefit plans, agreements,
programs, policies or other arrangements, whether or not subject to ERISA,
whether formal or informal, oral or written, legally binding or not, under which
any employee or former employee of Morgan or any of its Subsidiaries has any
present or future right to benefits (all the foregoing being herein called
"Benefit Plans"), maintained or contributed to by Morgan or Morgan Bank or any
of their Subsidiaries or under which Morgan, Morgan Bank or any of their
Subsidiaries has any present or future liability (the "Morgan Benefit Plans"),
Morgan has made available, or within 30 days after the execution hereof will
make available, to Chase a true and correct copy of (A) the most recent annual
report (Form 5500) filed with the IRS, (B) such Morgan Benefit Plan, (C) each
trust agreement relating to such Morgan Benefit Plan, (D) the most recent
summary plan
<PAGE>
description for each Morgan Benefit Plan for which a summary plan description is
required, (E) the most recent actuarial report or valuation relating to a Morgan
Benefit Plan subject to Title IV of ERISA and (F) the most recent determination
letter issued by the IRS with respect to any Morgan Benefit Plan qualified under
Section 401(a) of the Code.
(ii) With respect to the Morgan Benefit Plans, individually and in the
aggregate, no event has occurred and, to the knowledge of Morgan, there exists
no condition or set of circumstances, in connection with which Morgan or any of
its Subsidiaries could be subject to any liability that would reasonably be
expected to have a material adverse effect on Morgan under ERISA, the Code or
any other applicable law.
(iii) True and complete copies of the Morgan Stock Plans as in effect
on the date hereof have been, or within 30 days after the execution hereof will
be, provided or made available to Chase.
(iv) Except as set forth in the Morgan Disclosure Schedule, no Morgan
Benefit Plan or Morgan Stock Plan exists that could result in the payment to any
present or former employee of Morgan or any Subsidiary of Morgan of any money or
other property or accelerate or provide any other rights or benefits to any
present or former employee of Morgan or any Subsidiary of Morgan as a result of
the transactions contemplated by this Agreement, whether or not such payment
would constitute a parachute payment within the meaning of Code Section 280G.
(k) Subsidiaries. Exhibit 21 to Morgan's Annual Report on Form 10-K for
the fiscal year ended December 31, 1999 includes all the Subsidiaries of Morgan
which are Significant Subsidiaries. Each of Morgan's Subsidiaries that is a bank
(as defined in the BHC Act) is an "insured bank" as defined in the Federal
Deposit Insurance Act (the "FDIA") and applicable regulations thereunder. All of
the shares of capital stock of each of the Subsidiaries held by Morgan or by
another Morgan Subsidiary are fully paid and, except as provided in Sections
5004(8) and 114 of the New York Banking Law, nonassessable and are owned by
Morgan or a Subsidiary of Morgan free and clear of any claim, lien or
encumbrance.
(l) Agreements with Regulators. Neither Morgan nor any Subsidiary of
Morgan is a party to any written agreement or memorandum of understanding with,
or a party to any commitment letter or similar undertaking to, or is subject to
any order or directive by, or is a recipient of any extraordinary supervisory
letter from, or has adopted any board resolutions at the request of, any
Governmental Entity which restricts materially the conduct of its business, or
in any manner relates to its capital adequacy, its credit policies or its
management, nor has Morgan been advised by any Governmental Entity that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or similar
submission, or any such board resolutions.
(m) Absence of Certain Changes or Events. Except as disclosed in the
Morgan SEC Documents filed prior to the date of this Agreement or, in the case
of actions taken after the date hereof, except as permitted by Section 4.1,
since June 30, 2000 (i) Morgan and its Subsidiaries have conducted their
respective businesses in the ordinary course consistent with their past
practices and (ii) there has not been any change, circumstance or event
(including any
<PAGE>
event involving a prospective change) which has had, or would reasonably be
expected to have, a material adverse effect on Morgan.
(n) Board Approval. The Board of Directors of Morgan, by resolutions
duly adopted by unanimous vote of those voting at a meeting duly called and held
(the "Morgan Board Approval"), has (i) determined that this Agreement, the Stock
Option Agreements and the Merger are fair to and in the best interests of Morgan
and its stockholders and declared the Merger to be advisable, (ii) approved this
Agreement, the Stock Option Agreements and the Merger, and (iii) recommended
that the stockholders of Morgan adopt this Agreement and directed that such
matter be submitted for consideration by Morgan stockholders at the Morgan
Stockholders Meeting (as defined in Section 5.1(b)). The Morgan Board Approval
constitutes approval of this Agreement, the Morgan Stock Option Agreement and
the Merger for purposes of Section 203 of the DGCL. To the knowledge of Morgan,
except for Section 203 of the DGCL (which has been rendered inapplicable), no
state takeover statute is applicable to this Agreement, the Stock Option
Agreements, the Merger or the other transactions contemplated hereby or thereby.
(o) Vote Required. The affirmative vote of the holders of a majority of
the outstanding shares of Morgan Common Stock to adopt this Agreement (the
"Required Morgan Vote") is the only vote of the holders of any class or series
of Morgan capital stock necessary to approve and adopt this Agreement and the
transactions contemplated hereby (including the Merger).
(p) Accounting Matters. Neither Morgan nor, to its best knowledge, any
of its affiliates, has taken or agreed to take any action that would prevent
Chase from accounting for the business combination to be effected by the Merger
as a "pooling of interests".
(q) Properties. Except as disclosed in the Morgan SEC Documents filed
prior to the date of this Agreement, Morgan or one of its Subsidiaries (i) has
good and marketable title to all the properties and assets reflected in the
latest audited balance sheet included in such Morgan SEC Documents as being
owned by Morgan or one of its Subsidiaries or acquired after the date thereof
which are material to Morgan's business on a consolidated basis (except
properties sold or otherwise disposed of since the date thereof in the ordinary
course of business), free and clear of all claims, liens, charges, security
interests or encumbrances of any nature whatsoever, except (A) statutory liens
securing payments not yet due, (B) liens on assets of Subsidiaries of Morgan
which are banks incurred in the ordinary course of their banking business and
(C) such imperfections or irregularities of title, claims, liens, charges,
security interests or encumbrances as do not materially affect the use of the
properties or assets subject thereto or affected thereby or otherwise materially
impair business operations at such properties, and (ii) is the lessee of all
leasehold estates reflected in the latest audited financial statements included
in such Morgan SEC Documents or acquired after the date thereof which are
material to its business on a consolidated basis (except for leases that have
expired by their terms since the date thereof) and is in possession of the
properties purported to be leased thereunder, and each such lease is valid
without default thereunder by the lessee or, to Morgan's knowledge, the lessor,
except in the case of clauses (i) and (ii) above as would not reasonably be
expected to have a material adverse effect on Morgan.
(r) Interest Rate Risk Management Instruments. Any interest rate swaps,
caps, floors and option agreements and other interest rate risk management
arrangements, whether
<PAGE>
entered into for the account of Morgan or one of its Subsidiaries or entered
into by Morgan or one of its Subsidiaries for the account of a customer of
Morgan or one of its Subsidiaries, were entered into in the ordinary course of
business and in accordance with prudent business practice and applicable rules,
regulations and policies of any Governmental Entity and with counterparties
reasonably believed by Morgan to be financially responsible at the time, and are
legal, valid and binding obligations of Morgan or one of its Subsidiaries and,
to the best knowledge of Morgan, of the other parties thereto enforceable in
accordance with their terms (except as may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the rights of creditors
generally and the availability of equitable remedies), and are in full force and
effect, in each case except as would not reasonably be expected to have, either
individually or in the aggregate, a material adverse effect on Morgan. Morgan
and each of its Subsidiaries have duly performed all of their respective
obligations thereunder to the extent that such obligations to perform have
accrued, except as would not reasonably be expected to have, individually or in
the aggregate, a material adverse effect on Morgan, and, to the best knowledge
of Morgan, there are no breaches, violations or defaults or allegations or
assertions of such by any party thereunder, except as would not reasonably be
expected to have, either individually or in the aggregate, a material adverse
effect on Morgan.
(s) Intellectual Property. Morgan and its Subsidiaries own or have a
valid license to use all trademarks, service marks and trade names (including
any registrations or applications for registration of any of the foregoing)
(collectively, the "Morgan Intellectual Property") necessary to carry on their
business substantially as currently conducted, except where such failures to own
or validly license such Morgan Intellectual Property would not, individually or
in the aggregate, reasonably be expected to have a material adverse effect on
Morgan. Neither Morgan nor any such Subsidiary has received any notice of
infringement of or conflict with, and to Morgan's knowledge, there are no
infringements of or conflicts with, the rights of others with respect to the use
of any Morgan Intellectual Property that individually or in the aggregate, in
either such case, would reasonably be expected to have a material adverse effect
on Morgan.
(t) Brokers or Finders. No agent, broker, investment banker, financial
advisor or other firm or person is or will be entitled to any broker's or
finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement, except J.P. Morgan Securities
Inc., and Morgan agrees to indemnify Chase and to hold Chase harmless from and
against any and all claims, liabilities or obligations with respect to any other
fees, commissions or expenses asserted by any person on the basis of any act or
statement alleged to have been made by Morgan or its affiliates.
(u) Opinion of Morgan Financial Advisor. Morgan has received the
opinion of its financial advisor, J.P Morgan Securities Inc., dated the date of
this Agreement, to the effect that the Exchange Ratio is fair, from a financial
point of view, to Morgan and the holders of Morgan Common Stock.
3.2. Representations and Warranties of Chase. Chase represents and
warrants to Morgan as follows:
(a) Organization, Standing and Power. Chase is a bank holding company
registered under the BHC Act, which has duly elected to become, and meets the
applicable requirements for qualification as, a financial holding company
pursuant to Section 4(l) of the
<PAGE>
BHC Act. The Chase Manhattan Bank ("Chase Bank") is a wholly-owned Subsidiary of
Chase and a banking corporation organized under the laws of the State of New
York. Each of Chase and its Significant Subsidiaries is a bank, corporation or
partnership duly organized, validly existing and, in the case of banks or
corporations, in good standing under the laws of its jurisdiction of
incorporation or organization, has all requisite power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted, and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification necessary, other than in such
jurisdictions where the failure so to qualify would not, either individually or
in the aggregate, reasonably be expected to have a material adverse effect on
Chase. The Certificate of Incorporation and By-laws of Chase, copies of which
were previously furnished to Morgan, are true, complete and correct copies of
such documents as in effect on the date of this Agreement.
(b) Capital Structure. (i) The authorized capital stock of Chase
consists of 4,500,000,000 shares of Chase Common Stock and 200,000,000 shares of
Chase Preferred Stock. As of the close of business on August 31, 2000 (A)
1,322,758,290 shares of Chase Common Stock were outstanding (including shares
held in treasury), 222,049,228 shares of Chase Common Stock were reserved for
issuance upon the exercise or payment of outstanding stock options, stock units
or other awards or pursuant to Chase's dividend reinvestment plan, Value Shares,
Success Shares and Vision Shares Plans, the Deferred Compensation Plan for
Non-Employee Directors of Chase and Chase Bank, the Post-Retirement Compensation
Plan for Non-Employee Directors, Chase's Corporate Performance Incentive Plan,
Chase's Employee Stock Purchase Plan, the Deferred Compensation Plan of Chase
and Participating Companies, the Chase 1996 Long-Term Incentive Plan, and
long-term incentive and other stock plans assumed by Chase in connection with
the combinations with and acquisitions of Manufacturers Hanover Corporation,
Chemical Banking Corporation, Margaretten Financial Corporation and Hambrecht &
Quist Group (such plans and programs, collectively, the "Chase Stock Plans"),
and 13,890,325 shares of Chase Common Stock were held by Chase in its treasury
or by its Subsidiaries (other than trading account shares, trust account shares
or DPC shares); and (B) 23,100,000 shares of Chase Preferred Stock were
outstanding, consisting of 8,000,000 shares of 10.84% Cumulative Preferred
Stock, 9,100,00 shares of Adjustable Rate Cumulative Preferred Stock, Series L,
4,000,000 shares of Fixed/Adjustable Rate Noncumulative Preferred Stock and
2,000,000 shares of Adjustable Rate Cumulative Preferred Stock, Series N. All
outstanding shares of Chase Common Stock and Chase Preferred Stock have been
duly authorized and validly issued and are fully paid and non-assessable and not
subject to preemptive rights. The shares of Chase Common Stock and Chase Merger
Preferred Stock (x) to be issued pursuant to or as specifically contemplated by
this Agreement (including without limitation as contemplated by Section 5.8
hereof), or (y) which may be issued pursuant to the Chase Stock Option
Agreement, have been duly authorized and, if and when issued in accordance with
the terms hereof or thereof, will be validly issued, fully paid and
non-assessable and not subject to preemptive rights.
(ii) No Voting Debt of Chase is issued or outstanding.
(iii) Except for (A) this Agreement, (B) options or awards issued or to
be issued under the Chase Stock Plans, which represented, as of August 31, 2000,
the right to acquire up to an aggregate of 163,327,444 shares of Chase Common
Stock, (C) the Chase Stock Option Agreement, and (D) agreements entered into and
securities and other instruments issued
<PAGE>
after the date of this Agreement as permitted by Section 4.2, there are no
options, warrants, calls, rights, commitments or agreements of any character to
which Chase or any Subsidiary of Chase is a party or by which it or any such
Subsidiary is bound obligating Chase or any Subsidiary of Chase to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or any Voting Debt of Chase or of any Subsidiary of Chase or
obligating Chase or any Subsidiary of Chase to grant, extend or enter into any
such option, warrant, call, right, commitment or agreement. There are no
outstanding contractual obligations of Chase or any of its Subsidiaries to (A)
repurchase, redeem or otherwise acquire any shares of capital stock of Chase or
any of its Subsidiaries, other than the Chase Stock Option Agreement, or (B)
except as set forth in the disclosure schedule delivered by Chase to Morgan
concurrently herewith (the "Chase Disclosure Schedule"), pursuant to which Chase
or any of its Subsidiaries is or could be required to register shares of Chase
Common Stock or other securities under the Securities Act, except the Chase
Stock Agreement and any such contractual obligations entered into after the date
hereof as permitted by Section 4.2.
(iv) Since August 31, 2000, and except as permitted pursuant to Section
4.2, Chase has not (A) issued or permitted to be issued any shares of capital
stock, or securities exercisable or exchangeable for or convertible into shares
of capital stock, of Chase or any of its Subsidiaries, other than pursuant to
and as required by the terms of the Chase Stock Option Agreement, the Chase
Stock Plans and any employee stock options and other awards issued under the
Chase Stock Plans prior to the date hereof (or issued after the date hereof in
the ordinary course of business consistent with past practice as permitted by
such plans or, in the case of options and other equity-based awards issued
after the date of this Agreement, Sections 4.2(c) and 4.2(j)); (B) repurchased,
redeemed or otherwise acquired, directly or indirectly through one or more Chase
Subsidiaries, any shares of capital stock of Chase or any of its Subsidiaries
(other than the acquisition of trading account shares, trust account shares or
DPC shares in the ordinary course of business consistent with past practice); or
(C) declared, set aside, made or paid to the stockholders of Chase dividends or
other distributions on the outstanding shares of capital stock of Chase, other
than (x) regular quarterly cash dividends on the Chase Common Stock at a rate
not in excess of the regular quarterly cash dividend most recently declared by
Chase prior to the date of this Agreement and (y) cash dividends on the Chase
Preferred Stock as required by the terms of such preferred stock as in effect on
the date hereof.
(c) Authority. (i) Chase has all requisite corporate power and
authority to enter into this Agreement and the Stock Option Agreements and,
subject to adoption of this Agreement by the requisite vote of the holders of
Chase Common Stock, to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Stock Option
Agreements and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of Chase, subject in the case of the consummation of the Merger to the adoption
of this Agreement by the stockholders of Chase. This Agreement and the Stock
Option Agreements have been duly executed and delivered by Chase and each
constitutes a valid and binding obligation of Chase, enforceable against Chase
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equitable principles.
<PAGE>
(ii) The execution and delivery of this Agreement and the Stock Option
Agreements do not, and the consummation of the transactions contemplated hereby
and thereby will not, result in any Violation pursuant to (A) any provision of
the Certificate of Incorporation or By-laws of Chase or any Subsidiary of Chase,
or (B) except as disclosed in the Chase Disclosure Schedule and subject to
obtaining or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in paragraph (iii) below,
result in any Violation of any loan or credit agreement, note, mortgage,
indenture, lease, Chase Benefit Plan or other agreement, obligation, instrument,
permit, concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Chase or any Subsidiary of Chase or
their respective properties or assets which Violation, individually or in the
aggregate, would reasonably be expected to have a material adverse effect on
Chase.
(iii) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to Chase or any Subsidiary of Chase in connection with the execution
and delivery of this Agreement and the Stock Option Agreements by Chase or the
consummation by Chase of the transactions contemplated hereby and thereby, the
failure to make or obtain which would have a material adverse effect on Chase,
except for (A) the filing of applications and notices with the Federal Reserve
under the BHC Act and the FRA and approval of same, (B) the filing with the SEC
of the Joint Proxy Statement/Prospectus, the Form S-4 and such reports under
Sections 12, 13(a), 13(d), 13(g) and 16(a) of the Exchange Act as may be
required in connection with this Agreement, the Stock Option Agreements and the
transactions contemplated hereby and thereby and the obtaining from the SEC of
such orders as may be required in connection therewith, (C) such filings and
approvals as are required to be made or obtained under the securities or blue
sky laws of various states in connection with the transactions contemplated by
this Agreement, (D) the filing of the Certificate of Merger and the Certificates
of Designations for the Chase Merger Preferred Stock with the Secretary of State
of the State of Delaware, (E) the State Banking Approvals, (F) consents,
authorizations, approvals, filings or exemptions in connection with compliance
with the applicable provisions of federal or state securities laws relating to
the regulation of broker-dealers, investment companies and investment advisors
and federal commodities laws relating to the regulation of futures commission
merchants and the rules and regulations of the SEC and the CFTC thereunder and
of any applicable industry self-regulatory organization, and the rules of the
NYSE, or which are required under consumer finance, mortgage banking and other
similar laws of the various states in which Morgan or any of its Subsidiaries is
licensed or regulated, (G) notices or filings under the HSR Act, (H) the EU
Clearance, (I) such other filings, authorizations, orders and approvals as may
be required under foreign banking and similar laws with respect to bank
Subsidiaries of Morgan that are chartered or licensed under the laws of foreign
jurisdictions, and (J) such filings, notifications and approvals as are required
under the SBIA and the rules and regulations of the SBA thereunder.
(d) SEC Documents; Undisclosed Liabilities. (i) Chase has filed all
required reports, schedules, registration statements and other documents with
the SEC since December 31, 1997 (the "Chase SEC Documents"). As of their
respective dates of filing with the SEC (or, if amended or superseded by a
filing prior to the date hereof, as of the date of such filing), the Chase SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC
<PAGE>
thereunder applicable to such Chase SEC Documents, and none of the Chase SEC
Documents when filed contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of Chase included in the Chase
SEC Documents complied as to form, as of their respective dates of filing with
the SEC, in all material respects with all applicable accounting requirements
and with the published rules and regulations of the SEC with respect thereto
(except, in the case of the unaudited statements, as permitted by Form 10-Q of
the SEC), have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except as
may be disclosed therein) and fairly present in all material respects the
consolidated financial position of Chase and its consolidated Subsidiaries and
the consolidated results of operations, changes in stockholders' equity and cash
flows of such companies as of the dates and for the periods shown.
(ii) Except for (A) those liabilities that are fully reflected or
reserved for in the consolidated financial statements of Chase included in its
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2000, as
filed with the SEC, (B) liabilities incurred since June 30, 2000 in the ordinary
course of business consistent with past practice, and (C) liabilities which
would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on Chase, Chase and its Subsidiaries do not have, and
since June 30, 2000 Chase and its Subsidiaries have not incurred (except as
permitted by Section 4.2), any liabilities or obligations of any nature
whatsoever (whether accrued, absolute, contingent or otherwise and whether or
not required to be reflected in Chase's financial statements in accordance with
generally accepted accounting principles).
(e) Information Supplied. None of the information supplied or to be
supplied by Chase for inclusion or incorporation by reference in (i) the Form
S-4 will, at the time the Form S-4 is filed with the SEC and at the time it
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and (ii) the Joint
Proxy Statement/Prospectus will, at the date of mailing to stockholders and at
the times of the meetings of stockholders to be held in connection with the
Merger, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Joint Proxy Statement/Prospectus will comply as to form in
all material respects with the requirements of the Exchange Act and the rules
and regulations of the SEC thereunder, and the Form S-4 will comply as to form
in all material respects with the requirements of the Securities Act and the
rules and regulations of the SEC thereunder, except that no representation or
warranty is made by Chase with respect to statements made or incorporated by
reference therein based on information supplied by Morgan for inclusion or
incorporation by reference in the Joint Proxy Statement/Prospectus or Form S-4.
(f) Compliance with Applicable Laws. Chase and its Subsidiaries hold
all permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities which are material to the operation of the businesses of
Chase and its Subsidiaries, taken as a whole (the "Chase Permits"), and Chase
and its Subsidiaries are in compliance with the terms of the Chase Permits and
all applicable laws and regulations, except where the failure so to hold or
<PAGE>
comply, individually or in the aggregate, would not reasonably be expected to
have a material adverse effect on Chase. Except as disclosed in the Chase SEC
Documents filed prior to the date hereof or as set forth in the Chase Disclosure
Schedule, the businesses of Chase and its Subsidiaries are not being conducted
in violation of any law, ordinance or regulation of any Governmental Entity,
except for possible violations which, individually or in the aggregate, do not
have, and would not reasonably be expected to have, a material adverse effect on
Chase. To the knowledge of Chase, no investigation by any Governmental Entity
with respect to Chase or any of its Subsidiaries is pending or threatened, other
than, in each case, those the outcome of which, individually or in the
aggregate, would not reasonably be expected to have a material adverse effect on
Chase.
(g) Legal Proceedings. Except as disclosed in the Chase SEC Documents
filed prior to the date of this Agreement or as set forth in the Chase
Disclosure Schedule, there is no suit, action, investigation or proceeding
(whether judicial, arbitral, administrative or other) pending or, to the
knowledge of Chase, threatened, against or affecting Chase or any Subsidiary of
Chase as to which there is a significant possibility of an adverse outcome which
would, individually or in the aggregate, have a material adverse effect on
Chase, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Chase or any Subsidiary
of Chase having, individually or in the aggregate, a material adverse effect on
Chase or on the Surviving Corporation.
(h) Taxes. Chase and each of its Subsidiaries have filed all tax
returns required to be filed by any of them and have paid (or Chase has paid on
their behalf), or have set up an adequate reserve for the payment of, all taxes
required to be paid as shown on such returns, and the most recent financial
statements contained in the Chase SEC Documents reflect an adequate reserve for
all taxes payable by Chase and its Subsidiaries accrued through the date of such
financial statements. No material deficiencies for any taxes have been proposed,
asserted or assessed against Chase or any of its Subsidiaries that are not
adequately reserved for. Neither Chase nor any of its Subsidiaries has taken any
action or knows of any fact, agreement or plan or other circumstance that is
reasonably likely to prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
(i) Certain Agreements. Except as disclosed in or filed as exhibits to
the Chase SEC Documents filed prior to the date of this Agreement or as
disclosed in the Chase Disclosure Schedule and except for this Agreement and
the Stock Option Agreements, neither Chase nor any of its Subsidiaries is a
party to or bound by any contract, arrangement, commitment or understanding (i)
with respect to the employment of any directors, executive officers or key
employees, or with any consultants that are natural persons, involving the
payment of $10,000,000 or more per annum, (ii) which is a "material contract"
(as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) that
has not been filed as an exhibit to or incorporated by reference in the Chase
SEC Reports, (iii) which limits in any material way the ability of Chase or any
of its Subsidiaries to compete in any line of business, in any geographic area
or with any person, or which requires referrals of any material business or
requires Chase or any of its affiliates to make available material investment
opportunities to any person on a priority, equal or exclusive basis, (iv) with
or to a labor union or guild (including any collective bargaining agreement),
(v) in the case of a Chase Benefit Plan (as defined in Section 3.2(j)), any of
the benefits of which will be increased, or the vesting of the benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the
<PAGE>
Stock Option Agreements, or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement or the Stock Option Agreements, or (vi) which would prohibit or delay
the consummation of any of the transactions contemplated by this Agreement or
the Stock Option Agreements. Chase has previously made available to Morgan
complete and accurate copies of each contract, arrangement, commitment or
understanding of the type described in this Section 3.2(i) (collectively
referred to herein as "Chase Contracts"). All of the Chase Contracts are valid
and in full force and effect, except to the extent they have previously expired
in accordance with their terms or if the failure to be in full force and effect,
individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on Chase. Neither Chase nor any of its Subsidiaries has,
and to the best knowledge of Chase, none of the other parties thereto have,
violated any provision of, or committed or failed to perform any act which, with
or without notice, lapse of time or both would constitute a default under the
provisions of, any Chase Contract, except in each case for those violations and
defaults which, individually or in the aggregate, would not reasonably be
expected to result in a material adverse effect on Chase.
(j) Benefit Plans. (i) With respect to each Benefit Plan maintained or
contributed to by Chase or Chase Bank or any of their Subsidiaries or under
which Chase, Chase Bank or any of their Subsidiaries have any present or future
liability (the "Chase Benefit Plans"), Chase has made available, or within 30
days after the execution hereof will make available, to Morgan a true and
correct copy of (A) the most recent annual report (Form 5500) filed with the
IRS, (B) such Chase Benefit Plan, (C) each trust agreement relating to such
Chase Benefit Plan, (D) the most recent summary plan description for each Chase
Benefit Plan for which a summary plan description is required, (E) the most
recent actuarial report or valuation relating to a Chase Benefit Plan subject to
Title IV of ERISA and (F) the most recent determination letter issued by the IRS
with respect to any Chase Benefit Plan qualified under Section 401(a) of the
Code.
(ii) With respect to the Chase Benefit Plans, individually and in the
aggregate, no event has occurred and, to the knowledge of Chase, there exists no
condition or set of circumstances in connection with which Chase or any of its
Subsidiaries could be subject to any liability that would reasonably be expected
to have a material adverse effect upon Chase under ERISA, the Code or any other
applicable law.
(iii) True and complete copies of the Chase Stock Plans as in effect on
the date hereof have been, or within 30 days after the execution hereof will be,
provided or made available to Morgan.
(iv) Except as set forth in the Chase Disclosure Schedule, no Chase
Benefit Plan or Chase Stock Plan exists that could result in the payment to any
present or former employee of Chase or any Subsidiary of Chase of any money or
other property or accelerate or provide any other rights or benefits to any
present or former employee of Chase or any Subsidiary of Chase as a result of
the transactions contemplated by this Agreement, whether or not such payment
would constitute a parachute payment within the meaning of Code Section 280G.
(k) Subsidiaries. Exhibit 21.1 to Chase's Annual Report on Form 10-K
for the fiscal year ended December 31, 1999 includes all the Subsidiaries of
Chase which are Significant Subsidiaries. Each of Chase's Subsidiaries that is a
bank (as defined in the BHC Act) is an
<PAGE>
"insured bank" as defined in the FDIA and applicable regulations thereunder. All
of the shares of capital stock of each of the Subsidiaries held by Chase or by
another Subsidiary of Chase are fully paid and, except as provided in Sections
5004(8) and 114 of the New York Banking Law and 12 U.S.C. Section 55,
nonassessable and are owned by Chase or a Subsidiary of Chase free and clear
of any claim, lien or encumbrance.
(l) Agreements with Regulators. Except in connection with matters
disclosed in the Chase SEC Reports filed prior to the date hereof, neither Chase
nor any Subsidiary of Chase is a party to any written agreement or memorandum of
understanding with, or a party to any commitment letter or similar undertaking
to, or is subject to any order or directive by, or is a recipient of any
extraordinary supervisory letter from, or has adopted any board resolutions at
the request of, any Governmental Entity which restricts materially the conduct
of its business, or in any manner relates to its capital adequacy, its credit
policies or its management, nor has Chase been advised by any Governmental
Entity that it is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree, agreement,
memorandum of understanding, extraordinary supervisory letter, commitment letter
or similar submission, or any such board resolutions.
(m) Absence of Certain Changes or Events. Except as disclosed in the
Chase SEC Documents filed prior to the date of this Agreement (or, in the case
of actions taken after the date hereof, except as permitted by Section 4.2),
since June 30, 2000 (i) Chase and its Subsidiaries have conducted their
respective businesses in the ordinary course consistent with their past
practices and (ii) there has not been any change, circumstance or event
(including any event involving a prospective change) which has had, or would
reasonably be expected to have, a material adverse effect on Chase.
(n) Board Approval. The Board of Directors of Chase, by resolutions
duly adopted by unanimous vote of those voting at a meeting duly called and held
(the "Chase Board Approval"), has (i) determined that this Agreement, the Stock
Option Agreements and the Merger are fair to and in the best interests of Chase
and its stockholders and declared the Merger to be advisable, (ii) approved this
Agreement, the Stock Option Agreements and the Merger, and (iii) recommended
that the stockholders of Chase adopt this Agreement and directed that such
matter be submitted for consideration by Chase stockholders at the Chase
Stockholders Meeting (as defined in Section 5.1(c)). The Chase Board Approval
constitutes approval of this Agreement, the Chase Stock Option Agreement and the
Merger for purposes of Section 203 of the DGCL. To the knowledge of Chase,
except for Section 203 of the DGCL (which has been rendered inapplicable), no
state takeover statute is applicable to this Agreement, the Stock Option
Agreements, the Merger or the other transactions contemplated hereby or thereby.
(o) Vote Required. The affirmative vote of the holders of a majority of
the outstanding shares of Chase Common Stock to adopt this Agreement (the
"Required Chase Vote") is the only vote of the holders of any class or series of
Chase capital stock necessary to approve and adopt this Agreement and the
transactions contemplated hereby (including the Merger).
(p) Accounting Matters. Except for the matters disclosed in the Chase
Disclosure Schedule, neither Chase nor, to its best knowledge, any of its
affiliates, has taken or agreed to take any action that would prevent Chase from
accounting for the business combination to be effected by the Merger as a
"pooling of interests".
<PAGE>
(q) Properties. Except as disclosed in the Chase SEC Documents filed
prior to the date of this Agreement, Chase or one of its Subsidiaries (i) has
good and marketable title to all the properties and assets reflected in the
latest audited balance sheet included in such Chase SEC Documents as being owned
by Chase or one of its Subsidiaries or acquired after the date thereof which are
material to Chase's business on a consolidated basis (except properties sold or
otherwise disposed of since the date thereof in the ordinary course of
business), free and clear of all claims, liens, charges, security interests or
encumbrances of any nature whatsoever, except (A) statutory liens securing
payments not yet due, (B) liens on assets of Subsidiaries of Chase which are
banks incurred in the ordinary course of their banking business and (C) such
imperfections or irregularities of title, claims, liens, charges, security
interests or encumbrances as do not materially affect the use of the properties
or assets subject thereto or affected thereby or otherwise materially impair
business operations at such properties, and (ii) is the lessee of all leasehold
estates reflected in the latest audited financial statements included in such
Chase SEC Documents or acquired after the date thereof which are material to its
business on a consolidated basis (except for leases that have expired by their
terms since the date thereof) and is in possession of the properties purported
to be leased thereunder and each such lease is valid without default thereunder
by the lessee or, to Chase's knowledge, the lessor, except in the case of
clauses (i) and (ii) above as would not reasonably be expected to have a
material adverse effect on Chase.
(r) Interest Rate Risk Management Instruments. Any interest rate swaps,
caps, floors and option agreements and other interest rate risk management
arrangements, whether entered into for the account of Chase or one of its
Subsidiaries or entered into by Chase or one of its Subsidiaries for the account
of a customer of Chase or one of its Subsidiaries, were entered into in the
ordinary course of business and in accordance with prudent business practice and
applicable rules, regulations and policies of any Governmental Entity and with
counterparties reasonably believed by Chase to be financially responsible at the
time, and are legal, valid and binding obligations of Chase or one of its
Subsidiaries and, to the best knowledge of Chase, of the other parties thereto,
enforceable in accordance with their terms (except as may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the
rights of creditors generally and the availability of equitable remedies), and
are in full force and effect, in each case except as would not reasonably be
expected to have, either individually or in the aggregate, a material adverse
effect on Chase. Chase and each of its Subsidiaries have duly performed all of
their respective obligations thereunder to the extent that such obligations to
perform have accrued, except as would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on Chase, and, to
the best knowledge of Chase, there are no breaches, violations or defaults or
allegations or assertions of such by any party thereunder, except as would not
reasonably be expected to have, either individually or in the aggregate, a
material adverse effect on Chase.
(s) Intellectual Property. Chase and its Subsidiaries own or have a
valid license to use all trademarks, service marks and trade names (including
any registrations or applications for registration of any of the foregoing)
(collectively, the "Chase Intellectual Property") necessary to carry on their
business substantially as currently conducted, except where such failures to own
or validly license such Chase Intellectual Property would not, individually or
in the aggregate, reasonably be expected to have a material adverse effect on
Chase. Neither Chase nor any such Subsidiary has received any notice of
infringement of or conflict with, and to
<PAGE>
Chase's knowledge, there are no infringements of or conflicts with, the rights
of others with respect to the use of any Chase Intellectual Property that
individually or in the aggregate, in either such case, would reasonably be
expected to have a material adverse effect on Chase.
(t) Brokers or Finders. No agent, broker, investment banker, financial
advisor or other firm or person is or will be entitled to any broker's or
finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement, except Chase Securities Inc.,
and Chase agrees to indemnify Morgan and to hold Morgan harmless from and
against any and all claims, liabilities or obligations with respect to any other
fees, commissions or expenses asserted by any person on the basis of any act or
statement alleged to have been made by Chase or its affiliates.
(u) Opinion of Chase Financial Advisor. Chase has received the opinion
of its financial advisor, Chase Securities Inc., dated the date of this
Agreement, to the effect that the Exchange Ratio is fair, from a financial point
of view, to Chase and the holders of Chase Common Stock.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1. Covenants of Morgan. During the period from the date of this
Agreement and continuing until the Effective Time, Morgan agrees as to itself
and its Subsidiaries that, except as expressly contemplated or permitted by this
Agreement or the Stock Option Agreements or to the extent that Chase shall
otherwise consent in writing:
(a) Ordinary Course. Morgan and its Subsidiaries shall carry on their
respective businesses in the usual, regular and ordinary course consistent with
past practice and use all reasonable efforts to preserve intact their present
business organizations, maintain their rights, franchises, licenses and other
authorizations issued by Governmental Entities and preserve their relationships
with customers, suppliers and others having business dealings with them to the
end that their goodwill and ongoing businesses shall not be impaired in any
material respect at the Effective Time. Morgan shall not, nor shall it permit
any of its Subsidiaries to, (i) enter into any new material line of business,
(ii) change its or its Subsidiaries' lending, investment, underwriting, risk and
asset-liability management and other material banking or operating policies in
any respect which is material to Morgan, except as required by law or by
policies imposed by a Governmental Entity, (iii) incur or commit to any capital
expenditures or any obligations or liabilities in connection therewith other
than capital expenditures and obligations or liabilities incurred or committed
to in the ordinary course of business consistent with past practice, or (iv)
enter into or terminate any material lease, contract or agreement, or make any
change to any existing material leases, contracts or agreements, except in the
ordinary course of business consistent with past practice.
(b) Dividends; Changes in Stock. Morgan shall not, nor shall it permit
any of its Subsidiaries to, or propose to, (i) declare or pay any dividends on
or make other distributions in respect of any of its capital stock, except (A)
as provided in Section 5.12, (B) the declaration and payment of regular
quarterly cash dividends on the Morgan Common Stock at a rate not in excess of
the regular quarterly cash dividend most recently declared prior to the date of
this Agreement and regular cash dividends on the Morgan Preferred Stock in
accordance with the terms of such preferred stock as in effect on the date of
this Agreement, in each case with usual
<PAGE>
record and payment dates for such dividends in accordance with Morgan's past
dividend practice or as required by the terms of such preferred stock, and (C)
for dividends by a wholly-owned Subsidiary of Morgan, (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (iii) repurchase, redeem or otherwise
acquire, or permit any Subsidiary to redeem, purchase or otherwise acquire any
shares of its capital stock or any securities convertible into or exercisable
for any shares of its capital stock (except for the acquisition of trading
account shares, trust account shares and DPC shares in the ordinary course of
business consistent with past practice and except pursuant to agreements in
effect on the date hereof and disclosed or not required to be disclosed in the
Morgan Disclosure Schedule).
(c) Issuance of Securities. Morgan shall not, nor shall it permit any
of its Subsidiaries to, issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of its capital stock, any Voting Debt
or any securities convertible into or exercisable or exchangeable for, or any
rights, warrants or options to acquire, any such shares or Voting Debt, or enter
into any agreement with respect to any of the foregoing, other than (i) the
issuance of Morgan Common Stock upon the exercise of stock options issued under
the Morgan Stock Plans and either outstanding on the date of this Agreement or
thereafter issued as permitted by Sections 4.1(j) and 4.1(k), or pursuant to the
Morgan Stock Option Agreement, (ii) issuances by a wholly-owned Subsidiary of
its capital stock to its parent or to another wholly-owned Subsidiary of Morgan,
and (iii) such issuances as may be necessary for Morgan and the Merger to
qualify for "pooling of interests" accounting treatment.
(d) Governing Documents, Etc. Morgan shall not amend or propose to
amend its Certificate of Incorporation or By-laws or enter into, or permit any
Subsidiary to enter into, a plan of consolidation, merger or reorganization with
any person other than a wholly-owned Subsidiary of Morgan.
(e) No Acquisitions. Other than (i) acquisitions disclosed in the
Morgan Disclosure Schedule, and (ii) acquisitions in existing or related lines
of business of Morgan and its Subsidiaries the fair market value of the total
consideration for which does not exceed $100,000,000 in the aggregate, Morgan
shall not, and shall not permit any of its Subsidiaries to, acquire or agree to
acquire by merging or consolidating with, by purchasing a substantial equity
interest in or a substantial portion of the assets of, by forming a partnership
or joint venture with, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof or
otherwise acquire or agree to acquire any assets; provided, however, that the
foregoing shall not prohibit (i) internal reorganizations or consolidations
involving existing Subsidiaries other than Morgan Bank, (ii) foreclosures and
other debt-previously-contracted acquisitions in the ordinary course of
business, (iii) acquisitions of control by a banking Subsidiary in its fiduciary
capacity, (iv) investments made by small business investment company or venture
capital Subsidiaries, acquisitions of financial assets and merchant banking
activities, in each case in the ordinary course of business consistent with past
practice, (v) the creation of new Subsidiaries organized to conduct or continue
activities otherwise permitted by this Agreement, or (vi) acquisitions of
securities in the ordinary course of Morgan's or its Subsidiaries' underwriting,
trading or market-making businesses consistent with past practice.
<PAGE>
(f) No Dispositions. Other than (i) internal reorganizations or
consolidations involving existing Subsidiaries other than Morgan Bank, (ii)
dispositions referred to in Morgan SEC Documents filed prior to the date of this
Agreement or as disclosed in the Morgan Disclosure Schedule, (iii)
securitization activities in the ordinary course of business consistent with
past practice, and (iv) other activities in the ordinary course of business
consistent with past practice, Morgan shall not, and shall not permit any of its
Subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to
sell, lease, encumber or otherwise dispose of, any of its assets (including
capital stock of its Subsidiaries) which are material, individually or in the
aggregate, to Morgan.
(g) Indebtedness. Morgan shall not, and shall not permit any of its
Subsidiaries to, incur, create or assume any long-term indebtedness for borrowed
money (or modify any of the material terms of any such outstanding long-term
indebtedness) or guarantee any such long-term indebtedness or issue or sell any
long-term debt securities or warrants or rights to acquire any long-term debt
securities of Morgan or any of its Subsidiaries or guarantee any long-term debt
securities of others, other than (i) in replacement of existing or maturing
debt, (ii) indebtedness of any Subsidiary of Morgan to Morgan or to another
Subsidiary of Morgan, or (iii) in the ordinary course of business consistent
with past practice.
(h) Other Actions. Morgan shall not, and shall not permit any of its
Subsidiaries to, intentionally take any action that would, or reasonably might
be expected to, result in any of its representations and warranties set forth in
this Agreement being or becoming untrue, subject to such exceptions as do not
have, and would not reasonably be expected to have, individually or in the
aggregate, a material adverse effect on Morgan or on the Surviving Corporation
following the Effective Time, or in any of the conditions to the Merger set
forth in Article VI not being satisfied or in a violation of any provision of
this Agreement or the Stock Option Agreements, or (unless such action is
required by applicable law) which would adversely affect the ability of the
parties to obtain any of the Requisite Regulatory Approvals without imposition
of a condition or restriction of the type referred to in Section 6.1(g).
(i) Accounting Methods. Except as disclosed in Morgan SEC Documents
filed prior to the date of this Agreement, Morgan shall not change its methods
of accounting in effect at December 31, 1999, except as required by changes in
generally accepted accounting principles as concurred in by Morgan's independent
auditors.
(j) Pooling and Tax-Free Reorganization Treatment. Morgan shall not,
and shall not permit any of its Subsidiaries to, intentionally take or cause to
be taken any action, whether before or after the Effective Time, which would
disqualify the Merger as a "pooling of interests" for accounting purposes or as
a reorganization within the meaning of Section 368(a) of the Code; provided,
however, that nothing hereunder shall limit the ability of Morgan to exercise
its rights under the Stock Option Agreements.
(k) Compensation and Benefit Plans. During the period from the date of
this Agreement and continuing until the Effective Time, Morgan agrees as to
itself and its Subsidiaries that, except as disclosed in the Morgan Disclosure
Schedule, it will not, without the prior written consent of Chase (and subject
in all cases to Morgan's obligations under Section 4.1(j)), (i) enter into,
adopt, amend (except for such amendments as may be required by law) or terminate
any Morgan Benefit Plan, or any other employee benefit plan or any agreement,
arrangement, plan or policy between Morgan or a Subsidiary of Morgan and one or
more of its directors or officers, (ii) except for normal
<PAGE>
payments, awards and increases in the ordinary course of business consistent
with past practice that, in the aggregate, do not result in a material increase
in benefits or compensation expense, increase in any manner the compensation or
fringe benefits of any director, officer or employee or pay any benefit not
required by any plan and arrangement as in effect as of the date hereof
(including, without limitation, the granting of stock options, stock
appreciation rights, restricted stock, restricted stock units or performance
units or shares) or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing or (iii) enter into or renew any
contract, agreement, commitment or arrangement (other than a renewal occurring
in accordance with the terms thereof) providing for the payment to any director,
officer or employee of such party of compensation or benefits contingent, or the
terms of which are materially altered, upon the occurrence of any of the
transactions contemplated by this Agreement or the Stock Option Agreements;
provided however, that any such payments or awards that result in an aggregate
compensation expense for the 2000 fiscal year not exceeding 50% of consolidated
total revenues, net, of Morgan for that year (the "maximum expense") shall not
be regarded as a breach of Morgan's obligations hereunder; and provided further
that payments of target awards under the 1998 Performance Plan of J.P. Morgan &
Co. Incorporated and Affiliated Companies shall be permitted in all events
hereunder in accordance with the terms of such Plan, and any expense resulting
therefrom shall not be taken into account when making any calculation pursuant
to the previous proviso.
(l) Tax Elections. Morgan shall not (i) change any tax election, annual
tax accounting period or method of tax accounting in any material respect, (ii)
file any material amended tax return, (iii) enter into any closing agreement
relating to any material tax, (iv) settle any material tax claim or assessment,
or (v) surrender any right to claim a material tax refund or consent to any
extension or waiver of the limitations period applicable to any material Tax
claim or assessment.
(m) Investment Portfolio. Morgan shall not materially restructure or
materially change (on a consolidated basis) its investment securities portfolio,
its hedging strategy or its gap position, through purchases, sales or otherwise,
or the manner in which the portfolio is classified or reported or materially
alter the credit or risk concentrations associated with its underwriting,
market-making and other investment banking businesses.
(n) No Liquidation. Morgan shall not, and shall not permit any of its
Significant Subsidiaries to, adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such a liquidation or a dissolution,
restructuring, recapitalization or reorganization.
(o) Other Agreements. Morgan shall not, and shall not permit any of its
Subsidiaries to, agree to, or make any commitment to, take, or authorize, any of
the actions prohibited by this Section 4.1.
4.2. Covenants of Chase. During the period from the date of this
Agreement and continuing until the Effective Time, Chase agrees as to itself and
its Subsidiaries that, except as expressly contemplated or permitted by this
Agreement or the Stock Option Agreements or to the extent that Morgan shall
otherwise consent in writing:
(a) Ordinary Course. Chase and its Subsidiaries shall carry on their
respective businesses in the usual, regular and ordinary course consistent with
past practice and use all reasonable efforts to preserve intact their present
business organizations, maintain their rights, franchises, licenses and other
authorizations issued by Governmental Entities and preserve their
<PAGE>
relationships with customers, suppliers and others having business dealings with
them to the end that their goodwill and ongoing businesses shall not be impaired
in any material respect at the Effective Time. Chase shall not, nor shall it
permit any of its Subsidiaries to, (i) enter into any new material line of
business, (ii) change its or its Subsidiaries' lending, investment,
underwriting, risk and asset-liability management and other material banking or
operating policies in any respect which is material to Chase, except as required
by law or by policies imposed by a Governmental Entity, (iii) incur or commit to
any capital expenditures or any obligations or liabilities in connection
therewith other than capital expenditures and obligations or liabilities
incurred or committed to in the ordinary course of business consistent with past
practice, or (iv) enter into or terminate any material lease, contract or
agreement, or make any change to any existing material leases, contracts or
agreements, except in the ordinary course of business consistent with past
practice.
(b) Dividends; Changes in Stock. Chase shall not, nor shall it permit
any of its Subsidiaries to, or propose to, (i) declare or pay any dividends on
or make other distributions in respect of any of its capital stock, except (A)
as provided in Section 5.12, (B) the declaration and payment of regular
quarterly cash dividends on the Chase Common Stock at a rate not in excess of
the regular quarterly cash dividend most recently declared prior to the date of
this Agreement and regular cash dividends on the Chase Preferred Stock in
accordance with the terms of such preferred stock as in effect on the date of
this Agreement, in each case with usual record and payment dates for such
dividends in accordance with Chase's past dividend practice or as required by
the terms of such preferred stock, and (C) for dividends by a wholly-owned
Subsidiary of Chase, (ii) split, combine or reclassify any of its capital stock
or issue or authorize or propose the issuance or authorization of any other
securities in respect of, in lieu of or in substitution for, shares of its
capital stock, or (iii) repurchase, redeem or otherwise acquire, or permit any
Subsidiary to purchase or otherwise acquire, any shares of its capital stock or
any securities convertible into or exercisable for any shares of its capital
stock (except for the acquisition of trading account shares, trust account
shares and DPC shares in the ordinary course of business consistent with past
practice and except pursuant to agreements in effect on the date hereof and
disclosed or not required to be disclosed in the Chase Disclosure Schedule).
(c) Issuance of Securities. Chase shall not, nor shall it permit any of
its Subsidiaries to, issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of its capital stock of any class, any
Voting Debt or any securities convertible into or exercisable or exchangeable
for, or any rights, warrants or options to acquire, any such shares or Voting
Debt, or enter into any agreement with respect to any of the foregoing, other
than (i) the issuance of Chase Common Stock upon the exercise of stock options
issued under the Chase Stock Plans in accordance with the terms of the
applicable Chase Stock Plan in effect on the date of this Agreement, issuances
of stock options and other equity awards in the ordinary course of business
consistent with past practices or issuances of Chase Common Stock pursuant to
the Chase Stock Option Agreement, (ii) issuances by a wholly-owned Subsidiary of
its capital stock to its parent or to another wholly-owned Subsidiary of Chase,
(iii) issuances in respect of any acquisitions, mergers, share exchanges,
consolidations, business combinations or similar transactions by Chase or its
subsidiaries permitted by Section 4.2(e), including any financings therefor, and
(iv) as disclosed in the Chase Disclosure Schedule.
(d) Governing Documents. Chase shall not amend or propose to amend its
Certificate of Incorporation or By-laws in any way that is materially adverse to
Morgan or
<PAGE>
Morgan's stockholders or to Chase's ability to consummate the transactions
contemplated hereby or by the Chase Stock Option Agreement or, except as
permitted pursuant to Section 4.2(e) or 4.2(f), enter into, or permit any
Subsidiary to enter into, a plan of consolidation, merger or reorganization with
any person other than a wholly-owned Subsidiary of Chase.
(e) No Acquisitions. Other than acquisitions (whether by means of
merger, share exchange, consolidation, tender offer, asset purchase or
otherwise) and other business combinations (collectively, "Acquisitions")
provided that (A) the fair market value of the total consideration paid by Chase
and its Subsidiaries in Isuch Acquisitions does not exceed in the aggregate the
amount set forth in the Chase Disclosure Schedule, and (B) such Acquisitions do
not present a material risk of making it materially more difficult to obtain the
Requisite Regulatory Approvals, Chase shall not, and shall not permit any of its
Subsidiaries to, acquire or agree to acquire, by merging or consolidating with,
by purchasing a substantial equity interest in or a substantial portion of the
assets of, by forming a partnership or joint venture, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof or otherwise acquire or agree to acquire any
assets; provided, however, that the foregoing shall not prohibit (i) internal
reorganizations or consolidations involving existing Subsidiaries other than
Chase Bank, (ii) foreclosures and other debt-previously-contracted acquisitions
in the ordinary course of business, (iii) acquisitions of control by a banking
Subsidiary in its fiduciary capacity, (iv) investments made by small business
investment company or venture capital Subsidiaries, acquisitions of financial
assets and merchant banking activities, in each case in the ordinary course of
business consistent with past practice, (v) the creation of new Subsidiaries
organized to conduct or continue activities otherwise permitted by this
Agreement, or (vi) acquisitions of securities in the ordinary course of Chase's
or its Subsidiaries' underwriting, trading or market-making businesses
consistent with past practice.
(f) No Dispositions. Other than (i) internal reorganizations or
consolidations involving existing Subsidiaries other than Chase Bank, (ii)
dispositions referred to in Chase SEC Documents filed prior to the date of this
Agreement or as disclosed in the Chase Disclosure Schedule, (iii) securitization
activities in the ordinary course of business consistent with past practice,
(iv) other activities in the ordinary course of business consistent with past
practice, and (v) other dispositions of assets (including Subsidiaries) if the
fair market value of the total consideration received therefrom does not exceed
in the aggregate the amount set forth in the Chase Disclosure Schedule, Chase
shall not, and shall not permit any of its Subsidiaries to, sell, lease,
encumber or otherwise dispose of, or agree to sell, lease, encumber or otherwise
dispose of, any of its assets (including capital stock of its Subsidiaries)
which are material, individually or in the aggregate, to Chase.
(g) Indebtedness. Chase shall not, and shall not permit any of its
Subsidiaries to, incur, create or assume any long-term indebtedness for borrowed
money (or modify any of the material terms of any such outstanding long-term
indebtedness) or guarantee any such long-term indebtedness or issue or sell any
long-term debt securities or warrants or rights to acquire any long-term debt
securities of Chase or any of its Subsidiaries or guarantee any long-term debt
securities of others other than (i) in replacement of existing or maturing debt,
(ii) indebtedness of any Subsidiary of Chase or another Subsidiary of Chase or
(iii) in the ordinary course of business consistent with past practice.
<PAGE>
(h) Other Actions. Chase shall not, and shall not permit any
of its Subsidiaries to, intentionally take any action that would, or reasonably
might be expected to, result in any of its representations and warranties set
forth in this Agreement being or becoming untrue, subject to such exceptions as
do not have, and would not reasonably be expected to have, individually or in
the aggregate, a material adverse effect on Chase or on the Surviving
Corporation following the Effective Time, or in any of the conditions to the
Merger set forth in Article VI not being satisfied or in a violation of any
provision of this Agreement or the Stock Option Agreements, or (unless such
action is required by applicable law) which would adversely affect the ability
of the parties to obtain any of the Requisite Regulatory Approvals without
imposition of a condition or restriction of the type referred to in Section
6.1(g).
(i) Accounting Methods. Except as disclosed in Chase SEC
Document filed prior to the date of this Agreement, Chase shall not change its
methods of accounting in effect at December 31, 1999, except as required by
changes in generally accepted accounting principles as concurred in by Chase's
independent auditors.
(j) Pooling and Tax-Free Reorganization Treatment. Chase shall
not, and shall not permit any of its Subsidiaries to, intentionally take or
cause to be taken any action, whether before or after the Effective Time, which
would disqualify the Merger as a "pooling of interests" for accounting purposes
or as a reorganization within the meaning of Section 368(a) of the Code;
provided, however, that nothing hereunder shall limit the ability of Chase to
exercise its rights under the Stock Option Agreements.
(k) No Liquidation. Chase shall not, and shall not permit any
of its Significant Subsidiaries to, adopt a plan of complete or partial
liquidation or resolutions providing for or authorizing such a liquidation or a
dissolution, restructuring, recapitalization or reorganization.
(l) Other Agreements. Chase shall not, and shall not permit
any of its Subsidiaries to, agree to, or make any commitment to, take, or
authorize, any of the actions prohibited by this Section 4.2.
4.3. Transition. In order to facilitate the integration of the
operations of Morgan and Chase and their Subsidiaries and to permit the
coordination of their related operations on a timely basis, and in an effort to
accelerate to the earliest time possible following the Effective Time the
realization of synergies, operating efficiencies and other benefits expected to
be realized by the parties as a result of the Merger, each of Morgan and Chase
shall, and shall cause its Subsidiaries to, consult with the other on all
strategic and operational matters to the extent such consultation is not in
violation of applicable laws, including laws regarding the exchange of
information and other laws regarding competition. Each of Morgan and Chase
shall, and shall cause its Subsidiaries to, make available to the other at its
facilities and those of its Subsidiaries, where determined by Chase or Morgan,
as the case may be, to be appropriate and necessary, office space in order to
assist it in observing all operations and reviewing all matters concerning the
affairs of the other party. Without in any way limiting the provisions of
Section 5.2, Morgan and Chase, their respective Subsidiaries and their
respective officers, employees, counsel, financial advisors and other
representatives shall, upon reasonable notice to the other party, be entitled to
review the operations and visit the facilities of the other party and its
Subsidiaries at all times as may be deemed reasonably necessary by Chase or
Morgan, as the case may be, in order to accomplish the foregoing arrangements.
<PAGE>
4.4. Advice of Changes; Government Filings. Each party shall confer on
a regular and frequent basis with the other, report on operational matters and
promptly advise the other orally and in writing of any change or event having,
or which would reasonably be expected to have, a material adverse effect on such
party or which would cause or constitute a material breach of any of the
representations, warranties or covenants of such party contained herein. Morgan
and Chase shall file all reports required to be filed by each of them with the
SEC between the date of this Agreement and the Effective Time and shall deliver
to the other party copies of all such reports promptly after the same are filed.
Morgan, Chase and each Subsidiary of Chase or Morgan that is a bank shall file
all call reports with the appropriate bank regulators and all other reports,
applications and other documents required to be filed with the applicable
Governmental Entities between the date hereof and the Effective Time and shall
make available to the other party copies of all such reports promptly after the
same are filed. Each of Morgan and Chase shall have the right to review in
advance, and to the extent practicable each will consult with the other, in each
case subject to applicable laws relating to the exchange of information, with
respect to all the information relating to the other party, and any of their
respective Subsidiaries, which appears in any filing made with, or written
materials submitted to, any third party or any Governmental Entity in connection
with the transactions contemplated by this Agreement. In exercising the
foregoing right, each of the parties hereto agrees to act reasonably and as
promptly as practicable. Each party hereto agrees that to the extent practicable
it will consult with the other party hereto with respect to the obtaining of all
permits, consents, approvals and authorizations of all third parties and
Governmental Entities necessary or advisable to consummate the transactions
contemplated by this Agreement and each party will keep the other party apprised
of the status of matters relating to completion of the transactions contemplated
hereby.
4.5. Control of Other Party's Business. Nothing contained in this
Agreement (including, without limitation, Section 4.3) shall give Chase,
directly or indirectly, the right to control or direct the operations of Morgan
and nothing contained in this Agreement shall give Morgan, directly or
indirectly, the right to control or direct the operations of Chase prior to the
Effective Time. Prior to the Effective Time, each of Morgan and Chase shall
exercise, consistent with the terms and conditions of this Agreement, complete
control and supervision over its and its Subsidiaries' respective operations.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1. Preparation of Proxy Statement; Stockholders Meetings. (a) As
promptly as reasonably practicable following the date hereof, Chase and Morgan
shall cooperate in preparing and shall cause to be filed with the SEC mutually
acceptable proxy materials which shall constitute the proxy statement/prospectus
relating to the matters to be submitted to the Morgan stockholders at the Morgan
Stockholders Meeting (as defined in Section 5.1(b)) and to the Chase
stockholders at the Chase Stockholders Meeting (as defined in Section 5.1(c))
(such joint proxy statement/prospectus, and any amendments or supplements
thereto, the "Joint Proxy Statement/Prospectus") and Chase shall prepare and
file with the SEC a registration statement on Form S-4 (of which the Joint Proxy
Statement/Prospectus shall be a part) with respect to the issuance of Chase
Common Stock in the Merger (such Form S-4, and any amendments or supplements
thereto, the "Form S-4"). Each of Chase and Morgan shall use reasonable best
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efforts to have the Joint Proxy Statement/Prospectus cleared by the SEC and the
Form S-4 declared effective by the SEC and to keep the Form S-4 effective as
long as is necessary to consummate the Merger and the transactions contemplated
thereby. Chase and Morgan shall, as promptly as practicable after receipt
thereof, provide the other party copies of any written comments and advise the
other party of any oral comments with respect to the Joint Proxy
Statement/Prospectus or Form S-4 received from the SEC. Each party shall
cooperate and provide the other party with a reasonable opportunity to review
and comment on any amendment or supplement to the Joint Proxy
Statement/Prospectus and the Form S-4 prior to filing such with the SEC, and
each party will provide the other party with a copy of all such filings made
with the SEC. Notwithstanding any other provision herein to the contrary (but
subject to the rights of each of Morgan and Chase to make a Change in
Recommendation in accordance with Section 5.4(b)), no amendment or supplement
(including by incorporation by reference) to the Joint Proxy
Statement/Prospectus or the Form S-4 shall be made without the approval of each
party, which approval shall not be unreasonably withheld or delayed; provided
that with respect to documents filed by a party which are incorporated by
reference in the Form S-4 or Joint Proxy Statement/Prospectus, this right of
approval shall apply only with respect to information relating to the other
party or its business, financial condition or results of operations. Chase shall
use its reasonable best efforts to take any action required to be taken under
any applicable state securities laws in connection with the Merger and each
party shall furnish all information concerning it and the holders of its capital
stock as may be reasonably requested in connection with any such action. Each
party will advise the other party, promptly after it receives notice thereof, of
the time when the Form S-4 has become effective, the issuance of any stop order,
the suspension of the qualification of the Chase Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or any
request by the SEC for amendment of the Joint Proxy Statement/Prospectus or the
Form S-4. If at any time prior to the Effective Time any information relating to
either of the parties, or their respective affiliates, officers or directors,
should be discovered by either party which should be set forth in an amendment
or supplement to any of the Form S-4 or the Joint Proxy Statement/Prospectus so
that such documents would not include any misstatement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, the party
which discovers such information shall promptly notify the other party hereto
and, to the extent required by law, rules or regulations, an appropriate
amendment or supplement describing such information shall be promptly filed with
the SEC and disseminated to the stockholders of Morgan and Chase.
(b) Morgan shall duly take all lawful action to call, give
notice of, convene and hold a meeting of its stockholders as promptly as
practicable following the date upon which the Form S-4 becomes effective (the
"Morgan Stockholders Meeting") for the purpose of obtaining the Required Morgan
Vote with respect to the transactions contemplated by this Agreement and, unless
it is permitted to make a Change in Morgan Recommendation (as defined below)
pursuant to Section 5.4(b), shall use all reasonable best efforts to
solicit the adoption of this Agreement by the Required Morgan Vote; and the
Board of Directors of Morgan shall recommend adoption of this Agreement by the
stockholders of Morgan to the effect as set forth in Section 3.1(n) (the "Morgan
Recommendation") and shall not (x) withdraw, modify or qualify (or propose to
withdraw, modify or qualify) in any manner adverse to Chase such recommendation
or (y) take any other action or make any other statement in connection with the
Morgan Stockholders Meeting inconsistent with such recommendation (collectively,
a "Change
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in Morgan Recommendation"), except as and to the extent expressly permitted by
Section 5.4(b). Notwithstanding any Change in Morgan Recommendation, this
Agreement shall be submitted to the stockholders of Morgan at the Morgan
Stockholders Meeting for the purpose of adopting this Agreement and nothing
contained herein shall be deemed to relieve Morgan of such obligation.
(c) Chase shall duly take all lawful action to call, give
notice of, convene and hold a meeting of its stockholders as promptly as
practicable following the date upon which the Form S-4 becomes effective (the
"Chase Stockholders Meeting") for the purpose of obtaining the Required Chase
Vote with respect to the transactions contemplated by this Agreement and, unless
it is permitted to make a Change in Chase Recommendation (as defined below)
pursuant to Section 5.4(b), shall use all reasonable best efforts to solicit the
adoption of this Agreement by the Required Chase Vote; and the Board of
Directors of Chase shall recommend adoption of this Agreement by the
stockholders of Chase to the effect as set forth in Section 3.2(n) (the "Chase
Recommendation") and shall not (x) withdraw, modify or qualify (or propose to
withdraw, modify or qualify) in any manner adverse to Morgan such recommendation
or (y) take any other action or make any other statement in connection with the
Chase Stockholders Meeting inconsistent with such recommendation (a "Change in
Chase Recommendation"), except as and to the extent expressly permitted by
Section 5.4(b). Notwithstanding any Change in Chase Recommendation, this
Agreement shall be submitted to the stockholders of Chase at the Chase
Stockholders Meeting for the purpose of adopting this Agreement and nothing
contained herein shall be deemed to relieve Chase of such obligation.
(d) Morgan and Chase shall each use their reasonable best
efforts to cause the Morgan Stockholders Meeting and the Chase Stockholders
Meeting to be held on the same date.
5.2. Access to Information. (a) Upon reasonable notice, Morgan and
Chase shall each (and shall cause each of their respective Subsidiaries to)
afford to the representatives of the other, access, during normal business hours
during the period prior to the Effective Time, to all its properties, books,
contracts and records and, during such period, each of Morgan and Chase shall
(and shall cause each of their respective Subsidiaries to) make available to the
other (i) a copy of each report, schedule, registration statement and other
document filed or received by it during such period pursuant to the requirements
of Federal securities laws or Federal or state banking laws (other than reports
or documents which such party is not permitted to disclose under applicable law)
and (ii) all other information concerning its business, properties and personnel
as such other party may reasonably request. Neither party nor any of its
Subsidiaries shall be required to provide access to or to disclose information
where such access or disclosure would violate or prejudice the rights of its
customers, jeopardize the attorney-client privilege of the institution in
possession or control of such information or contravene any law, rule,
regulation, order, judgment, decree or binding agreement entered into prior to
the date of this Agreement. The parties will make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply.
(b) The parties will hold any such information which is
nonpublic in confidence to the extent required by, and in accordance with, the
provisions of the letter dated September 9, 2000, between Morgan and Chase (the
"Confidentiality Agreement"), which Confidentiality Agreement will remain in
full force and effect.
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(c) No such investigation by either Chase or Morgan shall
affect the representations and warranties of the other.
5.3. Reasonable Best Efforts. (a) Each of Morgan and Chase shall, and
shall cause its Subsidiaries to, use all reasonable best efforts (i) to take, or
cause to be taken, all actions necessary to comply promptly with all legal
requirements which may be imposed on such party or its Subsidiaries with respect
to the Merger and to consummate the transactions contemplated by this Agreement
as promptly as practicable, and (ii) to obtain (and to cooperate with the other
party to obtain) any consent, authorization, order or approval of, or any
exemption by, any Governmental Entity and/or any other public or private third
party which is required to be obtained or made by such party or any of its
Subsidiaries in connection with the Merger and the transactions contemplated by
this Agreement; provided, however, that a party shall not be obligated to take
any action pursuant to the foregoing if the taking of such action or such
compliance or the obtaining of such consent, authorization, order, approval or
exemption is reasonably likely to result in a condition or restriction on such
party or on the Surviving Corporation having an effect of the type referred to
in Section 6.1(g). Each of Morgan and Chase will promptly cooperate with and
furnish information to the other in connection with any such efforts by, or
requirement imposed upon, any of them or any of their Subsidiaries in connection
with the foregoing.
(b) Chase agrees to execute and deliver, or cause to be
executed and delivered by or on behalf of the Surviving Corporation, at or prior
to the Effective Time, supplemental indentures and other instruments required
for the due assumption of Morgan's outstanding debt and other securities to the
extent required by the terms of such securities and the instruments and
agreements relating thereto.
(c) Each of Morgan and Chase and their respective Boards of
Directors shall, if any state takeover statute or similar statute becomes
applicable to this Agreement, the Merger, the Stock Option Agreements or any
other transactions contemplated hereby or thereby, use all reasonable best
efforts to ensure that the Merger and the other transactions contemplated by
this Agreement and the Stock Option Agreements may be consummated as promptly as
practicable on the terms contemplated hereby or thereby and otherwise to
minimize the effect of such statute or regulation on this Agreement, the Merger,
the Stock Option Agreements and the other transactions contemplated hereby or
thereby.
5.4. Acquisition Proposals. (a) Chase and Morgan each agrees that
neither it nor any of its Subsidiaries nor any of the officers and directors of
it or its Subsidiaries shall, and that it shall use its reasonable best efforts
to cause its and its Subsidiaries' employees, agents and representatives
(including any investment banker, attorney or accountant retained by it or any
of its Subsidiaries) not to, directly or indirectly, (i) initiate, solicit,
encourage or knowingly facilitate any inquiries or the making of any proposal or
offer with respect to, or a transaction to effect, a merger, reorganization,
share exchange, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving it or any of its
Significant Subsidiaries (other than any such transaction permitted by Section
4.1(e) in the case of Morgan, and Section 4.2(e) in the case of Chase) or any
purchase or sale of 20% or more of the consolidated assets (including, without
limitation, stock of its Subsidiaries) of it and its Subsidiaries, taken as a
whole, or any purchase or sale of, or tender or exchange offer for, its
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voting securities that, if consummated, would result in any person (or the
stockholders of such person) beneficially owning securities representing 20% or
more of its total voting power (or of the surviving parent entity in such
transaction) or any of its Significant Subsidiaries (any such proposal, offer or
transaction (other than a proposal or offer made by the other party to this
Agreement or an affiliate thereof) being hereinafter referred to as an
"Acquisition Proposal"), (ii) have any discussions with or provide any
confidential information or data to any person relating to an Acquisition
Proposal, or engage in any negotiations concerning an Acquisition Proposal, or
knowingly facilitate any effort or attempt to make or implement an Acquisition
Proposal, (iii) approve or recommend, or propose publicly to approve or
recommend, any Acquisition Proposal or (iv) approve or recommend, or propose to
approve or recommend, or execute or enter into, any letter of intent, agreement
in principle, merger agreement, asset purchase or share exchange agreement,
option agreement or other similar agreement related to any Acquisition Proposal
or propose or agree to do any of the foregoing.
(b) Notwithstanding anything in this Agreement to the
contrary, either party to this Agreement or its respective Board of Directors
shall be permitted to (A) to the extent applicable, comply with Rule 14d-9 and
Rule 14e-2 promulgated under the Exchange Act with regard to an Acquisition
Proposal, (B) effect a Change in Morgan Recommendation or a Change in Chase
Recommendation (as applicable, a "Change in Recommendation"), or (C) engage in
any discussions or negotiations with, or provide any confidential information or
data to, any person in response to an unsolicited bona fide written Acquisition
Proposal by any such person first made after the date of this Agreement, if and
only to the extent that, in any such case referred to in clause (B) or (C):
(i) such party's stockholders meeting to vote on the adoption
of this Agreement shall not have occurred,
(ii) such party has complied in all material respects with
this Section 5.4,
(iii) its Board of Directors, after consultation with outside
counsel, determines in good faith that failure to take such action
would likely be inconsistent with its fiduciary duties under applicable
law,
(iv) in the case only of clause (B) above, (I) it has received
an unsolicited bona fide written Acquisition Proposal from a third
party and its Board of Directors concludes in good faith that such
Acquisition Proposal constitutes a Superior Proposal (as defined below)
(after giving effect to all of the concessions which may be offered by
the other party to this Agreement pursuant to clause (III) below), (II)
it has notified the other party to this Agreement, at least five
business days in advance, of its intention to effect a Change in
Recommendation, specifying the material terms and conditions of such
Superior Proposal and furnishing to the other party to this Agreement a
copy of any relevant proposed transaction agreements with the party
making such Superior Proposal and any other material documents received
by it or its representatives, and (III) prior to effecting such a
Change in Recommendation, it has, and has caused its financial and
legal advisors to, negotiate with the other party to this Agreement in
good faith to make such adjustments in the terms and conditions of this
Agreement such that such Acquisition Proposal would no longer
constitute a Superior Proposal,
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(v) in the case only of clause (C) above, its Board of Directors
concludes in good faith that there is a reasonable likelihood that such
Acquisition Proposal constitutes or is reasonably likely to result in a
Superior Proposal, and prior to providing any information or data to
any person in connection with an Acquisition Proposal by any such
person, its Board of Directors receives from such person an executed
confidentiality agreement having provisions that are no less favorable
to the party providing such information than those contained in the
Confidentiality Agreement, and
(vi) it notifies the other party to this Agreement as promptly as
practicable (and in any event within 24 hours of providing any
confidential information or data to any person or entering into
discussions or negotiations with any person), of such inquiries,
proposals or offers received by, any such information requested from,
or any such discussions or negotiations sought to be initiated or
continued with, it or any of its representatives indicating, in
connection with such notice, the identity of such person and the
material terms and conditions of any inquiries, proposals or offers
(including a copy thereof if in writing and any related available
documentation or correspondence). Each of Chase and Morgan agrees that
it will promptly keep the other party informed of the status and terms
of any such proposals or offers and the status and terms of any such
discussions or negotiations.
(c) Each of Chase and Morgan agrees that (i) it will, and will
cause its officers, directors and representatives to, immediately cease and
cause to be terminated any activities, discussions or negotiations existing as
of the date of this Agreement with any parties conducted heretofore with respect
to any Acquisition Proposal, (ii) it will immediately cease and cause its
Subsidiaries, and its and their officers, directors, agents, representatives and
advisors, to cease any and all existing activities, discussions or negotiations
with any third parties conducted heretofore with respect to any Acquisition
Proposal, and (iii) it will not release any third party from, or waive any
provisions of, any confidentiality or standstill agreement to which it or any of
its Subsidiaries is a party with respect to any Acquisition Proposal. Each of
Chase and Morgan agrees that it will use reasonable best efforts to promptly
inform its respective directors, officers, key employees, agents and
representatives of the obligations undertaken in this Section 5.4.
(d) Nothing in this Section 5.4 shall (x) permit either party
to terminate this Agreement or (y) affect any other obligation of the parties
under this Agreement. Neither party shall submit to the vote of its stockholders
any Acquisition Proposal other than the Merger.
(e) For purposes of this Agreement, "Superior Proposal" means
a bona fide written Acquisition Proposal which the Board of Directors of Chase
or Morgan, as the case may be, concludes in good faith, after consultation with
its financial advisors and legal advisors, taking into account all legal,
financial, regulatory and other aspects of the proposal and the person making
the proposal (including any break-up fees, expense reimbursement provisions and
conditions to consummation), (i) is more favorable to the stockholders of Chase
or Morgan, as the case may be, from a financial point of view, than the
transactions contemplated by this Agreement and (ii) is fully financed or
reasonably capable of being fully financed and otherwise reasonably capable of
being completed on the terms proposed; provided that, for purposes of this
definition of "Superior Proposal," the term Acquisition Proposal shall have the
meaning assigned to such term in Section 5.4(a), except that the reference to
"20% or more" in the definition of "Acquisition Proposal" shall be deemed to be
a reference to "a majority" and "Acquisition
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Proposal" shall only be deemed to refer to a transaction involving voting
securities of Chase or Morgan, as the case may be.
(f) Any disclosure (other than a "stop, look and listen" or
similar communication of the type contemplated by Rule 14-9(f) under the
Exchange Act) made pursuant to clause (A) of Section 5.4(b) shall be deemed to
be a Change in Recommendation unless the Board of Directors of the party making
such disclosure expressly reaffirms the Morgan Recommendation or Chase
Recommendation, as the case may be.
5.5. Affiliates. At least 45 days prior to the Closing Date, Morgan
shall deliver to Chase a letter identifying all persons who are, at the time
this Agreement is submitted for approval to the Morgan Stockholders Meeting,
"affiliates" of Morgan for purposes of Rule 145 under the Securities Act and/or
Accounting Series Releases 130 and 135 of the SEC, and Chase shall deliver to
Morgan a letter identifying all persons who are, at the time this Agreement is
submitted for approval to the Chase Stockholders Meeting, "affiliates" of Chase
for purposes of such Accounting Series Releases. Each of Chase and Morgan shall
use all reasonable efforts to cause each person named in the letter delivered by
it to deliver to the other party at least 30 days prior to the Closing Date a
written agreement, substantially in the form attached as Exhibits 5.5(a)(i) and
(ii) (in the case of persons named in the letter delivered by Morgan) or Exhibit
5.5(b) (in the case of persons named in the letter delivered by Chase).
5.6. Stock Exchange Listing. Chase shall use all reasonable efforts to
cause (i) the shares of Chase Common Stock to be issued in the Merger, (ii) the
shares of Chase Common Stock to be reserved for issuance upon exercise of Morgan
Stock Options (as defined below), and (iii) the shares of Chase Merger Preferred
Stock to be issued in the Merger in exchange for the Morgan Series A Preferred
Stock and the Morgan Series H Preferred Stock (or depositary shares in respect
thereof), each to be approved for listing on the NYSE, subject to official
notice of issuance, prior to the Closing Date.
5.7. Employee Benefit Plans. (a) Chase and Morgan agree that, unless
otherwise mutually determined, the Chase Benefit Plans and Morgan Benefit Plans
in effect at the date of this Agreement shall remain in effect after the
Effective Time with respect to employees covered by such plans at the Effective
Time, and the parties shall negotiate in good faith to formulate Benefit Plans
for the Surviving Corporation and its Subsidiaries, with respect both to
employees who were covered by the Chase Benefit Plans and Morgan Benefit Plans
at the Effective Time and employees who were not covered by such plans at the
Effective Time, that provide benefits for services after the Effective Time on a
basis that does not discriminate between employees who were covered by the Chase
Benefit Plans and employees who were covered by the Morgan Benefit Plans.
(b) Except as otherwise provided in Section 5.8, in the case
of Morgan Benefit Plans under which the employees' interests are based upon
Morgan Common Stock, Chase and Morgan agree that such interests shall be based
on Chase Common Stock in an equitable manner.
(c) With respect to Benefit Plans maintained or contributed to
outside the United States for the benefit of non-United States citizens or
residents, the principles set forth in the preceding paragraphs of this Section
5.7 shall apply to the extent the application of such principles does not
violate applicable foreign law.
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5.8. Stock Options, SARs and Restricted Stock Units. At the Effective
Time, each outstanding option to purchase shares of Morgan Common Stock (a
"Morgan Stock Option") and each outstanding stock appreciation right (a "Morgan
SAR") or restricted stock unit (a "Morgan Unit") issued pursuant to any Morgan
Stock Plan, whether vested or unvested, shall be assumed by Chase. Each Morgan
Stock Option shall be deemed to constitute an option to acquire, on the same
terms and conditions as were applicable under such Morgan Stock Option, the same
number of shares of Chase Common Stock as the holder of such Morgan Stock Option
would have been entitled to receive pursuant to the Merger had such holder
exercised such option in full immediately prior to the Effective Time, rounded,
if necessary, down, to the nearest whole share, at a price per share equal to
(y) the exercise price per share of the shares of Morgan Common Stock otherwise
purchasable pursuant to such Morgan Stock Option divided by (z) the Exchange
Ratio; provided, however, that in the case of any option to which section 421 of
the Code applies by reason of its qualification under section 422 of the Code
("incentive stock options"), the option price, the number of shares purchasable
pursuant to such option and the terms and conditions of exercise of such option
shall be determined in accordance with the method set forth above unless use of
such method will not preserve the status of such options as incentive stock
options, in which case the manner of determination shall be adjusted in a manner
that both complies with Section 424(a) of the Code and results in the smallest
modification in the economic values that otherwise would be achieved by the
holder pursuant to the method set forth above; and provided further, that
notwithstanding any other provisions of this Section 5.8(a), if use of the above
methods would disqualify the Merger as a "pooling of interests" for financial
accounting purposes, then such methods will be adjusted to the extent necessary
to preserve such accounting treatment.
(b) Each holder of a Morgan SAR shall be entitled to that
number of stock appreciation rights of Chase ("Chase SARs"), determined in the
same manner as set forth above with respect to Morgan Stock Options assumed by
Chase. Each holder of a Morgan Unit shall be entitled to that number of
restricted stock units of Chase determined by multiplying the number of Morgan
Units held by such holder immediately prior to the Effective Time by the
Exchange Ratio.
(c) As soon as practicable after the Effective Time, Chase
shall deliver to the holders of Morgan Stock Options, Morgan SARs and Morgan
Units appropriate notices setting forth such holders' rights pursuant to the
Morgan Stock Plans and the agreements evidencing the grants of such Morgan Stock
Options, Morgan SARs or Morgan Units, as the case may be, shall continue in
effect on the same terms and conditions (subject to the adjustments required by
this Section 5.8 after giving effect to the Merger and the assumption by Chase
as set forth above). If necessary, Chase shall comply with the terms of the
applicable Morgan Stock Plan and ensure, to the extent required by, and subject
to the provisions of, Section 5.8(a) and such Plan, that Morgan Stock Options
which qualified as incentive stock options prior to the Effective Time continue
to qualify as incentive stock options of Chase after the Effective Time.
(d) Chase shall take all corporate action necessary to reserve
for issuance a sufficient number of shares of Chase Common Stock for delivery
upon exercise of Morgan Stock Options assumed by it in accordance with this
Section 5.8. As soon as practicable after the Effective Time, Chase shall file a
registration statement on Form S-3 or Form S-8, as the case may be (or any
successor or other appropriate forms), with respect to the shares of Chase
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Common Stock subject to such options and shall use its best efforts to maintain
the effectiveness of such registration statement or registration statements (and
maintain the current status of the prospectus or prospectuses contained therein)
for so long as such options remain outstanding. With respect to those
individuals who subsequent to the Merger will be subject to the reporting
requirements under Section 16(a) of the Exchange Act, where applicable, Chase
shall administer the Morgan Stock Plans assumed pursuant to this Section 5.8 in
a manner that complies with Rule 16b-3 promulgated under the Exchange Act to the
extent the applicable Morgan Stock Plan complied with such rule prior to the
Merger.
5.9. Fees and Expenses. Whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement, the Stock Option
Agreements and the transactions contemplated hereby and thereby shall be paid by
the party incurring such expense, except as otherwise provided in the Stock
Option Agreements or in Section 7.2 hereof and except that (a) if the Merger is
consummated, the Surviving Corporation shall pay, or cause to be paid, any and
all property or transfer taxes imposed in connection with the Merger, and (b)
expenses incurred in connection with filing, printing and mailing the Joint
Proxy Statement/Prospectus and the Form S-4 shall be shared equally by Chase and
Morgan.
5.10. Governance; Name. (a) Following the date of this Agreement,
Chase's Board of Directors shall cause the number of directors that will
comprise the full Board of Directors of the Surviving Corporation at the
Effective Time to be fifteen. Of the members of the initial Board of Directors
of the Surviving Corporation at the Effective Time, nine shall be designated by
Chase (and shall include the current Chief Executive Officer of Chase) and six
shall be designated by Morgan (and shall include the current Chief Executive
Officer of Morgan). No other employees of Chase or Morgan shall be designated to
serve on the Board of Directors of the Surviving Corporation at the Effective
Time. Chase's Board of Directors shall take all necessary action to cause the
persons designated pursuant to the second preceding sentence to constitute the
full Board of Directors of the Surviving Corporation at the Effective Time, and
further to cause one of such designees of Morgan to be appointed to each of the
Audit, Governance and Compensation and Benefits Committees of the Board of
Directors of the Surviving Corporation promptly following the Effective Time.
Chase's Board of Directors shall also take such actions as are necessary to
cause the persons indicated in Exhibit 5.10(a) to be elected or appointed to the
offices of the Surviving Corporation specified in such Exhibit as of the
Effective Time.
(b) As of the Effective Time, the name of the Surviving
Corporation shall be J.P. Morgan Chase & Co.
5.11. Indemnification; Directors' and Officers' Insurance. (a) >From
and after the Effective Time, the Surviving Corporation shall indemnify, defend
and hold harmless, and provide advancement of expenses to, each person who is
now, or has been at any time prior to the date hereof or who becomes prior to
the Effective Time, an officer, director or employee of Morgan or any of its
Subsidiaries (the "Indemnified Parties") against all losses, claims, damages,
costs, expenses, liabilities or judgments or amounts that are paid in settlement
of or in connection with any claim, action, suit, proceeding or investigation
based in whole or in part on or arising in whole or in part out of the fact that
such person is or was a director, officer or employee of Morgan or any
Subsidiary of Morgan, and pertaining to any matter existing or occurring, or any
acts or omissions occurring, at or prior to the Effective Time, whether asserted
or claimed prior
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to, or at or after, the Effective Time (including matters, acts or omissions
occurring in connection with the approval of this Agreement and the consummation
of the transactions contemplated hereby) ("Indemnified Liabilities") (i) to the
same extent such persons are indemnified or have the right to advancement of
expenses as of the date of this Agreement by Morgan pursuant to Morgan's
Certificate of Incorporation, By-laws and indemnification agreements, if any, in
existence on the date hereof with any directors, officers and employees of
Morgan and its Subsidiaries and (ii) without limitation to clause (i), to the
fullest extent permitted by law.
(b) For a period of six years after the Effective Time, the
Surviving Corporation shall cause to be maintained in effect the current
policies of directors' and officers' liability insurance maintained by Morgan
(provided that the Surviving Corporation may substitute therefor policies with a
substantially comparable insurer of at least the same coverage and amounts
containing terms and conditions which are no less advantageous to the insured)
with respect to claims arising from facts or events which occurred at or before
the Effective Time; provided, however, that the Surviving Corporation shall not
be obligated to make annual premium payments for such insurance to the extent
such premiums exceed 250% of the premiums paid as of the date hereof by Morgan
for such insurance ("Morgan's Current Premium"), and if such premiums for such
insurance would at any time exceed 250% of Morgan's Current Premium, then the
Surviving Corporation shall cause to be maintained policies of insurance which,
in the Surviving Corporation's good faith determination, provide the maximum
coverage available at an annual premium equal to 250% of Morgan's Current
Premium. In the event that Chase acts as its own insurer for its directors and
officers with respect to matters typically covered by a directors' and officers'
liability insurance policy, Chase's obligations under this Section 5.11(b) may
be satisfied by such self-insurance, so long as Chase's senior debt ratings by
Standard & Poor's Corporation and Moody's Investors Services, Inc. are not more
than one rating grade lower than such ratings as in effect as of the date of
this Agreement.
(c) The Surviving Corporation shall pay (as incurred) all
expenses, including reasonable fees and expenses of counsel, that an Indemnified
Person may incur in enforcing the indemnity and other obligations provided for
in this Section 5.11.
(d) If the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of the
Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 5.11.
(e) The provisions of this Section 5.11 (i) are intended to be
for the benefit of, and shall be enforceable by, each Indemnified Party, his or
her heirs and representatives and (ii) are in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by contract or otherwise.
5.12. Dividends. After the date of this Agreement, each of Chase and
Morgan shall coordinate with the other the payment of dividends with respect to
the Chase Common Stock and
<PAGE>
Morgan Common Stock and the record dates and payment dates relating thereto, it
being the intention of the parties hereto that holders of Chase Common Stock and
Morgan Common Stock shall not receive two dividends, or fail to receive one
dividend, for any single calendar quarter with respect to their shares of Chase
Common Stock and/or Morgan Common Stock or any shares of Chase Common Stock that
any such holder receives in exchange for such shares of Morgan Common Stock in
the Merger.
5.13. Public Announcements. Chase and Morgan shall use reasonable best
efforts (i) to develop a joint communications plan, (ii) to ensure that all
press releases and other public statements with respect to the transactions
contemplated hereby shall be consistent with such joint communications plan, and
(iii) except in respect of any announcement required by applicable law or by
obligations pursuant to any listing agreement with or rules of any securities
exchange, to consult with each other before issuing any press release or, to the
extent practical, otherwise making any public statement with respect to this
Agreement or the transactions contemplated hereby. In addition to the foregoing,
except to the extent disclosed in or consistent with the Joint Proxy
Statement/Prospectus in accordance with the provisions of Section 5.1 or as
otherwise permitted under Section 4.4, no party shall issue any press release or
otherwise make any public statement or disclosure concerning the other party or
the other party's business, financial condition or results of operations without
the consent of such other party, which consent shall not be unreasonably
withheld or delayed.
5.14. Additional Agreements. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement or to vest the Surviving Corporation with full title to all
properties, assets, rights, approvals, immunities and franchises of either of
the Constituent Corporations, the proper officers and directors of each party to
this Agreement shall take all such necessary action.
ARTICLE VI
CONDITIONS PRECEDENT
6.1. Conditions to Each Party's Obligation To Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction prior to the Closing Date of the following conditions:
(a) Stockholder Approval. Morgan shall have obtained the
Required Morgan Vote in connection with the adoption of the Merger Agreement and
Chase shall have obtained the Required Chase Vote in connection with the
adoption of the Merger Agreement.
(b) NYSE Listing. The shares of (i) Chase Common Stock to be
issued in the Merger, (ii) Chase Common Stock to be reserved for issuance upon
exercise of the Morgan Stock Options and (iii) Chase Merger Preferred Stock to
be issued in the Merger in exchange for the Morgan Series A Preferred Stock and
the Morgan Series H Preferred Stock (or depositary shares in respect thereof),
shall have been authorized for listing on the NYSE upon official notice of
issuance.
(c) Other Approvals. Other than the filing provided for by
Section 1.1, all authorizations, consents, orders or approvals of, or
declarations or filings with, and all expirations of waiting periods required
from, any Governmental Entity (all the foregoing, "Consents") which are
necessary for the consummation of the Merger, other than Consents the failure to
obtain which would not reasonably be expected to have a material adverse effect
on the
<PAGE>
consummation of the Merger or on the Surviving Corporation, shall have been
filed, have occurred or been obtained (all such permits, approvals, filings and
consents and the lapse of all such waiting periods being referred to as the
"Requisite Regulatory Approvals") and all such Requisite Regulatory Approvals
shall be in full force and effect. Chase shall have received all state
securities or blue sky permits and other authorizations necessary to issue the
Chase Common Stock and Chase Merger Preferred Stock in exchange for Morgan
Common Stock and Morgan Preferred Stock and to consummate the Merger.
(d) Form S-4. The Form S-4 shall have become effective under
the Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order.
(e) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the Merger shall be in effect.
There shall not be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Merger, by any Federal or
state Governmental Entity which makes the consummation of the Merger illegal.
(f) Pooling. Chase and Morgan shall each have received letters
from PricewaterhouseCoopers LLP to the effect that the Merger qualifies for
"pooling of interests" accounting treatment if consummated in accordance with
this Agreement, and such letters shall not have been withdrawn.
(g) Burdensome Condition. There shall not be any action taken,
or any statute, rule, regulation, order or decree enacted, entered, enforced or
deemed applicable to the Merger by any Federal or state Governmental Entity
which, in connection with the grant of a Requisite Regulatory Approval or
otherwise, imposes any condition or restriction (a "Burdensome Condition") upon
the Surviving Corporation or its Subsidiaries which would reasonably be expected
to have a material adverse effect after the Effective Time on the present or
prospective consolidated financial condition, business or operating results of
the Surviving Corporation.
6.2. Conditions to Obligations of Chase. The obligation of Chase to
effect the Merger is subject to the satisfaction of the following conditions
unless waived by Chase:
(a) Representations and Warranties. The representations and
warranties of Morgan set forth in this Agreement shall be true and correct as of
the date of this Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Closing Date as though made on
and as of the Closing Date, subject to such exceptions as do not have and would
not reasonably be expected to have, individually or in the aggregate, a material
adverse effect on Chase or the Surviving Corporation following the Effective
Time, and Chase shall have received a certificate signed on behalf of Morgan by
the Chief Executive Officer and Chief Financial Officer of Morgan to such
effect.
(b) Performance of Obligations of Morgan. Morgan shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and Chase shall have
received a certificate signed on behalf of Morgan by the Chief Executive Officer
and Chief Financial Officer of Morgan to such effect.
(c) Tax Opinion. Chase shall have received the opinion of
Simpson Thacher & Bartlett, counsel to Chase, dated the Closing Date, to the
effect that the Merger will be treated for Federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the
<PAGE>
Code. In rendering such opinion, counsel to Chase shall be entitled to rely upon
customary representations and assumptions provided by Chase and Morgan that
counsel to Chase reasonably deems relevant.
6.3. Conditions to Obligations of Morgan. The obligation of Morgan to
effect the Merger is subject to the satisfaction of the following conditions
unless waived by Morgan:
(a) Representations and Warranties. Each of the
representations and warranties of Chase set forth in this Agreement shall be
true and correct as of the date of this Agreement and (except to the extent such
representations speak as of an earlier date) as of the Closing Date as though
made on and as of the Closing Date, subject to such exceptions as do not have,
and would not reasonably be expected to have, a material adverse effect on Chase
or the Surviving Corporation following the Closing Date, and Morgan shall have
received a certificate signed on behalf of Chase by the Chairman and Chief
Executive Officer and by the Vice Chairman-Finance or the Chief Financial
Officer of Chase to such effect.
(b) Performance of Obligations of Chase. Chase shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and Morgan shall have
received a certificate signed on behalf of Chase by the Chairman and Chief
Executive Officer and the Vice Chairman-Finance or the Chief Financial Officer
of Chase to such effect.
(c) Tax Opinion. Morgan shall have received the opinion of
Davis Polk & Wardwell, counsel to Morgan, dated the Closing Date, to the effect
that the Merger will be treated for Federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code. In rendering
such opinion, counsel to Morgan shall be entitled to rely upon customary
representations and assumptions provided by Chase and Morgan that counsel to
Morgan reasonably deems relevant.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1. Termination. This Agreement may be terminated at any time prior to
the Effective Time, by action taken or authorized by the Board of Directors of
the terminating party or parties, whether before or after approval of the Merger
by the stockholders of Morgan or Chase:
(a) by mutual consent of Chase and Morgan in a written
instrument;
(b) by either Chase or Morgan, upon written notice to the
other party, if a Governmental Entity of competent jurisdiction which must grant
a Requisite Regulatory Approval has denied approval of the Merger and such
denial has become final and non-appealable; or any Governmental Entity of
competent jurisdiction shall have issued an order, decree or ruling or taken any
other action permanently restraining, enjoining or otherwise prohibiting the
Merger, and such order, decree, ruling or other action has become final and
nonappealable; provided, however, that the right to terminate this Agreement
under this Section 7.1(b) shall not be available to any party whose failure to
comply with Section 5.3 or any other provision of this Agreement has been the
cause of, or resulted in, such action;
<PAGE>
(c) by either Chase or Morgan, upon written notice to the
other party, if the Merger shall not have been consummated on or before June 30,
2001; provided, however, that the right to terminate this Agreement under this
Section 7.1(c) shall not be available to any party whose failure to comply with
Section 5.3 or any other provision of this Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before such date;
(d) by Chase, upon written notice to Morgan, if Morgan shall
have (i) failed to make the Morgan Board Recommendation or effected a Change in
Morgan Recommendation (or resolved to take any such action), whether or not
permitted by the terms hereof, or (ii) materially breached its obligations under
this Agreement by reason of a failure to call the Morgan Stockholders Meeting in
accordance with Section 5.1(b) or a failure to prepare and mail to its
stockholders the Joint Proxy Statement/Prospectus in accordance with Section
5.1(a); or
(e) by Morgan, upon written notice to Chase, if Chase shall
have (i) failed to make the Chase Board Recommendation or effected a Change in
Chase Recommendation (or resolved to take any such action), whether or not
permitted by the terms hereof, or (ii) materially breached its obligations under
this Agreement by reason of a failure to call the Chase Stockholders Meeting in
accordance with Section 5.1(c) or a failure to prepare and mail to its
stockholders the Joint Proxy Statement/Prospectus in accordance with Section
5.1(a).
7.2. Effect of Termination. (a) In the event of termination of this
Agreement by either Morgan or Chase as provided in Section 7.1, this Agreement
shall forthwith become void and there shall be no liability or obligation on the
part of Chase or Morgan or their respective officers or directors, except with
respect to Sections 3.1(t) and 3.2(t), Section 5.2(b), Section 5.9, this Section
7.2 and Article VIII, which shall survive such termination and except that no
party shall be relieved or released from any liabilities or damages arising out
of its willful and material breach of this Agreement.
(b) Chase shall pay Morgan, by wire transfer of immediately
available funds, the sum of $1.25 billion (the "Chase Termination Fee") if this
Agreement is terminated as follows:
(i) if Morgan shall terminate this Agreement pursuant to
Section 7.1(e), then Chase shall pay the Chase Termination Fee on the
business day following such termination;
(ii) if (A) either party shall terminate this Agreement
pursuant to Section 7.1(c), (B) the approval of the stockholders of
Chase contemplated by this Agreement shall not have been obtained by
reason of the failure to obtain the Required Chase Vote at the Chase
Stockholders Meeting; and (C) at any time after the date of this
Agreement and at or before the date of the Chase Stockholders Meeting
an Acquisition Proposal shall have been publicly announced or otherwise
communicated to the senior management or Board of Directors of Chase (a
"Public Proposal" with respect to Chase), then Chase shall pay
one-third of the Chase Termination Fee on the business day following
such termination; and if (D) within eighteen (18) months of the date of
such termination of this Agreement, Chase or any of its Subsidiaries
executes any definitive agreement with respect to, or consummates, any
Acquisition Proposal, then Chase shall pay the remaining two-thirds of
the Chase Termination Fee upon the date of such execution or
consummation; and
<PAGE>
(iii) if (A) either party shall terminate this Agreement
pursuant to Section 7.1(c), (B) at any time after the date of this
Agreement and before such termination there shall have been a Public
Proposal with respect to Chase, and (C) following the occurrence of
such Public Proposal, Chase shall have intentionally breached (and not
cured after notice thereof) any representations, warranties, covenants
or agreements set forth in this Agreement, which breach shall have
materially contributed to the failure of the Effective Time to occur on
or before the date specified in Section 7.1(c), then Chase shall pay
one-third of the Chase Termination Fee on the business day following
such termination; and if (D) within eighteen (18) months of the date of
such termination of this Agreement, Chase or any of its Subsidiaries
executes any definitive agreement with respect to, or consummates, any
Acquisition Proposal, then Chase shall pay the remaining two-thirds of
the Chase Termination Fee upon the date of such execution or
consummation.
If Chase fails to pay all amounts due to Morgan on the dates specified, then
Chase shall pay all costs and expenses (including legal fees and expenses)
incurred by Morgan in connection with any action or proceeding (including the
filing of any lawsuit) taken by it to collect such unpaid amounts, together with
interest on such unpaid amounts at the prime lending rate prevailing at such
time, as published in the Wall Street Journal, from the date such amounts were
required to be paid until the date actually received by Morgan.
(c) Morgan shall pay Chase, by wire transfer of immediately
available funds, the sum of $1.25 billion (the "Morgan Termination Fee") if this
Agreement is terminated as follows:
(i) if Chase shall terminate this Agreement pursuant to
Section 7.1(d), then Morgan shall pay the Morgan Termination Fee on the
business day following such termination;
(ii) if (A) either party shall terminate this Agreement
pursuant to Section 7.1(c), (B) the approval of the stockholders of
Morgan contemplated by this Agreement shall not have been obtained by
reason of the failure to obtain the Required Morgan Vote at the Morgan
Stockholders Meeting, and (C) at any time after the date of this
Agreement and at or before the date of the Morgan Stockholders Meeting
there shall have been a Public Proposal with respect to Morgan, then
Morgan shall pay one-third of the Morgan Termination Fee on the
business day following such termination; and if (D) within eighteen
(18) months of the date of such termination of this Agreement, Morgan
or any of its Subsidiaries enters into any definitive agreement with
respect to, or consummates, any Acquisition Proposal, then Morgan shall
pay the remaining two-thirds of the Morgan Termination Fee on the date
of such execution or consummation; and
(iii) if (A) either party shall terminate this Agreement
pursuant to Section 7.1(c), (B) at any time after the date of this
Agreement and before such termination there shall have been a Public
Proposal with respect to Morgan, (C) following the occurrence of such
Public Proposal, Morgan shall have intentionally breached (and not
cured after notice thereof) any representations, warranties, covenants
or agreements set forth in this Agreement, which breach shall have
materially contributed to the failure of the Effective Time to occur on
or before the date specified in Section 7.1(c), then Morgan shall pay
one-third of the Morgan Termination Fee on the business day following
such termination; and if (D) within eighteen
<PAGE>
(18) months of the date of such termination of this Agreement, Morgan
or any of its Subsidiaries enters into any definitive agreement with
respect to, or consummates, any Acquisition Proposal, then Morgan shall
pay the remaining two-thirds of the Morgan Termination Fee upon the
date of such execution or consummation.
If Morgan fails to pay all amounts due to Chase on the dates specified, then
Morgan shall pay all costs and expenses (including legal fees and expenses)
incurred by Chase in connection with any action or proceeding (including the
filing of any lawsuit) taken by it to collect such unpaid amounts, together with
interest on such unpaid amounts at the prime lending rate prevailing at such
time, as published in the Wall Street Journal, from the date such amounts were
required to be paid until the date actually received by Chase.
7.3. Amendment. This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors, at any time
before or after approval of the matters presented in connection with the Merger
by the stockholders of Morgan or of Chase, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
7.4. Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other party hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party. The failure of
a party to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights.
ARTICLE VIII
GENERAL PROVISIONS
8.1. Non-survival of Representations, Warranties and Agreements. None
of the representations, warranties, covenants and agreements in this Agreement
or in any instrument delivered pursuant to this Agreement (other than the Stock
Option Agreements, which shall terminate in accordance with their terms),
including any rights arising out of any breach of such representations,
warranties, covenants, and agreements, shall survive the Effective Time, except
for those covenants and agreements contained herein and therein that by their
terms apply or are to be performed in whole or in part after the Effective Time.
8.2. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or by telecopy or telefacsimile, upon confirmation of
receipt, (b) on the first business day following the date of dispatch if
delivered by a recognized next-day courier service, or (c) on the third business
day following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice.
(a) if to Chase, to
<PAGE>
The Chase Manhattan Corporation
270 Park Avenue
New York, N.Y. 10017
Attention: William H. McDavid, Esq.
Telecopy No.: (212) 270-4288
with a copy to
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, N.Y. 10017
Attention: Richard I. Beattie, Esq.
Lee Meyerson, Esq.
Telecopy No.: (212) 455-2502
and
(b) if to Morgan, to
J.P. Morgan & Co. Incorporated
60 Wall Street
New York, N.Y. 10260
Attention: Edward J. Kelly III
Telecopy No.: (212) 648-5484
with a copy to
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attention: George R. Bason, Jr., Esq.
Telecopy No.: (212) 450-4800
8.3. Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available. The phrases "the date of this
Agreement", "the date hereof" and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to September 12, 2000. The phrases
"known" or "knowledge" mean, with respect to either party to this Agreement, the
actual knowledge of such party's executive officers after reasonable inquiry.
<PAGE>
8.4. Counterparts. This Agreement may be executed in counterparts, each
of which shall be considered one and the same agreement and shall become
effective when both counterparts have been signed by each of the parties and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.
8.5. Entire Agreement; No Third Party Beneficiaries. This Agreement
(including the documents and the instruments referred to herein, including the
Stock Option Agreements) (a) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter hereof, other than the Confidentiality
Agreement, which shall survive the execution and delivery of this Agreement and
(b) except as provided in Section 5.11, is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder.
8.6. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware (without giving effect to
choice of law principles thereof).
8.7. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability and, unless the
effect of such invalidity or unenforceability would prevent the parties from
realizing the major portion of the economic benefits of the Merger that they
currently anticipate obtaining therefrom, shall not render invalid or
unenforceable the remaining terms and provisions of this Agreement or affect the
validity or enforceability of any of the terms or provisions of this Agreement
in any other jurisdiction. If any provision of this Agreement is so broad as to
be unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
8.8. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by either of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other party, and any attempt to make any such assignment without
such consent shall be null and void. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
8.9. Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Federal Court or New York
State Court sitting in the Borough of Manhattan, City of New York, this being in
addition to any other remedy to which they are entitled at law or in equity.
<PAGE>
IN WITNESS WHEREOF, Chase and Morgan have caused this Agreement to be signed by
their respective officers thereunto duly authorized, all as of September 12,
2000.
THE CHASE MANHATTAN CORPORATION
By: /s/ William B. Harrison, Jr.
---------------------------------------
Name: William B. Harrison, Jr.
Title: Chairman and CEO
J.P MORGAN & CO. INCORPORATED
By: /s/ Douglas A. Warner III
---------------------------------------
Name: Douglas A. Warner III
Title: Chairman and CEO
<PAGE>
EXHIBIT 1.1(a)
TO THE MERGER AGREEMENT
[Included as Exhibit 10.2 to this current report on Form 8-K]
<PAGE>
EXHIBIT 1.1(b)
TO THE MERGER AGREEMENT
[Included as Exhibit 10.1 to this current report on Form 8-K]
<PAGE>
EXHIBIT 5.5(a)(i)
TO THE MERGER AGREEMENT
<PAGE>
EXHIBIT 5.5(a)(i)
[MORGAN RULE 145 AFFILIATE LETTER]
The Chase Manhattan Corporation
270 Park Avenue
New York, New York
Ladies and Gentlemen:
Pursuant to the terms of the Agreement the Plan of Merger dated as of
September 12, 2000 (the "Agreement"), between The Chase Manhattan Corporation, a
Delaware corporation ("Chase"), and J.P. Morgan & Co. Incorporated, a Delaware
corporation ("Morgan"), Morgan will be merged with and into Chase (the
"Merger"). Capitalized terms used herein and not defined have the meanings
assigned to them in the Agreement. As a result of the Merger, the undersigned
may receive shares of Common Stock, par value $1.00 per share, of Chase ("Chase
Common Stock") or shares of one or more series of preferred stock, par value
$1.00 per share, of Chase ("Chase Preferred Stock" and together with the Chase
Common Stock, the "Chase Securities") in exchange for, respectively, shares
owned by the undersigned of Common Stock, par value $2.50 per share, of Morgan
("Morgan Common Stock") or shares of one or more series of preferred stock,
without par value, of Morgan ("Morgan Preferred Stock" and together with the
Morgan Common Stock, the "Morgan Securities").
The undersigned has been advised that as of the date the Merger is
submitted to stockholders of Morgan for approval, the undersigned may be an
"affiliate" of Morgan as the term "affiliate" is defined for purposes of
paragraphs (c) and (d) of Rule 145 of the Rules and Regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Act").
The undersigned represents, warrants and covenants to Chase that in the
event the undersigned receives any Chase Securities as a result of the Merger:
A. At the time the Merger was submitted for a vote of the stockholders of
Morgan, (a) the undersigned may be deemed to have been an affiliate of Morgan
and (b) since the distribution by the undersigned of the Chase Securities has
not been registered under the Act, the undersigned may not sell, transfer or
otherwise dispose of Chase Securities issued to the undersigned in the Merger
unless (i) such sale, transfer or other disposition has been registered under
the Act, (ii) such sale, transfer or other disposition is made in conformity
with the provisions of Rule 145 promulgated by the Commission under the Act (as
such rule may hereinafter from time to time be amended), or (iii) in the opinion
of counsel reasonably acceptable to Chase, or in accordance with a "no action"
letter obtained by the undersigned from the staff of the Commission, such sale,
transfer or other disposition will not violate or is otherwise exempt from
registration under the Act.
<PAGE>
B. The undersigned understands that, except as provided in the Agreement in
Section 5.8(c), Chase is under no obligation to register the sale, transfer or
other disposition of the Chase Securities by the undersigned or on the
undersigned's behalf under the Act.
C. The undersigned also understands that stop transfer instructions will be
given to Chase's transfer agents with respect to the Chase Securities issued to
the undersigned and that there will be placed on the certificates for the Chase
Securities issued to the undersigned, or any substitutions therefor, a legend
stating in substance:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities
Act of 1933 applies. The shares represented by this certificate
may only be transferred in accordance with the terms of an
agreement dated , 20 between the registered
holder hereof and Chase Corporation, a copy of which agreement is
on file at the principal offices of Chase Corporation."
D. The undersigned also understands that unless the transfer by the
undersigned of the undersigned's Chase Securities has been registered under the
Act or is a sale made in conformity with the provisions of Rule 145 under the
Act, Chase reserves the right to put the following legend on the certificates
issued to any transferee of such Chase Securities from the undersigned:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 and were acquired
from a person who received such shares in a transaction to which
Rule 145 promulgated under the Securities Act of 1933 applies.
The shares have been acquired by the holder not with a view to,
or for resale in connection with, any distribution thereof within
the meaning of the Securities Act of 1933 and may not be offered,
sold, pledged or otherwise transferred except in accordance with
an exemption from the registration requirements of the
Securities Act of 1933."
E. It is understood and agreed that the legend set forth in paragraphs C or
D above, as the case may be, shall be removed by delivery of substitute
certificates without such legend if the undersigned shall have delivered to
Chase (i) a copy of a "no action" letter from the staff of the Commission, or an
opinion of counsel in form and substance reasonably satisfactory to Chase, to
the effect that such legend is not required for purposes of the Act, or (ii)
evidence or representations reasonably satisfactory to Chase that the Chase
Securities represented by such certificates are being or have been sold in a
transaction made in conformity with the provisions of Rule 145 under the Act.
F. The undersigned has carefully read this letter and the Agreement and
discussed its requirements and other applicable limitations upon the
undersigned's ability to sell, transfer or otherwise dispose of Chase
Securities, to the extent the undersigned felt necessary, with counsel of the
undersigned or counsel for Morgan.
By its acceptance hereof, Chase agrees, for a period of two years after the
Effective Time (as defined in the Agreement), that it, as the surviving
corporation, will file on a
<PAGE>
timely basis all reports required to be filed by it pursuant to Section 13 of
the Securities Exchange Act of 1934, as amended, so that the public information
provisions of Rule 144(c) under the Act are satisfied and the resale provisions
of Rules 145(d)(1) and (2) under the Act are therefore available to the
undersigned in the event the undersigned desires to transfer any Chase
Securities issued to the undersigned in the Merger.
This letter agreement shall be governed by and construed in accordance with
the laws of the State of Delaware. This letter agreement shall terminate if and
when the Agreement is terminated according to its terms.
<PAGE>
4
By signing this letter, without limiting or abrogating my agreements set
forth above, the undersigned does not admit that the undersigned is an
"affiliate" of Morgan within the meaning of the Act or the Rules and
Regulations, and the undersigned does not waive any right the undersigned may
have to object to any assertion that the undersigned is such an affiliate.
Very truly yours,
------------------------------------
Name:
Title:
[add below the signatures of all registered owners of
shares deemed beneficially owned by the affiliate]
------------------------------------
Name:
------------------------------------
Name:
------------------------------------
Name:
Accepted this day of
, 20 , by
THE CHASE MANHATTAN CORPORATION
By:
------------------------
Name:
Title:
<PAGE>
EXHIBIT 5.5(a)(ii)
TO THE MERGER AGREEMENT
<PAGE>
EXHIBIT 5.5(a)(ii)
[MORGAN POOLING AFFILIATE LETTER]
The Chase Manhattan Corporation
270 Park Avenue
New York, New York
Ladies and Gentlemen:
Pursuant to the terms of the Agreement and Plan of Merger dated as of
September 12, 2000 (the "Agreement"), between The Chase Manhattan Corporation,
a Delaware corporation ("Chase"), and J.P. Morgan & Co. Incorporated, a
Delaware corporation ("Morgan"), Morgan will be merged with and into Chase (the
"Merger").
The undersigned represents, warrants and covenants to Chase that:
A. The undersigned understands that as of the date of this letter, the
undersigned may be deemed to be an "affiliate" of Morgan, as such term is used
in and for purposes of Accounting Series Releases 130 and 135, as amended.
B. The undersigned will not sell, transfer or otherwise dispose of his or
her interests in, or reduce his or her risk relative to (i) any shares of Common
Stock, par value $1.00 per share, or shares of one or more series of preferred
stock, par value $1.00 per share, of Chase (the "Chase Securities") or (ii) any
shares of Common Stock, par value $2.50 per share, or shares of one or more
series of preferred stock, no par value, of Morgan (the "Morgan Securities"),
beneficially owned by the undersigned during the period commencing 30 days prior
to the effective date of the Merger and ending at such time as results covering
at least 30 days of combined operations of Morgan and Chase have been published
by Chase, which Chase agrees to publish consistent with its normal financial
reporting practice.
C. The undersigned has carefully read this letter and the Agreement and
discussed its requirements and other applicable limitations upon the
undersigned's ability to sell, transfer or otherwise dispose of Chase
Securities and Morgan Securities, to the extent the undersigned felt necessary,
with counsel to the undersigned or counsel for Chase.
<PAGE>
This letter agreement shall be governed by and construed in accordance with
the laws of the State of Delaware. This letter agreement shall terminate if and
when the Agreement is terminated according to its terms.
Very truly yours,
---------------------------------------
Name:
Title:
[add below the signatures of all
registered owners of shares deemed
beneficially owned by the affiliate]
---------------------------------------
Name:
---------------------------------------
Name:
---------------------------------------
Name:
Accepted this day of
, 20 , by
THE CHASE MANHATTAN CORPORATION
By:
--------------------------
Name:
Title:
<PAGE>
EXHIBIT 5.5(b)
TO THE MERGER AGREEMENT
<PAGE>
EXHIBIT 5.5(b)
[Chase Pooling Affiliate Letter]
The Chase Manhattan Corporation
270 Park Avenue
New York, New York
Ladies and Gentlemen:
Pursuant to the terms of the Agreement and Plan of Merger dated as of
September 12, 2000 (the "Agreement"), between The Chase Manhattan Corporation,
a Delaware corporation ("Chase"), and J.P. Morgan & Co. Incorporated, a
Delaware corporation ("Morgan"), Morgan will be merged with and into Chase (the
"Merger").
The undersigned represents, warrants and covenants to Chase that:
A. The undersigned understands that as of the date of this letter,
the undersigned may be deemed to be an "affiliate" of Chase, as such term
is used in and for purposes of Accounting Series Releases 130 and 135, as
amended.
B. The undersigned will not sell, transfer or otherwise dispose of
his or her interests in, or reduce his or her risk relative to (i) any
shares of Common Stock, par value $1.00 per share, or shares of one or more
series of preferred stock, par value $1.00 per share, of Chase (the "Chase
Securities") of (ii) any shares of Common Stock, par value $2.50 per share,
or shares or one or more series of preferred stock, no par value, of
Morgan (the "Morgan Securities") beneficially owned by the undersigned
during the period commencing 30 days prior to the effective date of the
Merger and ending at such time as results covering at least 30 days of
combined operations of Morgan and Chase have been published by Chase, which
Chase agrees to publish consistent with its normal financial reporting
practice.
C. The undersigned has carefully read this letter and the Agreement
and discussed its requirements and other applicable limitations upon the
undersigned's ability to sell, transfer or otherwise dispose of Chase
Securities and Morgan Securities, to the extent the undersigned felt
necessary, with counsel to the undersigned or counsel for Chase.
<PAGE>
This letter agreement shall be governed by and construed in accordance
with the laws of the State of Delaware. This letter agreement shall terminate
if and when the Agreement is terminated according to its terms.
Very truly yours,
--------------------------------
Name:
Title:
[add below the signatures of all
registered owners of shares deemed
beneficially owed by the affiliate]
--------------------------------
Name:
--------------------------------
Name:
--------------------------------
Name:
Accepted this day of
,20 , by
THE CHASE MANHATTAN CORPORATION
By:
----------------------------
Name:
Title:
<PAGE>
EXHIBIT 5.10(a)
TO THE MERGER AGREEMENT
<PAGE>
EXHIBIT 5.10(a)
Name Title
Douglas A. Warner III Chairman
William B. Harrison, Jr. President and Chief Executive Officer
Executive Committee of Management
Douglas A. Warner III co-Chairman
William B. Harrison, Jr. co-Chairman
Geoffrey Boisi
David A. Coulter
Ramon de Oliveira
Walter A. Gubert
Thomas B. Ketchum
Donald H. Layton
James B. Lee
Marc J. Shapiro
Jeffrey C. Walker
