MORGAN J P & CO INC, DEFM14A, 2000-11-22

MORGAN J P & CO INC
DEFM14A, 2000-11-22
STATE COMMERCIAL BANKS

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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12

J.P. Morgan & Co. Incorporated
(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[ ] No fee required.

[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

Common Stock, par value $2.50 per share ("Common Stock");
Adjustable Rate Cumulative Preferred Stock, Series A, stated value
$100 per share ("Series A"); Variable Cumulative Preferred Stock,
Series B, C, D, E and F, stated value $1,000 per share ("Series B"
through "Series F", respectively); and depositary shares, each
representing a one-tenth interest in a share of 6-5/8% Cumulative
Preferred Stock, Series H, stated value $500 per share ("Series
H").

(2) Aggregate number of securities to which transaction applies:

202,898,331 shares of Common Stock;
2,444,300 shares of Series A;
50,000 shares of each of Series B, C, D, E, and F; and
4,000,000 depositary shares, each representing a one-tenth interest
in a share of Series H.

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

The proposed maximum aggregate value of the transaction of
$34,920,105,404 was calculated in accordance with Rule
0-11(a)(4) and (c) of the Securities Exchange Act of 1934,
as amended, based on

(i) the product of (A) the average of the high and low
prices of Common Stock as reported on the New York
Stock Exchange Composite Transaction Tape ("NYSE")
on October 3, 2000 ($168.97) and (B) the maximum
number of shares of Common Stock to be converted in
the merger (202,898,331),

(ii) the product of (A) the average of the high and low
price of Series A as reported on the NYSE on
October 3, 2000 ($75.13) and (B) the maximum number
of shares of Series A to be converted in the merger
(2,444,300),

(iii) the product of (A) $1,000, the book value per share
of Series B, and (B) the maximum number of shares
of Series B to be converted in the merger (50,000),

(iv) the product of (A) $1,000, the book value per share of
Series C, and (B) the maximum number of shares of
Series C to be converted in the merger (50,000),

(v) the product of (A) $1,000, the book value per share of
Series D, and (B) the maximum number of shares of
Series D to be converted in the merger (50,000),

(vi) the product of (A) $1,000, the book value per share of
Series E, and (B) the maximum number of share of
Series E to be converted in the merger (50,000),

<PAGE>

(vii) the product of (A) $1,000, the book value per share
of Series F, and (B) the maximum number of shares
of Series F to be converted in the merger (50,000)
and

(viii) the product of (A) the average of the high and low
price on the NYSE of depositary shares representing
the Series H on the NYSE on October 3, 2000
($50.75) and (B) the maximum number of depositary
shares representing Series H to be converted in the
merger (4,000,000). No separate fee is payable for
the Series H.

(4) Proposed maximum aggregate value of transaction:

$34,920,105,404

(5) Total fee paid:

$6,984,021

[ ] Fee paid previously with preliminary materials.

[X] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:
$9,218,908

(2) Form, Schedule or Registration Statement No.:
Registration Statement on Form S-4, Registration No. 333-47350

(3) Filing Party:
The Chase Manhattan Corporation

(4) Date Filed:
October 5, 2000

<PAGE>

[THE CHASE MANHATTAN CORPORATION LOGO] [JP MORGAN LOGO]

TO THE STOCKHOLDERS OF THE CHASE MANHATTAN CORPORATION AND J.P. MORGAN & CO.
INCORPORATED

A MERGER PROPOSAL -- YOUR VOTE IS VERY IMPORTANT

The boards of directors of The Chase Manhattan Corporation and J.P. Morgan
& Co. Incorporated have approved an agreement to merge our two companies. The
proposed merger will create one of the largest and most globally diversified
financial services companies in the world and will provide us with a unique
opportunity to leverage our premier brands and comprehensive capabilities across
an unparalleled client franchise. We believe that the combined company, which
will be named J.P. Morgan Chase & Co., will be a formidable competitor in
financial services, positioned for superior growth and profitability in the
rapidly changing financial services industry.

IN THE PROPOSED MERGER, J.P. MORGAN WILL MERGE INTO CHASE, AND J.P. MORGAN
COMMON STOCKHOLDERS WILL RECEIVE 3.7 SHARES OF CHASE COMMON STOCK FOR EACH SHARE
OF J.P. MORGAN COMMON STOCK THEY OWN. This exchange ratio is fixed and will not
be adjusted to reflect stock price changes prior to the closing. Based on the
closing price of Chase's common stock on the New York Stock Exchange (trading
symbol "CMB") on September 12, 2000, the last day before public announcement of
the merger, the 3.7 exchange ratio represented approximately $207 in value for
each share of J.P. Morgan common stock. Based on Chase's closing price on
November 21, 2000 of $38.75, the 3.7 exchange ratio represented approximately
$143 in value for each share of J.P. Morgan common stock. WE URGE YOU TO OBTAIN
CURRENT MARKET QUOTATIONS OF CHASE AND J.P. MORGAN COMMON STOCK.

We expect the merger will be a tax-free transaction for Chase's
stockholders and, in general, for J.P. Morgan's stockholders, except for the
receipt by J.P. Morgan stockholders of cash instead of fractional shares of
common stock of the combined company. Upon completion of the merger, we estimate
that J.P. Morgan's former stockholders will own approximately 34% of the common
stock of J.P. Morgan Chase & Co.

We will each hold a special meeting at which we will ask our common
stockholders to approve the merger. Information about these meetings and the
merger is contained in this joint proxy statement-prospectus. IN PARTICULAR, SEE
"RISK FACTORS" BEGINNING ON PAGE 19. We urge you to read this document carefully
and in its entirety.

WHETHER OR NOT YOU PLAN TO ATTEND YOUR SPECIAL MEETING, PLEASE VOTE AS SOON
AS POSSIBLE TO MAKE SURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING. IF YOU
DO NOT VOTE, IT WILL HAVE THE SAME EFFECT AS VOTING AGAINST THE MERGER.

Each of our boards of directors unanimously recommends that its
stockholders vote FOR the merger. We strongly support this combination of our
companies and join our boards in their recommendations.

/s/ WILLIAM B. HARRISON, Jr. /s/ DOUGLAS A. WARNER III
William B. Harrison, Jr. Douglas A. Warner III
Chairman and Chief Executive Officer Chairman and Chief Executive Officer
The Chase Manhattan Corporation J.P. Morgan & Co. Incorporated

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities to be issued in
connection with the merger or determined if this joint proxy
statement-prospectus is accurate or complete. Any representation to the contrary
is a criminal offense.

The securities to be issued in connection with the merger are not savings or
deposit accounts or other obligations of any bank or non-bank subsidiary of
Chase or J.P. Morgan, and they are not insured by the Federal Deposit Insurance
Corporation or any other governmental agency.

This joint proxy statement-prospectus is dated November 21, 2000, and is
first being mailed to stockholders of Chase and J.P. Morgan on or about November
22, 2000.

<PAGE>

ADDITIONAL INFORMATION

This joint proxy statement-prospectus incorporates important business and
financial information about Chase and J.P. Morgan from other documents that are
not included in or delivered with this joint proxy statement-prospectus. This
information is available to you without charge upon your written or oral
request. You can obtain the documents incorporated by reference in this joint
proxy statement-prospectus through the Securities and Exchange Commission
website at http://www.sec.gov or by requesting them in writing, by e-mail or by
telephone at the appropriate address below:

- if you are a Chase stockholder: - if you are a J.P. Morgan
ChaseMellon Shareholder Services, L.L.C. stockholder:
By Mail: 44 Wall Street, 7th Floor Morrow & Co. Inc.
New York, New York 10005 By Mail: 445 Park Avenue
By E-mail: [email protected] New York, New York 10022
By Telephone: By E-mail:
Within U.S.: 1-888-244-9762 [email protected]
Outside U.S.: By Telephone:
From most non-U.S. locations: Within U.S.: 1-800-607-0088
1-866-293-6616 (toll-free) Outside U.S.: 44-207-222-4645
From all other non-U.S. locations:
1-201-373-5665
</TABLE>

IF YOU WOULD LIKE TO REQUEST ANY DOCUMENTS, PLEASE DO SO BY DECEMBER 15,
2000 IN ORDER TO RECEIVE THEM BEFORE THE SPECIAL MEETINGS.

See "Where You Can Find More Information" beginning on page 101.

VOTING ELECTRONICALLY OR
BY TELEPHONE

Chase stockholders of record may submit their proxies:

- through the Internet by visiting a website established for that purpose
at http://www.eproxy.com/cmbsp/ and following the instructions; or

- by telephone by calling the toll-free number 1-800-840-1208 in the United
States, Canada or Puerto Rico on a touch-tone phone and following the
recorded instructions.

J.P. Morgan stockholders of record may submit their proxies:

- through the Internet by visiting a website established for that purpose
at http://www.eproxyvote.com/jpm and following the instructions; or

- by telephone by calling the toll-free number 1-877-779-8683 in the United
States or Canada on a touch-tone phone and following the recorded
instructions. J.P. Morgan stockholders calling from another country may
call 1-201-536-8073.

<PAGE>

[THE CHASE MANHATTAN CORPORATION LOGO]
THE CHASE MANHATTAN CORPORATION
270 PARK AVENUE
NEW YORK, NEW YORK 10017

NOTICE OF SPECIAL MEETING OF CHASE STOCKHOLDERS

- DATE: DECEMBER 22, 2000

- TIME: 11:00 A.M., NEW YORK TIME

- PLACE: AUDITORIUM
THE CHASE MANHATTAN BANK
ONE CHASE MANHATTAN PLAZA
NEW YORK, NEW YORK 10081

To Chase Stockholders:

We are pleased to notify you of and invite you to a special meeting of
stockholders.

At the meeting you will be asked to vote on the following matter:

- Proposal to adopt a merger agreement between The Chase Manhattan
Corporation and J.P. Morgan & Co. Incorporated pursuant to which J.P.
Morgan will merge into Chase as described in the attached joint proxy
statement-prospectus.

Common stockholders of record at the close of business on November 15, 2000
may vote at the meeting.

Under Delaware law, holders of Chase's fixed/adjustable noncumulative
preferred stock who submit a written demand for appraisal of their shares and
who perfect their appraisal rights by complying with the other applicable
statutory procedures under Delaware law will be entitled to receive a cash
payment for the fair value of their shares as determined by the Delaware
Chancery Court. A summary of the applicable requirements of Delaware law is
contained in the attached joint proxy statement-prospectus under the caption
"The Merger -- Appraisal Rights." In addition, the text of the applicable
provisions of Delaware law is attached as Annex F to the attached joint proxy
statement-prospectus.

Your vote is important. Please complete, sign, date and return your proxy
card or voting instruction card in the enclosed envelope promptly, or authorize
the individuals named on your proxy card to vote your shares by calling the
toll-free telephone number or by using the Internet as described in the
instructions included with your proxy card or voting instruction card.

By Order of the Board of Directors

Anthony J. Horan
Secretary

November 21, 2000

<PAGE>

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS [JP MORGAN LOGO]

DATE: DECEMBER 22, 2000
TIME: 9:00 A.M., NEW YORK TIME
PLACE: ROOM 101-AMPHITHEATER
23 WALL STREET
NEW YORK, NEW YORK 10260

To J.P. Morgan Stockholders:

We are pleased to notify you of and invite you to a special meeting of
stockholders. The purpose of the special meeting is:

- To consider and vote upon a proposal to adopt a merger agreement between
The Chase Manhattan Corporation and J.P. Morgan & Co. Incorporated
pursuant to which J.P. Morgan will merge into Chase as described in the
attached joint proxy statement-prospectus.

Common stockholders of record at the close of business on November 15, 2000
may vote at the meeting.

Under Delaware law, holders of shares of J.P. Morgan's Series B, C, D, E
and F preferred stock who submit a written demand for appraisal of their shares
and who perfect their appraisal rights by complying with the other applicable
statutory procedures under Delaware law will be entitled to receive a cash
payment for the fair value of their shares as determined by the Delaware
Chancery Court. A summary of the applicable requirements of Delaware law is
contained in the attached joint proxy statement-prospectus under the caption
"The Merger -- Appraisal Rights." In addition, the text of the applicable
provisions of Delaware law is attached as Annex F to the attached joint proxy
statement-prospectus.

Rachel F. Robbins
Secretary

November 21, 2000

<PAGE>

TABLE OF CONTENTS

PAGE
----

QUESTIONS AND ANSWERS ABOUT VOTING PROCEDURES FOR THE
SPECIAL MEETINGS.......................................... 1

SUMMARY..................................................... 3
J.P. Morgan Common Stockholders to Receive 3.7 Shares of
J.P. Morgan Chase & Co. Common Stock for each J.P.
Morgan Common Share; Chase Stockholders to Keep Their
Shares................................................. 3
Exchange Ratio is Fixed and Will Not be Adjusted in
Response to Changes in Our Stock Prices................ 3
Merger Generally Tax-Free to Stockholders................. 4
Continuation of Current Dividend Policy................... 5
Our Boards of Directors Recommend that Chase and J.P.
Morgan Stockholders Approve the Merger................. 5
Financial Advisors Say Merger is Fair to Common
Stockholders........................................... 5
Appraisal Rights For Some Preferred Stockholders But Not
For Common Stockholders................................ 6
Financial Interests of Our Directors and Executive
Officers in the Merger................................. 6
Chase and J.P. Morgan to Hold Special Meetings............ 6
Record Date; Majority Stockholder Votes Required.......... 7
Merger Accounting Treatment to be Pooling of Interests.... 7
Directors and Management Following the Merger............. 7
Regulatory Approvals We Must Obtain for the Merger........ 7
Expected Timing of Merger................................. 8
Conditions to Completion of the Merger.................... 8
Termination of the Merger Agreement; Fees Payable......... 8
Chase and J.P. Morgan Granted Stock Options to Each
Other.................................................. 9
Information About Chase and J.P. Morgan................... 9
Selected Historical and Pro Forma Financial Data.......... 11
Comparative Per Share Data................................ 18

RISK FACTORS................................................ 19

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS............ 21

THE SPECIAL MEETINGS........................................ 22
Joint Proxy Statement-Prospectus.......................... 22
Date, Time and Place of the Special Meetings.............. 22
Purpose of the Special Meetings........................... 22
Record Date for the Special Meetings...................... 22
Votes Required............................................ 22
Proxies................................................... 23
Voting Electronically or by Telephone..................... 24
Solicitation of Proxies................................... 24

THE MERGER.................................................. 26
Effect of Merger; What You Will Receive in the Merger..... 26
Background of the Merger.................................. 26
Reasons of Both Boards of Directors for the Merger........ 28
Recommendation of, and Factors Considered by, Chase's
Board of Directors..................................... 31
Recommendation of, and Factors Considered by, J.P.
Morgan's Board of Directors............................ 33
Opinions of Financial Advisors............................ 36
Interests of Directors and Executive Officers in the
Merger................................................. 51

i
<PAGE>

PAGE
----

Board of Directors and Management After the Merger........ 53
Material United States Federal Income Tax Consequences of
the Merger............................................. 54
Accounting Treatment of the Merger........................ 56
Regulatory Approvals...................................... 56
Exchange of J.P. Morgan Stock Certificates................ 58
Treatment of Stock Options and Other Equity-Based
Awards................................................. 59
Restrictions on Sales of Shares by Affiliates of Chase and
J.P. Morgan............................................ 59
Stock Exchange Listings................................... 60
Appraisal Rights.......................................... 60
Delisting and Deregistration of J.P. Morgan Stock after
the Merger............................................. 62
Effect of Merger on J.P. Morgan Dividend Reinvestment
Plan................................................... 62
The Merger Agreement...................................... 62
Stock Option Agreements................................... 70

UNAUDITED PRO FORMA COMBINED FINANCIAL DATA................. 74

DESCRIPTION OF CHASE CAPITAL STOCK.......................... 87
Common Stock.............................................. 87
Existing Chase Preferred Stock............................ 87
Preferred Stock to be Issued in the Merger................ 90
Depositary Shares......................................... 92
Anti-Takeover Considerations.............................. 94

COMPARISON OF STOCKHOLDER RIGHTS............................ 95
Capitalization............................................ 95
Voting Rights............................................. 95
Number and Election of Directors.......................... 95
Vacancies on the Board of Directors and Removal of
Directors.............................................. 96
Amendments to the Certificate of Incorporation............ 96
Amendments to By-laws..................................... 96
Action by Written Consent................................. 96
Ability to Call Special Meetings.......................... 97
Notice of Stockholder Action.............................. 97
Limitation of Personal Liability of Directors and
Officers............................................... 98
Indemnification of Directors and Officers................. 98
State Anti-Takeover Statutes.............................. 99

LEGAL MATTERS............................................... 100

EXPERTS..................................................... 100

STOCKHOLDER PROPOSALS....................................... 100

WHERE YOU CAN FIND MORE INFORMATION......................... 101

ANNEX A -- Agreement and Plan of Merger
ANNEX B -- J.P. Morgan Stock Option Agreement
ANNEX C -- Chase Stock Option Agreement
ANNEX D -- Opinion of Chase Securities Inc.
ANNEX E -- Opinion of J.P. Morgan Securities Inc.
ANNEX F -- Section 262 of the Delaware General Corporation Law

ii
<PAGE>

QUESTIONS AND ANSWERS ABOUT VOTING PROCEDURES FOR THE SPECIAL MEETINGS

Q: WHAT DO I NEED TO DO NOW?

A: After carefully reading and considering the information contained in this
joint proxy statement-prospectus, please respond by completing, signing and
dating your proxy card or voting instruction card and returning it in the
enclosed postage-paid envelope, or, if available, by submitting your proxy or
voting instruction by telephone or through the Internet, as soon as possible
so that your shares may be represented at your special meeting.

Q: IF MY SHARES ARE HELD IN "STREET NAME" BY A BROKER OR BANK, WILL MY BROKER
OR BANK VOTE MY SHARES FOR ME?

A: Your broker or bank will vote your shares held by it in "street name" only
if you provide instructions to it on how to vote. You should follow the
directions your broker or bank provides. Shares that are not voted because
you do not properly instruct your broker or bank will have the effect of
votes against the merger.

Q: WHAT IF I DON'T VOTE?

A: - If you fail to respond, it will have the same effect as a vote against the
merger.

- If you respond and do not indicate how you want to vote, your proxy will
be counted as a vote in favor of the merger.

- If you respond and indicate that you are abstaining from voting, your
proxy will have the same effect as a vote against the merger.

Q: CAN I CHANGE MY VOTE AFTER I HAVE DELIVERED MY PROXY?

A: Yes. You can change your vote at any time before your proxy is voted at your
special meeting. You can do this in one of three ways:

- By submitting a written statement that you would like to revoke your
proxy to the Secretary of Chase or J.P. Morgan, as appropriate, before
your special meeting.

- By submitting a new proxy before your special meeting.

- If you are a holder of record, you can attend the special meeting and
vote in person.

If you submit your proxy or voting instruction electronically through the
Internet or by telephone, you can change your vote by submitting a proxy or
voting instruction at a later date, in which case your later-submitted proxy
or voting instruction will be recorded and your earlier proxy or voting
instruction revoked. If your shares are held in an account at a broker or
bank, you should contact your broker or bank to change your vote.

Q: SHOULD I SEND IN MY STOCK CERTIFICATES NOW?

A: No. If you are a J.P. Morgan stockholder, you will receive written
instructions from the exchange agent after the merger is completed on how to
exchange your stock certificates for J.P. Morgan Chase & Co. shares. PLEASE
DO NOT SEND IN YOUR STOCK CERTIFICATES WITH YOUR PROXY. If you are a Chase
stockholder, you will keep your existing shares, which will remain
outstanding and unchanged as shares of Chase -- which will be renamed J.P.
Morgan Chase & Co. following the merger.

1
<PAGE>

Q: WHY AM I RECEIVING THIS JOINT PROXY STATEMENT-PROSPECTUS?

A: We are delivering this document to you because it is serving as both a joint
proxy statement of Chase and J.P. Morgan and a prospectus of Chase. It is a
joint proxy statement because it is being used by our boards of directors to
solicit the proxies of our common stockholders. It is a prospectus because
Chase is offering shares of its common stock and preferred stock in exchange
for shares of J.P. Morgan common stock and preferred stock if the merger is
completed.

This document is also being sent to holders of preferred stock of Chase and
J.P. Morgan to provide them with notice of the special meetings as required
by Delaware law. None of those preferred stockholders is entitled to vote at
the special meetings; however, certain of those holders have appraisal rights
under Delaware law, as described under "The Merger -- Appraisal Rights."

Q: WHO CAN HELP ANSWER MY QUESTIONS?

A: If you have any questions about the merger or how to submit your proxy, or if
you need additional copies of this joint proxy statement-prospectus or the
enclosed proxy card or voting instruction card, you should contact:

2
<PAGE>

SUMMARY

This summary highlights selected information in this joint proxy
statement-prospectus and may not contain all of the information that is
important to you. You should carefully read this entire joint proxy
statement-prospectus and the other documents we refer you to for a more complete
understanding of the matters being considered at the special meetings. In
addition, we incorporate by reference important business and financial
information about Chase and J.P. Morgan into this joint proxy
statement-prospectus. You may obtain the information incorporated by reference
into this joint proxy statement-prospectus without charge by following the
instructions in the section entitled "Where You Can Find More Information" that
begins on page 101 of this joint proxy statement-prospectus.

J.P. MORGAN COMMON STOCKHOLDERS TO RECEIVE 3.7 SHARES OF J.P. MORGAN CHASE & CO.
COMMON STOCK FOR EACH J.P. MORGAN COMMON SHARE; CHASE STOCKHOLDERS TO KEEP THEIR
SHARES

J.P. Morgan common stockholders will receive 3.7 shares of common stock of
Chase -- which will be renamed J.P. Morgan Chase & Co. at the time of the
merger -- for each share of J.P. Morgan common stock they own.

Chase stockholders will keep their shares, which will remain outstanding
and unchanged as shares of J.P. Morgan Chase & Co. following the merger.

J.P. Morgan preferred stockholders will receive, for each share of J.P.
Morgan preferred stock they own, one share of a corresponding series of
substantially identical J.P. Morgan Chase & Co. preferred stock.

EXCHANGE RATIO IS FIXED AND WILL NOT BE ADJUSTED IN RESPONSE TO CHANGES IN OUR
STOCK PRICES

Because the exchange ratio is fixed in the merger agreement and neither
Chase nor J.P. Morgan has the right to terminate the merger agreement based on
changes in either party's stock price, THE MARKET VALUE OF THE J.P. MORGAN CHASE
& CO. COMMON STOCK THAT J.P. MORGAN STOCKHOLDERS RECEIVE IN THE MERGER MAY VARY
SIGNIFICANTLY.

The table below shows the closing prices of Chase and J.P. Morgan common
stock, which trade on the New York Stock Exchange under the symbols "CMB" and
"JPM," respectively, and the pro forma equivalent per share value of J.P. Morgan
common stock at the close of the regular trading session on September 11, 2000,
the day prior to the date on which stories regarding a possible merger between
Chase and J.P. Morgan were widely reported by the press; September 12, 2000, the
last trading day before our public announcement of the merger; and November 21,
2000, the most recent trading day for which that information was available.

<TABLE>
<CAPTION>
J.P. MORGAN
CHASE J.P. MORGAN PRO FORMA
DATE CLOSING PRICE CLOSING PRICE EQUIVALENT(A)
---- ------------- ------------- -------------
<S> <C> <C> <C>
September 11, 2000..................................... $57.50 $169.00 $212.75
September 12, 2000..................................... 56.06 177.75 207.42
November 21, 2000...................................... 38.75 141.44 143.38
</TABLE>

---------------

(a) The pro forma equivalent per share value of J.P. Morgan common stock is
calculated by multiplying the Chase closing price by the exchange ratio of
3.7.

3
<PAGE>

The following table sets forth, for the periods indicated, the high and low
sale prices per share of Chase common stock and J.P. Morgan common stock as
reported on the New York Stock Exchange Composite Tape.

<TABLE>
<CAPTION>
CHASE J.P. MORGAN
COMMON STOCK(a) COMMON STOCK
---------------- ------------------
CALENDAR QUARTER HIGH LOW HIGH LOW
---------------- ------ ------ ------- -------
<S> <C> <C> <C> <C>
1998
First Quarter.................................... $46.38 $32.85 $138.81 $ 98.81
Second Quarter................................... 51.00 42.79 148.69 116.94
Third Quarter.................................... 51.71 26.71 133.56 84.63
Fourth Quarter................................... 48.38 23.71 115.88 74.50
1999
First Quarter.................................... 59.67 45.37 126.44 99.25
Second Quarter................................... 60.75 46.75 146.75 123.94
Third Quarter.................................... 59.00 48.38 146.00 112.81
Fourth Quarter................................... 59.50 43.88 142.00 106.50
2000
First Quarter.................................... 67.17 45.50 138.00 104.88
Second Quarter................................... 62.00 44.13 143.38 110.13
Third Quarter.................................... 58.38 44.56 187.63 110.00
Fourth Quarter (through November 21)............. 48.13 32.38 171.63 118.00
</TABLE>

---------------
(a) Share-related data for Chase for all prior periods have been restated to
reflect the common stock splits mentioned in note (e) under "-- Selected
Historical Financial Data of Chase" in this Summary.

Both of our boards concluded that a fixed exchange ratio for the merger,
without any termination rights based on changes in the stock prices of either
party, was appropriate because it reflected the strategic purpose of the merger:
to create one of the world's preeminent, fully integrated financial services
companies by combining two companies with complementary clients, geographies and
products in a transaction that would create long-term value for the stockholders
of both companies. In the respective judgments of our boards, a combination of
the two companies based on an agreed-upon exchange ratio captured fairly the
relative contribution of each company to the combined organization based on
fundamental valuation assessments and would avoid fluctuations caused by
near-term market volatility. Our boards also noted that this type of transaction
structure was customary for mergers of this type in the financial services
industry and in other businesses. Our boards were aware that the stock prices of
both companies, as well as the stocks of other financial services companies,
were likely to fluctuate between the announcement and the closing of the merger,
but did not view this as a significant factor in the context of the long-term
strategic goals of the transaction. These considerations are discussed in
greater detail under the captions "The Merger -- Recommendation of, and Factors
Considered by, Chase's Board of Directors" and "The Merger -- Recommendation of,
and Factors Considered by, J.P. Morgan's Board of Directors."

WE URGE YOU TO OBTAIN CURRENT MARKET QUOTATIONS.

MERGER GENERALLY TAX-FREE TO STOCKHOLDERS (SEE PAGE 54)

We expect that the exchange of shares by J.P. Morgan stockholders will be
tax-free to them for U.S. federal income tax purposes. However, J.P. Morgan
common stockholders will have to pay tax on any cash they receive instead of
fractional J.P. Morgan Chase & Co. shares. We expect that the merger will be
tax-free to Chase stockholders for U.S. federal income tax purposes. We have
received an opinion from each of Simpson Thacher & Bartlett and Davis Polk &
Wardwell that the merger will be generally tax-free to our stockholders, as
further described under "Material United States Federal Income Tax Consequences
of the Merger."

You should be aware that the tax consequences to you of the merger may
depend upon your own situation. In addition, you may be subject to state, local
or foreign tax laws that are not

4
<PAGE>

discussed in this joint proxy statement-prospectus. You should therefore consult
with your own tax advisor for a full understanding of the tax consequences to
you of the merger.

CONTINUATION OF CURRENT DIVIDEND POLICY

The merger agreement permits each of us to continue to pay regular
quarterly cash dividends to our stockholders. We have agreed in the merger
agreement to coordinate dividend declarations and the related record dates and
payment dates so that our stockholders do not receive two dividends, or fail to
receive one dividend, for any single calendar quarter.

We also expect to continue to pay quarterly dividends on the common stock
of J.P. Morgan Chase & Co. after completion of the merger in an amount equal to
Chase's current dividend of $0.32 per quarter. The payment of dividends by J.P.
Morgan Chase & Co. in the future, however, will depend on business conditions,
our financial condition and earnings and other factors.

OUR BOARDS OF DIRECTORS RECOMMEND THAT CHASE AND J.P. MORGAN STOCKHOLDERS
APPROVE THE MERGER (SEE PAGES 31 AND 33)

CHASE STOCKHOLDERS. The Chase board of directors has determined that the
merger agreement and related agreements are fair to and in the best interests of
Chase and its stockholders and unanimously recommends that the Chase
stockholders vote FOR the adoption of the merger agreement.

J.P. MORGAN STOCKHOLDERS. The J.P. Morgan board of directors has
determined that the merger agreement and related agreements are fair to and in
the best interests of J.P. Morgan's stockholders and unanimously recommends that
the J.P. Morgan stockholders vote FOR the adoption of the merger agreement.

FACTORS CONSIDERED BY OUR BOARDS. In determining whether to approve the
merger, our boards of directors each consulted with our respective senior
managements and legal and financial advisors and considered the strategic,
financial and other considerations referred to under "The
Merger -- Recommendation of, and Factors Considered by, Chase's Board of
Directors" and "The Merger -- Recommendation of, and Factors Considered by, J.P.
Morgan's Board of Directors."

FINANCIAL ADVISORS SAY MERGER IS FAIR TO COMMON STOCKHOLDERS (SEE PAGE 36)

OPINION OF CHASE'S FINANCIAL ADVISOR. Chase's financial advisor, Chase
Securities Inc., has provided opinions to the Chase board dated as of September
12, 2000 and as of the date of this joint proxy statement-prospectus that, as of
those dates, and subject to and based on the qualifications and assumptions set
forth in its opinions, the exchange ratio in the merger was fair, from a
financial point of view, to Chase's common stockholders. The full text of Chase
Securities' opinion dated the date of this joint proxy statement-prospectus is
attached as Annex D to this joint proxy statement-prospectus. Chase urges its
stockholders to read that opinion in its entirety.

Chase has agreed to allocate a fee of $40 million to Chase Securities in
consideration for its services as financial advisor.

OPINION OF J.P. MORGAN'S FINANCIAL ADVISOR. J.P. Morgan's financial
advisor, J.P. Morgan Securities Inc., has provided opinions to the J.P. Morgan
board of directors dated as of September 12, 2000 and as of the date of this
joint proxy statement-prospectus that, as of those dates, and subject to and
based on the considerations referred to in its opinions, the exchange ratio in
the merger was fair, from a financial point of view, to J.P. Morgan's common
stockholders. The full text of J.P. Morgan Securities' opinion dated the date of
this joint proxy statement-prospectus is attached as Annex E to this joint proxy
statement-prospectus. J.P. Morgan urges its stockholders to read that opinion in
its entirety.

5
<PAGE>

J.P. Morgan has agreed to allocate a fee of $40 million to J.P. Morgan
Securities in consideration for its services as financial advisor.

FINANCIAL ADVISORS ARE OUR AFFILIATES AND MAY HAVE CONFLICTS OF
INTEREST. Each of Chase and J.P. Morgan decided to engage its subsidiary
investment bank as its financial advisor. As a result of their affiliations with
us, Chase Securities and J.P. Morgan Securities may have had potential conflicts
of interest in performing their duties as financial advisors. Our boards of
directors considered these potential conflicts of interests, as well as their
responsibilities under applicable law, when making their decisions to engage
Chase Securities and J.P. Morgan Securities. Both boards concluded that it was
appropriate and in the best interests of stockholders to approve the engagements
of Chase Securities and J.P. Morgan Securities based on both investment banks'
global standing, extensive experience in transactions of this type and
familiarity with the businesses in which Chase and J.P. Morgan operate. Both
boards also considered the disadvantages of retaining unaffiliated investment
banks as financial advisors, including the risks of disclosing confidential
internal information to their direct competitors as a result of that engagement.
Both boards noted that in a number of previous business combinations involving
major financial institutions, one or both of the merging parties had relied on
its affiliated investment bank as its financial advisor. See "Risk Factors" and
"The Merger -- Opinions of Financial Advisors -- Decision by Each Board to
Engage Affiliated Financial Advisor."

APPRAISAL RIGHTS FOR SOME PREFERRED STOCKHOLDERS BUT NOT FOR COMMON STOCKHOLDERS
(SEE PAGE 60)

Under Delaware law, the common stockholders of Chase and J.P. Morgan are
not entitled to appraisal rights in connection with the merger. Holders of J.P.
Morgan's Series B, C, D, E and F preferred stock and of Chase's fixed/adjustable
noncumulative preferred stock who submit a written demand for appraisal of their
shares and who perfect their appraisal rights by complying with the other
applicable statutory procedures required by Delaware law will be entitled to
receive payment in cash for the fair value of their shares as determined by the
Delaware Chancery Court. Holders of other series of preferred stock of Chase and
J.P. Morgan are not entitled to appraisal rights in connection with the merger.

FINANCIAL INTERESTS OF OUR DIRECTORS AND EXECUTIVE OFFICERS IN THE MERGER (SEE
PAGES 51 AND 52)

Some of the directors and executive officers of Chase and J.P. Morgan have
interests in the merger that are different from, or are in addition to, the
interests of stockholders of Chase and J.P. Morgan. These interests may include
the appointment to senior management positions at J.P. Morgan Chase & Co.,
rights under stock-based benefit programs and awards (including programs and
awards of J.P. Morgan under which an aggregate of 607,999 options held by
current executive officers of J.P. Morgan will become exercisable and 845,907
other stock-based awards held by current executive officers of J.P. Morgan will
be required to be distributed), rights under severance (in the case of Chase
officers) or retirement arrangements and/or rights to continued indemnification
and insurance coverage by J.P. Morgan Chase & Co. for acts or omissions
occurring prior to the merger. The boards of directors of Chase and J.P. Morgan
were aware of these interests when deciding to approve the merger.

CHASE AND J.P. MORGAN TO HOLD SPECIAL MEETINGS (SEE PAGE 22)

CHASE SPECIAL MEETING. The Chase special meeting will be held at the
Auditorium of The Chase Manhattan Bank, One Chase Manhattan Plaza, New York, New
York on December 22, 2000, starting at 11:00 a.m., New York time. At the Chase
special meeting, Chase's common stockholders will be asked to adopt the merger
agreement.

6
<PAGE>

J.P. MORGAN SPECIAL MEETING. The J.P. Morgan special meeting will be held
at the Amphitheater -- Room 101, J.P. Morgan & Co. Incorporated, 23 Wall Street,
New York, New York on December 22, 2000, starting at 9:00 a.m., New York time.
At the J.P. Morgan special meeting, J.P. Morgan's common stockholders will be
asked to adopt the merger agreement.

RECORD DATE; MAJORITY STOCKHOLDER VOTES REQUIRED (SEE PAGE 22)

CHASE SPECIAL MEETING. You may vote at the Chase special meeting if you
owned shares of Chase common stock at the close of business on November 15,
2000. On that date there were 1,310,573,015 shares of Chase common stock
outstanding, less than 1% of which were owned and entitled to be voted by Chase
directors and executive officers and their affiliates.

You can cast one vote for each share of Chase common stock you own. The
affirmative vote of a majority of the outstanding shares of Chase common stock
is required for adoption of the merger agreement by the Chase stockholders.

J.P. MORGAN SPECIAL MEETING. You may vote at the J.P. Morgan special
meeting if you owned shares of J.P. Morgan common stock at the close of business
on November 15, 2000. On that date there were 160,455,114 shares of J.P. Morgan
common stock outstanding, less than 1% of which were owned and entitled to be
voted by J.P. Morgan directors and executive officers and their affiliates.

You can cast one vote for each share of J.P. Morgan common stock you own.
The affirmative vote of a majority of the outstanding shares of J.P. Morgan
common stock is required for adoption of the merger agreement by the J.P. Morgan
stockholders.

MERGER ACCOUNTING TREATMENT TO BE POOLING OF INTERESTS (SEE PAGE 56)

We expect the merger to qualify as a "pooling of interests" for financial
accounting purposes. This means that we will treat our two companies as if they
had always been combined as one company for financial accounting purposes. As a
condition to our obligation to complete the merger, both parties must receive
letters from PricewaterhouseCoopers LLP, independent accountants of Chase and
J.P. Morgan, confirming that the merger will qualify for pooling of interests
treatment.

DIRECTORS AND MANAGEMENT FOLLOWING THE MERGER (SEE PAGE 53)

Following the merger, the board of directors of J.P. Morgan Chase & Co.
will consist of fifteen directors. The board will include William B. Harrison,
Jr., currently the Chairman and Chief Executive Officer of Chase, and eight
other directors designated by Chase. It will also include Douglas A. Warner III,
currently the Chairman and Chief Executive Officer of J.P. Morgan, and five
other directors designated by J.P. Morgan. Other than Messrs. Harrison and
Warner, none of the directors designated by Chase or J.P. Morgan will be an
employee of J.P. Morgan Chase & Co. at the effective time of the Merger.

Mr. Warner will be the Chairman of J.P. Morgan Chase & Co. and Mr. Harrison
will be the President and Chief Executive Officer of J.P. Morgan Chase & Co. In
addition, Messrs. Harrison and Warner will be co-Chairmen of the management
Executive Committee of J.P. Morgan Chase & Co., its senior policy-making
committee. The other members of the Executive Committee will be: Geoffrey T.
Boisi, David A. Coulter, Ramon de Oliveira, Walter A. Gubert, Thomas B. Ketchum,
Donald H. Layton, James B. Lee, Jr., Marc J. Shapiro and Jeffrey C. Walker. Each
of these persons is currently a senior executive of Chase or J.P. Morgan.

REGULATORY APPROVALS WE MUST OBTAIN FOR THE MERGER (SEE PAGE 56)

To complete the merger, we must obtain approvals from the Federal Reserve
Board and from New York state banking authorities. In addition, we must make
filings with or obtain
7
<PAGE>

approvals or clearances from various other federal, state and foreign regulatory
authorities, including antitrust authorities in the United States and other
countries in which Chase and J.P. Morgan conduct business. As of the date of
this joint proxy statement-prospectus, we have filed all material applications
and notices required in connection with the merger, and the Federal Trade
Commission and Department of Justice have granted early termination of the
waiting period under the Hart-Scott-Rodino Act. For more information regarding
these required regulatory approvals, see "The Merger -- Regulatory Approvals."

EXPECTED TIMING OF MERGER

We expect to complete the merger by the first quarter of 2001 but are
preparing to close by year-end 2000 if we have received the stockholder and
regulatory approvals required to do so.

CONDITIONS TO COMPLETION OF THE MERGER (SEE PAGE 62)

We may not complete the merger unless the following conditions are
satisfied or, where permitted, waived:

- the merger agreement must be adopted by the common stockholders of both
Chase and J.P. Morgan;

- the J.P. Morgan Chase & Co. common stock to be issued in the merger, and
the J.P. Morgan Chase & Co. preferred stock to be issued in the merger in
exchange for shares of J.P. Morgan Series A and Series H preferred stock,
must be approved for listing on the New York Stock Exchange;

- we must obtain all material regulatory approvals of the merger from
domestic and foreign governmental entities, and none of those approvals
may contain a condition or restriction that would have a material adverse
effect on J.P. Morgan Chase & Co.;

- no legal prohibition to completion of the merger may be in effect;

- we must each receive letters from PricewaterhouseCoopers LLP that the
merger qualifies for pooling of interests accounting treatment;

- our respective representations and warranties in the merger agreement
must be true and correct, subject to exceptions that would not have a
material adverse effect on J.P. Morgan Chase & Co. following the merger;

- we must each be in compliance in all material respects with our
respective covenants in the merger agreement; and

- we must each receive an opinion of tax counsel that the merger will
qualify as a tax-free reorganization.

TERMINATION OF THE MERGER AGREEMENT; FEES PAYABLE (SEE PAGE 66)

We may jointly agree to terminate the merger agreement at any time. Either
of us may also terminate the merger agreement if:

- a governmental entity that must grant a material regulatory approval
denies approval of the merger and that denial is final and nonappealable;
or a governmental entity permanently restrains or prohibits the merger
and that action is final and nonappealable; however, this termination
right is not available to a party whose failure to comply with the merger
agreement resulted in those actions;

- the merger is not completed on or before June 30, 2001; however, this
termination right is not available to a party whose failure to comply
with the merger agreement resulted in the failure to complete the merger
by that date; or

8
<PAGE>

- the other party's board of directors adversely changes its recommendation
that its stockholders vote in favor of the merger, or the other party
breaches its obligation to hold its stockholders' meeting to vote on
adoption of the merger agreement.

The merger agreement provides that in several circumstances described more
fully beginning on page 66 involving a "change in board recommendation" or a
third party acquisition proposal, either of us may be required to pay
termination fees to the other of up to $1.25 billion. The termination fees and
the stock option agreements described below could discourage other companies
from seeking to acquire or merge with either Chase or J.P. Morgan.

CHASE AND J.P. MORGAN GRANTED STOCK OPTIONS TO EACH OTHER (SEE PAGE 70)

Each of us has issued to the other an option to purchase up to 19.9% of our
respective outstanding shares of common stock. The exercise price of the option
issued by J.P. Morgan is $208.13 per J.P. Morgan share, and the exercise price
of the option issued by Chase is $56.25 per Chase share.

Each option becomes exercisable only if one of the following events occurs:

- prior to termination of the merger agreement, without the consent of the
option holder, the option issuer enters into an agreement with any person
other than the option holder relating to an acquisition proposal as
described in the stock option agreement;

- prior to termination of the merger agreement, any person other than the
option holder acquires beneficial ownership of, or a right to acquire
beneficial ownership of, voting securities representing 20% or more of
the voting power of the option issuer or any of its significant
subsidiaries; or

- the full termination fee under the merger agreement, as described above,
becomes payable by the option issuer.

Under the circumstances described in the stock option agreements, the
option holder may require the option issuer to repurchase the option and any
shares purchased under the option for a price specified in the stock option
agreement.

The option holder's profit under the applicable stock option agreement,
together with any termination fees paid under the merger agreement, is capped at
$1.25 billion.

INFORMATION ABOUT CHASE AND J.P. MORGAN

THE CHASE MANHATTAN CORPORATION
270 Park Avenue
New York, New York 10017
(212) 270-6000

Chase is a financial holding company incorporated under Delaware law in
1968.

Chase conducts its domestic and international financial services businesses
through various bank and nonbank subsidiaries, including:

- The Chase Manhattan Bank, a New York banking corporation headquartered in
New York City;

- Chase Manhattan Bank USA, National Association, a national bank
headquartered in Wilmington, Delaware; and

- Chase Securities Inc., which is engaged in securities underwriting and
dealing activities.

9
<PAGE>

Chase's activities are internally organized, for management reporting
purposes, into the following major business franchises:

- Investment Bank, which combines the strength of a leading commercial bank
and a leading investment bank to meet the needs of corporations,
institutional investors, financial institutions, governments,
entrepreneurs and private clients around the world;

- Chase Capital Partners, one of the world's largest and most diversified
private equity investment firms, with approximately $10.5 billion in
direct and fund investments at September 30, 2000;

- Global Services, which is a recognized leader in information and
transaction processing services, moving trillions of dollars daily in
securities and cash for its wholesale customers;

- Wealth Management, which includes Chase's asset management businesses,
comprised of the global asset management business recently acquired
through Chase's acquisition of Robert Fleming Holdings Limited; the Chase
Vista mutual funds, with approximately $50 billion under management;
Chase's institutional money management and cash management businesses;
and the Global Private Bank, which provides wealth management solutions
to a global client base of high net worth individuals and families; and

- National Consumer Services, which serves over 30 million customers
nationwide offering a wide variety of financial products and services
through a diverse array of distribution channels.

J.P. MORGAN & CO. INCORPORATED
60 Wall Street
New York, New York 10260
(212) 483-2323

J.P. Morgan is a leading global financial services firm that meets critical
financial needs for business enterprises, governments and individuals worldwide.
J.P. Morgan advises on corporate strategy and structure, raises capital,
develops, structures and makes markets in financial instruments and manages
investment assets. J.P. Morgan also commits its own capital to promising
enterprises and invests and trades to capture market opportunities for its own
account. J.P. Morgan was incorporated under Delaware law in 1968.

J.P. Morgan operates in the following primary business segments:

- Investment Banking, which includes corporate and institutional client
relationship management conducted by a global network of client bankers;

- Equities, which comprises underwriting, market-making, research, equity
derivatives and American Depositary Receipts (ADR) services;

- Interest Rate and Currency Markets, which comprises market-making, risk
management, sales and research across developed countries globally, as
well as in Eastern Europe, Africa and emerging Asia;

- Credit Markets, which includes underwriting, market-making and research
related to investment grade, high-yield and emerging market debt
securities;

- Asset Management Services, which delivers investment management expertise
and advice across all asset classes and global markets to private and
public sector institutional investors;

- Equity Investments, which invests J.P. Morgan's and third-party capital
in private equity investments worldwide, seeking capital appreciation;
and

- Proprietary Positioning, through which J.P. Morgan actively manages
market risk positions for its own account across a broad range of markets
and products.

10
<PAGE>

SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA

The following financial information is to aid you in your analysis of the
financial aspects of the merger. The following tables present (1) selected
historical financial data of Chase, (2) selected historical financial data of
J.P. Morgan and (3) selected unaudited pro forma combined financial data
reflecting the merger. The historical financial data show the financial results
actually achieved by Chase and J.P. Morgan for the periods indicated. The pro
forma combined financial data show financial results as if both companies had
been combined for the periods shown.

SELECTED HISTORICAL FINANCIAL DATA OF CHASE
(IN MILLIONS, EXCEPT PER SHARE AND RATIO DATA)

The selected historical financial data of Chase have been derived from the
historical consolidated financial statements and related notes of Chase, which
are incorporated by reference in this joint proxy statement-prospectus. On March
31, 1996, The Chase Manhattan Corporation (heritage Chase) merged into Chemical
Banking Corporation, which changed its name to The Chase Manhattan Corporation.
The merger was accounted for as a pooling of interests and accordingly the
amounts below include the consolidated results of heritage Chase. Interim
unaudited data for the nine months ended September 30, 2000 and 1999 reflect, in
the opinion of Chase's management, all adjustments (consisting only of normal,
recurring adjustments) necessary for a fair presentation of that data. Results
for the nine months ended September 30, 2000 do not necessarily indicate results
that may be obtained for any other interim period or for the year as a whole.
<TABLE>
<CAPTION>
AS OF OR FOR THE
NINE MONTHS
ENDED SEPTEMBER 30,
----------------------
2000 1999
-------- --------
<S> <C> <C>
CONDENSED STATEMENT
OF INCOME:
Net Interest Income(a)................. $ 5,869 $ 6,519
Provision for Loan Losses.............. 979 1,167
Noninterest Revenue(b)................. 10,872 9,432
Noninterest Expense(c)................. 10,632 8,994
-------- --------
Income Before Income Tax Expense and
Effect of Accounting Change.......... 5,130 5,790
Income Tax Expense..................... 1,795 2,037
-------- --------
Income Before Effect of Accounting
Change............................... 3,335 3,753
Net Effect of Change in Accounting
Principle(d)......................... -- --
-------- --------
Net Income............................. $ 3,335 $ 3,753
======== ========
PER COMMON SHARE:(e)
Income Before Effect of Accounting
Change(d):
Basic................................ $ 2.66 $ 2.96
Diluted.............................. $ 2.57 $ 2.86
Net Income:
Basic................................ $ 2.66 $ 2.96
Diluted.............................. $ 2.57 $ 2.86
Cash Dividends......................... $ 0.96 $ 0.81
Book Value At Period End............... $ 21.84 $ 17.34

COMMON SHARES OUTSTANDING:
Weighted-Average Basic Common Shares... 1,235.4 1,248.9
Weighted-Average Diluted Common
Shares............................... 1,279.1 1,291.4
Common Shares at Period End............ 1,310.0 1,234.8

AS OF OR FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
CONDENSED STATEMENT
OF INCOME:
Net Interest Income(a)................. $ 8,744 $ 8,566 $ 8,253 $ 8,331 $ 8,123
Provision for Loan Losses.............. 1,621 1,343 804 897 758
Noninterest Revenue(b)................. 13,473 10,090 8,555 7,544 6,837
Noninterest Expense(c)................. 12,221 11,383 10,094 11,167 9,390
-------- -------- -------- -------- --------
Income Before Income Tax Expense and
Effect of Accounting Change.......... 8,375 5,930 5,910 3,811 4,812
Income Tax Expense..................... 2,929 2,148 2,202 1,350 1,842
-------- -------- -------- -------- --------
Income Before Effect of Accounting
Change............................... 5,446 3,782 3,708 2,461 2,970
Net Effect of Change in Accounting
Principle(d)......................... -- -- -- -- (11)
-------- -------- -------- -------- --------
Net Income............................. $ 5,446 $ 3,782 $ 3,708 $ 2,461 $ 2,959
======== ======== ======== ======== ========
PER COMMON SHARE:(e)
Income Before Effect of Accounting
Change(d):
Basic................................ $ 4.32 $ 2.90 $ 2.77 $ 1.71 $ 2.12
Diluted.............................. $ 4.18 $ 2.83 $ 2.68 $ 1.65 $ 2.02
Net Income:
Basic................................ $ 4.32 $ 2.90 $ 2.77 $ 1.71 $ 2.11
Diluted.............................. $ 4.18 $ 2.83 $ 2.68 $ 1.65 $ 2.01
Cash Dividends......................... $ 1.09 $ 0.96 $ 0.83 $ 0.75 $ 0.65
Book Value At Period End............... $ 18.29 $ 17.93 $ 15.84 $ 14.19 $ 13.94
COMMON SHARES OUTSTANDING:
Weighted-Average Basic Common Shares... 1,243.2 1,269.2 1,273.8 1,310.4 1,294.8
Weighted-Average Diluted Common
Shares............................... 1,285.5 1,303.9 1,317.6 1,360.2 1,360.5
Common Shares at Period End............ 1,240.8 1,272.0 1,262.9 1,292.4 1,305.0
</TABLE>

11
<PAGE>
<TABLE>
<CAPTION>
AS OF OR FOR THE
NINE MONTHS
ENDED SEPTEMBER 30,
----------------------
2000 1999
-------- --------
<S> <C> <C>
SELECTED BALANCE SHEET ITEMS AT PERIOD
END:
Loans.................................. $191,258 $173,458
Total Assets........................... 425,816 371,044
Deposits............................... 229,601 219,623
Long-Term Debt and Other Capital
Securities(f)........................ 26,946 19,182
Total Stockholders' Equity............. 29,440 22,341
PERFORMANCE RATIOS:
RETURN ON AVERAGE:
Total Assets........................... 1.11%(g) 1.38%(g)
Common Stockholders' Equity............ 18.4%(g) 22.5%(g)
Total Stockholders' Equity............. 18.0%(g) 21.8%(g)
Common Dividend Payout Ratio(h)........ 37% 28%
Overhead Ratio -- Reported(i).......... 64% 56%
Overhead Ratio -- Adjusted(j).......... 62% 56%
ASSET QUALITY RATIOS:
Net Charge-offs to Average Loans....... 0.72%(g) 0.90%(g)
Managed Net Charge-offs to Average
Managed Loans(k)..................... 1.14%(g) 1.34%(g)
CAPITAL RATIOS:
Tier 1 Risk-Based Capital(l)........... 7.9% 8.2%
Total Risk-Based Capital(l)............ 11.6% 11.8%
Tier 1 Leverage(l)..................... 6.3% 6.7%
Common Stockholders' Equity to As-
sets................................. 6.7% 5.8%
EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDEND REQUIRE-
MENTS:
Excluding Interest on Deposits......... 1.99 2.52
Including Interest on Deposits......... 1.44 1.66

AS OF OR FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
SELECTED BALANCE SHEET ITEMS AT PERIOD
END:
Loans.................................. $176,159 $172,754 $168,454 $155,092 $150,207
Total Assets........................... 406,105 365,875 365,521 336,099 303,989
Deposits............................... 241,745 212,437 193,688 180,921 171,534
Long-Term Debt and Other Capital
Securities(f)........................ 20,140 18,375 15,127 13,314 12,825
Total Stockholders' Equity............. 23,617 23,838 21,742 20,994 20,836
PERFORMANCE RATIOS:
RETURN ON AVERAGE:
Total Assets........................... 1.47% 1.01% 1.04% .77% .97%
Common Stockholders' Equity............ 24.5% 17.3% 18.7% 12.5% 16.2%
Total Stockholders' Equity............. 23.7% 16.7% 17.6% 11.9% 15.1%
Common Dividend Payout Ratio(h)........ 26% 33% 30% 44% 29%
Overhead Ratio -- Reported(i).......... 55% 61% 60% 70% 63%
Overhead Ratio -- Adjusted(j).......... 55% 59% 58% 59% 63%
ASSET QUALITY RATIOS:
Net Charge-offs to Average Loans....... 1.00% 0.84% 0.50% 0.67% 0.57%
Managed Net Charge-offs to Average
Managed Loans(k)..................... 1.42% 1.37% 1.02% 0.96% 0.67%
CAPITAL RATIOS:
Tier 1 Risk-Based Capital(l)........... 8.4% 8.3% 7.9% 8.2% 8.2%
Total Risk-Based Capital(l)............ 12.1% 12.0% 11.6% 11.8% 12.3%
Tier 1 Leverage(l)..................... 6.6% 6.4% 6.0% 6.8% 6.7%
Common Stockholders' Equity to As-
sets................................. 5.6% 6.2% 5.5% 5.5% 6.0%
EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDEND REQUIRE-
MENTS:
Excluding Interest on Deposits......... 2.61 1.82 1.77 1.60 1.82
Including Interest on Deposits......... 1.70 1.42 1.41 1.30 1.38
</TABLE>

---------------
(a) Net interest income includes interest income from prior years' tax refunds
of $62 million in 1999, $191 million in 1998 and $54 million in 1996.

(b) Noninterest revenue in the first nine months of 2000 included a $176 million
loss resulting from the economic hedge of the purchase price of Robert
Fleming Holdings Limited prior to its acquisition and an $81 million gain
from the sale of a business in Panama. Noninterest revenue in the first nine
months and full year 1999 included $166 million in gains from sales of
nonstrategic assets. Noninterest revenue in 1997 included a $58 million gain
on the sale of Chase's remaining interest in the CIT Group Holdings, Inc.
("CIT") and a $44 million gain on the sale of a partially owned foreign
investment. Noninterest revenue in 1996 included a $60 million loss on the
sale of a building in Japan. Included in 1995 were gains of $110 million on
the sales of nonstrategic assets and a $28 million loss on the sale of half
of Chase's 40% interest in CIT.

(c) Full year and first nine months 1999 included a $100 million special
contribution to The Chase Manhattan Foundation. Noninterest expense in 1998
and 1997 included costs incurred for the accelerated vesting of stock-based
incentive awards of $37 million and $135 million, respectively. Noninterest
expense in 1996 included $40 million of costs for combining Chase's foreign
retirement plans. Additionally, restructuring costs of $129 million, $48
million, $529 million, $192 million, $1,814 million and $15 million were
included in the first nine months of 2000 and the full years 1999, 1998,
1997, 1996 and 1995, respectively.

12
<PAGE>

(d) In 1995, Chase adopted Statement of Financial Accounting Standards ("SFAS")
No. 106, "Employers' Accounting for Postretirement Benefits Other than
Pensions," related to the accounting for other postretirement benefits
relating to foreign plans and, as a result, recorded a $17 million charge
($11 million after-tax).

(e) Share-related data for all prior periods have been restated to reflect (i) a
3-for-2 common stock split that became effective in the second quarter of
2000 and (ii) a 2-for-1 common stock split that became effective in the
second quarter of 1998.

(f) Includes mandatorily redeemable preferred securities of subsidiaries.

(g) Annualized.

(h) Total cash dividends declared on common stock as a percentage of net income
applicable to common stock.

(i) Noninterest expense as a percentage of the total of net interest income and
noninterest revenue.

(j) Noninterest expense as a percentage of the total of net interest income and
noninterest revenue adjusted for the revenue and expense items described in
notes (a), (b) and (c) above.

(k) Managed loans include credit card receivables on the balance sheet plus
securitized credit card receivables.

(l) During 1997, Chase adopted the Federal Reserve Board's guidelines for
calculating market risk-adjusted capital. Prior periods have not been
restated.

13
<PAGE>

SELECTED HISTORICAL FINANCIAL DATA OF J.P. MORGAN
(IN MILLIONS, EXCEPT PER SHARE AND RATIO DATA)

The selected historical financial data of J.P. Morgan have been derived
from the historical consolidated financial statements and related notes of J.P.
Morgan, which are incorporated by reference in this joint proxy
statement-prospectus. Interim unaudited data for the nine months ended September
30, 2000 and 1999 reflect, in the opinion of J.P. Morgan's management, all
adjustments (consisting only of normal, recurring adjustments) necessary for a
fair presentation of that data. Results for the nine months ended September 30,
2000 do not necessarily indicate results that may be obtained for any other
interim period or for the year as a whole.

<TABLE>
<CAPTION>
AS OF OR FOR THE
NINE MONTHS
ENDED SEPTEMBER 30, AS OF OR FOR THE YEAR ENDED DECEMBER 31,
-------------------- -------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
CONDENSED STATEMENT OF
INCOME:
Net Interest Income.......... $ 1,182 $ 1,203 $ 1,541 $ 1,281 $ 1,872 $ 1,702 $ 2,003
Provision (Reversal of
Provision) for Loan Losses... (11) (150) (175) 110 -- -- --
Noninterest Revenue(a)....... 6,444 5,314 7,140 5,784 5,348 5,153 3,901
Noninterest Expense(b)....... 5,124 4,325 5,742 5,538 5,066 4,523 3,998
-------- -------- -------- -------- -------- -------- --------
Income Before Income Tax
Expense.................... 2,513 2,342 3,114 1,417 2,154 2,332 1,906
Income Tax Expense........... 829 796 1,059 454 689 758 610
-------- -------- -------- -------- -------- -------- --------
Net Income................... $ 1,684 $ 1,546 $ 2,055 $ 963 $ 1,465 $ 1,574 $ 1,296
======== ======== ======== ======== ======== ======== ========
PER COMMON SHARE:
NET INCOME:
Basic...................... $ 9.64 $ 8.33 $ 11.16 $ 5.08 $ 7.71 $ 8.11 $ 6.70
Diluted.................... $ 9.05 $ 7.76 $ 10.39 $ 4.71 $ 7.17 $ 7.63 $ 6.42
Cash Dividends............... $ 3.00 $ 2.97 $ 3.97 $ 3.84 $ 3.59 $ 3.31 $ 3.06
Book Value at Period End..... $ 62.31 $ 58.42 $ 57.83 $ 55.01 $ 55.99 $ 54.43 $ 50.71

COMMON SHARES OUTSTANDING:
Weighted-Average Basic Common
Shares..................... 171.7 182.4 181.0 182.4 185.2 189.9 190.4
Weighted-Average Diluted
Common Shares.............. 182.9 195.9 194.4 197.2 199.3 202.0 198.7
Common Shares at Period
End........................ 159.8 174.9 164.8 175.0 176.3 184.9 187.1

SELECTED BALANCE SHEET ITEMS
AT PERIOD END:
Loans........................ $ 26,987 $ 25,415 $ 26,849 $ 25,495 $ 31,578 $ 28,120 $ 23,453
Total Assets................. 281,681 254,819 260,898 261,067 262,159 222,026 184,879
Deposits..................... 40,184 48,823 45,319 55,028 58,879 52,724 46,438
Long-term Debt and Other
Capital Securities(c)...... 22,627 26,552 25,400 28,757 24,139 13,853 9,327
Total Stockholders' Equity... 11,962 12,008 11,439 11,261 11,404 11,432 10,451
</TABLE>

14
<PAGE>

ASSET QUALITY RATIO:
Net Charge-offs to Average
Loans...................... 0.06%(d) 0.10%(d) 0.05% 0.44% 0% 0.05% 0%

CAPITAL RATIOS:
Tier 1 Risk-Based
Capital(h)................. 8.6% 9.1% 8.8% 8.0% 8.0% 8.8% 8.8%
Total Risk-Based
Capital(h)................. 12.0% 13.2% 12.9% 11.7% 11.9% 12.2% 13.0%
Tier 1 Leverage(h)........... 4.5% 4.8% 4.7% 3.9% 4.4% 5.9% 6.1%
Common Stockholders' Equity
to Assets.................. 4.0% 4.4% 4.1% 4.0% 4.1% 4.8% 5.4%
</TABLE>

---------------

(a) Noninterest revenue in 1998 included a $131 million gain on the sale of J.P.
Morgan's global trust and agency services business and a $56 million gain on
the sale of an investment management business in Australia. Noninterest
revenue for 1996 included a $77 million gain on the partial sale of a
minority interest.

(b) Noninterest expense in 1999 included the reversal of $25 million for revised
real estate cost estimates related to the 1998 restructuring charges.
Noninterest expense in 1998 includes charges in the first and fourth
quarters totaling $358 million related to the restructuring of business
activities and other cost reduction programs.

(d) Annualized.

(e) Total cash dividends declared per common share as a percentage of diluted
net income per common share.

(f) Noninterest expense as a percentage of the total of net interest income
after loan loss provision and noninterest revenue.

(g) Noninterest expense as a percentage of the total of net interest income
after loan loss provision and noninterest revenue adjusted for the revenue
and expense items described in notes (a) and (b) above.

(h) During 1997, J.P. Morgan adopted the Federal Reserve Board's guidelines for
calculating market risk-adjusted capital. Prior periods have not been
restated.

15
<PAGE>

PRO FORMA CONDENSED COMBINED FINANCIAL DATA OF CHASE AND J.P. MORGAN
(IN MILLIONS, EXCEPT RATIO DATA)

The following table presents certain unaudited pro forma condensed combined
financial data for Chase and J.P. Morgan giving effect to the merger, which is
expected to be accounted for as a pooling of interests, as if the merger had
occurred as of the beginning of the earliest period presented, and after giving
effect to the pro forma adjustments described in the notes to the unaudited pro
forma combined financial statements. The information presented below should be
read together with the historical consolidated financial statements of Chase and
J.P. Morgan, including the related notes, which are incorporated by reference in
this joint proxy statement-prospectus, and together with the consolidated
historical financial data for Chase and J.P. Morgan and the other pro forma
financial information, including the related notes, appearing elsewhere in this
joint proxy-statement prospectus. See "Where You Can Find More Information" and
"Unaudited Pro Forma Combined Financial Data." The pro forma financial data are
not necessarily indicative of results that actually would have occurred had the
merger been completed on the dates indicated or that may be obtained in the
future.

<TABLE>
<CAPTION>
AS OF OR FOR THE
NINE MONTHS ENDED AS OF OR FOR THE YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
----------------------- --------------------------------
2000 1999 1999 1998 1997
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
CONDENSED STATEMENT OF INCOME:
Net Interest Income(a).................... $ 7,051 $ 7,722 $ 10,285 $ 9,847 $ 10,125
Provision for Loan Losses................. 968 1,017 1,446 1,453 804
Noninterest Revenue(b).................... 17,340 14,770 20,645 15,906 13,903
Noninterest Expense(c).................... 15,780 13,343 17,995 16,953 15,160
-------- -------- -------- -------- --------
Income Before Income Tax Expense.......... 7,643 8,132 11,489 7,347 8,064
Income Tax Expense........................ 2,624 2,833 3,988 2,602 2,891
-------- -------- -------- -------- --------
Net Income................................ $ 5,019 $ 5,299 $ 7,501 $ 4,745 $ 5,173
-------- -------- -------- -------- --------
SELECTED BALANCE SHEET ITEMS AT PERIOD
END:
Loans..................................... $218,245 $198,873 $203,008 $198,249 $200,032
Total Assets.............................. 707,497 625,863 667,003 626,942 627,680
Deposits.................................. 269,785 268,446 287,064 267,465 252,567
Long-Term Debt and Other Capital
Securities(h)........................... 49,573 45,734 45,540 47,132 39,266
Total Stockholders' Equity................ 39,602 34,349 35,056 35,099 33,146
PERFORMANCE RATIOS:
Return on Average:
Total Assets............................ 1.00%(d) 1.13%(d) 1.19% 0.72% 0.85%
Common Stockholders' Equity............. 19.0%(d) 21.2%(d) 22.5% 14.3% 16.8%
Total Stockholders' Equity.............. 18.4%(d) 20.4%(d) 21.7% 13.9% 16.0%
Common Dividend Payout Ratio(e)........... 35% 30% 28% 42% 35%
Overhead Ratio -- Reported(f)............. 65% 59% 58% 66% 63%
Overhead Ratio -- Adjusted(g)............. 64% 59% 58% 63% 62%
ASSET QUALITY RATIOS:
Net Charge-offs to Average Loans.......... 0.64%(d) 0.79%(d) 0.87% 0.78% 0.42%
Managed Net Charge-offs to Average Managed
Loans(i)................................ 1.01%(d) 1.19%(d) 1.26% 1.24% 0.87%
</TABLE>

16
<PAGE>

---------------
(a) Net interest income includes items described in note (a) under "-- Selected
Historical Financial Data of Chase" in this Summary.

(b) Noninterest revenue includes items described in note (b) under "-- Selected
Historical Financial Data of Chase" in this Summary and note (a) under
"-- Selected Historical Financial Data of J.P. Morgan" in this Summary.

(c) Noninterest expense includes items described in note (c) under "-- Selected
Historical Financial Data of Chase" in this Summary and note (b) under
"-- Selected Historical Financial Data of J.P. Morgan" in this Summary.

(d) Annualized.

(e) Total cash dividends declared on common stock as a percentage of net income
applicable to common stock.

(f) Noninterest expense as a percentage of the total of net interest income and
noninterest revenue.

(g) Noninterest expense as a percentage of the total of net interest income and
noninterest revenue adjusted for revenue and expense items described in
notes (a), (b) and (c) under "-- Selected Historical Financial Data of
Chase" in this Summary and notes (a) and (b) under "-- Selected Historical
Financial Data of J.P. Morgan" in this Summary.

(h) Includes mandatorily redeemable preferred securities of subsidiaries.

(i) Managed loans include credit card receivables on the balance sheet plus
securitized credit card receivables.

17
<PAGE>

COMPARATIVE PER SHARE DATA
(UNAUDITED)

We present below for Chase and J.P. Morgan historical, pro forma and pro
forma equivalent per share financial data for the nine months ended September
30, 2000 and 1999 and for each of the three years ending December 31, 1999. You
should read the information below together with the financial statements and
related notes of Chase and J.P. Morgan that are incorporated by reference in
this joint proxy statement-prospectus and with the unaudited pro forma combined
financial data included under "Unaudited Pro Forma Combined Financial Data."

<TABLE>
<CAPTION>
AS OF OR FOR THE NINE
MONTHS ENDED AS OF OR FOR THE
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------------- --------------------------
2000 1999 1999 1998 1997
--------- --------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
CHASE COMMON STOCK:(a)
INCOME PER COMMON SHARE:
BASIC:
Historical............................ $ 2.66 $ 2.96 $ 4.32 $ 2.90 $ 2.77
Pro Forma Combined.................... $ 2.64 $ 2.71 $ 3.87 $ 2.37 $ 2.53
DILUTED:
Historical............................ $ 2.57 $ 2.86 $ 4.18 $ 2.83 $ 2.68
Pro Forma Combined.................... $ 2.53 $ 2.59 $ 3.69 $ 2.27 $ 2.41
CASH DIVIDENDS PER COMMON SHARE:
Historical............................... $ .96 $ .81 $ 1.09 $ .96 $ .83
Pro Forma Combined(b).................... $ .96 $ .81 $ 1.09 $ .96 $ .83
BOOK VALUE PER SHARE AT PERIOD END:
Historical............................... $21.84 $17.34 $18.29 $17.93 $15.84
Pro Forma Combined....................... $20.03 $18.07

J.P. MORGAN COMMON STOCK:
INCOME PER COMMON SHARE:
BASIC:
Historical............................ $ 9.64 $ 8.33 $11.16 $ 5.08 $ 7.71
Pro Forma Equivalent(c)............... $ 9.77 $10.03 $14.32 $ 8.77 $ 9.36
DILUTED:
Historical............................ $ 9.05 $ 7.76 $10.39 $ 4.71 $ 7.17
Pro Forma Equivalent(c)............... $ 9.36 $ 9.58 $13.65 $ 8.40 $ 8.92
CASH DIVIDENDS PER COMMON SHARE:
Historical............................... $ 3.00 $ 2.97 $ 3.97 $ 3.84 $ 3.59
Pro Forma Equivalent(c).................. $ 3.55 $ 3.00 $ 4.03 $ 3.55 $ 3.07
BOOK VALUE PER SHARE AT PERIOD END:
Historical............................... $62.31 $58.42 $57.83 $55.01 $55.99
Pro Forma Equivalent(c).................. $74.11 $66.86
</TABLE>

(b) The Chase pro forma combined dividends per share represent historical
dividends per share.

(c) The J.P. Morgan pro forma equivalent per share amounts are calculated by
multiplying the Chase pro forma combined per share amounts by the exchange
ratio of 3.7.

18
<PAGE>

RISK FACTORS

In addition to the other information contained in or incorporated by
reference into this joint proxy statement-prospectus, including the matters
addressed under the caption "Information Regarding Forward-Looking Statements,"
you should carefully consider the following risk factors in deciding whether to
vote for adoption of the merger agreement.

BECAUSE THE MARKET PRICE OF CHASE COMMON STOCK MAY FLUCTUATE, YOU CANNOT BE SURE
OF THE MARKET VALUE OF THE COMMON STOCK THAT J.P. MORGAN STOCKHOLDERS WILL
RECEIVE IN THE MERGER.

Upon completion of the merger, each share of J.P. Morgan common stock will
be converted into 3.7 shares of common stock of Chase, which will then be named
J.P. Morgan Chase & Co. This exchange ratio will not be adjusted for changes in
the market price of either Chase common stock or J.P. Morgan common stock. Any
change in the price of Chase common stock prior to the merger will affect the
value that J.P. Morgan common stockholders will receive on the date of the
merger. Stock price changes may result from a variety of factors, including
general market and economic conditions, changes in our businesses, operations
and prospects and regulatory considerations, many of which factors are beyond
our control. Neither of us is permitted to terminate the merger agreement or
resolicit the vote of our stockholders solely because of changes in the market
price of either of our common stocks.

The prices of Chase common stock and J.P. Morgan common stock at the
closing of the merger may vary from their respective prices on the date the
merger agreement was executed, on the date of this joint proxy
statement-prospectus and on the date of the special meetings. As a result, the
value represented by the exchange ratio will also vary. For example, based on
the range of closing prices of Chase common stock during the period from
September 12, 2000, the last day before public announcement of the merger,
through November 21, 2000, the exchange ratio represented a value ranging from a
high of $207.43 to a low of $139.90 for each share of J.P. Morgan common stock.
Because we anticipate that the date that the merger is completed will be later
than the date of the special meetings, at the time of your special meeting, you
will not know the market value of the J.P. Morgan Chase & Co. common stock that
you will hold upon completion of the merger.

WE MAY FAIL TO REALIZE THE ANTICIPATED BENEFITS OF THE MERGER.

The success of the merger will depend, in part, on our ability to realize
the anticipated growth opportunities and cost savings from combining the
businesses of Chase and J.P. Morgan. Our managements originally estimated that
approximately $1.5 billion of pre-tax cost savings and approximately $400
million of incremental revenues, net of incremental expenses, would be realized
from the merger. Based on merger integration efforts to date, our managements
currently believe that those initial estimates are conservative but have not
arrived at or announced any revised estimates. However, to realize the
anticipated benefits from the merger, we must successfully combine the
businesses of Chase and J.P. Morgan in a manner that permits those growth
opportunities and costs savings to be realized. If we are not able to
successfully achieve these objectives, the anticipated benefits of the merger
may not be realized fully or at all or may take longer to realize than expected.

Chase and J.P. Morgan have operated and, until the completion of the
merger, will continue to operate, independently. It is possible that the
integration process could result in the loss of key employees, the disruption of
each company's ongoing businesses or inconsistencies in standards, controls,
procedures and policies that adversely affect our ability to maintain
relationships with clients and employees or to achieve the anticipated benefits
of the merger.

19
<PAGE>

DIRECTORS AND MANAGEMENT OF CHASE AND J.P. MORGAN AND OF OUR FINANCIAL ADVISORS
MAY HAVE POTENTIAL CONFLICTS OF INTEREST.

A number of directors of Chase and J.P. Morgan who have recommended that
you vote in favor of adoption of the merger agreement may have interests in the
merger that differ from yours. In addition, some members of management of Chase
and J.P. Morgan may also have interests that differ from yours. Following
completion of the merger, Douglas A. Warner III will be Chairman and William B.
Harrison, Jr. will be President and Chief Executive Officer of J.P. Morgan Chase
& Co. Messrs. Harrison and Warner and some members of management of Chase and
J.P. Morgan are subject to agreements and arrangements that may be affected by
the merger in accordance with their terms as described under "The
Merger -- Interests of Directors and Executive Officers in the Merger."
Non-employee directors of Chase and J.P. Morgan who do not continue to serve
with J.P. Morgan Chase & Co. may be entitled to accelerated deferred
compensation and retirement benefits as described under "The Merger -- Interests
of Directors and Executive Officers in the Merger." J.P. Morgan directors will
be entitled to the continuation of indemnification and insurance arrangements
under the merger agreement. You should be aware of these interests when you
consider your board's recommendation that you vote in favor the merger.

In addition, some members of management of Chase Securities and J.P. Morgan
Securities are also members of management of Chase and J.P. Morgan and also may
have interests in the merger that differ from yours, as described above. You
should be aware of those interests in considering the opinions of Chase
Securities and J.P. Morgan Securities.

THE MARKET PRICE OF THE J.P. MORGAN CHASE & CO. SHARES MAY BE AFFECTED BY
FACTORS DIFFERENT FROM THOSE AFFECTING THE SHARES OF CHASE OR J.P. MORGAN.

Upon completion of the merger, holders of J.P. Morgan common stock will
become holders of J.P. Morgan Chase & Co. common stock, as the surviving
corporation in the merger and as the successor to the combined businesses of
Chase and J.P. Morgan. Likewise, holders of Chase common stock will also be
common stockholders of J.P. Morgan Chase & Co. following completion of the
merger. Chase's businesses differ from those of J.P. Morgan, and accordingly the
results of operations of the combined company may be affected by factors
different from those currently affecting the results of operations of Chase or
J.P. Morgan. For a discussion of the businesses of Chase and J.P. Morgan and of
certain factors to consider in connection with those businesses, see the
documents incorporated by reference in this joint proxy statement-prospectus and
referred to under "Where You Can Find More Information."

J.P. MORGAN CHASE & CO. MAY BE SUBJECT TO ADVERSE REGULATORY CONDITIONS.

Before the merger may be completed, various approvals must be obtained
from, or notifications submitted to, the Federal Reserve Board, various bank
regulatory, antitrust and other authorities in the United States and abroad.
While some of these governmental approvals have been obtained as of the date of
this joint proxy statement-prospectus, the governmental entities from whom
remaining approvals are required, including the Federal Reserve Board, may
impose conditions on the completion of the merger or require changes to the
terms of the merger. These conditions or changes could have the effect of
delaying completion of the merger or imposing additional costs on or limiting
the revenues of J.P. Morgan Chase & Co., any of which might have a material
adverse effect on J.P. Morgan Chase & Co. following the merger.

20
<PAGE>

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This joint proxy statement-prospectus contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements may be made directly in this joint proxy statement-prospectus
or they may be made a part of this joint proxy statement-prospectus by appearing
in other documents filed with the Securities and Exchange Commission by Chase
and J.P. Morgan and incorporated by reference in this joint proxy
statement-prospectus. These statements may include statements regarding the
period following completion of the merger.

Words such as "anticipate," "estimate," "expect," "project," "intend,"
"plan," "believe," "target," "objective," "goal" and words and terms of similar
substance used in connection with any discussion of future operating or
financial performance of Chase, J.P. Morgan or J.P. Morgan Chase & Co. or the
merger identify forward-looking statements. All forward-looking statements are
management's present expectations of future events and are subject to a number
of factors and uncertainties that could cause actual results to differ
materially from those described in the forward-looking statements. In addition
to the factors relating to the merger discussed under the caption "Risk Factors"
above, the following risks related to the businesses of Chase and J.P. Morgan,
among others, could cause actual results to differ materially from those
described in the forward-looking statements: the risk of adverse impacts from an
economic downturn; increased competition; unfavorable political or other
developments in foreign markets; governmental or regulatory policies; market
volatility in securities markets, interest or foreign exchange rates or indices;
other factors impacting our operational plans; or legislative or regulatory
developments.

We caution you not to place undue reliance on the forward-looking
statements, which speak only as of the date of this joint proxy
statement-prospectus in the case of forward-looking statements contained in this
joint proxy statement-prospectus, or the dates of the documents incorporated by
reference in this joint proxy statement-prospectus in the case of
forward-looking statements made in those incorporated documents.

For additional information about factors that could cause actual results to
differ materially from those described in the forward-looking statements, please
see the quarterly reports on Form 10-Q and the annual reports on Form 10-K that
Chase and J.P. Morgan have filed with the Securities and Exchange Commission as
described under "Where You Can Find More Information."

WE EXPRESSLY QUALIFY IN THEIR ENTIRETY ALL FORWARD-LOOKING STATEMENTS
ATTRIBUTABLE TO EITHER OF US OR ANY PERSON ACTING ON OUR BEHALF BY THE
CAUTIONARY STATEMENTS CONTAINED OR REFERRED TO IN THIS SECTION.

21
<PAGE>

THE SPECIAL MEETINGS

JOINT PROXY STATEMENT-PROSPECTUS

This joint proxy statement-prospectus is being furnished to you in
connection with the solicitation of proxies by each of our boards of directors
in connection with our respective special meetings of stockholders.

This joint proxy statement-prospectus is first being furnished to our
stockholders on or about November 22, 2000.

DATE, TIME AND PLACE OF THE SPECIAL MEETINGS

The special meetings are scheduled to be held as follows:

<TABLE>
<S> <C>
For Chase stockholders: For J.P. Morgan stockholders:
December 22, 2000 December 22, 2000
11:00 a.m., New York time 9:00 a.m., New York time
Auditorium Room 101 - Amphitheater
The Chase Manhattan Bank J.P. Morgan & Co. Incorporated
One Chase Manhattan Plaza 23 Wall Street
New York, New York New York, New York
</TABLE>

PURPOSE OF THE SPECIAL MEETINGS

CHASE. At the Chase special meeting, Chase's stockholders will be asked to
consider and vote upon a proposal to adopt the merger agreement.

J.P. MORGAN. At the J.P. Morgan special meeting, J.P. Morgan's
stockholders will be asked to consider and vote upon a proposal to adopt the
merger agreement.

RECORD DATE FOR THE SPECIAL MEETINGS

The boards of directors of each of Chase and J.P. Morgan have fixed the
close of business on November 15, 2000 as the record date for determination of
stockholders entitled to notice of and to vote at our respective special
meetings of stockholders. On the record date, there were 1,310,573,015 shares of
Chase common stock outstanding, held by approximately 85,975 holders of record,
and 160,455,114 shares of J.P. Morgan common stock outstanding, held by
approximately 24,287 holders of record.

VOTES REQUIRED

CHASE. A majority of the outstanding shares of Chase common stock must be
represented, either in person or by proxy, to constitute a quorum at the Chase
special meeting. The affirmative vote of holders of a majority of the shares of
Chase common stock outstanding on the record date is required to adopt the
merger agreement. At the Chase special meeting, each share of Chase common stock
is entitled to one vote on all matters properly submitted to the Chase
stockholders.

As of the record date, Chase directors and executive officers and their
affiliates owned and were entitled to vote approximately 1,856,235 shares of
Chase common stock, representing less than 1% of the outstanding shares of Chase
common stock. These directors and executive officers have indicated that they
intend to vote their shares for adoption of the merger agreement.

22
<PAGE>

For information regarding stock ownership of certain beneficial owners of
Chase common stock, see Chase's proxy statement for its 2000 annual meeting of
stockholders, which is incorporated by reference in this joint proxy
statement-prospectus.

J.P. MORGAN. A majority of the outstanding shares of J.P. Morgan common
stock must be represented, either in person or by proxy, to constitute a quorum
at the J.P. Morgan special meeting. The affirmative vote of the holders of a
majority of the outstanding shares of J.P. Morgan common stock outstanding on
the record date is required to adopt the merger agreement. At the J.P. Morgan
special meeting, each share of J.P. Morgan common stock is entitled to one vote
on all matters properly submitted to the J.P. Morgan stockholders.

As of the record date, J.P. Morgan directors and executive officers and
their affiliates owned and were entitled to vote approximately 145,200 shares of
J.P. Morgan common stock, representing less than 1% of the outstanding shares of
J.P. Morgan common stock. These directors and executive officers have indicated
that they intend to vote their shares for adoption of the merger agreement.

For information regarding stock ownership of certain beneficial owners of
J.P. Morgan common stock, see J.P. Morgan's proxy statement for its 2000 annual
meeting of stockholders, which is incorporated by reference in this joint proxy
statement-prospectus.

ADJOURNMENT OR POSTPONEMENT. The Chase special meeting or the J.P. Morgan
special meeting may be adjourned or postponed, including by their respective
chairmen, in order to permit further solicitation of proxies.

PROXIES

All shares of Chase common stock and J.P. Morgan common stock represented
by properly executed proxies or voting instructions (including those given
through electronic voting through the Internet or by telephone) received before
or at the applicable special meeting will, unless revoked, be voted in
accordance with the instructions indicated on those proxies or voting
instructions. If no instructions are indicated on a properly executed proxy
card, the shares will be voted FOR adoption of the merger agreement. If you
return a properly executed proxy card or voting instruction card and have
indicated that you have abstained from voting, your Chase common stock or J.P.
Morgan common stock represented by the proxy will be considered present at the
applicable special meeting for purposes of determining a quorum, but will be
considered a vote against the merger. We urge you to mark each applicable box on
the proxy card or voting instruction card to indicate how to vote your shares.

If your shares are held in an account at a broker or bank, you must
instruct the broker or bank on how to vote your shares. If an executed proxy
card returned by a broker or bank holding shares indicates that the broker or
bank does not have discretionary authority to vote on a particular matter, the
shares will be considered present at the meeting for purposes of determining the
presence of a quorum, but will be considered a vote against the merger. This is
called a broker non-vote. Your broker or bank will vote your shares only if you
provide instructions on how to vote by following the instructions provided to
you by your broker or bank. If you hold shares through a Chase or J.P. Morgan
401(k) plan, your shares in the Chase plan, but not the J.P. Morgan plan, may be
voted even if you do not instruct the trustee how to vote, as explained in your
voting instruction card.

Because approval of the merger requires the affirmative vote of a majority
of the outstanding shares of Chase or J.P. Morgan common stock, as the case may
be, abstentions, failures to vote and broker non-votes will have the same effect
as a vote against the merger.

Neither Chase nor J.P. Morgan expects that any matter other than the
proposal to adopt the merger agreement will be brought before its special
meeting. If, however, other matters are properly presented, the persons named as
proxies will vote in accordance with their judgment
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<PAGE>

with respect to those matters, unless you withhold authority to do so on the
proxy card or voting instruction card.

The persons named as proxies may vote for one or more adjournments of the
Chase or J.P. Morgan special meeting, as the case may be, to permit further
solicitations in favor of the proposals to be submitted at those meetings.
However, no proxy that is voted against a proposal described in this joint proxy
statement-prospectus will be voted in favor of an adjournment.

You may revoke your proxy at any time before it is voted by:

- filing a written notice of revocation with the Secretary of Chase, 270
Park Avenue, New York, NY 10017, if you are a Chase stockholder;

- filing a written notice of revocation with the Secretary of J.P. Morgan,
60 Wall Street, New York, NY 10260, if you are a J.P. Morgan stockholder;

- granting a subsequently dated proxy; or

- appearing in person and voting at your special meeting if you are a
holder of record.

Attendance at a special meeting will not in and of itself constitute
revocation of a proxy. If a special meeting is postponed or adjourned, it will
not affect the ability of stockholders of record as of the record date to
exercise their voting rights or to revoke any previously-granted proxy using the
methods described above.

VOTING ELECTRONICALLY OR BY TELEPHONE

Because Delaware, the state in which both Chase and J.P. Morgan are
incorporated, permits electronic submission of proxies through the Internet or
by telephone, instead of submitting proxies by mail on the enclosed proxy card
or voting instruction card, stockholders of record and many stockholders who
hold their shares through a broker or bank will have the option to submit their
proxies or voting instructions electronically through the Internet or by
telephone. Please note that there are separate arrangements for using the
Internet and telephone depending on whether your shares are registered in your
company's stock records in your name or in the name of a broker, bank or other
holder of record. If you hold your shares through a broker, bank or other holder
of record, you should check your proxy card or voting instruction card forwarded
by your broker, bank or other holder of record to see which options are
available.

Chase stockholders of record may submit their proxies:

- through the Internet by visiting a website established for that purpose
at http://www.eproxy.com/cmbsp/ and following the instructions; or

- by telephone by calling the toll-free number 1-800-840-1208 in the United
States, Canada or Puerto Rico on a touch-tone phone and following the
recorded instructions.

J.P. Morgan stockholders of record may submit their proxies:

- through the Internet by visiting a website established for that purpose
at http://www.eproxyvote.com/jpm and following the instructions; or

SOLICITATION OF PROXIES

Chase and J.P. Morgan will share equally the expenses incurred in
connection with the printing and mailing of this joint proxy
statement-prospectus. To assist in the solicitation of proxies, Chase has
retained ChaseMellon Shareholder Services, L.L.C. and MacKenzie Partners,

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<PAGE>

Inc. for a combined fee of $50,000 plus reimbursement of expenses. J.P. Morgan
has retained Morrow & Co. Inc., for a fee of $20,000 plus reimbursement of
expenses, to assist in the solicitation of proxies. Chase, J.P. Morgan and their
respective proxy solicitors will also request banks, brokers and other
intermediaries holding shares of Chase or J.P. Morgan common stock beneficially
owned by others to send this joint proxy statement-prospectus to, and obtain
proxies from, the beneficial owners and will, if requested, reimburse the record
holders for their reasonable out-of-pocket expenses in so doing. Solicitation of
proxies by mail may be supplemented by telephone and other electronic means,
advertisements and personal solicitation by the directors, officers or employees
of Chase and J.P. Morgan. No additional compensation will be paid to our
directors, officers or employees for solicitation.

YOU SHOULD NOT SEND IN ANY STOCK CERTIFICATES WITH YOUR PROXY CARD. OUR
EXCHANGE AGENT WILL MAIL A TRANSMITTAL LETTER WITH INSTRUCTIONS FOR THE
SURRENDER OF STOCK CERTIFICATES TO J.P. MORGAN STOCKHOLDERS AS SOON AS
PRACTICABLE AFTER COMPLETION OF THE MERGER. CHASE STOCKHOLDERS SHOULD RETAIN
THEIR STOCK CERTIFICATES AND WILL NOT NEED TO SURRENDER THEM FOR EXCHANGE.

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<PAGE>

THE MERGER

This section of the joint proxy statement-prospectus describes material
aspects of the proposed merger, including the merger agreement and the stock
option agreements. This summary may not contain all of the information that is
important to you. You should carefully read this entire joint proxy
statement-prospectus and the other documents we refer you to for a more complete
understanding of the merger. In addition, we incorporate important business and
financial information about each of us into this joint proxy
statement-prospectus by reference. You may obtain the information incorporated
by reference into this joint proxy statement-prospectus without charge by
following the instructions in the section entitled "Where You Can Find More
Information" that begins on page 101.

EFFECT OF MERGER; WHAT YOU WILL RECEIVE IN THE MERGER

Upon completion of the merger, J.P. Morgan will merge with and into Chase,
with Chase as the surviving corporation, and Chase will change its name on the
date of the merger to J.P. Morgan Chase & Co.

In the merger, each outstanding share of J.P. Morgan common stock will be
converted into 3.7 shares of common stock of J.P. Morgan Chase & Co. No
fractional shares will be issued and cash will be paid instead of fractional
shares. The exchange ratio is fixed and will not be adjusted to reflect stock
price changes prior to the date of the merger.

Each outstanding share of preferred stock of J.P. Morgan will be converted
in the merger into one share of a corresponding new series of J.P. Morgan Chase
& Co. preferred stock having substantially the same terms as the J.P. Morgan
preferred stock.

BACKGROUND OF THE MERGER

Over the past decade, both Chase and J.P. Morgan have pursued strategies to
develop and broaden their wholesale financial services and investment banking
platforms. Both have focused on developing the necessary product leadership,
global reach and scale required to be a leading competitor in the global
financial services industry, particularly in the higher-growth areas of global
capital markets, strategic advice, asset management and private banking. Chase's
strategy has involved both internal growth and strategic acquisitions, including
the acquisitions of Hambrecht & Quist Group in 1999 and of Robert Fleming
Holdings Limited and The Beacon Group earlier this year. J.P. Morgan's strategy
for developing its investment banking business has focused principally on
internal growth and expansion. Through this strategy, J.P. Morgan has been able
to build an investment banking business that ranked among the top ten in the
1999 league table rankings for U.S. and global strategic advisory engagements as
well as U.S. corporate debt and common stock underwritings. In the wealth
management area, J.P. Morgan's strategy has involved both internal growth and
acquisitions and investments, including J.P. Morgan's 1997 acquisition of a 45%
interest in the mutual fund company American Century Companies, Inc., with
approximately $118 billion in assets under management as of June 30, 2000.

During this period the senior managements of Chase and J.P. Morgan
regularly reviewed with their respective boards their companies' strategic
objectives and the possible means of achieving those objectives, including
business combinations with other financial services companies. Both managements
also updated their boards regularly on the changing structure and dynamics of
the financial services industry and the increasing need for scale, global reach,
an expanded client base and a full product array in the investment banking and
wholesale financial services businesses.

Representatives of Chase and J.P. Morgan held discussions regarding the
possible benefits of a business combination or other strategic transaction at
various times in the past. Among the

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<PAGE>

representatives of Chase involved in these discussions were Mr. Harrison, its
Chairman and Chief Executive Officer, Walter Shipley, Mr. Harrison's predecessor
as Chase's Chairman and Chief Executive Officer, and Geoffrey T. Boisi, who was
previously an advisor to Chase and is now a Vice Chairman of Chase. Among the
representatives of J.P. Morgan was Mr. Warner, its Chairman and Chief Executive
Officer. None of these discussions progressed beyond a preliminary stage, and
none had occurred for nearly two years prior to the discussions that led to the
proposed merger.

In mid-August of this year, Chase contacted Mr. Warner and indicated
Chase's interest in discussing again the possibility of a business combination
between Chase and J.P. Morgan. Following that conversation, the parties held
further telephone conversations that ultimately led to a meeting between Mr.
Harrison and Mr. Warner on August 23. After this meeting, Mr. Harrison and Mr.
Warner agreed that a small group of senior representatives from each of Chase
and J.P. Morgan should meet to review the business fit between the two
organizations and the benefits that might arise out of a combination. Based on
this further review, Messrs. Harrison and Warner concluded that the changes and
developments in their respective companies over the past several years,
including Chase's substantially expanded investment banking and asset management
operations, had created a new opportunity for a strategic merger between the two
companies. Over the ensuing days Mr. Harrison and Mr. Warner, together with a
gradually expanding group of senior executives from each company, continued to
meet to explore the complementary strengths of the two companies and the
possible benefits of a merger, along with the structure and terms of a potential
combination. During this period each of Mr. Harrison and Mr. Warner contacted
members of their respective boards to brief them individually on the status of
the ongoing discussions.

In addition, during this period representatives of Chase and J.P. Morgan,
together with their legal and financial advisors, discussed the specific terms
of a merger between the two companies. These discussions covered management and
the name of the combined company, the terms of a draft merger agreement and
various other matters relating to the proposed merger, including the structure
of the transaction, the exchange ratio, tax and accounting issues and required
regulatory approvals. In addition, each side continued its due diligence review
of the business and operations of the other.

On September 8, 2000, the boards of directors of Chase and J.P. Morgan each
held a special meeting at which their respective managements provided updates on
the merger discussions to date and the strategic implications and possible
benefits and risks of a business combination between the two companies. Chase's
and J.P. Morgan's managements and their respective advisors also reviewed with
their boards the results of their due diligence reviews of the other company to
that point and discussed various other matters with their boards relating to the
structure and terms of the proposed merger. At the Chase board meeting, Chase's
legal advisors discussed with the board its fiduciary duties under Delaware law
in connection with the proposed merger. At the conclusion of these meetings, the
board of each company authorized its management team to continue negotiating the
terms of a definitive merger for possible presentation to the boards for
consideration the following week.

From September 8 through September 12, 2000, both parties and their
financial and legal advisors continued negotiating the terms of a definitive
merger agreement and continued their due diligence reviews.

Late in the afternoon of September 12 the board of directors of each of
Chase and J.P. Morgan held a special meeting to consider the proposed
transaction. At these meetings, each board considered the strategic reasons for
the proposed transaction, the principal terms of the proposed transaction and
the results of its due diligence review of the other. In addition, J.P. Morgan's
legal advisors discussed with the J.P. Morgan board its fiduciary duties under
Delaware law and each company's legal advisors described to each board the terms
of the

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<PAGE>

proposed merger agreement and stock option agreements and responded to questions
from directors. At the Chase board meeting Chase's financial advisor, Chase
Securities, presented a summary of its financial analyses relating to the
proposed merger and delivered its opinion that the proposed exchange ratio in
the merger was fair to the Chase common stockholders from a financial point of
view. At the J.P. Morgan board meeting J.P. Morgan's financial advisor, J.P.
Morgan Securities, presented a summary of its financial analyses relating to the
proposed merger and delivered its opinion that the proposed exchange ratio in
the merger was fair to the J.P. Morgan common stockholders from a financial
point of view. Following deliberations, each board of directors unanimously
approved the merger agreement and the related agreements and the transactions
contemplated by those agreements and resolved to recommend that its stockholders
vote to adopt the merger agreement.

Following these board meetings, Mr. Harrison and Mr. Warner executed the
merger agreement and related stock option agreements on behalf of Chase and J.P.
Morgan. Early the following morning, Chase and J.P. Morgan issued a joint press
release announcing the proposed merger.

REASONS OF BOTH BOARDS OF DIRECTORS FOR THE MERGER

In reaching their respective decisions to approve the merger, the boards of
directors of each of Chase and J.P. Morgan considered, among other factors,
various strategic benefits expected to be derived from the merger. We have
summarized below the key strategic benefits identified by both of our boards of
directors during their individual evaluations of the proposed merger. Because
both of our boards considered and reached the same conclusions on the common
benefits of the merger described below, we have presented this information in a
single section that reflects the views of each of our boards.

Each of our boards believes that the combination of Chase and J.P. Morgan
would create one of the world's preeminent, fully integrated financial services
companies with an unparalleled client base, leading global capabilities, product
leadership in growth markets and a diversified earnings stream. The combined
firm would be well-positioned not only to generate substantial shareholder
value, but also to meet the challenges posed by ongoing consolidation and change
in the financial services industry, including the need to retain and attract the
best employees.

In recent years Chase has made significant strides toward achieving these
goals both through internal growth and through acquisitions such as those of
Hambrecht & Quist, Flemings and The Beacon Group. J.P. Morgan has transformed
itself from a wholesale commercial bank into a leading global investment bank
and wealth management firm principally through internal growth and expansion.
Our boards believe that the proposed combination of Chase and J.P. Morgan should
generate substantially more value for stockholders than either firm could
generate on its own or in connection with any other reasonably possible
transaction.

STRATEGIC CONSIDERATIONS. Our boards believe that the merger would provide
a number of significant strategic opportunities and benefits, including the
following:

- Complementary Strengths in Clients, Geographies and Products.

- Our respective client bases and product offerings are highly
complementary and present significant opportunities for
cross-marketing the combined company's broader product array. The
addition of Chase's non-investment grade clients, middle-market
clients, and clients engaged in so-called "new economy" businesses,
consisting of media, telecommunications, information technology, life
sciences and Internet-based products and services, to J.P. Morgan's
existing client base should create a broad and diverse set of clients
that would generate the opportunity for substantial growth in
revenues, especially in light of the increased breadth of the combined
firm's product offerings.

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<PAGE>

- The combined company would be a globally balanced wholesale financial
services firm. On a pro forma basis, approximately 52% of its 1999
revenues (excluding revenues from Chase's National Consumer Services
group) were derived from North America, 30% from Europe, 12% from the
Asia/Pacific region and 6% from Latin America.

- Our merger would create a firm with leading positions in fixed income
underwriting and trading, syndicated lending, risk management
products, private equity, institutional asset management and private
banking. Combining the positions that Chase and J.P. Morgan have each
achieved in mergers and acquisitions advice and in equity underwriting
and trading should also enable the combined firm to serve the full
range of our clients' needs more effectively.

On a pro forma basis using published "league table" rankings for 1999,
as published by Thomson Financial Securities Data, the combined company
would have the following product rankings:

<TABLE>
<CAPTION>
PRODUCT RANK
------- ----
<S> <C>
Global syndicated loans............................. 1
Global investment grade debt offerings.............. 3
Global high yield debt offerings.................... 3
M&A advisory:
Europe (completed transactions)................... 3
Global (completed transactions)................... 5
Common stock offerings
U.S. offerings.................................... 6
Global offerings.................................. 8
</TABLE>

In addition, the combined firm would have leading positions in overall
risk management, complex risk management strategies, credit
derivatives, interest rate derivatives and foreign exchange.

Finally, the combined company would have, on a pro forma basis, a total
of $720 billion of assets under management at December 31, 1999
(including the combined company's interest in American Century
Companies, Inc.), ranking it as the second largest active asset manager
in the United States behind Fidelity Investments (based on rankings for
1999 published in Investment Dealer's Digest). These assets would also
be well diversified:

- by category, with 52% in equities, 25% in fixed income and 23% in
cash and other asset classes,

- by geographic region, with 65% in the United States and 35% outside
the United States, and

- by client type, with 60% held for institutional investors and 40%
held for private clients.

- Greater Diversification of Business Lines. The combined company would be
broadly diversified across a number of wholesale and retail financial
services businesses. This diversification would be expected to provide a
more stable revenue stream through changing economic cycles and volatile
securities markets. On a pro forma basis, approximately 48% of the
combined company's revenues for the first six months of 2000 came from
global banking, while 27% came from U.S. consumer services, 11% came from
asset management and other wealth services (including the combined
company's interest

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<PAGE>

in American Century Companies, Inc.), 9% came from global services and 5% came
from private equity investments.

- Enhanced Scale and Global Reach. During the past several years the
financial services industry has undergone significant consolidation. As a
result, our principal competitors in many of our most important business
lines have become global in size and in range of product offerings. In
addition, many of the clients for our wholesale financial services have
also consolidated and grown substantially larger and frequently prefer to
deal with financial institutions that can provide a full range of
products on a global basis. We believe that to compete effectively in
this environment a financial institution must have a strong capital base
and be able to offer a full array of products on a global basis.

The combined firm would be truly global. At September 8, 2000, J.P.
Morgan Chase & Co. would have ranked among the top five global financial
institutions on the basis of market capitalization and as one of the
three largest financial institutions in the United States based on pro
forma 1999 revenues and net income, book value at June 30, 2000 and
market capitalization at September 5, 2000. As of December 31, 1999, the
combined company would have had approximately $660 billion in assets and
more than $36 billion in stockholders' equity. Scale of this magnitude
would provide the resources necessary for J.P. Morgan Chase & Co. to
capitalize on opportunities as they emerge, to respond effectively to
rapid change in the financial services industry and to the needs of
clients and to offer a much broader range of products to its clients than
either Chase or J.P. Morgan could on its own.

- Synergies and Cost Savings. While potential cost savings are not the
principal reason for the merger, the transaction would nevertheless be
expected to produce significant cost savings and incremental net revenue
from combining the two companies. Our managements originally estimated
these synergies at approximately $1.9 billion (pre-tax), consisting of
approximately $1.5 billion of pre-tax cost savings and incremental
revenues, net of incremental expenses, of approximately $400 million. Our
managements also estimated that these synergies would be achieved by the
end of the second year following the merger, with one-third estimated to
be achieved in the first year. Chase and J.P. Morgan have established
merger integration teams that are developing detailed integration and
restructuring plans. The plans are expected to provide greater detail on
cost savings, including the number of likely job eliminations. In
addition, the plans will detail anticipated severance costs, the costs of
disposing of certain premises and equipment and other merger-related
expenses, including technology and systems-integration costs. Based on
these merger integration efforts, our managements currently believe our
initial estimates of cost savings were conservative but have not arrived
at or announced revised estimates. As the merger integration process
progresses further, announcements may be made from time to time regarding
decisions and developments in the merger integration process. We also
expect that the merger will result in pre-tax costs of approximately $2.8
billion, a portion of which will be taken as a charge to earnings upon
closing of the merger.

- Enhanced Employee Opportunities. We believe that achieving leadership
positions in key product areas -- something made possible by the
merger -- would significantly enhance our ability to attract and retain
the best employees, which in turn would increase the financial benefits
of the merger. We also believe that the close cultural fit between the
two companies should facilitate the integration of our respective
employees into a single organization.

CONSIDERATION OF FIXED EXCHANGE RATIO STRUCTURE. Both of our boards
considered whether a fixed exchange ratio was the appropriate transaction
structure to achieve the strategic benefits referred to above and concluded that
it was. As discussed in more detail below under "-- Recommendation of, and
Factors Considered by, Chase's Board of Directors" and

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<PAGE>

"-- Recommendation of, and Factors Considered by, J.P. Morgan's Board of
Directors," our boards concluded that a fixed exchange ratio structure would
more properly reflect the long-term valuation assessments being made by the
boards than would a structure under which short-term market volatility could
impact the parties' contractual obligations. Our boards also noted that a fixed
exchange ratio was customary for transactions of this type.

RECOMMENDATION OF, AND FACTORS CONSIDERED BY, CHASE'S BOARD OF DIRECTORS

At a meeting of the Chase board of directors on September 12, 2000, after
due consideration, the Chase board unanimously:

- determined that the merger agreement, the stock option agreements and the
merger are fair to and in the best interests of Chase and Chase's
stockholders;

- approved the merger agreement and the stock option agreements; and

- determined to recommend that the stockholders of Chase adopt the merger
agreement.

ACCORDINGLY, THE CHASE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
CHASE STOCKHOLDERS VOTE FOR ADOPTION OF THE MERGER AGREEMENT.

In reaching its decision to approve the merger agreement and related
agreements and to recommend that the Chase stockholders adopt the merger
agreement, the Chase board consulted with its senior management, with Chase's
financial advisor, Chase Securities, and with its legal advisors, including its
General Counsel and its outside counsel, Simpson Thacher & Bartlett. The board
also considered the following material factors:

- all the reasons described above under "-- Reasons of Both Boards of
Directors for the Merger", including:

- the complementary strengths in clients, geographies and products of
Chase and J.P. Morgan;

- the benefits expected to result from the business and geographic
diversification of the combined company compared to Chase on a
stand-alone basis;

- the cost savings and incremental revenues expected to be realized as a
result of the merger; and

- enhanced employee opportunities;

- historical information concerning Chase's and J.P. Morgan's respective
businesses, financial performance and condition, operations, management,
competitive positions and stock performance, which comparisons generally
informed the board's determination as to the relative values of Chase,
J.P. Morgan and the combined company; in particular, the Chase board
noted a number of aspects of J.P. Morgan's business and operations that
made it an attractive strategic fit for Chase:

- J.P. Morgan had made great progress in its ongoing strategic shift to
focus on investment banking and other wholesale financial businesses,
with its 1999 lending revenues representing only approximately 9% of
J.P. Morgan's total 1999 revenues;

- J.P. Morgan has a strong international presence with non-U.S. revenues
accounting for 53% of total 1999 revenues;

- J.P. Morgan has strong growth rates in business segments that are
important to Chase's long term business strategies, with compound
annual growth rates in revenues since 1996 from equities, private
equity, investment banking and asset management of 59%, 43%, 23% and
14%, respectively; and

- J.P. Morgan has a broad and balanced global product portfolio, with
revenues over the prior twelve months from equities, investment
banking, asset management

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<PAGE>

services and interest rate and currency markets accounting for 18%,
17%, 16% and 17%, respectively, of total revenues;

- current developments and trends in the financial services industry,
including trends toward consolidation and globalization;

- presentations by members of Chase's senior management as to the results
of their due diligence review of J.P. Morgan's business and operations;

- presentations by Chase's senior management regarding Chase's criteria for
a successful merger -- strategic fit, reasonable execution risk, and
financial benefits to Chase's stockholders -- and management's assessment
that the proposed merger would meet each of these criteria;

- the alternatives reasonably available to Chase if it did not pursue the
merger with J.P. Morgan, including the possibility of pursuing an
acquisition of or merger with another financial services company, and the
conclusion that no other reasonably available alternative or prospective
merger partner would yield greater benefits for Chase and its
stockholders than the merger with J.P. Morgan;

- the financial analyses and presentations of Chase's financial advisor and
its opinion that the exchange ratio was fair, from a financial point of
view, to Chase's common stockholders (see "-- Opinions of Financial
Advisors -- Opinion of Chase's Financial Advisor" below); in this
connection the Chase board noted, based on the presentations by Chase
Securities, that:

- the implied value of the merger exchange ratio was consistent with the
terms of the two most recent acquisitions of large investment banks,
based on the ratios of implied price to book value and to last twelve
months net income and also the implied price as a premium over the
prior month's average stock price; and

- the implied value of the merger exchange ratio was consistent with the
range of implied equity values for J.P. Morgan calculated by Chase
Securities in its different analyses prepared for the Chase board;

- the terms and conditions of the merger agreement and the stock option
agreements, including the fact that the exchange ratio is fixed and
therefore not subject to adjustment, nor is the merger agreement subject
to termination, regardless of any change in the trading prices of either
company's stock between signing of the merger agreement and closing; in
connection with this review:

- the Chase board considered a fixed exchange ratio appropriate to
reflect the strategic purpose of the merger and consistent with market
practice for mergers of this type and noted that a fixed exchange
ratio would more fairly capture the respective ownership interests of
the Chase and J.P. Morgan stockholders based on fundamental valuation
assessments and avoid fluctuations caused by near-term market
volatility;

- the Chase board also considered the relative contributions of Chase
and J.P. Morgan to the combined entity and determined that the 34%
equity ownership of J.P. Morgan's former common stockholders in the
combined company would be appropriate in light of J.P. Morgan's
contribution to the combined company's pro forma revenues (28%), net
income (28%), book value (32%) and assets (39%), in each case before
giving effect to any merger-related synergies or cost savings;

- the corporate governance provisions established for the transaction,
including the board composition and designation of key senior management,
which the Chase board considered to be of significant importance in
ensuring an effective and timely integration of the two companies'
operations;

- the provisions of the merger agreement and stock option agreement
designed to restrict the ability of the parties to entertain third party
acquisition proposals, and the provisions of

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<PAGE>

the merger agreement providing for the payment of termination fees in
certain events; the Chase board concluded that those provisions were
appropriate means to increase the likelihood that the transaction would
be completed;

- the likelihood that the merger will be completed on a timely basis,
including the likelihood that the merger will receive all necessary
regulatory approvals;

- Chase management's experience in successfully implementing its previous
strategic merger transactions;

- the expected treatment of the merger as a pooling of interests for
financial accounting purposes and as a tax-free reorganization for U.S.
federal income tax purposes, which the board concluded would be
beneficial for Chase's stockholders;

- the interests of certain Chase officers and directors in the merger (see
"-- Interests of Directors and Executive Officers in the
Merger -- Chase"); and

- the anticipated impact of the merger on Chase's stockholders and
customers.

Chase's board of directors also considered the potential adverse
consequences of the merger, including the following:

- the challenges of combining the operations of two major international
businesses;

- the risk that anticipated growth synergies and cost savings will not be
achieved;

- the near-term dilution to Chase's stockholders expected to result from
the merger; and

- the risk of diverting management's attention from other strategic
priorities to implement merger integration efforts.

In view of the wide variety of factors considered in connection with its
evaluation of the merger and the complexity of these matters, the Chase board
did not find it useful, and did not attempt, to quantify, rank or otherwise
assign relative weights to these factors. The Chase board relied on the
experience and expertise of Chase Securities, its financial advisor, for
quantitative analyses of the financial terms of the merger. See "-- Opinions of
Financial Advisors -- Opinion of Chase's Financial Advisor." In addition, except
as noted above, the Chase board did not undertake to make any specific
determination as to whether any particular factor, or any aspect of any
particular factor, was favorable or unfavorable to the Chase board's ultimate
determination, but rather the Chase board conducted an overall analysis of the
factors described above, including thorough discussions with, and questioning
of, Chase's management and legal and financial advisors. In considering the
factors described above, individual members of Chase's board may have given
different weight to different factors.

The Chase board considered all these factors as a whole, and overall
considered the factors to be favorable to, and to support, its determination.

RECOMMENDATION OF, AND FACTORS CONSIDERED BY, J.P. MORGAN'S BOARD OF DIRECTORS

At a meeting of J.P. Morgan's board of directors held on September 12,
2000, after due consideration, the J.P. Morgan board unanimously:

- determined that the merger agreement, the stock option agreements and the
merger are fair to and in the best interests of J.P. Morgan and its
stockholders;

- approved the merger agreement and the stock option agreements; and

- determined to recommend that the stockholders of J.P. Morgan approve the
merger agreement.

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<PAGE>

ACCORDINGLY, THE J.P. MORGAN BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
THE J.P. MORGAN STOCKHOLDERS VOTE FOR ADOPTION OF THE MERGER AGREEMENT.

In approving the transaction and making these recommendations, the J.P.
Morgan board consulted with J.P. Morgan's management as well as its financial
advisor and outside legal counsel, and considered the following material
factors:

- all the reasons described above under "-- Reasons of Both Boards of
Directors for the Merger;"

- the possibility, as alternatives to the merger, of not pursuing any
transaction or of pursuing an acquisition of, or a business combination
or joint venture with, an entity other than Chase, and the J.P. Morgan
board's conclusion that a transaction with Chase is more feasible, and is
expected to yield greater benefits, than the likely alternatives;

- the value of the exchange ratio provided for in the merger agreement
relative to the current market prices and historical trading prices of
J.P. Morgan and Chase and the board's determination that the implied
value represented a substantial premium for J.P. Morgan's common
stockholders;

- that as more fully described below under "-- Rationale for Fixed Exchange
Ratio", it was more advantageous for J.P. Morgan's stockholders for the
exchange ratio to be fixed rather than being subject to adjustment;

- the ownership interest of J.P. Morgan stockholders in the combined
company relative to J.P. Morgan's contribution to pro forma combined
earnings and the board's conclusion that, by most measures, the ownership
interest of J.P. Morgan's common stockholders would be proportionately
larger than their implied contribution to the combined entity;

- comparisons of historical financial measures for Chase and J.P. Morgan,
including earnings, assets, book value and return on equity, which
comparisons generally informed the board's determination as to the
relative values of Chase, J.P. Morgan and the combined company;

- current industry, economic and market conditions, developments and trends
and the board's analysis of their potential impacts on J.P. Morgan, Chase
and the combined entity;

- the intended treatment of the merger as a pooling of interests for
financial accounting purposes, which the board viewed as being important
to the results of operations of the combined entity on a going forward
basis under generally accepted accounting principles and to the resulting
stock price of J.P. Morgan;

- the ability to complete the merger as a tax-free reorganization for U.S.
federal income tax purposes, and the board's conclusion that this
treatment would be beneficial to a large number of its stockholders;

- the terms and conditions of the merger agreement, including the
conditions to closing and the fact that the merger agreement is not
subject to termination in the event of any change in the trading prices
of either company's stock between signing of the merger agreement and
closing and the board's ultimate determination that these terms and
conditions were appropriate given the nature of the transaction;

- the restrictions on either party's ability to entertain third party
acquisition proposals and the payment of termination fees in specified
circumstances and the board's determination of the appropriateness of
these provisions, including with respect to their impact on the
likelihood that the transaction would ultimately be consummated;

- the grant by each party to the other of an option to acquire stock
exercisable under specified circumstances pursuant to the stock option
agreements, as discussed under

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<PAGE>

"-- Stock Option Agreements" below, and the board's determination of the
appropriateness of these provisions, including with respect to their
impact on the likelihood that the transaction would ultimately be
consummated;

- the analyses and presentations of J.P. Morgan Securities, and J.P. Morgan
Securities' opinion to the effect that, as of September 12, 2000, and
based upon and subject to the various considerations set forth in its
opinion, the exchange ratio in the merger was fair from a financial point
of view to the J.P. Morgan common stockholders, and the board's
determination that the retention of an affiliated financial advisor was
in the best interests of J.P. Morgan's stockholders as described below
under "-- Opinions of Financial Advisors -- Decision by Each Board to
Engage Affiliated Financial Advisor";

- the role that J.P. Morgan's current management would play in the
management of the combined company and the composition of the combined
company's board of directors and management Executive Committee, and the
board's belief that this role would lead to increased shareholder value
over the long-term;

- the expected opportunities for, and the major role expected to be played
by, J.P. Morgan employees in the combined firm and the board's belief
that this role would lead to increased shareholder value over the long
term; and

- the interests that certain executive officers and directors of J.P.
Morgan may have with respect to the merger in addition to their interests
as stockholders of J.P. Morgan generally, as discussed under
"-- Interests of Directors and Executive Officers in the Merger -- J.P.
Morgan" below.

J.P. Morgan's board of directors also considered the potential adverse
consequences of the merger, including the following:

- the challenges of combining the businesses of two major corporations of
this size and the attendant risk of not achieving the expected synergies
and other benefits and of diverting management focus and resources from
other strategic opportunities and operational matters for an extended
period of time, as discussed under "Risk Factors" above; and

- that while the merger is likely to be completed, there are risks
associated with obtaining necessary approvals, as discussed under "Risk
Factors" and "-- Regulatory Approvals."

In view of the wide variety of factors considered in connection with its
evaluation of the merger and the complexity of these matters, the J.P. Morgan
board did not find it useful, and did not attempt, to quantify, rank or
otherwise assign relative weights to these factors. The J.P. Morgan board relied
on the experience and expertise of J.P. Morgan Securities, its financial
advisor, for quantitative analysis of the financial terms of the merger. See
"-- Opinions of Financial Advisors -- Opinion of J.P. Morgan's Financial
Advisor." In addition, except as noted above, the J.P. Morgan board did not
undertake to make any specific determination as to whether any particular
factor, or any aspect of any particular factor, was favorable or unfavorable to
the J.P. Morgan board's ultimate determination, but rather the J.P. Morgan board
conducted an overall analysis of the factors described above, including thorough
discussions with, and questioning of, J.P. Morgan's management and legal and
financial advisors. In considering the factors described above, individual
members of J.P. Morgan's board may have given different weight to different
factors.

The J.P. Morgan board considered all these factors as a whole, and overall
considered the factors to be favorable to, and to support, its determination.

At a meeting on October 11, 2000, the J.P. Morgan board of directors
reviewed the proposed merger with the assistance of J.P. Morgan Securities. In
this connection J.P. Morgan Securities reviewed, among other things, the
relative performance of each of Chase's and J.P. Morgan's common stock after the
announcement of the transaction, including with respect to
35
<PAGE>

various stock indices. While the board acknowledged these factors and was
informed by J.P. Morgan Securities that it was possible that Chase's common
stock price could decline further, the board did not question the underlying
rationale for the merger or the desirability of the merger in light of trading
fluctuations in the Chase common stock price. As of the date of this joint proxy
statement-prospectus, the recommendation of the J.P. Morgan board regarding the
transaction and the merger agreement remains in effect.

RATIONALE FOR FIXED EXCHANGE RATIO. In agreeing to a fixed exchange ratio for
the merger, the J.P. Morgan board considered the possibility of a collar or
other adjustable exchange ratio. The board concluded, however, that a fixed
exchange ratio was preferable under all the circumstances, despite the fact that
the price of Chase's common stock could decrease on a short term basis after
announcement of the transaction. The material reasons for this decision are
described below.

The board was advised that fixed exchange ratios, with no collars, have
become customary in large, all-stock bank merger transactions. Such exchange
ratios fix the percentage ownership of the parties in the combined firm at the
time the merger agreement is approved by the boards and symmetrically allocate
the risks associated with movements in the price of the issuer's stock. In this
respect they reflect the intention to share risks and rewards that generally
underlie all-stock merger transactions such as the proposed merger.

Moreover, given its view of the combined firm's prospects, the J.P. Morgan
board concluded that it was better to achieve a higher initial exchange ratio,
and a larger percentage ownership of the combined firm, than to secure
protection against near-term price movements in Chase's common stock through a
collar or other adjustable exchange ratio. While a fixed exchange ratio exposes
the recipient stockholders to a decline in nominal value if the price of the
issuer's stock falls in the period between announcement and closing, it also
allows the recipient stockholders to benefit from the potential strength of the
combination over time. The ultimate value of the combined firm will be
determined not by movements in the issuer's stock price between announcement and
closing, but by the performance of the combined firm over time. The J.P. Morgan
board concluded that concerns about near-term market fluctuations generally
should not outweigh judgments about longer-term value.

Finally, the J.P. Morgan board was interested in insulating the
transaction, to the extent practical, from any uncertainty that might be
generated by near-term market developments. In the board's judgment, near-term
movements in market prices, or in the price of Chase's common stock, are often
unrelated to the fundamental financial and strategic factors supporting the
transaction or to the longer-term value of the combination. Yet such movements
in the context of a collar or other adjustable exchange ratio can create
uncertainty with respect to the consummation of a transaction if the issuer is
forced to issue more shares to compensate for near-term changes in nominal
value. In fact, the existence of a collar or adjustable exchange ratio can
aggravate an initial decline in an issuer's stock price because it could require
the issuer to issue additional shares to the recipient stockholders. The
avoidance of the uncertainty that can be created by a collar or adjustable
exchange ratio was another important factor in the J.P. Morgan board's decision
to agree to a fixed exchange ratio.

OPINIONS OF FINANCIAL ADVISORS

DECISION BY EACH BOARD TO ENGAGE AFFILIATED FINANCIAL ADVISOR. Chase and
J.P. Morgan each considered obtaining a fairness opinion from an independent
financial advisor with respect to the exchange ratio in the merger. Under the
laws of Delaware, which is the state in which both companies are incorporated,
the board of directors of a company is not required to obtain a fairness opinion
or an outside valuation report prior to approving a business combination as long
as the directors have adequate information upon which a proper exercise of
business judgment can be made. Delaware law also permits directors to rely upon
information, opinions, reports and

36
<PAGE>

other statements presented by any of the company's officers or employees. The
boards of both Chase and J.P. Morgan concluded that their respective investment
banking subsidiaries were experienced and knowledgeable in financial advisory
engagements of this size and complexity and that reliance upon their reports and
opinions was appropriate. In this connection, Chase and J.P. Morgan each noted
that its investment banking subsidiary ranked among the top ten in the world for
global completed M&A advisory transactions during the first half of 2000. In
addition, Chase also considered Chase Securities' experience and familiarity
with Chase in light of the fact that Chase had relied on Chase Securities as its
financial advisor in three other major transactions over the prior twelve
months -- the acquisitions of Hambrecht & Quist Group ($1.35 billion) and Robert
Fleming Holdings Limited ($6.9 billion) and the sale of Chase's Hong Kong
consumer business ($1.32 billion). Likewise, J.P. Morgan had over many years
developed a close working relationship in formulating strategic policy with J.P.
Morgan Securities. As a result, the J.P. Morgan board valued the familiarity
with the strategic issues facing the board that J.P. Morgan Securities had
developed as part of that relationship.

The Chase and J.P. Morgan boards also noted that obtaining a fairness
opinion from an unaffiliated financial advisor would have involved disclosing
proprietary information about their businesses and strategies to significant
competitors of each company. In addition, in the current environment of active
consolidation in the investment banking industry, it would also have created the
risk of providing sensitive information to competitors which might have an
interest in proposing their own business combination with Chase or J.P. Morgan.
In this connection, each board also noted that in a number of previous business
combinations involving major financial institutions, one or both of the merging
parties had relied on its affiliated investment bank as its financial advisor.

In light of the foregoing considerations, the Chase and J.P. Morgan boards
each concluded that obtaining a fairness opinion from their respective
investment bank subsidiaries was appropriate and in the best interests of their
respective stockholders.

OPINION OF CHASE'S FINANCIAL ADVISOR. Chase retained Chase Securities to
act as its financial advisor in connection with the proposed merger. In
connection with its engagement, Chase instructed Chase Securities to evaluate
the fairness, from a financial point of view, of the exchange ratio in the
merger to the holders of Chase common stock. At the September 12, 2000 meeting
of the Chase board of directors, Chase Securities delivered its oral opinion,
which was subsequently confirmed in writing, to the effect that, as of September
12, 2000 and based upon the various qualifications and assumptions set forth in
the opinion, the exchange ratio of 3.7 shares of Chase common stock for each
share of J.P. Morgan common stock was fair, from a financial point of view, to
the holders of Chase common stock.

Chase Securities has confirmed its September 12, 2000 opinion by delivering
its written opinion to the Chase board, dated as of the date of this joint proxy
statement-prospectus, to the same effect. In connection with its written opinion
dated as of the date of this joint proxy statement-prospectus, Chase Securities
confirmed the appropriateness of its reliance on the analyses used to render its
earlier opinion and reviewed the assumptions used in its analyses and the
factors considered in connection with its earlier opinion.

The full text of Chase Securities' opinion dated as of the date of this
joint proxy statement-prospectus is attached as Annex D to this joint proxy
statement-prospectus. We urge you to read this opinion in its entirety for the
assumptions made, procedures followed, matters considered and limits of the
review by Chase Securities in arriving at its opinions. This summary of the
Chase Securities opinions is qualified in its entirety by reference to the full
text of Chase Securities' opinions. Chase Securities has consented to the
inclusion of its opinion dated as of the date of this joint proxy
statement-prospectus and the references to it in this joint proxy
statement-prospectus. In giving this consent, Chase Securities does not admit
that it comes within the category of persons whose consent is required under
Section 7 of the Securities Act

37
<PAGE>

or the SEC's rules under that Act, nor does it admit that it is an expert with
respect to any part of the registration statement of which this joint proxy
statement-prospectus is a part, as the term "expert" is used in the Securities
Act and the Securities and Exchange Commission's rules under the Act.

Chase Securities' opinions are directed only to the fairness, from a
financial point of view, of the exchange ratio to the Chase common stockholders
as of the respective dates of those opinions, and do not constitute
recommendations to the Chase board in connection with the merger, do not address
the merits of the underlying decision by Chase to engage in the merger or the
price or range of prices at which shares of Chase common stock or J.P. Morgan
common stock may trade subsequent to the announcement or completion of the
merger, and do not constitute recommendations to any stockholder of Chase as to
how that stockholder should vote at the Chase special meeting. No limitations
were imposed by Chase upon Chase Securities with respect to the investigation
made or procedures followed by it in rendering its opinions. The exchange ratio
was determined by arm's length negotiations between Chase and J.P. Morgan.

In connection with rendering its opinions, Chase Securities, among other
things:

- reviewed the merger agreement;

- in the case of its opinion dated as of the date of this joint proxy
statement-prospectus, reviewed this joint proxy statement-prospectus;

- reviewed publicly available business and financial information relating
to Chase and J.P. Morgan and their industries;

- reviewed certain internal financial and operating data provided to Chase
Securities by the managements of Chase and J.P. Morgan relating to their
respective businesses, including projections as to the amount and timing
of the cost savings and the related expenses and synergies expected to
result from the merger;

- discussed with members of the senior managements of Chase and J.P. Morgan
the operations, historical financial statements and future prospects,
before and after giving effect to the merger, of their respective
companies and those officers' views of the business, operations and
strategic benefits and other implications of the merger, including the
cost savings and synergies expected to result from the merger and other
matters Chase Securities considered appropriate;

- compared the financial and operating performance of Chase and J.P. Morgan
with publicly available information relating to companies comparable to
Chase and J.P. Morgan and reviewed the relevant historical stock prices
and trading volumes of Chase common stock, J.P. Morgan common stock and
publicly traded securities of companies comparable to Chase and J.P.
Morgan; and

- reviewed the financial terms of recent transactions comparable to the
merger that Chase Securities considered relevant.

In addition, Chase Securities conducted other analyses and examinations and
considered other financial, economic and market criteria as it deemed
appropriate.

In rendering its opinions, Chase Securities assumed and relied upon,
without independent verification, the accuracy and completeness of all financial
and other information publicly available or provided to, reviewed by or
discussed with Chase Securities for purposes of its opinions. Chase Securities
relied upon the assurances of management of Chase and J.P. Morgan that they were
not aware of any facts that would make that information inaccurate or
misleading. Chase Securities did not make or obtain any independent evaluations
or appraisals of the assets or liabilities of Chase or J.P. Morgan, nor did it
conduct a physical inspection of the properties and facilities of Chase or J.P.
Morgan. Chase Securities assumed that the projection information

38
<PAGE>

regarding the expected cost savings and synergies resulting from the merger that
was provided to or discussed with it was reasonably determined based on the best
currently available estimates and judgments of the managements of Chase and J.P.
Morgan as to the cost savings and synergies expected to result from the merger.
Chase Securities further assumed that, in all material respects, those
projections as to expected cost savings and synergies will be realized in the
amounts and at the times indicated. Chase Securities expressed no view as to
those projections of expected cost savings and synergies or the assumptions upon
which they were based.

For purposes of rendering its opinions, Chase Securities assumed, in all
respects material to its analyses, that the representations and warranties of
each party contained in the merger agreement are true and correct, that each
party will perform all of the covenants and agreements required to be performed
by it under the merger agreement and that all conditions to the completion of
the merger will be satisfied without being waived. Chase Securities also assumed
that all material governmental, regulatory or other consents and approvals will
be obtained and that, in the course of obtaining any necessary governmental,
regulatory or other consents and approvals, or any amendments, modifications or
waivers to any documents to which either Chase or J.P. Morgan is a party, as
contemplated by the merger agreement, no restrictions will be imposed or
amendments, modifications or waivers made that would have any material adverse
effect on the contemplated benefits to Chase of the merger. Chase Securities
also assumed that the merger will be accounted for as a pooling of interests
under generally accepted accounting principles and that it will qualify as a
tax-free reorganization for U.S. federal income tax purposes. Chase Securities
based its opinions on market, economic and other conditions as they existed on
the respective dates of its opinions.

The following sections summarize the material analyses performed by Chase
Securities and reviewed with the Chase board at its meeting on September 12,
2000 in connection with Chase Securities' presentation and its opinion to the
Chase board on that date. We have presented some of the summaries in tabular
format. In order to understand the financial analyses used by Chase Securities
more fully, you should read the tables together with the text of each summary.
The tables alone do not constitute a complete description of Chase Securities'
financial analyses.

The following table summarizes the implied per share equity value for J.P.
Morgan derived from the analyses indicated, all of which are described in
greater detail below. Additional analyses performed by Chase Securities that
were not intended to arrive at an implied equity value range are also described
below but are not included in the table.

<TABLE>
<CAPTION>
IMPLIED EQUITY
VALUATION METHODOLOGY VALUE RANGE
--------------------- --------------
<S> <C>
Comparable companies analysis............................... $155-205
Comparable transactions analysis............................ 170-240
Discounted cash flow analysis
without estimated synergies............................... 160-215
with estimated synergies.................................. 215-270
Sum of the parts analysis................................... 185-225
Value of merger consideration based upon Chase stock closing
prices on:
September 8, 2000 ($57.81)................................ $ 214
September 12, 2000 ($56.06)............................... 207
November 21, 2000 ($38.75)................................ 143
</TABLE>

Transaction Overview. Chase Securities presented an overview of the
proposed transaction, including the key financial terms of the transaction and
an implied valuation of J.P. Morgan based on a fixed exchange ratio of 3.7
shares of Chase common stock and a total of 186 million diluted shares of J.P.
Morgan common stock, based on the treasury stock method. Chase Securities

39
<PAGE>

noted that, based on the foregoing, and using the September 8, 2000 closing
price per share of Chase common stock of $57.81, Chase's implied per share offer
price was $214 per J.P. Morgan share and the aggregate implied diluted equity
value of the J.P. Morgan common stock was $39.9 billion. (Based on Chase's
closing stock price on November 21, 2000, Chase's implied offer price was $143
per J.P. Morgan share at that date.) Chase Securities also calculated that,
based on the foregoing and on Chase's diluted shares, J.P. Morgan stockholders
would own on a pro forma basis approximately 34% of the combined company.

Chase Securities calculated that the implied diluted equity value of the
J.P. Morgan common stock of $39.9 billion represented a 3.6x multiple to J.P.
Morgan's common stockholders' equity as of June 30, 2000, an 18.8x multiple to
J.P. Morgan's net income over the last twelve months, a 19.3x multiple to J.P.
Morgan's estimated net income for 2000, based on publicly available
Institutional Brokers Estimates System, or IBES, estimates and an 18.2x multiple
to J.P. Morgan's estimated net income for 2001, based on publicly available IBES
estimates. IBES is a data service that monitors and publishes compilations of
earnings estimates by selected research analysts.

Chase Securities further noted that Chase's implied per share offer price
represented a 30% premium over J.P. Morgan's closing price on September 8, 2000
and a 27% premium over J.P. Morgan's 52-week high trading price.

Contribution Analysis. Chase Securities compared the J.P. Morgan pro forma
equity ownership of 34%, as described in "-- Transaction Overview" above, to the
expected relative contributions of Chase and J.P. Morgan to the pro forma
combined company. Chase Securities calculated that Chase and J.P. Morgan would
contribute to the combined entity as follows (before giving effect to any
merger-related synergies or cost savings):

<TABLE>
<CAPTION>
CHASE J.P. MORGAN
----- -----------
<S> <C> <C>
1999 Net Revenue Contribution........................... 72% 28%
1999 Net Income Contribution............................ 72% 28%
1999 Book Value Contribution............................ 68% 32%
1999 Asset Contribution................................. 61% 39%
</TABLE>

Comparable Companies Analysis. Chase Securities compared certain financial
and operating information and ratios for J.P. Morgan, using publicly available
information, including publicly available IBES estimates of earnings per share,
with corresponding publicly available financial and operating information and
ratios for the following companies in lines of business that Chase Securities
believed to be generally comparable to J.P. Morgan:

- Morgan Stanley Dean Witter & Co.

- Goldman Sachs Group, Inc.

- Merrill Lynch & Co., Inc.

- Lehman Brothers Holdings Inc.

- The Bear Stearns Companies Inc.

- Donaldson, Lufkin & Jenrette, Inc. ("DLJ")

For each of the companies analyzed, other than DLJ, Chase Securities
calculated the closing share price on September 8, 2000 as a multiple of
earnings per share for the last twelve months and for fiscal years 2000 and
2001, based on publicly available IBES estimates of earnings per share. For DLJ,
Chase Securities used DLJ's closing share price on August 1, 2000 due to the
pendency of its announced transaction with Credit Suisse Group. Chase Securities
also calculated the ratio of market capitalization at September 8, 2000 to book
value as of the preceding quarter-end for each of the companies analyzed.

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<PAGE>

These analyses showed the following:

<TABLE>
<CAPTION>
LOW HIGH MEAN MEDIAN
----- ----- ----- ------
<S> <C> <C> <C> <C>
Price as multiple of:
Last twelve months' earnings........... 9.2x 23.2x 16.0x 14.8x
Estimated 2000 earnings................ 10.8x 20.7x 15.5x 14.4x
Estimated 2001 earnings................ 10.4x 19.5x 14.6x 13.3x
Market capitalization to book value...... 1.69x 7.36x 3.68x 3.22x
</TABLE>

Based on these and related analyses, Chase Securities calculated an implied
per share equity value for J.P. Morgan ranging from $155 to $205, as compared to
Chase's implied per share offer price of $214. (Based on Chase's closing stock
price on November 21, 2000, Chase's implied offer price was $143 per J.P. Morgan
share at that date, which represented a decline of approximately 22% since the
date of announcement of the merger. In comparison, a market
capitalization-weighted index of the companies used in the comparable companies
analysis (excluding DLJ) declined by 26.9% during the period from September 13,
2000 through November 17, 2000.) Chase Securities noted that the implied equity
values derived from the analyses of comparable companies reflected public market
trading multiples and did not include any acquisition premiums.

None of the selected companies reviewed was identical to J.P. Morgan or
Chase and, accordingly, an analysis of the foregoing necessarily involves
complex considerations and judgments concerning differences in financial and
operational characteristics of the companies involved and other factors that
could affect the companies compared to J.P. Morgan and Chase.

Comparable Transactions Analysis. Chase Securities analyzed the purchase
price and transaction value multiples based upon an analysis of publicly
available information relating to four selected large-capitalization
transactions in the financial services industry announced since September 1997
in which the purchase price, calculated using stock prices as of the
announcement date and including retention pools on an after-tax basis, ranged
from $9.4 billion to $13.0 billion. Chase Securities calculated the purchase
price as a multiple of book value and as a multiple of net income over the last
twelve months, as well as the premium paid over the one month prior average of
the target company's stock price. The results of this comparison were as
follows:

<TABLE>
<CAPTION>
PREMIUM OVER
PURCHASE ONE MONTH
PURCHASE PRICE/LAST PRIOR AVERAGE
ANNOUNCEMENT PURCHASE PRICE PRICE/BOOK TWELVE MONTHS TARGET STOCK
TRANSACTION DATE ($ IN BILLIONS) VALUE NET INCOME PRICE
----------- ------------ --------------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Credit Suisse/DLJ.......... 08/00 $ 13.0 3.3x 18.0x 56%
UBS/PaineWebber............ 06/00 $ 11.7 3.9x 20.5x 52%
Deutsche Bank/
Bankers Trust.............. 11/98 $ 9.0 2.1x 21.6x 36%
Travelers Group/
Salomon Inc. .............. 09/97 $ 9.4 2.0x 12.2x 28%
---- ----- --
Mean.................. 2.8x 18.1x 43%

Chase/J.P. Morgan.......... 09/00 $ 39.9 3.6x 18.8x 43%
</TABLE>

Based on these comparisons, Chase Securities calculated an implied per
share equity value for J.P. Morgan ranging from $170 to $240, as compared to
Chase's implied per share offer price of $214. (Based on Chase's closing stock
price on November 21, 2000, Chase's implied offer price was $143 per J.P. Morgan
share at that date.)

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<PAGE>

None of the selected transactions reviewed were identical to the merger
and, accordingly, an analysis of the foregoing necessarily involves complex
considerations and judgments concerning differences in financial and operational
characteristics of the companies involved and other factors that could affect
the transactions selected compared to the merger.

Discounted Cash Flow Analysis. Chase Securities performed a discounted
cash flow analysis for J.P. Morgan. Chase Securities calculated a range of per
share equity values for J.P. Morgan assuming discount rates ranging from 10.5%
to 15%, terminal multiples of cash net income in the year 2003 ranging from
13.0x to 17.0x and perpetuity growth rates for cash net income in the year 2003
ranging from 2.0% to 6.0%. Chase Securities performed the discounted cash flow
analysis assuming, in one case, no synergies or cost savings from the merger,
and in the other case, pre-tax synergies and cost savings from the merger of
$1.9 billion phased in over a period of time. The analysis indicated per share
equity values for J.P. Morgan ranging from $160 to $215 in the no-synergies case
and from $215 to $270 in the synergies case, as compared to Chase's implied per
share offer price of $214. (Based on Chase's closing stock price on November 21,
2000, Chase's implied offer price was $143 per J.P. Morgan share at that date.)

Sum of the Parts Analysis. Chase Securities calculated a range of implied
per share equity values for J.P. Morgan based on the equity value of J.P.
Morgan's various business segments. The value of the Banking and Asset
Management segments was calculated based upon various measures of financial
performance for each business segment over the last twelve months. The Banking
segment was divided into Investment Banking & Trading, Private Equity and
Credit/ Lending while the Asset Management segment was divided into
Institutional, High Net Worth and Mutual Funds. The value of the Private Equity
component of the Banking segment was calculated based on the fair market value
of the Private Equity portfolio as reported in J.P. Morgan's Annual Report on
Form 10-K for the year ended December 31, 1999. Based on this analysis, Chase
Securities calculated an implied per share equity value for J.P. Morgan ranging
from $185 to $225, as compared to Chase's implied per share offer price of $214.
(Based on Chase's closing stock price on November 21, 2000, Chase's implied
offer price was $143 per J.P. Morgan share at that date.)

Accretion/Dilution Analysis. Chase Securities analyzed the expected pro
forma impact of the merger on earnings per share for Chase for 2001 and 2002.
The analysis was based, in one case, assuming no synergies or cost savings from
the merger, and in the other case, assuming cumulative pre-tax synergies and
cost savings from the merger of $1.9 billion. In both cases, the analysis was
based on the diluted shares outstanding, plus an assumed issuance of an
additional 7.4 million shares of Chase common stock to take account of
anticipated additional issuances of J.P. Morgan shares prior to the completion
of the merger, and the proposed exchange ratio of 3.7. The pro forma results
were calculated based on publicly available IBES estimates and information
provided by Chase and J.P. Morgan regarding expected cost savings and synergies
from the merger. In the "no synergies" case, the analysis indicated that the
merger would have a dilutive effect of approximately (10)% in 2001 and 2002. In
the "synergies" case, the analysis indicated that the merger would have a
dilutive effect of approximately (5)% in 2001 and a slightly accretive effect of
1.1% in 2002.

Historical Exchange Ratio Analysis. Chase Securities reviewed the
historical trading price of J.P. Morgan common stock relative to Chase common
stock based on closing prices during the period from September 8, 1997 to
September 8, 2000. This analysis indicated an average market exchange ratio of
2.45x for the one-year period ending on September 8, 2000, and 2.59x for the
three-year period ending on September 8, 2000. For the one-year period ending
September 8, 2000, the market exchange ratio ranged from 1.93x to 2.99x, with a
median of 2.48x. The market exchange ratio as of the close of trading on
September 8, 2000 was 2.84x.

42
<PAGE>

The preparation of a fairness opinion is a complex process and involves
various judgments and determinations as to the most appropriate and relevant
assumptions and financial analyses and the application of these methods to the
particular circumstances involved. Such an opinion is therefore not readily
susceptible to partial analysis or summary description and taking portions of
the analyses set out above, without considering the analyses as a whole, would,
in the opinion of Chase Securities, create an incomplete and misleading picture
of the processes underlying the analyses considered in rendering Chase
Securities' opinions. Chase Securities did not form an opinion as to whether any
individual analysis, considered in isolation, supported or failed to support
Chase Securities' opinions. In arriving at its opinions, Chase Securities
considered the results of all such analyses and did not assign specific weights
to particular analyses. The analyses performed by Chase Securities, particularly
those based on forecasts, are not necessarily indicative of actual values or
actual future results, which may be significantly more or less favorable than
suggested by these analyses. Those analyses were prepared solely as part of
Chase Securities' analysis of the fairness, from a financial point of view, to
Chase's stockholders of the exchange ratio in the merger. The foregoing summary
is qualified in its entirety by reference to the full text of Chase Securities'
opinion attached as Exhibit D to this joint proxy statement-prospectus.

Chase Securities, as part of its financial advisory business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions and valuations for estate, corporate
and other purposes. Chase Securities is a wholly-owned subsidiary of Chase.
Chase Securities and other affiliates of Chase, in the ordinary course of
business, have, from time to time, provided and in the future may continue to
provide, for customary compensation, commercial and investment banking services
to Chase and its affiliates, including serving as underwriter or agent with
respect to numerous securities offerings by Chase and acting as financial
advisor with respect to certain acquisitions and divestitures. In the ordinary
course of business, Chase Securities or its affiliates may trade in the debt and
equity securities of Chase and J.P. Morgan for their own accounts and for the
accounts of their customers, and accordingly, may at any time hold a long or
short position in those securities.

The terms of the engagement of Chase Securities by Chase are set forth in a
letter agreement, dated as of September 8, 2000, between Chase Securities and
Chase. Pursuant to the terms of the letter agreement, Chase has agreed to
allocate to Chase Securities a fee of $40 million. In addition, Chase has agreed
to reimburse Chase Securities for its reasonable out-of-pocket expenses and to
indemnify Chase Securities against certain liabilities relating to or arising
out of its engagement.

OPINION OF J.P. MORGAN'S FINANCIAL ADVISOR. J.P. Morgan retained J.P.
Morgan Securities Inc. to act as its financial advisor in connection with the
proposed merger. On September 12, 2000, the board of directors of J.P. Morgan
held a meeting to evaluate the proposed merger. At this meeting, J.P. Morgan
Securities rendered its oral opinion that, as of that date and based upon and
subject to the factors and assumptions set forth in its opinion, the exchange
ratio in the proposed merger of 3.7 shares of Chase common stock for each share
of J.P. Morgan common stock was fair, from a financial point of view, to the
J.P. Morgan common stockholders. J.P. Morgan Securities subsequently confirmed
its oral opinion by delivering to the board of directors of J.P. Morgan a
written opinion dated September 12, 2000. In connection with the preparation of
this joint proxy statement-prospectus, J.P. Morgan Securities delivered an
updated written opinion to the board of directors of J.P. Morgan dated the date
of this joint proxy statement-prospectus. In connection with this updated
opinion, J.P. Morgan Securities confirmed the appropriateness of the analyses,
assumptions (subject to appropriate updating), and factors considered in
connection with its earlier opinion. J.P. Morgan's board of directors did not
limit the investigations made or the procedures followed by J.P. Morgan
Securities in giving either its original or its updated opinion.

43
<PAGE>

The full text of the updated J.P. Morgan Securities opinion which
describes, among other things, the assumptions made, matters considered, and
qualifications and limitations on the review undertaken by J.P. Morgan
Securities is attached as Annex E to this document and is incorporated in this
document by reference. J.P. Morgan stockholders should read J.P. Morgan
Securities' updated opinion carefully and in its entirety. J.P. Morgan
Securities has consented to the inclusion of its updated opinion and the
references to it in this joint proxy statement-prospectus. In giving this
consent, J.P. Morgan Securities does not admit that it comes within the category
of persons whose consent is required under Section 7 of the Securities Act or
the SEC's rules under that Act, nor does it admit that it is an expert with
respect to any part of the registration statement of which this joint proxy
statement-prospectus is a part, as the term "expert" is used in the Securities
Act and the SEC's rules under the Act.

J.P. Morgan Securities' opinions are directed to the board of directors of
J.P. Morgan and address only the fairness, from a financial point of view, of
the exchange ratio to the common stockholders of J.P. Morgan. The opinions do
not address any other aspect of the merger or any related transaction, nor do
they constitute a recommendation to any stockholder as to how to vote at the
J.P. Morgan special meeting. The summary of the fairness opinions set forth in
this document is qualified in its entirety by reference to the full text of the
opinions.

In arriving at its opinions, J.P. Morgan Securities reviewed:

- the merger agreement;

- this joint proxy statement-prospectus, in the case of its updated
opinion;

- various publicly available information concerning the businesses of J.P.
Morgan and Chase and of several other companies engaged in businesses
comparable to those of J.P. Morgan and Chase, and the reported market
prices for other companies' securities deemed comparable;

- the publicly available terms of various transactions involving companies
comparable to J.P. Morgan and Chase and the consideration received for
those companies;

- current and historical market prices of J.P. Morgan's and Chase's common
stock;

- the audited financial statements of J.P. Morgan for the fiscal year ended
December 31, 1999 and the audited financial statements of Chase for the
fiscal year ended December 31, 1999;

- the unaudited financial statements of J.P. Morgan and Chase for the
period ended June 30, 2000 and, in the case of its updated opinion,
September 30, 2000;

- various agreements with respect to outstanding indebtedness or
obligations of J.P. Morgan or Chase;

- various internal financial analyses prepared by J.P. Morgan and Chase and
their respective managements; and

- the terms of other business combinations that J.P. Morgan Securities
deemed relevant.

J.P. Morgan Securities also held discussions with several members of the
managements of J.P. Morgan and Chase on numerous aspects of the merger, the past
and current business operations of J.P. Morgan and Chase, the financial
condition and future prospects and operations of J.P. Morgan and Chase, the
effects of the merger on the financial condition and future prospects of J.P.
Morgan and Chase, and other matters that J.P. Morgan Securities believed
necessary or appropriate to its inquiry. In addition, J.P. Morgan Securities
reviewed other financial studies and analyses and considered such other
information that it deemed appropriate for the purposes of its opinions.

44
<PAGE>

J.P. Morgan Securities relied upon and assumed, without independent
verification, the accuracy and completeness of all information that was publicly
available or that was furnished to it by J.P. Morgan and Chase or otherwise
reviewed by J.P. Morgan Securities. J.P. Morgan Securities is not responsible or
liable for that information or its accuracy. J.P. Morgan Securities did not
conduct any valuations or appraisal of any assets or liabilities, and valuations
or appraisals were not provided to J.P. Morgan Securities. In relying on
financial analyses provided to it, J.P. Morgan Securities assumed that those
analyses had been reasonably prepared based on assumptions reflecting the best
currently available estimates and judgments by management as to the expected
future results of operations and financial condition of J.P. Morgan and Chase to
which those analyses relate. J.P. Morgan Securities also assumed that the merger
will be effected as a tax-free exchange and that the merger will be consummated
as described in the merger agreement. J.P. Morgan Securities relied as to all
legal matters relevant to rendering its opinions upon the advice of counsel.

As is customary in the rendering of fairness opinions, J.P. Morgan
Securities based its opinions on economic, market and other conditions as in
effect on, and the information made available to J.P. Morgan Securities as of,
the date of each opinion. Subsequent developments may affect the opinions, and
J.P. Morgan Securities does not have any obligation to update, revise, or
reaffirm its opinions. J.P. Morgan Securities expressed no opinion as to the
price at which J.P. Morgan's or Chase's stock will trade at any future time.

In accordance with customary investment banking practice, J.P. Morgan
Securities employed generally accepted valuation methods in reaching its
opinions. The following is a summary of the material financial analyses that
J.P. Morgan Securities utilized in providing its September 12, 2000 opinion. We
have presented some of the summaries of financial analyses in tabular format. In
order to understand the financial analyses used by J.P. Morgan Securities more
fully, you should read the tables together with the text of each summary. The
tables alone do not constitute a complete description of J.P. Morgan Securities'
financial analyses.

The following table summarizes the implied per share equity value for J.P.
Morgan derived from the analyses indicated, all of which are described in
greater detail below.

<TABLE>
<CAPTION>
IMPLIED EQUITY
VALUATION METHODOLOGY VALUE RANGE
--------------------- --------------
<S> <C>
Comparable companies analysis............................... $177 - $222
Comparable transactions analysis
all transactions.......................................... $177 - $224
most recent transactions.................................. $200 - $219
Discounted cash flow analysis
without estimated synergies............................... $171 - $181
with synergies............................................ $206 - $218
Contribution analysis....................................... $203 - $213
Value of merger consideration based upon closing price of
Chase common stock on
September 8, 2000 ($57.81)............................. $214
September 12, 2000 ($56.06)............................ $207
September 13, 2000 ($50.69)............................ $188
November 21, 2000 ($38.75)............................. $143
</TABLE>

Offer Valuation. J.P. Morgan Securities reviewed the terms of the proposed
merger, including the historical relationship between the stock prices of J.P.
Morgan and Chase and the aggregate transaction value. J.P. Morgan Securities
also reviewed the value of the consideration offered based upon the $57.81
closing price of Chase's common stock on September 8, 2000, the next to last
trading day prior to the September 12, 2000 meeting of J.P. Morgan's board of

45
<PAGE>

directors. This analysis indicated that the implied value of Chase's proposal
was approximately $213.91 per share of J.P. Morgan common stock. J.P. Morgan
Securities calculated that, based on this proposal, J.P. Morgan's common
stockholders would receive a premium of 30.5% to the $164.00 closing price of
J.P. Morgan's common stock on September 8, 2000 and a premium of 48.4% to the
$144.13 closing price of J.P. Morgan's common stock ten days prior to
announcement.

J.P. Morgan Securities calculated that the proposed transaction exchange
ratio represented a 19.2x multiple to last twelve months GAAP EPS, an 18.0x
multiple to forward GAAP EPS, and a 3.30x multiple to tangible book value, based
upon the $57.81 closing price of Chase's common stock on September 8, 2000.

Pro Forma Merger Analysis. J.P. Morgan Securities analyzed pro forma
earnings per share forecasts for 2000 and 2001 and median long-term growth rates
based upon estimates provided by IBES. IBES is a data service that monitors and
publishes compilations of earnings estimates by selected research analysts.
Assuming transaction synergies phased in 100% by 2002, the analysis showed that
the merger would be accretive to GAAP earnings per share and cash earnings per
share of the combined company in 2002.

Contribution Analysis. J.P. Morgan Securities reviewed and analyzed the
relative contributions to be made by J.P. Morgan and Chase to the combined
entity, based upon assets, equity, earnings and market capitalization. These
contributions were compared to the approximately 34.8% continuing ownership
stake that J.P. Morgan's common stockholders would have in the combined company
following the merger. Principally, J.P. Morgan Securities analyzed the market
value and net earnings contributed by J.P. Morgan and Chase to the combined
entity. This analysis indicated that as of September 8, 2000, J.P. Morgan
contributed 28.2% of the pro forma combined market capitalization based on its
closing price of $164.00 that day. Based on IBES 2001 estimates for J.P. Morgan
and Chase as of September 8, 2000, J.P. Morgan contributed earnings equal to
27.2% of the combined entity's 2001 earnings, before synergies.

Public Trading Multiples. Using publicly available information, J.P.
Morgan Securities compared selected financial data of J.P. Morgan with similar
data for selected publicly traded companies (the "broker/dealer peers") engaged
in businesses which J.P. Morgan Securities judged to be reasonably comparable to
those of J.P. Morgan. These companies were:

Bear Stearns
Goldman Sachs
Lehman Brothers
Merrill Lynch
Morgan Stanley Dean Witter

These companies were selected because of their operating, organizational
and overall business similarities with J.P. Morgan. The median, high and low
valuation levels for the broker/dealer peer group was determined. Based upon a
review of that information and closing stock prices on September 8, 2000, J.P.
Morgan Securities determined that J.P. Morgan generally traded in line to
slightly below the median level of its peer group.

<TABLE>
<CAPTION>
BROKER/DEALER PEERS
------------------------
JPM MEDIAN HIGH LOW
----- ------ ----- -----
<S> <C> <C> <C> <C>
Price to:
2000E EPS...................................... 14.3x 15.5x 19.7x 11.3x
2001E EPS...................................... 13.7 14.9 17.6 10.1
Book value..................................... 2.36 3.20 6.74 2.43
Tangible book value............................ 2.53 3.98 7.32 2.43
</TABLE>

46
<PAGE>

J.P. Morgan Securities also calculated a range of imputed values for a
share of J.P. Morgan common stock based on the ratios for the broker/dealer
peers. This analysis resulted in a range of imputed values for J.P. Morgan
common stock of between $177 and $222.

J.P. Morgan Securities also reviewed and compared certain public market
data related to Chase to the publicly available corresponding data for four
groups of selected companies which J.P. Morgan Securities deemed to be relevant:

<TABLE>
<CAPTION>
COMMERCIAL
BROKER/DEALERS BANKING GLOBAL SERVICES CREDIT CARDS
-------------- ------------------ ---------------- -------------------
<S> <C> <C> <C>
Morgan Stanley Citigroup Bank of New York MBNA
Goldman Sachs Bank of America Mellon Financial Providian Financial
Merrill Lynch Wells Fargo State Street Capital One
J.P. Morgan Bank One
Lehman Brothers First Union
DLJ
Bear Stearns
</TABLE>

Based on its review of that information, J.P. Morgan Securities determined
the following:

<TABLE>
<CAPTION>
PRICE TO PRICE TO PRICE TO IBES LONG- DIVIDEND
2000 EPS 2001 EPS BOOK VALUE TERM GROWTH YIELD
-------- -------- ---------- ------------- --------
<S> <C> <C> <C> <C> <C>
Chase.................... 14.5x 13.0x 2.75x 12.0% 2.21%
Broker/Dealers........... 17.6x 17.4x 2.89x 12.8% 0.76%
Commercial Banking....... 17.2x 12.9x 2.30x 12.0% 2.27%
Global Services.......... 27.9x 24.9x 6.74x 13.0% 1.19%
Credit Cards............. 24.5x 20.4x 7.77x 25.0% 0.17%
</TABLE>

J.P. Morgan Securities noted that this analysis supported the conclusion
that Chase common stock was fairly valued when compared to the relevant peer
group.

Selected Transaction Analysis. Using publicly available information, J.P.
Morgan Securities examined the following transactions involving financial
institutions:

<TABLE>
<CAPTION>
ACQUIROR TARGET
-------- ------
<S> <C>
Credit Suisse Group.................. DLJ
UBS AG............................... Paine Webber Group Inc.
Chase................................ Robert Fleming
Chase................................ Hambrecht & Quist
Deutsche Bank........................ Bankers Trust
First Security....................... Van Kasper
BankBoston........................... BancAmerica Robertson Stephens
Societe Generale..................... Cowen & Co.
U.S. Bancorp......................... Piper Jaffray
Travelers Group...................... Salomon Brothers
Fleet Financial...................... Quick & Reilly Group
ING Group............................ Furman Selz LLC
First Union.......................... Wheat First Butcher Singer Inc.
CIBC................................. Oppenheimer Holdings
NationsBank.......................... Montgomery Securities
BankAmerica.......................... Robertson, Stephens
Bankers Trust........................ Alex. Brown
Dean Witter.......................... Morgan Stanley
</TABLE>

47
<PAGE>

While J.P. Morgan Securities calculated ratios from each of the preceding
transactions, J.P. Morgan Securities determined that Credit Suisse Group's
proposed acquisition of DLJ (CSFB/DLJ) and UBS AG's proposed acquisition of
Paine Webber Group Inc. (UBS/PWJ), provided the most accurate representation of
a comparable transaction. J.P. Morgan Securities analyzed the premium to the
market price ten days prior to announcement, estimates of the next twelve
months' projected earnings per share and tangible book value per share. Based
upon a review of that information, J.P. Morgan Securities determined the
following:

<TABLE>
<CAPTION>
MOST COMPARABLE TRANSACTIONS
------------------------------
CMB/JPM CSFB/DLJ UBS/PWJ
------- -------- -------
<S> <C> <C> <C>
10-day premium to market.......................... 48.4% 59.8% 54.6%
Next twelve months EPS............................ 18.0x 18.2x 16.2x
Tangible book value............................... 3.30x 2.92x 4.10x
</TABLE>

J.P. Morgan Securities also calculated a range of imputed values for a
share of J.P. Morgan's common stock based on the ratios for the broader list of
comparable transactions. This analysis resulted in a range of imputed values for
J.P. Morgan's common stock of between $177 and $224.

Discounted Cash Flow Analysis. Using a discounted cash flow analysis, J.P.
Morgan Securities estimated the net present value of the future streams of
after-tax cash flows that J.P. Morgan could produce on a stand-alone basis from
2000 through 2005 and distribute to J.P. Morgan's stockholders. In this
analysis, J.P. Morgan Securities used earnings estimates from IBES for 2000 and
2001 and assumed that J.P. Morgan's earnings were grown thereafter at an annual
rate ranging from 8.5% to 11.5%. For each growth rate, J.P. Morgan Securities
calculated the sum of: (i) the estimated 2000-2005 distributable income streams
per share, projected such that J.P. Morgan's tangible equity ratio would be
maintained at 4.0%, and discounted to present values at an assumed discount rate
of 10.5%, and (ii) the terminal values per share of J.P. Morgan's common stock
based on assumed multiples of J.P. Morgan's projected 2006 earnings ranging from
12.0x to 15.0x. This discounted cash flow analysis indicated a reference range
of $155 to $207 per share of J.P. Morgan's common stock. J.P. Morgan Securities
noted that a narrowed valuation reference range of $171 to $181 per share of
J.P. Morgan common stock was more appropriate based on the assumed ranges of
earnings growth rates and terminal values used in these analyses.

J.P. Morgan Securities also used a discounted cash flow analysis to
estimate the net present value of transaction synergies assumed to result from
the merger. These synergies were assumed to produce cash flows resulting from:
(i) cost savings and revenue enhancements, which were assumed to be fully phased
in by 2002, grown at 3% annually and (ii) a restructuring charge based on fully
phased-in cost savings. The transaction synergy cash flows were discounted to
present values at an assumed discount rate of 10.5%, and terminal values were
based on assumed multiples of projected 2006 transaction synergies ranging from
12.0x to 15.0x. This discounted cash flow analysis indicated a valuation
reference range for the transaction synergies (assuming 50% of the value of
these synergies accrued to J.P. Morgan's stockholders) of $35 to $41 per share
of J.P. Morgan's common stock.

In addition, J.P. Morgan Securities tested the sensitivity of the values
for J.P. Morgan on a stand-alone basis and for transaction synergies by varying
certain assumptions. The reference ranges were not materially changed by
reasonable variations of key assumptions.

When the stand-alone discounted cash flow analysis was combined with the
discounted cash flow analysis to estimate the net present value of the
transaction synergies, the indicated valuation reference range was $190 to $248
per share of J.P. Morgan's common stock. J.P. Morgan Securities noted that a
narrowed valuation reference range of $206 to $218 per share of

48
<PAGE>

J.P. Morgan common stock was more appropriate based on the assumed ranges of
earnings growth rates and terminal values used in these analyses.

J.P. Morgan Securities also performed a discounted cash flow analysis to
estimate the distributable income from 2000 to 2005 for Chase on a stand-alone
basis. In this analysis, J.P. Morgan Securities used IBES earnings estimates for
2000 and 2001 and assumed that Chase's earnings were grown thereafter at an
annual rate ranging from 10% to 13%. For each growth rate, J.P. Morgan
Securities calculated the sum of: (i) the estimated 2000-2005 distributable
income streams per share, projected such that Chase's tangible equity ratio
would be maintained at 5.0%, and discounted to present values at an assumed
discount rate of 10.5%, and (ii) the terminal values per share of Chase's common
stock based on assumed multiples of Chase's projected 2006 earnings ranging from
12.0x to 15.0x. This discounted cash flow analysis indicated a reference range
of $61 to $81 per share of Chase's common stock, versus a closing share price
for Chase of $57.81 on September 8, 2000.

J.P. Morgan Securities has informed J.P. Morgan that it has reviewed the
terms of the proposed merger in light of changes in the common stock price of
Chase, as well as financial institutions generally. In particular, J.P. Morgan
Securities reviewed the value of Chase's proposal as of September 8, 2000 (a
recent trading day prior to the September 12, 2000 board of directors meeting),
September 12, 2000 (the date of the merger agreement), September 13, 2000 (the
date of the transaction announcement) and November 17, 2000, as set forth in the
following table.

IMPLIED VALUE TO J.P. MORGAN COMMON STOCKHOLDERS ASSUMING A 3.7X EXCHANGE
RATIO APPLIED TO CHASE'S COMMON STOCK PRICE AS OF:

<TABLE>
<S> <C>
September 8, 2000 (recent trading day before board
meeting).................................................. $213.91
September 12, 2000 (date of merger agreement)............... $207.42
September 13, 2000 (date of announcement)................... $187.54
November 17, 2000........................................... $146.61
</TABLE>

As a result of changes in the common stock price of Chase, based on the
November 21, 2000 closing price of Chase's common stock, the implied value of
the proposed merger per share of J.P. Morgan common stock on that date was $143.
This price is below the implied equity value ranges resulting from each of the
comparable companies analysis, comparable transactions analysis, discounted cash
flow analyses and contribution analysis performed by J.P. Morgan Securities in
connection with its September 12, 2000 opinion.

49
<PAGE>

J.P. Morgan Securities noted the following movements in valuations in the
financial services sector since each of September 8, 2000 and the date of
announcement through November 17, 2000:

<TABLE>
<CAPTION>
PERFORMANCE SINCE
------------------
9/8/00 9/13/00
------- -------
<S> <C> <C>
BROKER/DEALERS
Morgan Stanley Dean Witter & Co. ........................... -34.89% -34.43%
Goldman Sachs Group, Inc. .................................. -29.12% -31.47%
Merrill Lynch & Co., Inc. .................................. -6.16% -5.90%
Lehman Brothers Holdings Inc. .............................. -28.41% -29.04%
Bear Stearns Companies Inc. ................................ -21.57% -20.36%
MEDIAN...................................................... -28.41% -29.04%
COMMERCIAL & RETAIL BANKING
Citigroup, Inc. ............................................ -9.57% -8.35%
Bank of America Corporation................................. -27.93% -29.04%
Wells Fargo & Company....................................... -2.49% -4.28%
Bank One Corporation........................................ -11.99% -16.10%
First Union Corporation..................................... -15.35% -15.70%
MEDIAN...................................................... -11.99% -15.70%
Chase....................................................... -31.46% -21.82%
</TABLE>

J.P. Morgan Securities has reaffirmed its opinion as of the date of this
joint proxy statement-prospectus. J.P. Morgan understands that material to J.P.
Morgan Securities' reaffirmation were the following: (i) the fact that since the
date of J.P. Morgan Securities' earlier opinion, no material operational changes
have occurred that would impact, positively or negatively, the expected
long-term earnings or business prospects of Chase or J.P. Morgan or cause the
relative values of the two companies to diverge in any material way; (ii) the
fact that since the date of J.P. Morgan Securities' opinion, no material
negative revisions have occurred to the synergies expected to occur in
connection with the merger (which revisions might impact the expected value to
be created by the merger and therefore potentially alter the benefits to be
derived by J.P. Morgan's stockholders); and (iii) the fact that Chase's stock
price performance since the transaction announcement date has generally been in
line with its peer group (and not, in the opinion of J.P. Morgan Securities,
indicative of any issue specifically related to Chase).

This summary does not purport to be a complete description of the analyses or
data presented by J.P. Morgan Securities. The preparation of a fairness opinion
is a complex process and is not necessarily susceptible to partial analysis or
summary description. J.P. Morgan Securities believes that one must consider its
opinions, the summary and its analyses as a whole. Selecting portions of this
summary and these analyses, without considering the analyses as a whole, would
create an incomplete view of the processes underlying the analyses and opinions.
In arriving at its opinions, J.P. Morgan Securities considered the results of
all of the analyses as a whole. No single factor or analysis was determinative
of J.P. Morgan Securities' fairness determination. Rather, the totality of the
factors considered and analyses performed operated collectively to support its
determination. J.P. Morgan Securities based its analyses on assumptions that it
deemed reasonable, including those concerning general business and economic
conditions and industry-specific factors. This summary sets forth under the
description of each analysis the other principal assumptions upon which J.P.
Morgan Securities based that analysis. Analyses based upon forecasts of future
results are inherently uncertain, as they are subject to numerous factors or
events beyond the control of the parties and their advisors. Accordingly, these

50
<PAGE>

forecasts and analyses are not necessarily indicative of actual future results,
which may be significantly more or less favorable than suggested by those
analyses. Moreover, J.P. Morgan Securities' analyses are not and do not purport
to be appraisals or otherwise reflective of the prices at which businesses
actually could be bought or sold. As a part of its investment banking business,
J.P. Morgan Securities and its affiliates are continually engaged in the
valuation of businesses and their securities in connection with mergers and
acquisitions, investments for passive and control purposes, negotiated
underwritings, secondary distributions of listed and unlisted securities,
private placements, and valuations for estate, corporate and other purposes.
J.P. Morgan Securities is a wholly-owned subsidiary of J.P. Morgan. J.P. Morgan
Securities and other affiliates of J.P. Morgan, in the ordinary course of
business, have from time to time provided, and in the future may continue to
provide, for customary compensation, commercial and investment banking services
to J.P. Morgan and its affiliates, including serving as underwriter or agent
with respect to securities offerings by J.P. Morgan and acting as financial
advisor with respect to acquisitions and divestitures. In the ordinary course of
business J.P. Morgan Securities or its affiliates may trade in the debt and
equity securities of Chase and J.P. Morgan for their own accounts and for the
accounts of their customers, and accordingly, may at any time hold a long or
short position in those securities.

J.P. Morgan selected J.P. Morgan Securities to advise it and deliver a
fairness opinion with respect to the merger on the basis of its experience and
its familiarity with J.P. Morgan. J.P. Morgan has agreed to allocate to J.P.
Morgan Securities a fee of $40 million in connection with its engagement.

INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS IN THE MERGER

CHASE. In considering the recommendation of the board of directors of
Chase to vote for the proposal to adopt the merger agreement, stockholders of
Chase should be aware that members of the Chase board of directors and members
of Chase's executive management have agreements or arrangements that provide
them with interests in the merger that may differ from those of Chase's
stockholders. The Chase board of directors was aware of these agreements and
arrangements during its deliberations on the merits of the merger and in making
its decision to recommend to the Chase stockholders that they vote to adopt the
merger agreement.

Management Positions. As described below under "-- Board of Directors and
Management After the Merger," the merger agreement provides that William B.
Harrison, Jr., Chase's current Chairman and Chief Executive Officer, will be
President and Chief Executive Officer of J.P. Morgan Chase & Co. In addition,
Mr. Harrison will be co-Chairman of the management Executive Committee of J.P.
Morgan Chase & Co., and Geoffrey T. Boisi, David A. Coulter, Donald H. Layton,
James B. Lee, Jr., Marc J. Shapiro and Jeffrey C. Walker, all current senior
executives of Chase, will also serve on that Executive Committee.

Severance Agreements. Certain executive officers of Chase, including Mr.
Harrison, are parties to agreements that provide severance benefits if the
officer's employment is terminated by the employer without "cause" or by the
executive for "good reason" (each as defined in the officer's agreement) during
the term of the agreement. The agreements generally expire on the later to occur
of December 31, 2000 or two years following a change in control occurring on or
prior to December 31, 2000 (which would include approval of the merger by
Chase's stockholders at the meeting on December 22, 2000). Following a change in
control, "good reason" will include a substantial diminution in the overall
importance of the officer's role, balancing any increase or decrease in the
officer's responsibilities against any increase or decrease in the relative
sizes of the businesses, activities or functions for which he has
responsibility. Under the agreements, in the event of termination by the
employer without cause or by the employee for good reason, an officer would be
entitled (a) to receive, in substantially equal payments over the course of 24
months or, at the officer's election, in a lump sum, an amount equal to two
times (three times in the case of Mr. Harrison) the sum of (i) the officer's
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annual base salary and (ii) an amount equal to the average percentage annual
bonus paid or payable over the preceding three years (expressed as a percentage
of annual base salary) and (b) subject to certain conditions and unless the
officer had made a lump-sum election with respect to the cash portion of his
severance, to continue to participate in Chase's life and accident and health
insurance plans for a 24-month period following the officer's termination. If
the officer had been employed by Chase for five consecutive years prior to his
termination, the officer also would be entitled to coverage under Chase's
retiree medical and life insurance programs. In addition, upon the termination,
each officer would be entitled to full vesting of stock options and restricted
stock units, except that performance-based restrictions on his restricted stock
or other stock-based awards would continue. The officers would continue to be
eligible for their performance-based awards, which would become payable at the
end of the applicable performance period, if and to the extent the relevant
performance goals were achieved.

Outside Directors. Under Chase's deferred compensation and pension
liquidation plans for non-employee directors, payments of cash and/or stock
compensation that otherwise had been deferred would begin following such time as
the director ceases to serve. In accordance with these plans, payments will be
made to those directors of Chase who do not become directors of J.P. Morgan
Chase & Co. in accordance with the director's election under the plans, and may
be made in a lump sum or in periodic payments over a specified number of years.

J.P. MORGAN. In considering the recommendation of the board of directors
of J.P. Morgan to vote for the proposal to adopt the merger agreement,
stockholders of J.P. Morgan should be aware that members of the J.P. Morgan
board of directors and members of J.P. Morgan's management team have agreements
or arrangements that provide them with interests in the merger that may differ
from those of J.P. Morgan stockholders. The J.P. Morgan board of directors was
aware of these agreements and arrangements during its deliberations on the
merits of the merger and in making its decision to recommend to the J.P. Morgan
stockholders that they vote to adopt the merger agreement.

Management Positions. As described below under "-- Board of Directors and
Management After the Merger," the merger agreement provides that Douglas A.
Warner III, J.P. Morgan's current Chairman and Chief Executive Officer, will
become Chairman of J.P. Morgan Chase & Co. In addition, Mr. Warner will be
co-Chairman of the management Executive Committee of J.P. Morgan Chase & Co.,
and Ramon de Oliveira, Walter A. Gubert and Thomas B. Ketchum, all current
senior executives of J.P. Morgan, will also serve on that Executive Committee.

J.P. Morgan Employee Stock Options and Restricted Shares. The J.P. Morgan
stock-based benefit programs and awards and other deferred compensation programs
and awards define a change in control as occurring upon the approval by the
stockholders of a transaction such as the merger. Any vesting or acceleration of
stock-based and other awards under these programs upon a change in control will
be in accordance with their terms. Except for awards relating to an aggregate of
922,388 share credits and 1,875,000 stock options, upon a change in control
awards under these programs will vest and, in the case of stock options, become
immediately exercisable or, in the case of restricted stock awards, become
immediately distributable.

Accordingly, upon a change in control, certain of the outstanding employee
stock options will become exercisable and certain other stock-based awards will
become payable. The number of shares of J.P. Morgan common stock relating to
stock options that will become exercisable as a result of the merger for Messrs.
Warner, Gubert and Michael E. Patterson, each of whom is currently a J.P. Morgan
executive officer and director, is 227,000, 141,000 and 83,000, respectively,
and the number of shares of J.P. Morgan common stock representing their
outstanding stock-based awards that will be required to be distributed is
approximately 307,997, 199,863 and 161,564, respectively. The aggregate number
of options becoming exercisable by reason of the merger for David Sidwell,
Rachel Robbins and Thomas Ketchum, the other current executive officers of J.P.
Morgan, is 156,999 shares and the total number of shares of

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J.P. Morgan common stock representing outstanding stock-based awards that will
be required to be distributed to these other current executive officers is
approximately 178,679.

For additional information about options and other stock-based awards held
by certain J.P. Morgan directors and executives, see J.P. Morgan's proxy
statement for its 2000 annual meeting of stockholders and for additional
information on the effect of the merger on stock options and other stock-based
awards, see "-- Treatment of Stock Options and Other Equity-Based Awards" below.

Outside Directors. Under J.P. Morgan's director stock plan and deferred
compensation plan for non-employee directors, payments of deferred cash and/or
stock compensation begin following such time as the director ceases to serve.
Under this plan, directors of J.P. Morgan who do not become directors of J.P.
Morgan Chase & Co. will receive payment of stock, in a lump sum, and payments of
cash will be made in accordance with the director's election under the plan,
which may be made in a lump sum or in periodic payments over a specified number
of years.

Indemnification and Insurance. The merger agreement provides that, upon
completion of the merger, J.P. Morgan Chase & Co. will indemnify and hold
harmless, and provide advancement of expenses to, all past and present officers,
directors and employees of J.P. Morgan and its subsidiaries

- to the same extent those persons were entitled to indemnification or
advancement of expenses under J.P. Morgan's certificate of incorporation,
by-laws and indemnification agreements; and

- to the fullest extent permitted by law.

The merger agreement also provides that J.P. Morgan Chase & Co. will
maintain for a period of six years after completion of the merger the current
directors' and officers' liability insurance policies maintained by J.P. Morgan,
or policies with a substantially comparable insurer of at least the same
coverage and amounts containing terms and conditions that are no less
advantageous to the insured, with respect to claims arising from facts or events
that occurred on or before the completion of the merger, although J.P. Morgan
Chase & Co. will not be required to make annual premium payments in excess of
250% of the annual premiums currently paid by J.P. Morgan for directors' and
officers' liability insurance. J.P. Morgan Chase & Co. may satisfy this
requirement through self-insurance to the extent Chase does so for its officers
and directors.

BOARD OF DIRECTORS AND MANAGEMENT AFTER THE MERGER

BOARD OF DIRECTORS. The merger agreement provides that upon completion of
the merger:

- the board of directors of J.P. Morgan Chase & Co. will be comprised of
fifteen individuals, nine of whom will be designated by Chase and six of
whom will be designated by J.P. Morgan;

- other than Douglas A. Warner III and William B. Harrison, Jr., no
employees of J.P. Morgan Chase & Co. will serve on the board of directors
of J.P. Morgan Chase & Co. at the effective time of the merger; and

- one director designee of J.P. Morgan will be appointed to each of the
Audit Committee, the Governance Committee and the Compensation and
Benefits Committee of J.P. Morgan Chase & Co.

As of the date of this joint proxy statement-prospectus, neither the board
of directors of Chase nor the board of directors of J.P. Morgan has finally
determined which directors (other than Messrs. Harrison and Warner) will be
designated to the board of directors of J.P. Morgan Chase & Co. Biographical
information with respect to our current directors, from whom the designees to
the board of directors of J.P. Morgan Chase & Co. will be selected, is contained

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in our respective proxy statements for our 2000 annual meetings of stockholders
and is incorporated by reference in this joint proxy statement-prospectus.

MANAGEMENT. Mr. Warner will be the Chairman of J.P. Morgan Chase & Co. and
Mr. Harrison will be the President and Chief Executive Officer of J.P. Morgan
Chase & Co. In addition, Messrs. Harrison and Warner will be co-Chairmen of the
management Executive Committee of J.P. Morgan Chase & Co., its senior
policy-making committee. The other members of that Executive Committee will be:
Geoffrey T. Boisi, David A. Coulter, Ramon de Oliveira, Walter A. Gubert, Thomas
B. Ketchum, Donald H. Layton, James B. Lee, Jr., Marc J. Shapiro and Jeffrey C.
Walker. Each of these persons is currently a senior executive of Chase or J.P.
Morgan.

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

The following summary discusses the material U.S. federal income tax
consequences of the merger to U.S. holders of J.P. Morgan stock.

For purposes of this discussion, we use the term "U.S. holder" to mean:

- a citizen or resident of the United States;

- a corporation, partnership or other entity created or organized under the
laws of the United States or any of its political subdivisions;

- a trust that (x) is subject to the supervision of a court within the
United States and the control of one or more U.S. persons or (y) has a
valid election in effect under applicable United States Treasury
regulations to be treated as a United States person; or

- an estate that is subject to U.S. federal income tax on its income
regardless of its source.

This discussion is based upon the U.S. Internal Revenue Code, Treasury
regulations, administrative rulings and judicial decisions currently in effect,
all of which are subject to change, possibly with retroactive effect. The
discussion assumes that J.P. Morgan stockholders hold their J.P. Morgan capital
stock as a capital asset within the meaning of section 1221 of the Internal
Revenue Code. Further, the discussion does not address all aspects of U.S.
federal income taxation that may be relevant to a particular stockholder in
light of his, her or its circumstances or to stockholders subject to special
treatment under the U.S. federal income tax laws, including:

- insurance companies;

- tax-exempt organizations;

- dealers in securities or foreign currency;

- financial institutions;

- traders in securities that elect the mark-to-market method of accounting
for their securities;

- persons that hold their J.P. Morgan capital stock as part of a straddle,
a hedge against currency risk or a constructive sale or conversion
transaction;

- persons that have a functional currency other than the U.S. dollar;

- investors in pass-through entities;

- stockholders who acquired their J.P. Morgan capital stock through the
exercise of options or otherwise as compensation or through a
tax-qualified retirement plan; or

- holders of options granted under any J.P. Morgan benefit plan.

If a partnership holds J.P. Morgan capital stock, the tax treatment of a
partner will generally depend upon the status of the partner and upon the
activities of the partnership. Partners of partnerships holding J.P. Morgan
capital stock should consult their tax advisors.

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Furthermore, this discussion does not consider the potential effects of any
state, local or foreign tax laws.

Neither of us has requested or intends to request a ruling from the United
States Internal Revenue Service with respect to any of the U.S. federal income
tax consequences of the merger and, as a result, there can be no assurance that
the Internal Revenue Service will not disagree with or challenge any of the
conclusions described below.

It is a condition to the closing of the merger that each of Chase and J.P.
Morgan receive a tax opinion from its counsel that the merger qualifies as a
reorganization within the meaning of section 368(a) of the Internal Revenue
Code. These opinions will be based upon updated representation letters provided
by Chase and J.P. Morgan to be delivered at the time of closing. Although the
merger agreement allows us to waive this condition to closing, we currently do
not anticipate doing so. If either of us does waive this condition, we will
inform you of this decision and ask you to vote on the merger taking this into
consideration.

Based on the assumptions discussed above and upon facts, factual
representations and assumptions contained in the representation letters provided
by Chase and J.P. Morgan, all of which must continue to be true and accurate in
all material respects as of the effective time, it is the opinion of each of
Simpson Thacher & Bartlett, counsel to Chase, and Davis Polk & Wardwell, counsel
to J.P. Morgan, that

- the merger qualifies as a reorganization within the meaning of section
368(a) of the Internal Revenue Code;

- no gain or loss will be recognized by U.S. holders of J.P. Morgan capital
stock on the exchange of their J.P. Morgan capital stock for J.P. Morgan
Chase & Co. capital stock, except for cash received instead of fractional
shares, as discussed below;

- the aggregate adjusted basis of the J.P. Morgan Chase & Co. capital stock
received in the merger by a U.S. holder of J.P. Morgan capital stock
(including any fractional share of J.P. Morgan Chase & Co. capital stock
with respect to which the U.S. holder receives cash) will be equal to the
aggregate adjusted basis of the U.S. holder's J.P. Morgan capital stock
exchanged for that J.P. Morgan Chase & Co. capital stock; and

- the holding period of the J.P. Morgan Chase & Co. capital stock received
in the merger by a U.S. holder of J.P. Morgan capital stock will include
the holding period of the U.S. holder's J.P. Morgan capital stock
exchanged for that J.P. Morgan Chase & Co. capital stock.

CASH INSTEAD OF FRACTIONAL SHARES. The receipt of cash instead of a
fractional share of J.P. Morgan Chase & Co. common stock will be treated as a
taxable disposition of that fractional share interest and the U.S. holder will
recognize taxable gain or loss for U.S. federal income tax purposes based upon
the difference between the amount of cash received by that U.S. holder and the
U.S. holder's adjusted tax basis in the fractional share. The gain or loss will
constitute capital gain or loss and will constitute long-term capital gain or
loss if the U.S. holder's holding period in J.P. Morgan common stock surrendered
in the merger is greater than 12 months as of the date of the merger. For
non-corporate U.S. holders, this long-term capital gain generally will be
subject to tax at a maximum U.S. federal income tax rate of 20%. The
deductibility of capital losses is subject to limitations.

BACKUP WITHHOLDING. Some non-corporate J.P. Morgan stockholders may be
subject to backup withholding at a 31% rate on cash payments received instead of
fractional shares of capital stock in the merger unless they:

- furnish a correct taxpayer identification number and certify that they
are not subject to backup withholding on the substitute Form W-9 or
successor form included in the letter of

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transmittal to be delivered to J.P. Morgan stockholders following the
date of completion of the merger; or

- are otherwise exempt from backup withholding.

REPORTING REQUIREMENTS. A U.S. holder of J.P. Morgan capital stock
receiving capital stock as a result of the merger may be required to retain
records related to that U.S. holder's J.P. Morgan capital stock, and file with
its U.S. federal income tax return a statement setting forth facts relating to
the merger.

THIS SUMMARY DOES NOT ADDRESS TAX CONSEQUENCES THAT MAY VARY WITH, OR ARE
CONTINGENT ON, INDIVIDUAL CIRCUMSTANCES. MOREOVER, THE SUMMARY DOES NOT ADDRESS
ANY NON-INCOME TAX OR ANY FOREIGN, STATE OR LOCAL TAX CONSEQUENCES OF THE
MERGER. THE SUMMARY DOES NOT ADDRESS THE TAX CONSEQUENCES OF ANY TRANSACTION
OTHER THAN THE MERGER. ACCORDINGLY, WE STRONGLY URGE YOU TO CONSULT WITH A TAX
ADVISOR TO DETERMINE THE PARTICULAR FEDERAL, STATE, LOCAL OR FOREIGN INCOME OR
OTHER TAX CONSEQUENCES TO YOU OF THE MERGER.

ACCOUNTING TREATMENT OF THE MERGER

We intend to account for the merger under the pooling of interests method
of accounting for business combinations. This means that we will treat our two
companies as if they had always been combined as one company for financial
accounting purposes. The unaudited pro forma combined financial data contained
in this joint proxy statement-prospectus have been prepared using the pooling of
interests method to account for the merger. See "Unaudited Pro Forma Combined
Financial Data." It is a condition to our obligation to complete the merger that
we receive letters at closing from PricewaterhouseCoopers LLP confirming that
the merger qualifies for pooling of interests accounting treatment. See "-- The
Merger Agreement -- Conditions to Completion of the Merger."

REGULATORY APPROVALS

To complete the merger, we need to obtain approvals from, or make filings
with, a number of U.S. federal and state bank, antitrust and other regulatory
authorities as well as regulatory authorities in various foreign jurisdictions.
These approvals and filings are described below.

FEDERAL RESERVE APPROVAL. Chase has filed an application with the Federal
Reserve Board requesting approval of the merger. Copies of the application were
provided to the U.S. Department of Justice, the Federal Deposit Insurance
Corporation, the Office of the Comptroller of the Currency and the appropriate
state regulatory agencies. The application described the terms of the merger,
the parties involved and the activities to be conducted by J.P. Morgan Chase &
Co. as a result of the merger and provided other financial and managerial
information. In evaluating the application, the Federal Reserve Board will
consider the financial and managerial resources and prospects of the existing
and combined institutions and the convenience and needs of the communities to be
served by our insured depository institution subsidiaries. Among other things,
the Federal Reserve Board will also evaluate the capital adequacy of J.P. Morgan
Chase & Co.

The Federal Reserve Board must deny an application if it determines that
the transaction would result in a monopoly or be in furtherance of any
combination or conspiracy to monopolize or attempt to monopolize a given
business activity in any part of the United States. The Federal Reserve Board
must also deny an application if it determines that the transaction would
substantially lessen competition or would tend to create a monopoly in any
section of the country, or would in any other manner result in a restraint of
trade, unless the Federal Reserve Board finds that the anti-competitive effects
of the transaction are clearly outweighed by the probable effects of the
transaction in providing benefits to the public.

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Under the Community Reinvestment Act, or CRA, the Federal Reserve Board
must take into account the record of performance of each of us in meeting the
credit needs of the entire community, including low and moderate income
neighborhoods, served by our depository institution subsidiaries. As part of the
review process in merger transactions, the Federal Reserve Board frequently
receives protests from community groups and others, and several such protests
have been received as of the date of this joint proxy statement-prospectus.
Those protests also protested the New York applications referred to below. All
of our insured depository institution subsidiaries required to have ratings
under the CRA have received either an outstanding or satisfactory CRA rating in
their most recent CRA examinations by their respective federal regulators.

Applicable federal law provides for the publication of notice and public
comment on the application filed by Chase with the Federal Reserve Board. Under
current law, the merger may not be completed until the Federal Reserve Board has
approved the merger and a period of 30 days, which may be reduced to 15 days by
the Federal Reserve Board with the concurrence of the Attorney General of the
United States, following the date of approval by the Federal Reserve Board, has
expired. As noted below, the Department of Justice has indicated that it has
completed its antitrust review of the transaction and accordingly we expect that
the post-approval waiting period will be reduced to 15 days.

Our rights to acquire stock under the stock option agreements entered into
in connection with the merger agreement are also subject to the prior approval
of the Federal Reserve Board to the extent the exercise would result in either
of us owning more than 5% of the outstanding shares of common stock of the
other. In considering whether to approve the exercise of an option, the Federal
Reserve Board will generally apply the same statutory criteria as it would apply
to its consideration of approval of the merger.

U.S. ANTITRUST CLEARANCE. Each of us has also filed with the U.S. Federal
Trade Commission and the U.S. Department of Justice a notice relating to certain
nonbank subsidiaries of J.P. Morgan and Chase in satisfaction of the filing
requirements under the Hart-Scott-Rodino Act. Under the applicable requirements
of the Hart-Scott-Rodino Act, we may not complete the merger for 30 days after
submission of that notice, which period may be extended by an agency request for
additional information or terminated at any time with the approval of both
agencies. On November 3, 2000, the Federal Trade Commission and Department of
Justice granted early termination of the Hart-Scott-Rodino waiting period. In
addition, on November 3, 2000, a representative of the Department of Justice
Antitrust Division advised us that it had completed and closed its antitrust
review of the transaction.

COMPETITION APPROVALS ABROAD. The merger requires that we comply with
notification requirements in a number of countries outside the United States.

The local procedural rules in these countries differ from country to
country as do the legal tests against which mergers are reviewed to determine if
the local competition authority can issue a decision clearing the transaction.
Local authorities may have the power to block mergers which breach the
substantive test set out in the local jurisdiction.

In all cases, a filing requires the disclosure of financial and transaction
information which is then reviewed by the competition authority. In most reviews
the competition authority contacts other industry participants, such as
customers, suppliers and competitors of the merging parties, to confirm that the
information provided is correct and to canvass their opinions on the
transaction.

In reaching its decision each competition authority will consider if the
merger results in a market concentration which is likely to breach the test for
acceptable mergers in its jurisdiction. In the majority of countries this test
relates either to the creation of a dominant position or market power sufficient
to operate against the proper functioning of the market.

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NEW YORK STATE BANKING APPROVALS. The merger will be subject to the prior
approval of the Superintendent of Banks and the Banking Board of the State of
New York. On October 11, 2000, Chase filed an application requesting those
approvals and that application is pending as of the date of this joint proxy
statement-prospectus. The factors that the Superintendent of Banks and the
Banking Board will consider in determining whether to grant their approval
include the competitive effects of the merger, the principles of sound banking
and the public interest and the needs of the communities served by Chase and
J.P. Morgan.

OTHER APPROVALS. In addition, the merger requires bank regulatory approval
in the State of Delaware, which was obtained on October 31, 2000, as well as
certain notices to or approvals of various regulatory authorities in foreign
jurisdictions where Chase and J.P. Morgan are engaged in business. Chase and
J.P. Morgan are in the process of filing the required notices and applications
in these various jurisdictions.

The approval of an application means only that the regulatory criteria for
approval have been satisfied or waived. It does not mean that the approving
authority has determined that the consideration to be received by J.P. Morgan
stockholders is fair. Regulatory approval does not constitute an endorsement or
recommendation of the merger.

While we believe that we will receive the requisite regulatory approvals
for the merger, there can be no assurances regarding the timing of the
approvals, our ability to obtain the approvals on satisfactory terms or the
absence of litigation challenging such approvals. There can likewise be no
assurance that U.S. or foreign regulatory authorities will not attempt to
challenge the merger on antitrust grounds or for other reasons, or, if such a
challenge is made, as to the result thereof. Our obligation to complete the
merger is conditioned upon the receipt of all necessary consents, approvals and
actions of governmental authorities and the filing of all other notices with
such authorities which would reasonably be expected to have a material adverse
effect on J.P. Morgan Chase & Co. if they were not received or filed. See
"-- The Merger Agreement -- Conditions to Completion of the Merger."

EXCHANGE OF J.P. MORGAN STOCK CERTIFICATES

Promptly after the merger is completed, if you are a J.P. Morgan
stockholder, our exchange agent will mail to you a letter of transmittal and
instructions for use in surrendering your J.P. Morgan stock certificates in
exchange for stock of J.P. Morgan Chase & Co. When you deliver your J.P. Morgan
stock certificates to the exchange agent along with a properly executed letter
of transmittal and any other required documents, your stock certificates will be
canceled.

J.P. Morgan common stockholders will receive statements indicating
book-entry ownership of J.P. Morgan Chase & Co. stock and may request stock
certificates representing the number of full shares of J.P. Morgan Chase & Co.
stock to which they are entitled under the merger agreement. J.P. Morgan common
stockholders will receive a cash payment, without interest, instead of any
fractional shares of J.P. Morgan Chase & Co. common stock that would have been
otherwise issuable to them as a result of the merger. The amount of cash payable
to any J.P. Morgan common stockholder will, at Chase's election, be either:

- a pro rata portion of the proceeds from the sale by the exchange agent of
shares of J.P. Morgan Chase & Co. common stock representing the aggregate
of all fractional shares to which all J.P. Morgan common stockholders
were otherwise entitled, or

- an amount equal to the fractional share interest to which the holder
would have been entitled multiplied by the closing price on the New York
Stock Exchange for a share of Chase common stock as reported on the New
York Stock Exchange Consolidated Tape at the close of the New York Stock
Exchange regular session of trading on the business day prior to the
effective time of the merger.

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J.P. Morgan preferred stockholders will receive stock certificates
representing the same number of shares of preferred stock of J.P. Morgan Chase &
Co. as the number of shares of J.P. Morgan preferred stock surrendered.

DO NOT SUBMIT YOUR J.P. MORGAN STOCK CERTIFICATES FOR EXCHANGE UNTIL YOU
RECEIVE THE TRANSMITTAL INSTRUCTIONS AND LETTER OF TRANSMITTAL FROM THE EXCHANGE
AGENT.

If you are a J.P. Morgan stockholder, you are not entitled to receive any
dividends or other distributions on J.P. Morgan Chase & Co. stock until the
merger is completed and you have surrendered your J.P. Morgan stock certificates
in exchange for J.P. Morgan Chase & Co. stock. If there is any dividend or other
distribution on J.P. Morgan Chase & Co. stock with a record date after the date
on which the merger is completed and a payment date prior to the date you
surrender your J.P. Morgan stock certificates in exchange for J.P. Morgan Chase
& Co. stock, you will receive the dividend or distribution, without interest,
with respect to the whole shares of J.P. Morgan Chase & Co. stock issued to you
promptly after you surrender your J.P. Morgan stock certificates and the J.P.
Morgan Chase & Co. shares are issued in exchange. If there is any dividend or
other distribution on J.P. Morgan Chase & Co. stock with a record date after the
date on which the merger is completed and a payment date after the date you
surrender your J.P. Morgan stock certificates in exchange for J.P. Morgan Chase
& Co. stock, you will receive the dividend or distribution, without interest,
with respect to the whole shares of J.P. Morgan Chase & Co. stock issued to you
promptly after the payment date.

J.P. Morgan Chase & Co. will only issue stock or cash instead of a
fractional share in a name other than the name in which a surrendered J.P.
Morgan stock certificate is registered if you present the exchange agent with
all documents required to show and effect the unrecorded transfer of ownership
and show that you paid any applicable stock transfer taxes.

TREATMENT OF STOCK OPTIONS AND OTHER EQUITY-BASED AWARDS

When the merger is completed, J.P. Morgan Chase & Co. will assume each
outstanding J.P. Morgan employee stock option, and each option will be deemed to
constitute an option to acquire the same number of shares of J.P. Morgan Chase &
Co. common stock that the holder of the option would have been entitled to
receive if the holder had exercised the option in full immediately prior to the
effective time of the merger, rounded down if necessary to the nearest whole
share. The exercise price per share for the assumed options will be the exercise
price per share under the J.P. Morgan stock options divided by the exchange
ratio. Holders of outstanding J.P. Morgan stock appreciation rights will be
entitled to a number of J.P. Morgan Chase & Co. stock appreciation rights
determined in the same manner. Holders of outstanding J.P. Morgan restricted
stock units will be entitled to a number of J.P. Morgan Chase & Co. restricted
stock units determined by multiplying the number of J.P. Morgan restricted stock
units by the exchange ratio.

The other terms of all J.P. Morgan options, stock appreciation rights and
units referred to above will continue to apply.

Chase will file a registration statement covering the issuance of the
shares of J.P. Morgan Chase & Co. common stock subject to each J.P. Morgan
option and restricted stock unit and will maintain the effectiveness of that
registration statement for as long as any of the options or restricted stock
units remain outstanding.

RESTRICTIONS ON SALES OF SHARES BY AFFILIATES OF CHASE AND J.P. MORGAN

The shares of J.P. Morgan Chase & Co. common stock and preferred stock to
be issued in connection with the merger will be registered under the Securities
Act of 1933 and will be freely transferable under the Securities Act, except for
shares issued to any person who is deemed to be an "affiliate" of J.P. Morgan at
the time of its special meeting. J.P. Morgan expects that each

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of those affiliates will agree with Chase that the affiliate will not transfer
any shares of stock received in the merger except in compliance with the
Securities Act. In addition, we expect that each of our affiliates will agree
with Chase not to dispose of any stock of Chase, J.P. Morgan or J.P. Morgan
Chase & Co., or enter into any transaction with respect to that stock intended
to reduce their risk relative to that stock, during the period beginning 30 days
prior to the effective time of the merger and ending on the date on which
financial results covering at least 30 days of combined operations after the
merger have been published. This joint proxy statement-prospectus does not cover
resales of J.P. Morgan Chase & Co. common stock or preferred stock by affiliates
of Chase or J.P. Morgan.

STOCK EXCHANGE LISTINGS

Chase will use all reasonable efforts to cause the following shares of J.P.
Morgan Chase & Co. to be approved for listing on the New York Stock Exchange,
subject to official notice of issuance, before the completion of the merger:

- J.P. Morgan Chase & Co. common stock to be issued in the merger;

- J.P. Morgan Chase & Co. common stock reserved for issuance upon exercise
of J.P. Morgan stock options or restricted stock units; and

- J.P. Morgan Chase & Co. preferred stock to be issued upon conversion in
the merger of J.P. Morgan's Series A and Series H preferred stock.

In addition, Chase plans to apply to the London and Tokyo stock exchanges to
list the J.P. Morgan Chase & Co. common stock to be issued in the merger and
reserved for the J.P. Morgan stock options and restricted stock units. However,
those listings are not a condition to completion of the merger. The J.P. Morgan
common stock is currently also listed on the Amsterdam, Frankfurt, Paris and
Swiss stock exchanges and international depositary receipts representing J.P.
Morgan's common stock are listed on the Brussels stock exchange. We have not yet
determined whether we will apply to have the J.P. Morgan Chase & Co. common
stock listed on one or more of those stock exchanges.

APPRAISAL RIGHTS

The following summary of the provisions of Section 262 of the Delaware
General Corporation Law is not intended to be a complete statement of the
provisions of that section and is qualified in its entirety by reference to the
full text of Section 262 of the Delaware General Corporation Law, a copy of
which is attached to this joint proxy statement-prospectus as Annex F and is
incorporated into this summary by reference.

Under Delaware law, the common stockholders of Chase and J.P. Morgan are
not entitled to appraisal rights in connection with the merger. However, holders
of J.P. Morgan's preferred stock (except holders of J.P. Morgan's Series A and
Series H preferred stock) and holders of Chase's fixed/adjustable noncumulative
preferred stock are entitled to appraisal rights under Delaware law. Those
series of preferred stock to which appraisal rights may apply are referred to
below as the "appraisal stock."

If the merger is completed, each holder of appraisal stock who (1) files
written notice with J.P. Morgan or Chase, as the case may be, of an intention to
exercise rights of appraisal of his, her or its shares prior to the applicable
special meeting and (2) follows the procedures set forth in Section 262, will be
entitled to be paid by J.P. Morgan Chase & Co. the fair value in cash of the
shares of appraisal stock. The fair value of appraisal stock will be determined
by the Delaware Court of Chancery, exclusive of any element of value arising
from the merger. The shares of appraisal stock with respect to which holders
have perfected their appraisal rights in accordance with Section 262 and have
not effectively withdrawn or lost their appraisal rights are referred to in this
joint proxy statement-prospectus as the "dissenting shares."

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Within ten days after the effective date of the merger, J.P. Morgan Chase &
Co. must mail a notice to all stockholders who have complied with clause (1)
above notifying those stockholders of the effective date of the merger. Within
120 days after the effective date of the merger, holders of appraisal stock may
file a petition in the Delaware Court of Chancery for the appraisal of their
shares, although they may, within 60 days of the effective date, withdraw their
demand for appraisal. Within 120 days of the effective date, the holders of
dissenting shares may also, upon written request, receive from J.P. Morgan Chase
& Co. a statement setting forth the aggregate number of shares with respect to
which demands for appraisal have been received.

Appraisal rights are available only to the record holder of shares. If you
wish to exercise appraisal rights but have a beneficial interest in shares held
of record by or in the name of another person, such as a broker, bank or
nominee, you should act promptly to cause the record holder to follow the
procedures set forth in Section 262 to perfect your appraisal rights.

A demand for appraisal should be signed by or on behalf of the stockholder
exactly as the stockholder's name appears on the stockholder's stock
certificates. If the shares are owned of record in a fiduciary capacity, such as
by a trustee, guardian or custodian, the demand should be executed in that
capacity, and if the shares are owned of record by more than one person, as in a
joint tenancy or tenancy in common, the demand should be executed by or on
behalf of all joint owners. An authorized agent, including one or more joint
owners, may execute a demand for appraisal on behalf of a record holder;
however, in the demand the agent must identify the record holder or holders and
expressly disclose that the agent is executing the demand as an agent for the
record holder or holders. A record holder such as a broker or nominee who holds
shares as nominee for several beneficial owners may exercise appraisal rights
for the shares held for one or more beneficial owners and not exercise rights
for the shares held for other beneficial owners. In this case, the written
demand should state the number of shares for which appraisal rights are being
demanded. When no number of shares is stated, the demand will be presumed to
cover all shares of a particular beneficial owner that are held of record by the
broker or nominee.

Dissenting shares lose their status as dissenting shares if:

- the merger is abandoned;

- the dissenting stockholder fails to make a timely written demand for
appraisal;

- neither J.P. Morgan Chase & Co. nor the stockholder files a complaint or
intervenes in a pending action within 120 days after the effective date
of the merger; or

- the stockholder delivers to J.P. Morgan Chase & Co., within 60 days of
the effective date of the merger, or thereafter with J.P. Morgan Chase &
Co.'s approval, a written withdrawal of the stockholder's demand for
appraisal of the dissenting shares, although no appraisal proceeding in
the Delaware Court of Chancery may be dismissed as to any stockholder
without the approval of the court.

FAILURE TO FOLLOW THE STEPS REQUIRED BY SECTION 262 OF THE DELAWARE GENERAL
CORPORATION LAW FOR PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE LOSS OF
APPRAISAL RIGHTS, IN WHICH EVENT A STOCKHOLDER WILL BE ENTITLED, IN THE CASE OF
SHARES OF J.P. MORGAN, TO RECEIVE THE CONSIDERATION WITH RESPECT TO THE HOLDER'S
DISSENTING SHARES IN ACCORDANCE WITH THE MERGER AGREEMENT AND, IN THE CASE OF
CHASE, TO RETAIN THE SHARES FOLLOWING THE EFFECTIVE TIME OF THE MERGER. IN VIEW
OF THE COMPLEXITY OF THE PROVISIONS OF SECTION 262 OF THE DELAWARE GENERAL
CORPORATION LAW, STOCKHOLDERS WHO ARE CONSIDERING EXERCISING APPRAISAL RIGHTS
SHOULD CONSULT THEIR OWN LEGAL ADVISORS.

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DELISTING AND DEREGISTRATION OF J.P. MORGAN STOCK AFTER THE MERGER

When the merger is completed, the J.P. Morgan common stock and the series
of J.P. Morgan preferred stock currently listed on the New York Stock Exchange
will be delisted from the New York Stock Exchange and deregistered under the
Securities Exchange Act of 1934.

EFFECT OF MERGER ON J.P. MORGAN DIVIDEND REINVESTMENT PLAN

On September 12, 2000, J.P. Morgan terminated its dividend reinvestment
plan. Each J.P. Morgan stockholder enrolled in the J.P. Morgan dividend
reinvestment plan will receive information about enrolling in the dividend
reinvestment plan of J.P. Morgan Chase & Co.

THE MERGER AGREEMENT

This section of the joint proxy statement-prospectus describes the material
terms of the merger agreement. The following summary is qualified in its
entirety by reference to the complete text of the merger agreement, which is
incorporated by reference and attached as Annex A to this joint proxy
statement-prospectus. We urge you to read the full text of the merger agreement.

COMPLETION OF THE MERGER. The merger will be completed when we file a
certificate of merger with the Delaware Secretary of State. However, we may
agree to a later time for completion of the merger and specify that time in the
certificate of merger. We will file the certificate of merger as soon as
practicable after the satisfaction or waiver of the closing conditions in the
merger agreement, which are described below.

We expect to complete the merger no later than the first quarter of 2001
but are preparing to close by year-end 2000 if we have received the stockholder
and regulatory approvals required to do so.

POSSIBLE ALTERNATIVE MERGER STRUCTURE. The merger agreement provides that we
may agree to change the structure of the merger. No such change will alter the
kind or amount of consideration to be issued to J.P. Morgan's stockholders;
adversely affect the tax consequences to them in the merger; cause the merger
not to qualify as a pooling of interests for financial accounting purposes;
materially delay any required regulatory approval; or otherwise cause any
closing condition not to be capable of being fulfilled (unless waived by the
party entitled to its benefits).

CONDITIONS TO COMPLETION OF THE MERGER.

Conditions to Both Parties' Obligations. We may not complete the merger
unless each of the following conditions is satisfied or waived:

- the merger agreement has been adopted by the affirmative vote of:

- the holders of a majority of the outstanding shares of J.P. Morgan
common stock; and

- the holders of a majority of the outstanding shares of Chase common
stock;

- the shares of J.P. Morgan Chase & Co. common stock to be issued in the
merger or reserved for issuance upon exercise of J.P. Morgan stock
options, and the J.P. Morgan Chase & Co. preferred stock to be issued in
the merger upon conversion of the J.P. Morgan Series A and Series H
preferred stock, have been authorized for listing on the New York Stock
Exchange, subject to official notice of issuance;

- all regulatory approvals necessary for the completion of the merger have
been obtained, other than approvals the failure of which to obtain would
not reasonably be expected to have a material adverse effect on
completion of the merger or on J.P. Morgan Chase & Co., and none of those
approvals contains a condition or restriction that would reasonably

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be expected to have a material adverse effect after the merger on the
present or prospective financial condition, business or operating results
of J.P. Morgan Chase & Co.;

- Chase has received all state securities and blue sky permits necessary to
issue the J.P. Morgan Chase & Co. common stock and preferred stock in the
merger;

- the registration statement of which this joint proxy statement-prospectus
is a part has been declared effective by the Securities and Exchange
Commission and is not subject to any stop order or proceedings seeking a
stop order;

- no restraining order or injunction prohibiting completion of the merger
is in effect and completion of the merger is not illegal under any
applicable law; and

- we have received letters from PricewaterhouseCoopers LLP confirming that
the merger qualifies for pooling of interests accounting treatment.

Conditions to Each Party's Obligations. Each party's obligation to
complete the merger is also subject to the satisfaction or waiver of the
following additional conditions:

- the representations and warranties of the other party must be true and
correct as of the date of the merger agreement and, except for
representations and warranties that speak as of an earlier date, must
also be true and correct as of the closing date of the merger, subject to
any exceptions that do not have, and would not reasonably be expected to
have, a material adverse effect on Chase or J.P. Morgan Chase & Co.;

- the other party must have performed in all material respects all
obligations that it is required by the merger agreement to perform on or
prior to the closing date; and

- each party has received an opinion from its tax counsel that the merger
will be treated as a tax-free reorganization for U.S. federal income tax
purposes.

For purposes of the merger agreement, the term "material adverse effect"
means, with respect to either of us, a material adverse effect on the condition
(financial or otherwise), properties, assets, liabilities or businesses of our
company and our subsidiaries taken as a whole or on our ability to perform our
obligations under the merger agreement or the stock option agreements on a
timely basis. However, any change or event caused by or resulting from the
following will not be deemed to have a material adverse effect:

- changes in prevailing interest rates, currency exchange rates or other
economic or monetary conditions in the United States or elsewhere;

- changes in United States or foreign securities markets, including changes
in price levels or trading volumes;

- changes or events affecting the financial services industry generally and
not specifically relating to either of us or our respective subsidiaries,
as the case may be; or

- the merger agreement or the transactions contemplated by the merger
agreement or the announcement of those transactions.

In addition, the merger agreement specifically provides that a change in the
trading prices of either of our capital stocks, by itself, will not constitute a
material adverse effect.

NO SOLICITATIONS OF ALTERNATIVE TRANSACTIONS. The merger agreement
contains detailed provisions prohibiting each of us from seeking an alternative
transaction to the merger. Under these "no solicitation" provisions, we have
agreed that neither of us may:

- initiate, solicit, encourage or knowingly facilitate any inquires or the
making of an acquisition proposal, as described below;

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- 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;

- approve or recommend, or propose publicly to approve or recommend, any
acquisition proposal; or

- 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.

For purposes of the merger agreement, the term "acquisition proposal"
means, with respect to either of us, 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 either of us or any of our significant
subsidiaries, other than acquisitions permitted by the terms of the
merger agreement;

- any purchase or sale of 20% or more of the consolidated assets of either
of us and our subsidiaries, including stock of our subsidiaries, taken as
a whole; or

- any purchase or sale of, or tender or exchange offer for, the voting
securities of that party that, if completed, would result in any person
beneficially owning securities representing 20% or more of our total
voting power or of the total voting power of the surviving parent entity
in the transaction, or any of our significant subsidiaries.

The merger agreement permits us to comply with Rule 14d-9 and Rule 14e-2
under the Securities Exchange Act with regard to an acquisition proposal that
either of us may receive. In addition, if either of us receives an unsolicited
bona fide written acquisition proposal prior to our respective special meeting
to vote on the merger agreement, the party receiving that proposal may engage in
discussions with or provide confidential information to the person making that
acquisition proposal if:

- the board of directors of the party receiving the acquisition proposal
concludes in good faith that the acquisition proposal constitutes or
would be reasonably likely to result in a superior proposal, as described
below;

- the board of directors of the party receiving the acquisition proposal,
after consultation with outside counsel, determines in good faith that
the failure to engage in those discussions or provide that confidential
information would likely be inconsistent with the board's fiduciary
duties under applicable law;

- the party receiving the acquisition proposal enters into a
confidentiality agreement with the person making the inquiry or proposal
having terms that are no less favorable to the party providing the
information than those in the confidentiality agreement between Chase and
J.P. Morgan; and

- the party receiving the acquisition proposal notifies the other party to
the merger 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:

- any inquiries, proposals or offers received by, any information
requested from, or any discussions or negotiations sought to be
initiated or continued with, it or any of its representatives; and

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- the identity of the person and the material terms and conditions of
any inquiries, proposals or offers, including a copy of the inquiries,
proposals and offers if in writing and any related available
documentation or correspondence.

For purposes of the merger agreement, "superior proposal" means a bona fide
written acquisition proposal made to a party to the merger agreement to acquire
a majority of the assets or voting power of that party which the board of
directors of that party concludes in good faith, after consultation with its
financial and legal advisors, taking into account all legal, financial,
regulatory and other aspects of the proposal and the person making the proposal:

- is more favorable to the stockholders of that party from a financial
point of view than the merger; and

- is reasonably capable of being completed.

Each of us has agreed in the merger agreement that:

- we will immediately terminate any activities, discussions or negotiations
existing as of the date of the merger agreement with any parties
conducted before that date with respect to any acquisition proposal;

- we will not release any third party from, or waive any provisions of, any
confidentiality or standstill agreement relating to a possible
acquisition proposal;

- we will use reasonable best efforts to inform our respective directors,
officers and key employees of the foregoing restrictions in the merger
agreement; and

- we will not submit to the vote of our respective stockholders any
acquisition proposal other than the merger agreement.

Nothing contained in the "no solicitation" provisions of the merger
agreement will permit either of us to terminate the merger agreement or affect
any of our other obligations under the merger agreement, including our
obligations to call and hold special meetings of our respective stockholders to
vote on the merger agreement.

BOARD OF DIRECTORS' COVENANT TO RECOMMEND MERGER. In the merger agreement,
each of our boards of directors agreed to recommend to our respective
stockholders that they vote to adopt the merger agreement at the applicable
special stockholders' meeting that we will hold for that purpose. Neither of our
boards may withdraw this recommendation, modify it in a manner that is adverse
to the other party, or take any other action that is inconsistent with this
recommendation (all of which we refer to as a "change in board recommendation"),
except as follows. If either of us receives an unsolicited bona fide written
acquisition proposal prior to our respective special stockholders' meeting to
vote on the merger agreement, the party receiving that proposal may make a
change in board recommendation if:

- its board of directors, after consultation with outside counsel,
determines in good faith that failure to take that action would likely be
inconsistent with its fiduciary duties under applicable law;

- it notifies the other party of the proposal within the time and in the
manner described above;

- its board of directors concludes in good faith that the acquisition
proposal constitutes a superior proposal, after giving effect to all the
concessions made by the other party to the merger agreement as described
in the second following bullet point;

- it notifies the other party to the merger agreement at least five
business days in advance of its intention to effect a change in board
recommendation, specifying the material terms of the superior proposal
and furnishing a copy of any relevant proposed transaction agreements and
any other material documents received; and
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- prior to making the change in board recommendation, its board of
directors negotiates with the other party to the merger agreement in good
faith to adjust the terms of the merger agreement so that the acquisition
proposal would no longer be a superior proposal.

If either of us makes a change in board recommendation, the other may terminate
the merger agreement and the party making the change in board recommendation
will owe a termination fee to the terminating party, as described below under
"-- Termination Fees."

TERMINATION. We may terminate the merger agreement at any time prior to
the completion of the merger, whether before or after the stockholder approvals
have been obtained, by mutual consent.

In addition, either of us may terminate the merger agreement by written
notice to the other party:

- if any governmental entity:

- that must grant a material regulatory approval has denied approval of
the merger and the denial has become final and nonappealable; or

- of competent jurisdiction issues an order, decree or ruling or takes
any other action permanently restraining, enjoining or otherwise
prohibiting the merger, and the order, decree, ruling or other action
has become final and nonappealable;

except that this right to terminate will not be available to a party whose
failure to comply with the merger agreement has been the cause of, or
resulted in, that action;

- if the merger is not completed on or before June 30, 2001, except that
this right to terminate will not be available to a party whose failure to
comply with any provision of the merger agreement has been the cause of,
or resulted in, the failure of the merger to be completed by June 30,
2001; or

- if the board of directors of the other party (1) fails to recommend that
its stockholders vote to adopt the merger agreement or makes a change in
board recommendation, whether or not permitted by the terms of the merger
agreement, or (2) materially breaches its obligations under the merger
agreement by failing to call its special stockholders' meeting or by
failing to mail this joint proxy statement-prospectus to its
stockholders.

TERMINATION FEES. The merger agreement provides that each of us may be
required to pay a termination fee to the other of up to $1.25 billion in the
following circumstances:

- If a party terminates the merger agreement in accordance with the last
bullet point above, the other party must pay the full termination fee on
the business day following the termination.

- If (1) the approval of the stockholders of a party is not obtained by
reason of that party's failure to obtain the required vote at its
stockholders' meeting, (2) after the date of the merger agreement and
before that party's stockholders' meeting an acquisition proposal is made
with respect to that party, and (3) the merger agreement is terminated
because the merger is not completed by June 30, 2001, then the party
whose stockholders failed to approve the merger agreement will owe the
other party one-third of the termination fee. If within 18 months after
this termination of the merger agreement, the party whose stockholders
failed to approve the merger agreement enters into an agreement for, or
completes, an acquisition proposal, the remaining two-thirds of the
termination fee will become payable.

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- If a party intentionally breaches the merger agreement after an
acquisition proposal has been made with respect to it, does not cure that
breach after being notified of the breach; and the merger agreement is
terminated because the merger is not completed by June 30, 2001, then the
party that committed the breach will, if the breach materially
contributed to the failure of the merger to close by June 30, 2001, owe
the other party one-third of the termination fee. If within 18 months
after this termination of the merger agreement the breaching party enters
into an agreement for, or completes, an acquisition proposal, the
remaining two-thirds of the termination fee will become payable.

CONDUCT OF BUSINESS PENDING THE MERGER. Under the merger agreement, each
of us has agreed that, during the period before completion of the merger, except
as expressly contemplated or permitted by the merger agreement and the stock
option agreements, or to the extent that the other party consents in writing, we
will carry on our respective businesses in the usual, regular and ordinary
course consistent with past practice, and will use all reasonable efforts to
preserve intact our present business organizations, maintain our rights and
authorizations and preserve our relationships with customers, suppliers and
others so that our goodwill and ongoing businesses are not impaired in any
material respect. Each of us has agreed not to, and not to permit our
subsidiaries to, enter into any new material line of business, change our or our
subsidiaries' lending, investment, underwriting, risk and asset-liability
management and other material banking or operating policies in any respect that
is material to it, except as required by law or policies of a governmental
entity. Each of us has also agreed that we will not, and will not permit any of
our subsidiaries to, incur or commit to any capital expenditures or any
obligations or liabilities in connection with capital expenditures, other than
in the ordinary course of business consistent with past practice. Each of us has
further agreed not to, and not to permit our subsidiaries to, enter into,
terminate or change any material leases, contracts or agreements except in the
ordinary course of business consistent with past practice.

In addition to the above agreements regarding the conduct of business
generally, each of us has agreed to various specific restrictions relating to
the conduct of our businesses, including the following (in each case subject to
exceptions specified in the merger agreement):

- the declaration or payment of dividends and changes in capital stock,
other than regular cash dividends;

- the repurchase or redemption of capital stock;

- the issuance or sale of capital stock, voting debt or other equity
interests;

- the amendment of our respective certificates of incorporation or by-laws;

- the acquisition of assets or other entities;

- the disposition of assets;

- the incurrence or the guarantee of long-term debt;

- the taking of actions that would result, or might reasonably be expected
to result, in a breach of any representations and warranties in the
merger agreement or in any conditions to the merger not being satisfied;

- changes in accounting methods;

- the taking of actions that would disqualify the merger as a pooling of
interests for accounting purposes or as a tax-free reorganization for
U.S. federal income tax purposes; and

- the liquidation or recapitalization of significant subsidiaries.

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In addition, J.P. Morgan has agreed to some additional specific
restrictions relating to the conduct of its business, including restrictions on:

- changes in employee benefit plans and compensation of its directors,
executive officers and employees;

- changes in any tax election, annual tax accounting periods or method of
tax accounting; the filing of any material amended tax return; or the
taking of other specified actions with respect to material tax claims or
assessments; and

- material changes in its investment securities portfolio, hedging strategy
or gap position or material changes in the credit or risk concentrations
associated with its underwriting, market-making and other investment
banking businesses.

Additional Agreements. Each of us has agreed to cooperate with the other
and to use our reasonable best efforts to:

- take all actions necessary to comply promptly with all legal requirements
which may be imposed on either of us with respect to the merger and to
consummate the merger as promptly as practicable; and

- obtain any consent, authorization, order or approval of, or any exemption
by, any governmental entity or any other third party which is required to
be obtained in connection with the merger or transactions related to the
merger unless reasonably likely to result in a condition or restriction
on J.P. Morgan Chase & Co. that would reasonably be expected to have a
material adverse effect after completion of the merger on J.P. Morgan
Chase & Co.'s present or prospective consolidated financial condition,
business or operating results.

The merger agreement also contains covenants relating to cooperation
between us in the preparation of this joint proxy statement-prospectus and
additional agreements between us relating to, among other things, consultation
regarding transition matters, access to information, mutual notice of specified
matters and public announcements.

COORDINATION OF DIVIDENDS. We have agreed in the merger agreement to
coordinate the payment of dividends and the designation of record and payment
dates relating to Chase and J.P. Morgan common stock so that holders of our
common stocks will not receive two dividends, or fail to receive one dividend,
for any calendar quarter.

BENEFITS MATTERS. We have agreed that our respective retirement and other
employee benefit plans will remain in effect after completion of the merger with
respect to employees covered by those plans, except that interests under any
benefit plan that are based on J.P. Morgan common stock will be based instead on
J.P. Morgan Chase & Co. common stock in an equitable manner. We have also agreed
to negotiate in good faith to formulate benefit plans for J.P. Morgan Chase &
Co. after the effective time of the merger on a basis that does not discriminate
between employees who were covered by the benefit plans of Chase and employees
who were covered by the benefit plans of J.P. Morgan.

AMENDMENT, EXTENSION AND WAIVER. We may amend the merger agreement by
action taken or authorized by our respective boards of directors, at any time
before or after adoption of the merger agreement by our respective stockholders.
After adoption of the merger agreement by either of our respective stockholders,
no amendment may be made which by law requires further approval by those
stockholders, unless we obtain that further approval. All amendments to the
merger agreement must be in writing signed by both of us.

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At any time before the completion of the merger, we may, by written action
taken or authorized by our respective boards of directors, to the extent legally
allowed:

- extend the time for the performance of any of the obligations or other
acts provided for in the merger agreement;

- waive any inaccuracies in the representations and warranties contained in
the merger agreement or in any document delivered pursuant to the merger
agreement; and

- waive compliance with any of the agreements or conditions contained in
the merger agreement.

FEES AND EXPENSES. Whether or not the merger is completed, all costs and
expenses incurred in connection with the merger agreement, the stock option
agreements and the merger will be paid by the party incurring the expense,
except as otherwise provided in the merger agreement or stock option agreements
and except that:

- if the merger is completed, J.P. Morgan Chase & Co. will pay any property
or transfer taxes imposed in connection with the merger; and

- all expenses and fees incurred in connection with the filing, printing
and mailing of this joint proxy statement-prospectus and the registration
statement of which it is a part will be shared equally by Chase and J.P.
Morgan.

REPRESENTATIONS AND WARRANTIES. The merger agreement contains customary
and substantially reciprocal representations and warranties by each of us
relating to, among other things:

- corporate organization and similar corporate matters;

- capital structure;

- authorization of the merger agreement and stock option agreements and
absence of conflicts;

- documents filed with the Securities and Exchange Commission, financial
statements included in those documents and absence of material
undisclosed liabilities;

- information supplied in connection with this joint proxy
statement-prospectus and the registration statement of which it is a
part;

- compliance with applicable laws;

- legal proceedings;

- taxes;

- material agreements;

- employee benefits;

- subsidiaries;

- agreements with regulators;

- absence of specified changes or events;

- board approval and applicable state takeover laws;

- the stockholder vote required to adopt the merger agreement;

- accounting matters;

- ownership of properties;

- interest rate risk management instruments;

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- intellectual property;

- brokers and finders; and

- opinion of financial advisor.

STOCK OPTION AGREEMENTS

This section of the joint proxy statement-prospectus describes the material
terms of the reciprocal stock options that Chase and J.P. Morgan granted to each
other at the time we entered into the merger agreement. The following summary is
qualified in its entirety by reference to the complete text of the stock option
agreements, which are incorporated by reference and attached as Annexes B and C
to this joint proxy statement-prospectus. We urge you to read the full text of
the stock option agreements.

In connection with the execution and delivery of the merger agreement, we
entered into:

- the Chase stock option agreement, under which Chase granted to J.P.
Morgan an irrevocable option to purchase, in whole or in part, an
aggregate of up to 260,464,725 shares of Chase common stock at a price of
$56.25 per share, exercisable as described below; and

- the J.P. Morgan stock option agreement, under which J.P. Morgan granted
to Chase an irrevocable option to purchase, in whole or in part, an
aggregate of up to 31,596,653 shares of J.P. Morgan common stock at a
price of $208.13 per share, exercisable as described below.

WHEN THE OPTIONS MAY BE EXERCISED. The option holder under a stock option
agreement may exercise the option to purchase shares of common stock of the
option issuer, in whole or in part, at any time following the occurrence of any
of the following events:

- if prior to termination of the merger agreement, without the consent of
the option holder, the option issuer enters into an agreement to effect,
or effects, in a single transaction or series of related transactions,
any acquisition proposal;

- if prior to the termination of the merger agreement, any third party or
group acquires beneficial ownership of 20% or more of the voting power of
the option issuer or any of its significant subsidiaries; or

- if an event occurs the result of which is that the aggregate termination
fee required to be paid by the option issuer under the merger agreement
equals $1.25 billion.

The right of the option holder to purchase shares of common stock under the
applicable stock option agreement will expire on the first to occur of:

- the completion of the merger;

- the termination of the merger agreement, provided that no event has
occurred or could occur in the future that would entitle the option
holder to purchase common stock under the applicable stock option
agreement;

- the date on which the option holder has received $1.25 billion in "total
profit," as calculated under the stock option agreement, from the
exercise or sale of the option or shares issued upon exercise of the
option or from the receipt of termination fees under the merger
agreement; and

- 90 days after an event has occurred that would entitle the option holder
to purchase common stock under the applicable stock option agreement.

Any purchase of shares of common stock by the option holder may be subject
to regulatory approvals, including prior approval of the Federal Reserve Board.
70
<PAGE>

ADJUSTMENTS UPON CHANGES IN CAPITALIZATION AND SUBSTITUTE OPTION. The
number and kind of securities subject to each stock option agreement and the
exercise price will be adjusted for any change in the number of issued and
outstanding shares of common stock of the option issuer in the event of any
stock dividend, subdivision, spin-off, stock split, split-up, merger,
consolidation, recapitalization, combination, exchange of shares or dividend or
distribution, other than regular cash dividends. Accordingly, the option holder
will receive, upon exercise of the option, the number and class of shares or
other securities or property that the option holder would have received if the
option had been exercised immediately before the event or record date for the
event, as applicable. In addition, if additional shares of common stock of the
option issuer become outstanding after the date of the applicable stock option
agreement, the total number of shares of the option issuer's common stock
subject to the option will be automatically increased to 19.9% of all the issued
and outstanding shares of that option issuer's common stock, excluding any
shares previously issued upon exercise of the option.

In the event that the option issuer enters into any agreement:

- to consolidate with or merge into any person other than the option
holder, and the option issuer will not be the continuing or surviving
corporation in the consolidation or merger;

- to permit any person, other than the option holder, to merge into the
option issuer and the option issuer will be the continuing or surviving
or acquiring corporation but, in connection with the merger;

- the outstanding shares of common stock of the option issuer will be
changed into or exchanged for stock or other securities of any other
person or cash or any other property; or

- the outstanding shares of common stock of the option issuer will,
after the merger, represent less than 50% of the outstanding voting
securities of the merged company; or

- to sell or otherwise transfer all or substantially all of its assets or
all of the assets of its subsidiaries, taken as a whole, to any person,
other than the option holder,

then, in each case, the agreement governing the transaction must contain a
provision that the option granted under the stock option agreement will upon
completion of the transaction be converted into, or exchanged for, a substitute
option with substantially identical terms to acquire shares of the surviving
corporation or a person that controls the surviving corporation and at a price
intended to preserve the economics of the option, except that the substitute
option will be immediately exercisable if the original option was at that time
exercisable and will be subject to provisions regarding repurchase of the
substitute option specified in the stock option agreement.

REPURCHASE OF THE OPTION. After an option becomes exercisable, the option
holder has the right to require the option issuer to repurchase the option and
any shares acquired upon exercise of the option at any time following any of the
following events:

- any person other than the option holder acquires or has the right to
acquire beneficial ownership of 50% or more of the then outstanding
shares of the option issuer's common stock; or

- the option issuer enters into an agreement with a person other than the
option holder for a merger, consolidation or sale of all or substantially
all of its assets of a type described above in the second paragraph under
"-- Adjustment Upon Changes in Capitalization and Substitute Option."

71
<PAGE>

The repurchase price for any such repurchase will equal the sum of:

- the aggregate exercise price paid for all shares issued under the option;

- the excess of the market/offer price referred to below over the exercise
price times the number of shares with respect to which the option has not
been exercised; and

- the excess of the market/offer price over the exercise price paid for
each share owned by the option holder with respect to which the option
holder had exercised the option.

The term "market/offer price" is defined in the stock option agreements to
mean the highest of:

- the highest price per share at which a tender offer or exchange offer for
the option issuer's common stock has been made;

- the highest price to be paid for common stock of the option issuer by any
third party under an agreement with the option issuer;

- the price per share received by holders of the option issuer's common
stock in a business combination transaction;

- the highest closing price for shares of the option issuer's common stock
within the 12-month period immediately preceding the transaction in
question; and

- in the event of a sale of all or substantially all of the option issuer's
assets, the sum of the price paid in that sale and the current market
value of the remaining assets of the option issuer divided by the number
of outstanding shares of the option issuer's common stock.

REGISTRATION RIGHTS. Each of the stock option agreements provides that the
option holder has specified rights to require the option issuer to register,
under the Securities Act and any applicable state laws, all shares purchased by
the option holder under the stock option agreement. The option issuer may
repurchase at a specified average market value any shares requested to be
registered instead of registering those shares.

PROFIT LIMITATIONS. Each of the stock option agreements provides that in
no event will the option holder's "total profit," as defined below, exceed, in
the aggregate, $1.25 billion. If the option holder's total profit would
otherwise exceed $1.25 billion, the option holder, at its sole discretion, will
either (a) reduce the number of shares subject to the option, (b) deliver to the
option issuer for cancellation shares of the option issuer's common stock, (c)
pay cash to the option issuer, (d) reduce the amount payable by the option
issuer upon repurchase of the option and/or the option shares or (e) any
combination of the above, so that the option holder's actually realized total
profit does not exceed $1.25 billion after taking into account the above
actions.

In addition, the option may not be exercised for a number of shares that
would result in a "notional total profit," as defined below, of more than $1.25
billion. If exercise of the option would otherwise result in the notional total
profit exceeding that amount, the option holder, in its discretion, may take any
of the actions specified above so that the notional total profit does not exceed
$1.25 billion.

For purposes of the option agreements, "total profit" means the aggregate
amount (before taxes) of:

- the excess of (1) the net cash amounts or fair market value of any
property received by the option holder in a sale of shares received on
exercise of the option, other than to a wholly-owned subsidiary of the
option holder, or a repurchase of those shares by the option issuer, over
(2) the option holder's aggregate purchase price for those shares, plus

72
<PAGE>

- all equivalent net amounts with respect to any substitute option, plus

- any termination fee paid to the option holder under the merger agreement,
minus

- all cash paid and the value of all shares surrendered to the option
issuer as described above to reduce the total profit or notional total
profit.

For purposes of the stock option agreements, "notional total profit" with
respect to any number of shares the option holder proposes to purchase under the
option means the total profit on the proposed purchase date assuming that those
shares were purchased and, together with all other shares received upon exercise
of the option and held by the option holder and its affiliates as of that date,
were sold for cash at the closing market price for the option issuer's common
stock as of the close of business on the preceding trading day, less customary
brokerage commissions.

ASSIGNABILITY. Neither of the stock option agreements, nor any of the
rights, interests or obligations under them, may be assigned by either of the
parties without the prior written consent of the other party.

EFFECT OF STOCK OPTION AGREEMENTS. The stock option agreements are
intended to increase the likelihood that the merger will be completed on the
terms set forth in the merger agreement and to compensate the option holder for
the efforts undertaken and the expenses and losses incurred by it if the merger
is not completed. The stock option agreements may prevent a third party from
completing a pooling of interests transaction with Chase or J.P. Morgan, as the
case may be, for a period of two years and could make any business combination
with a third party more expensive than would otherwise be the case.
Consequently, the stock option agreements may discourage persons who might be
interested in acquiring all or a significant interest in Chase or J.P. Morgan
before completion of the merger from considering or proposing an acquisition,
even if those persons were prepared to offer higher consideration per share of
J.P. Morgan common stock or Chase common stock than the consideration implicit
in the merger.

73
<PAGE>

UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME SUMMARY
OF CHASE AND J.P. MORGAN
(IN MILLIONS, EXCEPT PER SHARE DATA)

The following unaudited pro forma combined statement of income summary
combines the historical consolidated statements of income of Chase and J.P.
Morgan giving effect to the merger, which is expected to be accounted for as a
pooling of interests, as if the merger had occurred as of the beginning of the
earliest period presented and after giving effect to the pro forma adjustments
described in the notes to the pro forma combined financial statements. The
information presented below should be read together with the historical
consolidated financial statements of Chase and J.P. Morgan, including the
related notes, which are incorporated by reference in this joint proxy
statement-prospectus (see "Where You Can Find More Information"), and together
with the condensed consolidated historical and other pro forma financial
information, including the related notes, appearing elsewhere in this joint
proxy statement-prospectus. The pro forma financial data are not necessarily
indicative of the results that actually would have occurred had the merger been
completed on the dates indicated or that may be obtained in the future.

<TABLE>
<CAPTION>
FOR THE
NINE MONTHS
ENDED SEPTEMBER 30, FOR THE YEAR ENDED DECEMBER 31,
-------------------- --------------------------------
2000 1999 1999 1998 1997
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
Loans.......................................... $12,555 $10,911 $14,783 $15,498 $14,950
Securities..................................... 3,326 3,610 4,804 5,072 4,585
Trading Assets................................. 5,125 3,991 5,432 6,775 7,045
Federal Funds Sold and Securities Purchased
Under Resale Agreements...................... 3,083 2,279 3,016 4,201 4,636
Securities Borrowed............................ 1,663 1,405 1,877 2,129 1,814
Deposits With Banks............................ 568 761 1,006 936 724
Other Sources.................................. 401 192 289 319 450
------- ------- ------- ------- -------
Total Interest Income................. 26,721 23,149 31,207 34,930 34,204
------- ------- ------- ------- -------
INTEREST EXPENSE
Deposits....................................... 7,916 6,529 8,845 9,663 9,314
Short-Term and Other Liabilities............... 9,389 6,831 9,323 12,612 12,534
Long-Term Debt................................. 2,365 2,067 2,754 2,808 2,231
------- ------- ------- ------- -------
Total Interest Expense................ 19,670 15,427 20,922 25,083 24,079
------- ------- ------- ------- -------
NET INTEREST INCOME............................ 7,051 7,722 10,285 9,847 10,125
Provision for Loan Losses...................... 968 1,017 1,446 1,453 804
------- ------- ------- ------- -------
NET INTEREST INCOME AFTER PROVISION FOR LOAN
LOSSES....................................... 6,083 6,705 8,839 8,394 9,321
NONINTEREST REVENUE
Trading Revenue................................ 5,156 3,967 5,252 3,600 3,460
Investment Banking Fees........................ 3,311 2,633 3,517 2,903 2,259
Trust, Custody and Investment Management Fees.. 2,620 2,132 2,868 2,473 2,164
Credit Card Revenue............................ 1,311 1,258 1,698 1,474 1,088
Other Fees and Commissions..................... 2,911 2,364 3,310 2,792 2,565
Private Equity Gains........................... 1,113 1,533 3,147 1,312 1,238
Securities Gains (Losses)...................... 111 43 (192) 469 314
Other Revenue.................................. 807 840 1,045 883 815
------- ------- ------- ------- -------
Total Noninterest Revenue............. 17,340 14,770 20,645 15,906 13,903
</TABLE>

74
<PAGE>

<TABLE>
<CAPTION>
FOR THE
NINE MONTHS
ENDED SEPTEMBER 30, FOR THE YEAR ENDED DECEMBER 31,
-------------------- --------------------------------
2000 1999 1999 1998 1997
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
------- ------- ------- ------- -------
NONINTEREST EXPENSE
Salaries....................................... 8,193 6,792 9,049 7,402 7,028
Employee Benefits.............................. 1,245 1,111 1,485 1,469 1,436
Occupancy...................................... 943 886 1,190 1,123 1,100
Technology and Communications.................. 1,786 1,600 2,179 2,172 1,984
Professional Services.......................... 838 721 1,012 1,045 850
Amortization of Intangibles.................... 342 243 329 293 172
Restructuring Costs............................ 129 -- 23 887 192
Other Expense.................................. 2,304 1,990 2,728 2,562 2,398
------- ------- ------- ------- -------
Total Noninterest Expense............. 15,780 13,343 17,995 16,953 15,160
------- ------- ------- ------- -------
INCOME BEFORE INCOME TAX EXPENSE............... 7,643 8,132 11,489 7,347 8,064
Income Tax Expense............................. 2,624 2,833 3,988 2,602 2,891
------- ------- ------- ------- -------
NET INCOME..................................... $ 5,019 $ 5,299 $ 7,501 $ 4,745 $ 5,173
------- ------- ------- ------- -------
NET INCOME APPLICABLE TO COMMON STOCK.......... $ 4,944 $ 5,218 $ 7,395 $ 4,612 $ 4,955
------- ------- ------- ------- -------
NET INCOME PER SHARE:
Basic........................................ $ 2.64 $ 2.71 $ 3.87 $ 2.37 $ 2.53
Diluted...................................... $ 2.53 $ 2.59 $ 3.69 $ 2.27 $ 2.41
</TABLE>

See the additional unaudited pro forma combined financial statements and related
notes.
75
<PAGE>

UNAUDITED PRO FORMA COMBINED BALANCE SHEET
OF CHASE AND J.P. MORGAN
AT SEPTEMBER 30, 2000
(IN MILLIONS)

The following unaudited pro forma combined balance sheet combines the
historical consolidated balance sheets of Chase and J.P. Morgan giving effect to
the merger, which is expected to be accounted for as a pooling of interests, as
if the merger had been effective on September 30, 2000. The information
presented below should be read together with the historical consolidated
financial statements of Chase and J.P. Morgan, including the related notes,
which are incorporated by reference in this joint proxy statement-prospectus
(see "Where You Can Find More Information"), and together with the condensed
consolidated historical and other pro forma financial information, including the
related notes, appearing elsewhere in this joint proxy statement-prospectus. The
pro forma financial data are not necessarily indicative of the financial
position that actually would have occurred had the merger been completed on
September 30, 2000 or that may be obtained in the future.

76
<PAGE>
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
OF CHASE AND J.P. MORGAN -- (CONTINUED)
AT SEPTEMBER 30, 2000
(IN MILLIONS)

<TABLE>
<CAPTION>
PRO
FORMA PRO
CHASE J.P. MORGAN ADJUSTMENTS FORMA
HISTORICAL HISTORICAL (a,c,k,m,n) COMBINED
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
LIABILITIES
Deposits:
Domestic:
Noninterest-Bearing.................................... $ 47,067 $ 992 $ 48,059
Interest-Bearing....................................... 81,003 2,671 83,674
Foreign:
Noninterest-Bearing.................................... 6,054 790 6,844
Interest-Bearing....................................... 95,477 35,731 131,208
-------- -------- ------- --------
Total Deposits.................................... 229,601 40,184 -- 269,785
Federal Funds Purchased and Securities Sold Under
Repurchase Agreements.................................... 61,943 83,267 145,210
Commercial Paper........................................... 7,338 12,124 19,462
Other Borrowed Funds....................................... 7,252 12,813 20,065
Trading Liabilities:
Debt and Equity Instruments.............................. 13,321 45,651 58,972
Derivative Payables...................................... 27,367 37,886 65,253
Accounts Payable, Accrued Expenses and Other Liabilities,
Including the Allowance for Credit Losses................ 22,058 15,167 1,800(c) 39,025
Long-Term Debt............................................. 24,157 21,477 45,634
Guaranteed Preferred Beneficial Interests in Corporation's
Junior Subordinated Deferrable Interest Debentures....... 2,789 1,150 3,939
-------- -------- ------- --------
TOTAL LIABILITIES................................. 395,826 269,719 1,800 667,345
-------- -------- ------- --------
PREFERRED STOCK OF SUBSIDIARY.............................. 550 -- 550
-------- -------- ------- --------
STOCKHOLDERS' EQUITY
Preferred Stock............................................ 828 694 (2)(b) 1,520
Common Stock............................................... 1,323 502 90(b) 1,915
Capital Surplus............................................ 9,300 3,368 (505)(b) 12,163
Retained Earnings.......................................... 19,626 12,052 (4,247)(b) 25,631
(1,800)(c)
Accumulated Other Comprehensive (Loss) Income.............. (1,005) 10 (995)
Treasury Stock, At Cost.................................... (632) (4,664) 4,664(b) (632)
-------- -------- ------- --------
TOTAL STOCKHOLDERS' EQUITY........................ 29,440 11,962 (1,800) 39,602
-------- -------- ------- --------
TOTAL LIABILITIES, PREFERRED STOCK OF SUBSIDIARY
AND STOCKHOLDERS' EQUITY........................ $425,816 $281,681 $ -- $707,497
======== ======== ======= ========
</TABLE>

See notes to unaudited pro forma combined financial statements.
77
<PAGE>

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME OF CHASE AND J.P. MORGAN

The following unaudited pro forma combined statements of income combine the
historical consolidated statements of income of Chase and J.P. Morgan giving
effect to the merger, which is expected to be accounted for as a pooling of
interests, as if the merger had been effective as of the beginning of the
earliest period presented and after giving effect to the pro forma adjustments
described in the notes to the pro forma combined financial statements. The
information presented below should be read together with the historical
consolidated financial statements of Chase and J.P. Morgan, including the
related notes, which are incorporated by reference in this joint proxy
statement-prospectus (see "Where You Can Find More Information"), and together
with the condensed consolidated historical and other pro forma financial
information, including the related notes, appearing elsewhere in this joint
proxy statement-prospectus. The pro forma financial data are not necessarily
indicative of the results that actually would have occurred had the merger been
completed on the dates indicated or that may be obtained in the future.

78
<PAGE>

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME OF CHASE AND J.P. MORGAN

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
PRO
FORMA PRO
CHASE J.P. MORGAN ADJUSTMENTS FORMA
HISTORICAL HISTORICAL (a,c,k,m,n) COMBINED
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans....................................................... $11,108 $1,447 $ -- $12,555
Securities.................................................. 2,879 447 -- 3,326
Trading Assets.............................................. 1,425 3,700 -- 5,125
Federal Funds Sold and Securities Purchased Under Resale
Agreements................................................ 1,349 1,792 (58)(e) 3,083
Securities Borrowed......................................... -- 1,605 58(e) 1,663
Deposits With Banks......................................... 331 237 -- 568
Other Sources............................................... -- 401 -- 401
------- ------ ----- -------
Total Interest Income............................... 17,092 9,629 -- 26,721
------- ------ ----- -------
INTEREST EXPENSE
Deposits.................................................... 6,302 1,614 -- 7,916
Short-Term and Other Liabilities............................ 3,678 5,711 -- 9,389
Long-Term Debt.............................................. 1,243 1,122 -- 2,365
------- ------ ----- -------
Total Interest Expense.............................. 11,223 8,447 -- 19,670
------- ------ ----- -------
NET INTEREST INCOME......................................... 5,869 1,182 -- 7,051
Provision (Reversal of Provision) for Loan Losses........... 979 (11) -- 968
------- ------ ----- -------
NET INTEREST INCOME AFTER PROVISION (REVERSAL OF PROVISION)
FOR LOAN LOSSES........................................... 4,890 1,193 -- 6,083
------- ------ ----- -------
NONINTEREST REVENUE
Trading Revenue............................................. 2,448 2,708 -- 5,156
Investment Banking Fees..................................... 1,900 1,411 -- 3,311
Trust, Custody and Investment Management Fees............... 1,718 863 39(g) 2,620
Credit Card Revenue......................................... 1,311 -- -- 1,311
Other Fees and Commissions.................................. 2,201 749 (39)(g) 2,911
Private Equity Gains........................................ 773 -- 340(d) 1,113
Securities Gains............................................ 167 284 (340)(d) 111
Other Revenue............................................... 354 429 24(f) 807
------- ------ ----- -------
Total Noninterest Revenue........................... 10,872 6,444 24 17,340
------- ------ ----- -------
NONINTEREST EXPENSE
Salaries.................................................... 5,128 3,065 -- 8,193
Employee Benefits........................................... 795 450 -- 1,245
Occupancy................................................... 689 254 -- 943
Technology and Communications............................... 856 751 316(i) 1,786
(137)(l)
Professional Services....................................... 569 132 137(l) 838
Amortization of Intangibles................................. 318 -- 24(f) 342
Restructuring Costs......................................... 129 -- -- 129
Other Expense............................................... 2,148 472 (316)(i) 2,304
------- ------ ----- -------
Total Noninterest Expense........................... 10,632 5,124 24 15,780
------- ------ ----- -------
INCOME BEFORE INCOME TAX EXPENSE............................ 5,130 2,513 -- 7,643
Income Tax Expense.......................................... 1,795 829 -- 2,624
------- ------ ----- -------
NET INCOME.................................................. $ 3,335 $1,684 $ -- $ 5,019
------- ------ ----- -------
NET INCOME APPLICABLE TO COMMON STOCK....................... $ 3,289 $1,655 $ -- $ 4,944
------- ------ ----- -------
NET INCOME PER COMMON SHARE:
Basic..................................................... $ 2.66 $ 9.64 $ 2.64
Diluted................................................... $ 2.57 $ 9.05 $ 2.53
Average Common Shares Outstanding:
Basic..................................................... 1,235.4 171.7 1,870.7(b)
Diluted................................................... 1,279.1 182.9 1,955.8(b)
</TABLE>

See notes to unaudited pro forma combined financial statements.

79
<PAGE>

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME OF CHASE AND J.P. MORGAN

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
PRO
FORMA PRO
CHASE J.P. MORGAN ADJUSTMENTS FORMA
HISTORICAL HISTORICAL (a,c,k,m,n) COMBINED
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans....................................................... $ 9,662 $1,249 $ -- $ 10,911
Securities.................................................. 2,344 1,266 -- 3,610
Trading Assets.............................................. 1,228 2,763 -- 3,991
Federal Funds Sold and Securities Purchased Under Resale
Agreements................................................ 1,122 1,188 (31)(e) 2,279
Securities Borrowed......................................... -- 1,374 31(e) 1,405
Deposits With Banks......................................... 540 221 -- 761
Other Sources............................................... -- 192 -- 192
-------- ------ ----- --------
Total Interest Income............................... 14,896 8,253 -- 23,149
-------- ------ ----- --------
INTEREST EXPENSE
Deposits.................................................... 4,806 1,723 -- 6,529
Short-Term and Other Liabilities............................ 2,635 4,196 -- 6,831
Long-Term Debt.............................................. 936 1,131 -- 2,067
-------- ------ ----- --------
Total Interest Expense.............................. 8,377 7,050 -- 15,427
-------- ------ ----- --------
NET INTEREST INCOME......................................... 6,519 1,203 -- 7,722
Provision (Reversal of Provision) for Loan Losses........... 1,167 (150) -- 1,017
-------- ------ ----- --------
NET INTEREST INCOME AFTER PROVISION (REVERSAL OF PROVISION)
FOR LOAN LOSSES........................................... 5,352 1,353 -- 6,705
-------- ------ ----- --------
NONINTEREST REVENUE
Trading Revenue............................................. 1,606 2,361 -- 3,967
Investment Banking Fees..................................... 1,388 1,245 -- 2,633
Trust, Custody and Investment Management Fees............... 1,332 776 24(g) 2,132
Credit Card Revenue......................................... 1,258 -- -- 1,258
Other Fees and Commissions.................................. 1,777 611 (24)(g) 2,364
Private Equity Gains........................................ 1,215 -- 318(d) 1,533
Securities Gains (Losses)................................... 160 201 (318)(d) 43
Other Revenue............................................... 696 120 24(f) 840
-------- ------ ----- --------
Total Noninterest Revenue........................... 9,432 5,314 24 14,770
-------- ------ ----- --------
NONINTEREST EXPENSE
Salaries.................................................... 4,217 2,575 -- 6,792
Employee Benefits........................................... 731 380 -- 1,111
Occupancy................................................... 642 244 -- 886
Technology and Communications............................... 737 707 284(i) 1,600
(128)(l)
Professional Services....................................... 510 83 128(l) 721
Amortization of Intangibles................................. 219 -- 24(f) 243
Restructuring Costs......................................... -- -- -- --
Other Expense............................................... 1,938 336 (284)(i) 1,990
-------- ------ ----- --------
Total Noninterest Expense........................... 8,994 4,325 24 13,343
-------- ------ ----- --------
INCOME BEFORE INCOME TAX EXPENSE............................ 5,790 2,342 -- 8,132
Income Tax Expense.......................................... 2,037 796 -- 2,833
-------- ------ ----- --------
NET INCOME.................................................. $ 3,753 $1,546 $ -- $ 5,299
-------- ------ ----- --------
NET INCOME APPLICABLE TO COMMON STOCK....................... $ 3,698 $1,520 $ -- $ 5,218
-------- ------ ----- --------
NET INCOME PER COMMON SHARE:
Basic..................................................... $ 2.96 $ 8.33 $ 2.71
Diluted................................................... $ 2.86 $ 7.76 $ 2.59
Average Common Shares Outstanding:
Basic..................................................... 1,248.9 182.4 1,923.8(b)
Diluted................................................... 1,291.4 195.9 2,016.2(b)
</TABLE>

See notes to unaudited pro forma combined financial statements.

80
<PAGE>

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME OF CHASE AND J.P. MORGAN

FOR YEAR ENDED DECEMBER 31, 1999
(IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
PRO
FORMA PRO
CHASE J.P. MORGAN ADJUSTMENTS FORMA
HISTORICAL HISTORICAL (a,c,k,m,n) COMBINED
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans....................................................... $13,113 $ 1,670 $ -- $14,783
Securities.................................................. 3,216 1,588 -- 4,804
Trading Assets.............................................. 1,705 3,727 -- 5,432
Federal Funds Sold and Securities Purchased Under Resale
Agreements................................................ 1,451 1,609 (44)(e) 3,016
Securities Borrowed......................................... -- 1,833 44(e) 1,877
Deposits With Banks......................................... 752 254 -- 1,006
Other Sources............................................... -- 289 -- 289
------- ------- ------ -------
Total Interest Income............................... 20,237 10,970 -- 31,207
------- ------- ------ -------
INTEREST EXPENSE
Deposits.................................................... 6,592 2,253 -- 8,845
Short-Term and Other Liabilities............................ 3,653 5,670 -- 9,323
Long-Term Debt.............................................. 1,248 1,506 -- 2,754
------- ------- ------ -------
Total Interest Expense.............................. 11,493 9,429 -- 20,922
------- ------- ------ -------
NET INTEREST INCOME......................................... 8,744 1,541 -- 10,285
Provision (Reversal of Provision) for Loan Losses........... 1,621 (175) -- 1,446
------- ------- ------ -------
NET INTEREST INCOME AFTER PROVISION (REVERSAL OF PROVISION)
FOR LOAN LOSSES........................................... 7,123 1,716 -- 8,839
------- ------- ------ -------
NONINTEREST REVENUE
Trading Revenue............................................. 2,137 3,115 -- 5,252
Investment Banking Fees..................................... 1,887 1,630 -- 3,517
Trust, Custody and Investment Management Fees............... 1,801 1,035 32(g) 2,868
Credit Card Revenue......................................... 1,698 -- -- 1,698
Other Fees and Commissions.................................. 2,496 846 (32)(g) 3,310
Private Equity Gains........................................ 2,522 -- 625(d) 3,147
Securities Gains (Losses)................................... 101 332 (625)(d) (192)
Other Revenue............................................... 831 182 32(f) 1,045
------- ------- ------ -------
Total Noninterest Revenue........................... 13,473 7,140 32 20,645
------- ------- ------ -------
NONINTEREST EXPENSE
Salaries.................................................... 5,678 3,371 -- 9,049
Employee Benefits........................................... 964 521 -- 1,485
Occupancy................................................... 866 299 25(h) 1,190
Technology and Communications............................... 1,015 947 383(i) 2,179
(166)(l)
Professional Services....................................... 719 127 166(l) 1,012
Amortization of Intangibles................................. 297 -- 32(f) 329
Restructuring Costs......................................... 48 -- (25)(h) 23
Other Expense............................................... 2,634 477 (383)(i) 2,728
------- ------- ------ -------
Total Noninterest Expense........................... 12,221 5,742 32 17,995
------- ------- ------ -------
INCOME BEFORE INCOME TAX EXPENSE............................ 8,375 3,114 -- 11,489
Income Tax Expense.......................................... 2,929 1,059 -- 3,988
------- ------- ------ -------
NET INCOME.................................................. $ 5,446 $ 2,055 $ -- $ 7,501
------- ------- ------ -------
NET INCOME APPLICABLE TO COMMON STOCK....................... $ 5,375 $ 2,020 $ -- $ 7,395
------- ------- ------ -------
NET INCOME PER COMMON SHARE:
Basic..................................................... $ 4.32 $ 11.16 $ 3.87
Diluted................................................... $ 4.18 $ 10.39 $ 3.69
Average Common Shares Outstanding:
Basic..................................................... 1,243.2 181.0 1,912.9(b)
Diluted................................................... 1,285.5 194.4 2,004.8(b)
</TABLE>

See notes to unaudited pro forma combined financial statements.

81
<PAGE>

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME OF CHASE AND J.P. MORGAN

FOR YEAR ENDED DECEMBER 31, 1998
(IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
PRO
FORMA PRO
CHASE J.P. MORGAN ADJUSTMENTS FORMA
HISTORICAL HISTORICAL (a,c,k,m,n) COMBINED
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans...................................................... $13,389 $ 2,109 $ -- $ 15,498
Securities................................................. 3,616 1,456 -- 5,072
Trading Assets............................................. 2,431 4,344 -- 6,775
Federal Funds Sold and Securities Purchased Under Resale
Agreements............................................... 2,211 2,031 (41)(e) 4,201
Securities Borrowed........................................ -- 2,088 41(e) 2,129
Deposits With Banks........................................ 642 294 -- 936
Other Sources.............................................. -- 319 -- 319
------- ------- ----- --------
Total Interest Income.............................. 22,289 12,641 -- 34,930
------- ------- ----- --------
INTEREST EXPENSE
Deposits................................................... 6,840 2,823 -- 9,663
Short-Term and Other Liabilities........................... 5,612 7,000 -- 12,612
Long-Term Debt............................................. 1,271 1,537 -- 2,808
------- ------- ----- --------
Total Interest Expense............................. 13,723 11,360 -- 25,083
------- ------- ----- --------
NET INTEREST INCOME........................................ 8,566 1,281 -- 9,847
Provision for Loan Losses.................................. 1,343 110 -- 1,453
------- ------- ----- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES........ 7,223 1,171 -- 8,394
------- ------- ----- --------
NONINTEREST REVENUE
Trading Revenue............................................ 1,238 2,362 -- 3,600
Investment Banking Fees.................................... 1,502 1,401 -- 2,903
Trust, Custody and Investment Management Fees.............. 1,543 881 49(g) 2,473
Credit Card Revenue........................................ 1,474 -- -- 1,474
Other Fees and Commissions................................. 2,093 748 (49)(g) 2,792
Private Equity Gains....................................... 967 -- 345(d) 1,312
Securities Gains........................................... 609 205 (345)(d) 469
Other Revenue.............................................. 664 187 32(f) 883
------- ------- ----- --------
Total Noninterest Revenue.......................... 10,090 5,784 32 15,906
------- ------- ----- --------
NONINTEREST EXPENSE
Salaries................................................... 5,025 2,377 -- 7,402
Employee Benefits.......................................... 854 856 (241)(h) 1,469
Occupancy.................................................. 798 437 (112)(h) 1,123
Technology and Communications.............................. 890 1,192 349(i) 2,172
(5)(h)
(254)(l)
Professional Services...................................... 668 123 254(l) 1,045
Amortization of Intangibles................................ 261 -- 32(f) 293
Restructuring Costs........................................ 529 -- 358(h) 887
Other Expense.............................................. 2,358 553 (349)(i) 2,562
------- ------- ----- --------
Total Noninterest Expense.......................... 11,383 5,538 32 16,953
------- ------- ----- --------
INCOME BEFORE INCOME TAX EXPENSE........................... 5,930 1,417 -- 7,347
Income Tax Expense......................................... 2,148 454 -- 2,602
------- ------- ----- --------
NET INCOME................................................. $ 3,782 $ 963 $ -- $ 4,745
------- ------- ----- --------
NET INCOME APPLICABLE TO COMMON STOCK...................... $ 3,684 $ 928 $ -- $ 4,612
------- ------- ----- --------
NET INCOME PER COMMON SHARE:
Basic.................................................. $ 2.90 $ 5.08 $ 2.37
Diluted................................................ $ 2.83 $ 4.71 $ 2.27
Average Common Shares Outstanding:
Basic.................................................. 1,269.2 182.4 1,944.1(b)
Diluted................................................ 1,303.9 197.2 2,033.5(b)
</TABLE>

See notes to unaudited pro forma combined financial statements.

82
<PAGE>

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME OF CHASE AND J.P. MORGAN

FOR YEAR ENDED DECEMBER 31, 1997
(IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
PRO
FORMA PRO
CHASE J.P. MORGAN ADJUSTMENTS FORMA
HISTORICAL HISTORICAL (a,c,k,m,n) COMBINED
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans....................................................... $12,921 $ 2,029 $ -- $ 14,950
Securities.................................................. 3,028 1,557 -- 4,585
Trading Assets.............................................. 2,770 4,275 -- 7,045
Federal Funds Sold and Securities Purchased Under Resale
Agreements................................................ 2,607 2,059 (30)(e) 4,636
Securities Borrowed......................................... -- 1,784 30(e) 1,814
Deposits With Banks......................................... 525 199 -- 724
Other Sources............................................... -- 450 -- 450
------- ------- ----- --------
Total Interest Income............................... 21,851 12,353 -- 34,204
------- ------- ----- --------
INTEREST EXPENSE
Deposits.................................................... 6,561 2,753 -- 9,314
Short-Term and Other Liabilities............................ 5,903 6,631 -- 12,534
Long-Term Debt.............................................. 1,134 1,097 -- 2,231
------- ------- ----- --------
Total Interest Expense.............................. 13,598 10,481 -- 24,079
------- ------- ----- --------
NET INTEREST INCOME......................................... 8,253 1,872 -- 10,125
Provision for Loan Losses................................... 804 -- -- 804
------- ------- ----- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES......... 7,449 1,872 -- 9,321
------- ------- ----- --------
NONINTEREST REVENUE
Trading Revenue............................................. 1,323 2,137 -- 3,460
Investment Banking Fees..................................... 1,136 1,123 -- 2,259
Trust, Custody and Investment Management Fees............... 1,307 792 65(g) 2,164
Credit Card Revenue......................................... 1,088 -- -- 1,088
Other Fees and Commissions.................................. 1,983 647 (65)(g) 2,565
Private Equity Gains........................................ 831 -- 407(d) 1,238
Securities Gains............................................ 312 409 (407)(d) 314
Other Revenue............................................... 575 240 -- 815
------- ------- ----- --------
Total Noninterest Revenue........................... 8,555 5,348 -- 13,903
------- ------- ----- --------
NONINTEREST EXPENSE
Salaries.................................................... 4,598 2,430 -- 7,028
Employee Benefits........................................... 839 597 -- 1,436
Occupancy................................................... 767 333 -- 1,100
Technology and Communications............................... 792 1,025 307(i) 1,984
(140)(l)
Professional Services....................................... 575 135 140(l) 850
Amortization of Intangibles................................. 172 -- -- 172
Restructuring Costs......................................... 192 -- -- 192
Other Expense............................................... 2,159 546 (307)(i) 2,398
------- ------- ----- --------
Total Noninterest Expense........................... 10,094 5,066 -- 15,160
------- ------- ----- --------
INCOME BEFORE INCOME TAX EXPENSE............................ 5,910 2,154 -- 8,064
Income Tax Expense.......................................... 2,202 689 -- 2,891
------- ------- ----- --------
NET INCOME.................................................. $ 3,708 $ 1,465 $ -- $ 5,173
------- ------- ----- --------
NET INCOME APPLICABLE TO COMMON STOCK....................... $ 3,526 $ 1,429 $ -- $ 4,955
------- ------- ----- --------
NET INCOME PER COMMON SHARE:
Basic..................................................... $ 2.77 $ 7.71 $ 2.53
Diluted................................................... $ 2.68 $ 7.17 $ 2.41
Average Common Shares Outstanding:
Basic..................................................... 1,273.8 185.2 1,959.0(b)
Diluted................................................... 1,317.6 199.3 2,055.0(b)
</TABLE>

See notes to unaudited pro forma combined financial statements.

83
<PAGE>

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS OF CHASE AND J.P.
MORGAN

(a) Chase and J.P. Morgan are in the process of reviewing their accounting
policies and, as a result of this review, it may be necessary to reclassify
either Chase's or J.P. Morgan's financial statements to conform to those
accounting policies that are determined by J.P. Morgan Chase & Co. to be
most appropriate. While some reclassifications of prior periods have been
included in the pro forma combined financial statements included in this
joint proxy statement-prospectus, further reclassifications may be necessary
upon the completion of this review process.

(b) It is intended that the merger will be accounted for on a pooling of
interests accounting basis and, accordingly, the related pro forma
adjustments to the various stockholders' equity accounts at September 30,
2000 reflect (i) an exchange of 592 million shares of Chase common stock
(using the exchange ratio of 3.7) for the 160 million outstanding shares of
J.P. Morgan common stock at September 30, 2000; (ii) the exchange of each
outstanding share of J.P. Morgan preferred stock into one share of Chase
preferred stock; and (iii) the assumed cancellation and retirement of all
remaining shares of J.P. Morgan common stock and preferred stock held in
J.P. Morgan's treasury. Prior to consummation of the merger, J.P. Morgan may
issue up to 5 million shares of its common stock (which would be converted
in the merger into 18.5 million shares of J.P. Morgan Chase & Co. common
stock at the exchange ratio of 3.7) in a registered public offering. The
issuance of common stock would not have a material impact on the pro forma
combined balance sheet, the pro forma combined earnings per share data, or
on the pro forma capital ratios or performance ratios and would have no
impact on the pro forma statement of income and, as such, has not been
reflected in these pro forma combined financial statements.

For the income per share calculations, the pro forma combined average common
shares outstanding (basic and diluted) reflects the exchange of Chase common
stock (using the exchange ratio of 3.7) for the outstanding shares of J.P.
Morgan common stock.

(c) Our managements have estimated that the merger will result in synergies of
approximately $1.9 billion (pre-tax), consisting of estimated cost savings
of approximately $1.5 billion (pre-tax) and estimated incremental revenues,
net of incremental expenses, of approximately $400 million (pre-tax). The
synergies were estimated to be achieved by the end of the second year
following the merger, with one-third estimated to be realized in the first
year. Based on merger integration efforts to date, our managements
currently believe those initial estimates were conservative but have not
arrived at or announced revised estimates. These synergies have not been
included in the pro forma combined amounts.

It is anticipated that the merger will result in costs of approximately
$2.8 billion, pre-tax ($1.8 billion after-tax). Under current accounting
rules, a significant portion of these costs will not be accruable at the
time of the merger. The detailed plans for the restructuring initiatives
have not been finalized and, as such, the amount of restructuring costs
accruable at the merger date has not been determined. For purposes of these
pro forma combined financial statements, the after-tax effect of the
anticipated restructuring costs have been reflected in the pro forma
combined balance sheet; however, since the anticipated restructuring costs
are nonrecurring, they have not been reflected in the pro forma combined
statement of income. Both the pre-tax and tax effect are included in the
captions accounts payable, accrued expenses and other liabilities and
retained earnings on the pro forma balance sheet.

The anticipated restructuring costs are expected to reflect severance
expenses incurred in connection with anticipated staff reductions, costs
incurred in connection with planned office

84
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED CHASE AND J.P. MORGAN FINANCIAL
STATEMENTS -- (CONTINUED)

eliminations and other merger-related expenses, including costs to
eliminate redundant back office and other operations of Chase and J.P.
Morgan.

(d) J.P. Morgan's historical financial data reflect the gains/losses from
private equity investments in investment securities revenue. To conform with
Chase's classification, J.P. Morgan's historical financial data have been
reclassified on a pro forma basis to reflect these gains/losses as a
component of private equity gains on the income statement.

(e) Chase's historical financial data reflect securities borrowed as a component
of federal funds sold and securities purchased under resale agreements. To
conform with J.P. Morgan's classification, Chase's historical financial data
have been reclassified on a pro forma basis to reflect securities borrowed
and the related interest income as separate line items on both the balance
sheet and income statement.

(f) J.P. Morgan's historical financial data include goodwill amortization
expense that is recorded in other revenue. To conform with Chase's
classification, J.P. Morgan's historical financial data have been
reclassified on a pro forma basis to reflect the goodwill amortization
expense as a component of amortization of intangibles on the income
statement.

(g) J.P. Morgan's historical financial data include custody and securities
handling fees as a component of other fees and commissions. To conform with
Chase's classification, J.P. Morgan's historical financial data have been
reclassified on a pro forma basis to reflect custody and securities handling
fees as a component of trust, custody and investment management fees on the
income statement.

(h) J.P. Morgan's historical financial data reflect restructuring-related
charges (and reversal of charges) within employee benefits, occupancy, and
technology and communications expenses. To conform with Chase's
classification, J.P. Morgan's historical financial data have been
reclassified on a pro forma basis to reflect the charges (or their reversal)
as a component of restructuring costs on the income statement.

(i) Chase's historical financial data reflect telecommunications expense as a
component of other expense. To conform with J.P. Morgan's classification,
Chase's historical financial data have been reclassified on a pro forma
basis to reflect telecommunications expense as a component of technology
and communications expense on the income statement.

(j) Chase's historical financial data reflect accounts receivable as a
component of other assets on the balance sheet. To conform with J.P.
Morgan's classification, Chase's historical financial data have been
reclassified on a pro forma basis to reflect accounts receivable as a
component of accrued interest and accounts receivable on the balance sheet.

(k) Transactions between Chase and J.P. Morgan are not material in relation to
the pro forma combined financial statements and therefore intercompany
balances have not been eliminated from the pro forma combined amounts.

(l) J.P. Morgan's historical financial data include technology consultant
expense as a component of technology and communications expense. To conform
with Chase's classification, J.P. Morgan's historical financial data have
been reclassified on a pro forma basis to reflect technology consultant
expense as a component of professional services expense on the income
statement.

85
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED CHASE AND J.P. MORGAN FINANCIAL
STATEMENTS -- (CONTINUED)

(m) On July 6, 2000, Chase acquired The Beacon Group, LLC and on August 1, 2000,
Chase acquired Robert Fleming Holdings Limited. Both transactions were
accounted for under the purchase method. Although when compared with Chase's
historical financial statements, these acquisitions are not considered
individually or collectively to be a "significant subsidiary," these
acquisitions involved the issuance from treasury of 68.9 million shares of
Chase common stock. The net assets acquired from these acquisitions
approximated $24 billion, while the liabilities approximated $21 billion.
The fair value of the assets and liabilities of Beacon and Flemings are
subject to adjustment for a period up to twelve months subsequent to their
respective acquisition dates. The goodwill related to these acquisitions of
approximately $5 billion is expected to be amortized over 15 years.

(n) Chase's proposed disposition of its Hong Kong consumer banking operations in
the fourth quarter of 2000 is not considered significant to the pro forma
combined financial statements and, therefore, its impact is not included in
these statements.

86
<PAGE>

DESCRIPTION OF CHASE CAPITAL STOCK

The following summary is a description of the material terms of Chase's
capital stock and is not complete. You should also refer to Chase's certificate
of incorporation, including the certificates of designations pursuant to which
the outstanding series of Chase's preferred stock were issued. Chase's
certificate of incorporation is filed as an exhibit to the registration
statement of which this joint proxy statement-prospectus is part. You should
also refer to the applicable provisions of the Delaware General Corporation Law.

THE FOLLOWING DESCRIPTION OF CHASE'S OUTSTANDING CAPITAL STOCK SHOULD BE
READ CAREFULLY BY J.P. MORGAN STOCKHOLDERS SINCE, AT THE EFFECTIVE TIME OF THE
MERGER, EACH OUTSTANDING SHARE OF J.P. MORGAN COMMON STOCK WILL BE CONVERTED
INTO 3.7 SHARES OF J.P. MORGAN CHASE & CO. COMMON STOCK AND EACH OUTSTANDING
SHARE OF J.P. MORGAN PREFERRED STOCK WILL BE CONVERTED INTO A SHARE OF PREFERRED
STOCK OF J.P. MORGAN CHASE & CO. HAVING SUBSTANTIALLY THE SAME TERMS AS THE
CONVERTED J.P. MORGAN PREFERRED STOCK.

COMMON STOCK

As of the date of this joint proxy statement-prospectus, Chase is
authorized to issue up to 4,500,000,000 shares of common stock. At the November
15, 2000 record date, Chase had 1,322,758,290 shares of common stock issued
(including 12,185,275 shares held in treasury) and had reserved approximately
220,126,054 shares of common stock for issuance under various employee or
director incentive, compensation and option plans.

Holders of Chase common stock are entitled to receive dividends when, as
and if declared by Chase's board of directors out of funds legally available for
payment, subject to the rights of holders of the Chase preferred stock.

Each holder of Chase common stock is entitled to one vote per share.
Subject to the rights, if any, of the holders of any series of preferred stock
under the applicable certificates of designations and applicable law, all voting
rights are vested in the holders of shares of Chase common stock. Holders of
shares of Chase common stock have noncumulative voting rights, which means that
the holders of more than 50% of the shares voting for the election of directors
can elect 100% of the directors and the holders of the remaining shares will not
be able to elect any directors.

In the event of a voluntary or involuntary liquidation, dissolution or
winding up of Chase, the holders of Chase common stock will be entitled to share
equally in any of the assets available for distribution after Chase has paid in
full all of its debts and after the holders of all series of Chase's outstanding
preferred stock have received their liquidation preferences in full.

The issued and outstanding shares of Chase common stock are fully paid and
nonassessable. Holders of shares of Chase common stock are not entitled to
preemptive rights. Shares of Chase common stock are not convertible into shares
of any other class of capital stock. ChaseMellon Shareholder Services, L.L.C. is
the transfer agent, registrar and dividend disbursement agent for the Chase
common stock.

EXISTING CHASE PREFERRED STOCK

Under Chase's certificate of incorporation, Chase's board of directors is
authorized, without further stockholder action, to issue up to 200,000,000
shares of preferred stock, in one or more series, and to determine the voting
powers and the designations, preferences and relative, participating, optional
or other special rights, and qualifications, limitations or restrictions, of
each series.

Under regulations adopted by the Federal Reserve Board, if the holders of
any series of Chase preferred stock become entitled to vote for the election of
directors because dividends on

87
<PAGE>

that series are in arrears, that series may then be deemed a "class of voting
securities." In such a case, a holder of 25% or more of the series, or a holder
of 5% or more of the series if that holder would also be considered to exercise
a "controlling influence" over Chase, may then be subject to regulation as a
bank holding company in accordance with the Bank Holding Company Act. In
addition, (1) any other bank holding company may be required to obtain the prior
approval of the Federal Reserve Board to acquire or retain 5% or more of that
series, and (2) any person other than a bank holding company may be required to
obtain the approval of the Federal Reserve Board to acquire or retain 10% or
more of that series.

As of the date of this joint proxy statement-prospectus, Chase has four
series of preferred stock issued and outstanding, as described in the following
table:

<TABLE>
<CAPTION>
AMOUNT
OUTSTANDING
STATED VALUE ON
AND RECORD RATE IN
REDEMPTION SHARES DATE EARLIEST EFFECT AT
PRICE PER (IN (IN REDEMPTION SEPTEMBER 30,
SHARE(a) MILLIONS) MILLIONS) DATE 2000(b)
------------ --------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Adjustable Rate
Series L
Cumulative......... $100.00 2.0 $200 6/30/99 5.0400%(b)
Adjustable Rate
Series N
Cumulative......... 25.00 9.1 228 6/30/99 5.1000(b)
10.84% Cumulative.... 25.00 8.0 200 6/30/01 10.84
Fixed/Adjustable
Noncumulative...... 50.00 4.0 200 6/30/03(c) 4.96(c)
</TABLE>

---------------
(a) Redemption price is price indicated in table, plus accrued but unpaid
dividends, if any.

(b) Floating rates are based on certain U.S. Treasury rates. The minimum and
maximum rates are 4.50% and 10.50%, respectively, for each of the Series L
preferred stock and the Series N preferred stock.

(c) Dividends on this series of Chase preferred stock for dividend periods
commencing on or after July 1, 2003 will be at a floating rate based on
certain U.S. Treasury rates, but subject to a minimum rate of 5.46% and a
maximum rate of 11.46%. The amount of dividends payable may be adjusted, and
the stock may be redeemed earlier than June 30, 2003, in the event of
certain amendments to the Internal Revenue Code relating to the
dividends-received deduction.

RANKING. All the outstanding series of Chase preferred stock have the same
rank. All the outstanding series of Chase preferred stock have preference over
the Chase common stock with respect to the payment of dividends and the
distribution of assets in the event of a liquidation or dissolution of Chase.

DIVIDENDS. Dividends payable on each series of outstanding Chase preferred
stock are payable quarterly, when and as declared by the Chase board of
directors, on each March 31, June 30, September 30 and December 31. Dividends on
all the outstanding series of Chase preferred stock, other than the
fixed/adjustable rate noncumulative preferred stock, are cumulative. If Chase
fails to declare a dividend on the fixed/adjustable rate noncumulative preferred
stock for any dividend period, holders of that series have no right to receive a
dividend for that dividend period, whether or not Chase declares dividends on
that series for any future dividend periods.

Chase may not declare or pay any dividends on any series of Chase preferred
stock unless, for the dividend period commencing after the immediately preceding
dividend payment date, Chase has previously declared and paid or
contemporaneously declares and pays full dividends, and cumulative dividends
still owing, if any, on all other series of Chase preferred stock that have the
same rank as, or rank senior to, that series of preferred stock. If Chase does
not pay in full the dividends on those equally-and senior-ranking series, it may
only declare dividends pro rata, so that the amount of dividends declared per
share on that series of preferred stock and on each other equally-ranking series
of Chase preferred stock will bear to each other the same ratio that accrued
dividends per share on that series of preferred stock and those other series
bear to each other. In addition, generally, unless Chase has paid full
dividends, including cumulative dividends still owing, if any, on all
outstanding shares of any series of cumulative preferred stock,

88
<PAGE>

Chase may not declare or pay dividends on its common stock and generally may not
redeem or purchase any Chase common stock. Chase will not pay interest or any
sum of money instead of interest on any dividend payment or payments that may be
in arrears.

RIGHTS UPON LIQUIDATION; REDEMPTION. In the event of the liquidation,
dissolution or winding-up of Chase, holders of Chase preferred stock are
entitled to receive liquidating distributions in the amount set forth opposite
the applicable series in the table above, plus accrued and unpaid dividends, if
any, before Chase makes any distribution of assets to the holders of Chase
common stock. Each of the outstanding series of Chase preferred stock is
redeemable at Chase's option at a redemption price per share equal to the
redemption price set forth opposite that series in the table above, plus accrued
but unpaid dividends, if any. In addition, Chase may redeem the shares of the
fixed/adjustable rate noncumulative preferred stock earlier than June 30, 2003
in the event of certain amendments to the Internal Revenue Code relating to the
dividends-received deduction.

VOTING RIGHTS. If, at the time of any annual meeting of Chase's
stockholders, the equivalent of six quarterly dividends payable on any series of
Chase's outstanding cumulative preferred stock is in default, the number of
directors constituting Chase's board of directors will be increased by two and
the holders of all the outstanding Chase preferred stock, voting together as a
single class, will be entitled to elect those additional two directors at that
annual meeting. Each director elected by the holders of shares of the
outstanding Chase preferred stock will continue to serve as director for the
full term for which he or she was elected, even if prior to the end of that term
Chase has paid in full the amount of dividends that had been in arrears. For
purposes of this paragraph, "default" means that accrued and unpaid dividends on
the applicable series are equal to or greater than the equivalent of six
quarterly dividends.

All series of the outstanding Chase preferred stock, other than Chase's
Series L preferred stock, provide that the affirmative vote of the holders of at
least two-thirds of the shares of all outstanding series of Chase preferred
stock, voting together as a single class without regard to series, will be
required to:

- create any class or series of stock having a preference over any
outstanding series of Chase preferred stock; or

- change the provisions of Chase's certificate of incorporation in a manner
that would adversely affect the voting powers or other rights of the
holders of a series of Chase preferred stock.

Those series of Chase preferred stock also state that if the amendment does
not adversely affect all series of outstanding preferred stock, then the
amendment will only need to be approved by holders of at least two-thirds of the
shares of the series of Chase preferred stock adversely affected.

Chase's Series L preferred stock provides as follows:

- the consent of holders of at least two-thirds of the outstanding shares
of the particular series, voting as a separate class, is required for any
amendment of Chase's certificate of incorporation that would adversely
affect the powers, preferences, privileges or rights of that series; and

- the consent of the holders of at least two-thirds of the voting power of
that series and each series of Chase preferred stock having the same
rank, voting together as a single class without regard to series, is
required to create, authorize or issue, or reclassify any stock into any
additional class or series of, stock ranking prior to that series as to
dividends or upon liquidation, or any other security or obligation
convertible into or exercisable for any such prior-ranking stock.

89
<PAGE>

MISCELLANEOUS. No series of outstanding Chase preferred stock is
convertible into shares of Chase common stock or other securities of Chase. No
series of outstanding Chase preferred stock is subject to preemptive rights.

TRANSFER AGENT AND REGISTRAR. ChaseMellon Shareholder Services, L.L.C. is
the transfer agent, registrar and dividend disbursement agent for the Chase
preferred stock. The registrar for the Chase preferred stock will send notices
to the holders of the Chase preferred stock of any meetings at which such
holders will have the right to elect directors or to vote on any other matter.

PREFERRED STOCK TO BE ISSUED IN THE MERGER

Chase's board of directors has authorized the creation of the following
series of preferred stock in accordance with the terms of the merger agreement:

- 2,444,300 shares of adjustable rate cumulative preferred stock, Series A
(the "Series A preferred stock"), issuable upon conversion of J.P.
Morgan's adjustable rate preferred stock, Series A;

- 50,000 shares of variable cumulative preferred stock, Series B (the
"Series B preferred stock"), issuable upon conversion of J.P. Morgan's
variable cumulative preferred stock, Series B;

- 50,000 shares of variable cumulative preferred stock, Series C (the
"Series C preferred stock"), issuable upon conversion of J.P. Morgan's
variable cumulative preferred stock, Series C;

- 50,000 shares of variable cumulative preferred stock, Series D (the
"Series D preferred stock"), issuable upon conversion of J.P. Morgan's
variable cumulative preferred stock, Series D;

- 50,000 shares of variable cumulative preferred stock, Series E (the
"Series E preferred stock"), issuable upon conversion of J.P. Morgan's
variable cumulative preferred stock, Series E;

- 50,000 shares of variable cumulative preferred stock, Series F (the
"Series F preferred stock"), issuable upon conversion of J.P. Morgan's
variable cumulative preferred stock, Series F; and

- 400,000 shares of 6 5/8% cumulative preferred stock, Series H (the
"Series H preferred stock"), issuable upon conversion of J.P. Morgan's
6 5/8% cumulative preferred stock, Series H.

Each share of preferred stock to be issued by J.P. Morgan Chase & Co. in
the merger will be, when issued, fully paid and nonassessable.

RANKING. Each series of preferred stock issued in the merger will have the
same rank as each series of preferred stock outstanding on the date of this
joint proxy statement-prospectus with respect to the payment of dividends and
the distribution of assets in the event of a liquidation or dissolution of J.P.
Morgan Chase & Co. The Series H preferred stock will be represented by
depositary receipts for depositary shares, each representing a one-tenth
interest in a share of Series H preferred stock. See "-- Depositary Shares"
below.

DIVIDENDS. Holders of each series of preferred stock to be issued in the
merger will be entitled to receive cash dividends when, as and if declared by
the board of directors of J.P. Morgan Chase & Co. Each series of preferred stock
to be issued in the merger will be cumulative and dividends on those series will
accrue, whether or not there are funds legally available for the payment of
dividends and whether or not declared. Holders of each series of preferred stock
issued in the merger will be entitled to receive full accumulated cash dividends

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before any dividends are declared or paid on the common stock or any other stock
of J.P. Morgan Chase & Co. that ranks junior to the preferred stock as to
dividends.

Dividends on the Series A preferred stock will be payable quarterly on each
March 31, June 30, September 30 and December 31. The dividend rate for the
Series A preferred stock will be an annual rate equal to the highest of (1) the
three-month U.S. Treasury bill rate, (2) the U.S. Treasury ten-year constant
maturity rate and (3) the U.S. Treasury twenty-year constant maturity rate,
minus, in each case, 4.875%; however, in no case will the rate be higher than
11.5% or lower than 5.0%.

Dividends on the Series B, C, D, E and F preferred stock will be payable on
dividend payment dates to be set by an agent of J.P. Morgan Chase & Co.
appointed for the purpose of setting that date. A dividend period may be no
longer than 30 years and no shorter than seven days, in the case of shares for
which the auction method is used, or one business day, in the case of shares for
which the remarketing method is used. In the case of shares for which the
auction method is used, the dividend period will be 49 days, unless changed by
the agent or unless there are certain changes to applicable tax laws. The
dividend rate will be determined either by an auction conducted for each series
on the business day before a new dividend period begins or by a remarketing. The
method used to determine the dividend rate will be set by an agent of J.P.
Morgan Chase & Co. appointed for the purpose of determining that method, based
on then-existing financing alternatives. If the auction method is used, the
dividend rate will be based on bids submitted to the trust company that conducts
the auction by existing and potential holders of the preferred stock. If the
remarketing method is used, the dividend rate will be the lowest rate at which
the shares can be remarketed for a specified per share amount. The rate for any
dividend period is subject to a maximum rate based on the "AA" composite
commercial paper rate, the LIBOR rate or the U.S. Treasury rate, depending on
the length of the dividend period and the credit ratings of the Series B, C, D,
E and F preferred stock. If J.P. Morgan Chase & Co. fails to pay or set aside
for payment at the applicable time dividends payable or fails to pay at the
applicable time the redemption price for shares called for redemption, and that
failure continues for more than three business days, then the dividend rate for
each dividend period until that failure is cured will be 200% of the federal
funds rate, the "AA" composite commercial paper rate, the LIBOR rate or the U.S.
Treasury rate, depending on the length of the dividend period.

Dividends on the Series H preferred stock will accrue at an annual rate of
6 5/8% and will be payable quarterly on March 31, June 30, September 30 and
December 31.

RIGHTS UPON LIQUIDATION. In the event of a liquidation of J.P. Morgan
Chase & Co., the holders of each series of preferred stock to be issued in the
merger will be entitled to receive, before any distribution is made to the
holders of J.P. Morgan Chase & Co. common stock or any other series of stock
ranking junior to the applicable series of preferred stock upon liquidation, a
liquidation preference per share equal to the liquidation preference set forth
opposite that series below, plus accrued and unpaid dividends:

<TABLE>
<CAPTION>
LIQUIDATION
SERIES PREFERENCE
------ -----------
<S> <C>
Series A................................................. $ 100
Series B................................................. 1,000
Series C................................................. 1,000
Series D................................................. 1,000
Series E................................................. 1,000
Series F................................................. 1,000
Series H................................................. 500
</TABLE>

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REDEMPTION. The Series A preferred stock will be redeemable at any time at
the option of J.P. Morgan Chase & Co. at a redemption price equal to its
liquidation preference, plus accrued and unpaid dividends.

Each of the Series B, C, D, E and F preferred stock will be eligible for
redemption on the last dividend payment date in any dividend period; during any
dividend period where the dividend rate is the then-applicable maximum interest
rate; and on any other redemption date established in the preceding auction or
remarketing. The redemption price of each series will equal $1,000 per share or
such other redemption price established in the preceding auction or remarketing,
plus accrued and unpaid dividends.

The Series H preferred stock will not be redeemable before March 31, 2006.
On or after March 31, 2006, the Series H preferred stock may be redeemed at any
time at the option of J.P. Morgan Chase & Co. at a redemption price equal to its
liquidation preference, plus accrued and unpaid dividends.

VOTING RIGHTS. Holders of the shares of preferred stock to be issued in
the merger will have no voting rights, except that each series will provide that
a vote of at least two-thirds of the voting power of all outstanding shares of
the applicable series, and all outstanding shares of preferred stock of J.P.
Morgan Chase & Co. having the same rank as that series, including all currently
outstanding series of Chase's preferred stock, voting together as a single class
without regard to series, will be necessary in order to:

- authorize or issue any capital stock that will be senior to that series
of preferred stock; or

- amend, alter or repeal any of the provisions of the certificate of
incorporation of J.P. Morgan Chase & Co., including the certificate of
designation relating to that series, in such a way as to adversely affect
the preferences, rights, powers or privileges of the preferred stock of
that series.

If at the time of any annual meeting of stockholders the equivalent of six
quarterly dividends payable on shares of any series of preferred stock issued in
the merger are in default, then the number of directors constituting the board
of directors of J.P. Morgan Chase & Co. will increase by two. The holders of
shares of preferred stock of that series, voting together as a single class with
any shares of stock having like voting rights, including all currently
outstanding series of Chase's preferred stock, will have the right to elect two
directors to the board of directors of J.P. Morgan Chase & Co. This right to
elect two directors will continue until the default in payment of all dividends
which permitted the election of these directors ceases.

Holders of preferred stock to be issued in the merger upon conversion of
J.P. Morgan's Series A preferred stock will be entitled to one-tenth of one vote
per share with respect to each matter as to which they are entitled to vote, and
holders of preferred stock to be issued upon conversion of J.P. Morgan's Series
B, C, D, E, F and H preferred stock will be entitled to one vote per share with
respect to each matter as to which they are entitled to vote.

MISCELLANEOUS. No series of preferred stock to be issued in the merger
will be convertible into shares of common stock or any other securities of J.P.
Morgan Chase & Co., nor is any series subject to preemptive rights.

TRANSFER AGENT AND REGISTRAR. ChaseMellon Shareholder Services, L.L.C.
will be the transfer agent, registrar and dividend disbursement agent for the
preferred stock to be issued in the merger.

DEPOSITARY SHARES

Upon completion of the merger, J.P. Morgan Chase & Co. will assume the
obligations of J.P. Morgan under the deposit agreement in respect of J.P.
Morgan's Series H preferred stock and will instruct Morgan Guaranty Trust
Company of New York, as depositary, to treat the shares

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of Series H preferred stock issued in the merger as new deposited securities
under the deposit agreement. In accordance with the terms of the deposit
agreement, the existing depositary receipts formerly evidencing depositary
shares, each representing a one-tenth interest in J.P. Morgan's Series H
preferred stock, will automatically evidence depositary shares, each
representing a one-tenth interest in the Series H preferred stock issued in the
merger.

The following is a summary of material provisions of the deposit agreement.
This description is qualified by reference to the deposit agreement, which is an
exhibit to the registration statement of which this joint proxy
statement-prospectus is a part.

DIVIDENDS AND OTHER DISTRIBUTIONS. The depositary will distribute all cash
dividends or other cash distributions received on the Series H preferred stock
to the record holders of depositary shares in proportion to the number of such
depositary shares owned by those holders.

If J.P. Morgan Chase & Co. makes a distribution other than in cash, the
depositary will distribute property received by it to the record holders of
depositary shares that are entitled to receive the distribution, unless the
depositary determines that it is not feasible to make the distribution. If this
occurs, the depositary may, with the approval of J.P. Morgan Chase & Co., sell
the property and distribute the net proceeds from that sale to the holders.

WITHDRAWAL OF STOCK. A holder of depositary shares represented by
depositary receipts may obtain those shares, or the cash or property represented
by those shares, by surrendering his, her or its depositary receipts to the
depositary. Holders of depositary shares will be entitled to receive whole
shares of the related series of preferred stock, but will not be subsequently
entitled to receive depositary shares with respect to those shares of preferred
stock. If the depositary receipts surrendered by the holder represent more
shares of stock than are being withdrawn by the holder, the depositary will
issue a new depositary receipt representing the excess number of shares.

REDEMPTION OF DEPOSITARY SHARES. Upon redemption, in whole or in part, of
the Series H preferred stock by J.P. Morgan Chase & Co. the depositary will
redeem the depositary shares from the proceeds received by it resulting from the
redemption, in whole or in part, of the Series H preferred stock. The redemption
price per depositary share will be equal to one-tenth of the redemption price
per share of the Series H preferred stock. Whenever J.P. Morgan Chase & Co.
redeems shares of Series H preferred stock, the depositary will redeem, as of
the same redemption date, the number of depositary shares representing shares of
Series H preferred stock redeemed.

VOTING THE SERIES H PREFERRED STOCK. Upon receipt of notice of any meeting
at which the holders of Series H preferred stock are entitled to vote, the
depositary will mail the information contained in the notice of meeting to the
record holders of the depositary shares. Each record holder of those depositary
shares on the record date, which will be the same date as the record date for
the Series H preferred stock, will be entitled to instruct the depositary as to
the exercise of the voting rights pertaining to the number of shares of Series H
preferred stock represented by that holder's depositary shares. The depositary
will try, as far as practicable, to vote the number of shares of the Series H
preferred stock underlying those depositary shares in accordance with those
instructions, and J.P. Morgan Chase & Co. will agree to take all action
requested by the depositary in order to enable the depositary to do so. The
depositary will not vote shares of the Series H preferred stock if it does not
receive specific instructions from the holders of depositary shares relating to
those shares.

AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT. The deposit agreement
may be amended at any time by agreement between the depositary and J.P. Morgan
Chase & Co. However, any amendment that materially and adversely alters the
rights of the holders of depositary shares will not be effective unless that
amendment has been approved by the holders

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of at least a majority of the depositary shares then outstanding. The deposit
agreement may be terminated by J.P. Morgan Chase & Co. or the depositary only
if:

- all outstanding depositary shares have been redeemed; or

- there has been a final distribution in respect of the Series H preferred
stock in connection with any liquidation, dissolution or winding up of
J.P. Morgan Chase & Co. and that distribution has been distributed to the
holders of depositary receipts.

CHARGES OF DEPOSITARY. J.P. Morgan Chase & Co. will pay all transfer and
other taxes and governmental charges arising solely from the existence of the
depositary arrangements. J.P. Morgan Chase & Co. will also pay charges of the
depositary in connection with the initial deposit of the Series H preferred
stock and any redemption of the Series H preferred stock. Holders of depositary
receipts will pay transfer and other taxes and governmental charges and any
other charges as are expressly provided in the deposit agreement to be for their
accounts.

RESIGNATION AND REMOVAL OF DEPOSITARY. The depositary may resign at any
time by delivering a notice to J.P. Morgan Chase & Co. of its election to do so.
J.P. Morgan Chase & Co. may remove the depositary at any time. Any resignation
or removal will take effect upon the appointment of a successor depositary and
its acceptance of its appointment. The successor depositary must be appointed
within 60 days after delivery of the notice of resignation or removal and must
be a bank or trust company having its principal office in the United States and
having a combined capital and surplus of at least $50 million.

MISCELLANEOUS. The depositary will forward to holders of depositary
receipts all reports and communications received from J.P. Morgan Chase & Co.
and required to be furnished to the holders of the Series H preferred stock.
Neither the depositary nor J.P. Morgan Chase & Co. will be liable if prevented
or delayed by law or any circumstance beyond its control in performing its
obligations under the deposit agreement. The depositary and J.P. Morgan Chase &
Co. disclaim any obligation or liability under the deposit agreement to holders
of depositary receipts other than for negligence or willful misconduct. They
will not be obligated to prosecute or defend any legal proceeding in respect of
any depositary shares or Series H preferred stock unless satisfactory indemnity
is furnished. J.P. Morgan Chase & Co. and the depositary may rely upon written
advice of counsel or accountants, or upon information provided by persons
presenting Series H preferred stock for deposit, by holders of depositary
receipts or by other persons believed to be competent, and on documents believed
to be genuine. The depositary disclaims responsibility for the failure to carry
out any instructions to vote any of the depositary shares or for the manner or
effect of any vote made, as long as that action or inaction is in good faith.
The depositary will be liable to J.P. Morgan Chase & Co. for any liability
arising out of acts performed or omitted by the depositary due to its gross
negligence or willful misconduct.

ANTI-TAKEOVER CONSIDERATIONS

Delaware law and Chase's certificate of incorporation and by-laws contain a
number of provisions which may have the effect of discouraging transactions that
involve an actual or threatened change of control of Chase or, after completion
of the merger, J.P. Morgan Chase & Co. For a description of these provisions,
see "Comparison of Stockholder Rights."

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COMPARISON OF STOCKHOLDER RIGHTS

Chase and J.P. Morgan are both organized under the laws of the State of
Delaware. Any differences, therefore, in the rights of holders of Chase capital
stock and J.P. Morgan capital stock arise primarily from differences in their
respective certificates of incorporation and by-laws. Upon completion of the
merger, the certificate of incorporation and by-laws of Chase in effect
immediately prior to the effective time of the merger will be the certificate of
incorporation and by-laws of the surviving corporation in the merger, except
that the name of the surviving corporation will be changed to "J.P. Morgan Chase
& Co." Consequently, after the effective time of the merger, the rights of the
stockholders of J.P. Morgan Chase & Co. will be determined by reference to the
Chase certificate of incorporation and by-laws.

CAPITALIZATION

CHASE. The authorized capital stock of Chase consists of:

- 4,500,000,000 shares of Chase common stock, par value $1.00 per share;
and

- 200,000,000 shares of Chase preferred stock, par value $1.00 per share.

J.P. MORGAN. The authorized capital stock of J.P. Morgan consists of:

- 500,000,000 shares of J.P. Morgan common stock, par value $2.50 per
share; and

- 10,000,000 shares of J.P. Morgan preferred stock, without par value.

VOTING RIGHTS

In the case of both Chase and J.P. Morgan, each holder of common stock has
the right to cast one vote for each share of common stock held of record on all
matters submitted to a vote of stockholders, including the election of
directors. Holders of common stock do not have cumulative voting rights.

For a description of the voting rights of the Chase preferred stock,
including the preferred stock to be issued in the merger, see "Description of
Chase Capital Stock -- Existing Chase Preferred Stock" and "Description of Chase
Capital Stock -- Preferred Stock to be Issued in the Merger."

NUMBER AND ELECTION OF DIRECTORS

CHASE. The board of directors of Chase currently has 14 members. The
merger agreement provides that Chase's board of directors will take necessary
action to cause the number of directors of J.P. Morgan Chase & Co. at the
effective time of the merger to be 15. The Chase by-laws provide that the Chase
board of directors will consist of a number of directors to be fixed from time
to time by the Chase board of directors or the stockholders.

Chase's certificate of incorporation and by-laws do not provide for a
staggered board of directors.

J.P. MORGAN. The board of directors of J.P. Morgan currently has 15
members. The J.P. Morgan by-laws provide that the J.P. Morgan board of directors
will consist of a number of directors to be fixed from time to time by a vote of
a majority of the J.P. Morgan board of directors. J.P. Morgan's certificate of
incorporation states that the number of directors will in no case be less than
three.

J.P. Morgan's certificate of incorporation and by-laws do not provide for a
staggered board of directors.

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VACANCIES ON THE BOARD OF DIRECTORS AND REMOVAL OF DIRECTORS

CHASE. Vacancies on the board of directors of Chase, including vacancies
and unfilled newly created directorships resulting from any increase in the
authorized number of directors, may be filled only by a majority vote of the
directors then in office, even if those directors do not constitute a quorum.
The director elected to fill the vacancy will have a term of office expiring at
the next annual meeting.

Delaware law provides that, except in the case of a classified board of
directors or where cumulative voting applies, a director, or the entire board of
directors, of a corporation may be removed, with or without cause, by the
affirmative vote of a majority of the shares of the corporation entitled to vote
at an election of directors. These provisions of Delaware law regarding the
removal of directors govern the removal of directors from Chase's board of
directors.

J.P. MORGAN. J.P. Morgan's certificate of incorporation and by-laws do not
contain a provision regarding the filling of vacancies on the board of
directors. Under Delaware law,

- vacancies on the board of directors of J.P. Morgan and newly created
directorships resulting from any increase in the authorized number of
directors elected by all of the stockholders having the right to vote as
a single class may be filled by a majority vote of the directors then in
office, even if those directors do not constitute a quorum, or by the
stockholders; and

- in the case of directors elected by one or more particular class or
series of stock, vacancies or newly created directorships of that class
or series may be filled by a majority of the directors elected by that
class or series then in office.

The provisions of Delaware law regarding the removal of directors described
above govern the removal of directors from J.P. Morgan's board of directors.

AMENDMENTS TO THE CERTIFICATE OF INCORPORATION

The provisions of Delaware law regarding amendments to the certificate of
incorporation govern the amendment of the certificates of incorporation of both
Chase and J.P. Morgan. Under Delaware law, an amendment to the certificate of
incorporation of a corporation requires the approval of the corporation's board
of directors and the approval of holders of a majority of the outstanding stock
entitled to vote upon the proposed amendment.

AMENDMENTS TO BY-LAWS

The certificates of incorporation of each of Chase and J.P. Morgan
authorize the board of directors to adopt, amend or repeal any provision of the
corporation's by-laws. Under Delaware law, stockholders entitled to vote also
have the power to adopt, amend or repeal by-laws.

ACTION BY WRITTEN CONSENT

CHASE. Chase's certificate of incorporation prohibits action by written
consent of holders of common stock. Chase's certificate of incorporation
provides that holders of shares of a class or series other than common stock may
take action by written consent of holders representing not less than a majority
of the voting power of all of the class or series (or such greater minimum
percentage as is prescribed by statute), provided notice is given to all holders
entitled to vote on the taking of any action without a meeting that is taken by
less than unanimous written consent.

J.P. MORGAN. J.P. Morgan's certificate of incorporation permits action by
written consent of the holders of not less than a majority of all the stock
entitled to vote upon such action, subject to specified conditions.

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ABILITY TO CALL SPECIAL MEETINGS

CHASE. Special meetings of Chase stockholders may be called by Chase's
board of directors, the chairman of the board, a vice chairman of the board, the
chief executive officer or the president or as otherwise provided by Delaware
law.

J.P. MORGAN. Special meetings of J.P. Morgan stockholders may be called by
J.P. Morgan's board of directors, the chairman of the board, the chairman of the
executive committee, a vice chairman of the board or the president. J.P. Morgan
must also call a special meeting whenever requested in writing by holders of a
majority of J.P. Morgan's capital stock.

NOTICE OF STOCKHOLDER ACTION

CHASE. Under Chase's by-laws, in order for a stockholder to nominate
candidates for election to Chase's board of directors at any annual or any
special stockholders' meeting at which the board of directors has determined
that directors will be elected, timely written notice must be given to the
Secretary of Chase before the annual or special meeting. Similarly, in order for
a stockholder to propose business to be brought before any annual stockholders'
meeting, timely written notice must be given to the Secretary of Chase before
the annual meeting.

Under Chase's by-laws, to be timely, notice of stockholder nominations or
proposals to be made at an annual stockholders' meeting must be received by the
Secretary of Chase no less than 90 days nor more than 120 days before the first
anniversary of the preceding year's annual meeting. If the date of the annual
meeting is more than 30 days before or more than 60 days after the anniversary
of the preceding year's annual meeting, notice will also be timely if delivered
within 10 days of the date on which public announcement of the meeting was first
made by Chase. In the case of a special meeting, notice of a stockholder
nomination must be received no less than 60 days nor more than 90 days before a
special meeting at which directors are to be elected or within 10 days of the
date on which public announcement of the special meeting was first made by
Chase.

In addition, if the number of directors to be elected is increased and no
public announcement is made by Chase naming all of the nominees or specifying
the size of the increased board of directors at least 90 days before the first
anniversary of the preceding year's annual meeting, a stockholder's notice will
be considered timely, with respect to the nominees for any new positions created
by the increase, if it is delivered to the Secretary of Chase within 10 days of
the date on which public announcement of the meeting was first made by Chase.

A stockholder's notice to Chase must set forth all of the following:

- all information required to be disclosed in solicitations of proxies for
election of directors, or information otherwise required by applicable
law, relating to any person that the stockholder proposes to nominate for
election or re-election as a director, including that person's written
consent to being named in the proxy statement as a nominee and to serving
as a director if elected;

- a brief description of the business the stockholder proposes to bring
before the meeting, the reasons for conducting that business at that
meeting and any material interest of the stockholder in the business
proposed; and

- the stockholder's name and address as they appear on Chase's books, the
class and number of shares of Chase that are beneficially owned by the
stockholder and whether the stockholder is part of a group that intends
to solicit proxies in support of its proposal or nomination.

J.P. MORGAN. Under J.P. Morgan's by-laws, at any annual meeting of
stockholders, any business that may properly come before the meeting may be
conducted.

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LIMITATION OF PERSONAL LIABILITY OF DIRECTORS AND OFFICERS

Delaware law provides that a corporation may include in its certificate of
incorporation a provision limiting or eliminating the liability of its directors
to the corporation and its stockholders for monetary damages arising from a
breach of fiduciary duty, except for:

- a breach of the duty of loyalty to the corporation or its stockholders;

- acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;

- payment of a dividend or the repurchase or redemption of stock in
violation of Delaware law; or

- any transaction from which the director derived an improper personal
benefit.

The certificates of incorporation of both Chase and J.P. Morgan provide
that, to the fullest extent Delaware law permits the limitation or elimination
of the liability of directors, no director will be liable to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

GENERAL. Under Delaware law, a corporation generally may indemnify
directors and officers:

- for actions taken in good faith and in a manner they reasonably believed
to be in, or not opposed to, the best interests of the corporation; and

- with respect to any criminal proceeding, to the extent they had no
reasonable cause to believe that their conduct was unlawful.

In addition, Delaware law provides that a corporation may advance to a
director or officer expenses incurred in defending any action upon receipt of an
undertaking by the director or officer to repay the amount advanced if it is
ultimately determined that he or she is not entitled to indemnification.

CHASE. Chase's certificate of incorporation permits Chase to indemnify any
director, officer, employee, or agent of Chase or any other person serving in
that capacity at the request of Chase with another corporation, partnership,
joint venture, trust or other enterprise to the fullest extent permitted by
Delaware law. Chase's by-laws require Chase to indemnify any of those persons to
the fullest extent permitted by applicable law against all expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred by those
persons in connection with proceedings in which they were are or have been
threatened to be involved by virtue of their positions with Chase. In addition,
under Chase's by-laws, Chase will pay in advance of the disposition of any those
proceedings, after receipt of an appropriately documented request, any
reasonable expenses incurred by or on behalf of a person who may be entitled to
indemnification subject to the person agreeing to repay any amounts advanced if
it is determined that Chase cannot indemnify the person against those expenses.
The indemnification rights conferred by Chase are not exclusive of any other
right to which persons seeking indemnification may be entitled under any
statute, Chase's certificate of incorporation or by-laws, any agreement, vote of
stockholders or disinterested directors or otherwise.

Chase is authorized to purchase and maintain insurance on behalf of its
directors and officers.

J.P. MORGAN. J.P. Morgan's certificate of incorporation provides for
indemnification, to the fullest extent permitted by Delaware law, of any person
who is or was a director, officer, employee or agent of J.P. Morgan and who is
or was involved in any manner, or who is threatened to be made involved in any
manner, in any pending or completed action, suit or

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proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he or she is or was a director, officer, employee or agent of
J.P. Morgan, or is or was serving at the request of J.P. Morgan as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise. This right to indemnification includes the right to
be paid expenses incurred in connection with any of those proceedings in advance
of its final disposition to the fullest extent authorized by Delaware law.

J.P. Morgan is authorized to purchase and maintain insurance on behalf of
its directors, officers, employees and agents.

STATE ANTI-TAKEOVER STATUTES

Under the Delaware business combination statute, a corporation is
prohibited from engaging in any business combination with an interested
stockholder who, together with its affiliates or associates, owns, or who is an
affiliate or associate of the corporation and within a three-year period did
own, 15% or more of the corporation's voting stock for a three year period
following the time the stockholder became an interested stockholder, unless:

- prior to the time the stockholder became an interested stockholder, the
board of directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming
an interested stockholder;

- the interested stockholder owned at least 85% of the voting stock of the
corporation, excluding specified shares, upon consummation of the
transaction which resulted in the stockholder becoming an interested
stockholder; or

- at or subsequent to the time the stockholder became an interested
stockholder, the business combination is approved by the board of
directors of the corporation and authorized by the affirmative vote, at
an annual or special meeting and not by written consent, of at least
66 2/3% of the outstanding voting shares of the corporation, excluding
shares held by that interested stockholder.

A business combination generally includes:

- mergers, consolidations and sales or other dispositions of 10% or more of
the assets of a corporation to or with an interested stockholder;

- specified transactions resulting in the issuance or transfer to an
interested stockholder of any capital stock of the corporation or its
subsidiaries; and

- other transactions resulting in a disproportionate financial benefit to
an interested stockholder.

The provisions of the Delaware business combination statute do not apply to
a corporation if, subject to certain requirements, the certificate of
incorporation or by-laws of the corporation contain a provision expressly
electing not to be governed by the provisions of the statute or the corporation
does not have voting stock listed on a national securities exchange, authorized
for quotation on an inter-dealer quotation system of a registered national
securities association or held of record by more than 2,000 stockholders.

Neither Chase nor J.P. Morgan has adopted any provision in its certificate
of incorporation or by-laws to "opt out" of the Delaware business combination
statute and the statute is applicable to business combinations involving Chase
or J.P. Morgan.

99
<PAGE>

LEGAL MATTERS

Simpson Thacher & Bartlett, New York, New York, has provided an opinion for
Chase regarding the validity of the shares of Chase offered by this joint proxy
statement-prospectus.

Simpson Thacher & Bartlett and Davis Polk & Wardwell, New York, New York,
counsel for J.P. Morgan, have provided and will provide at the closing of the
merger opinions regarding certain federal income tax consequences of the merger
for Chase and J.P. Morgan, respectively.

EXPERTS

CHASE. The audited financial statements of Chase incorporated in this
joint proxy statement-prospectus by reference to Chase's Annual Report on Form
10-K for the year ended December 31, 1999 have been incorporated in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of that firm as experts in accounting and auditing.

J.P. MORGAN. The audited financial statements of J.P. Morgan incorporated
in this joint proxy statement-prospectus by reference to J.P. Morgan's Annual
Report on Form 10-K for the year ended December 31, 1999 have been incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of that firm as experts in accounting and
auditing.

STOCKHOLDER PROPOSALS

CHASE. Under the rules of the Securities and Exchange Commission,
proposals that stockholders seek to have included in the proxy statement for
Chase's next annual meeting must be received by the Secretary of Chase not later
than December 6, 2000.

Chase's by-laws govern the submission of nominations for director or other
business proposals that a stockholder wishes to have considered at a meeting of
stockholders but that are not included in Chase's proxy statement for that
meeting. Under Chase's by-laws, nominations for director or other business
proposals to be addressed at Chase's next annual meeting may be made by a
stockholder entitled to vote who has delivered a notice to the Secretary of
Chase not later than the close of business on February 15, 2001 and not earlier
than January 16, 2001. The notice must contain the information required by the
by-laws.

These advance notice provisions are in addition to, and separate from, the
requirements that a stockholder must meet in order to have a proposal included
in Chase's proxy statement under the rules of the Securities and Exchange
Commission.

J.P. MORGAN. If the merger agreement is adopted by the stockholders of
Chase and J.P. Morgan and the merger is completed, J.P. Morgan does not expect
to hold a 2001 annual meeting of stockholders.

If the merger agreement is not adopted or the merger is not completed for
any other reason, any J.P. Morgan stockholder that wants to submit a proposal
for possible inclusion in J.P. Morgan's proxy statement for its 2001 annual
meeting of stockholders must have ensured that the proposal was received by the
Secretary of J.P. Morgan on or before November 10, 2000. If a J.P. Morgan
stockholder intends to present a proposal at J.P. Morgan's 2001 annual meeting
and has not requested timely inclusion in J.P. Morgan's proxy statement for that
meeting, J.P. Morgan must receive notice of the proposal no later than January
24, 2001. If J.P. Morgan does not receive notice by that date, no discussion of
the proposal will be required to be included in J.P. Morgan's 2001 proxy
statement and J.P. Morgan may use its discretionary authority to vote on the
proposal if the J.P. Morgan stockholder does present it at J.P. Morgan's annual
meeting.

100
<PAGE>

WHERE YOU CAN FIND MORE INFORMATION

Chase and J.P. Morgan file annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any document we file at the Securities and Exchange
Commission's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the Securities and Exchange Commission at
1-800-SEC-0330 for further information on the public reference rooms. Our
Securities and Exchange Commission filings are also available to the public at
the Securities and Exchange Commission's website at http://www.sec.gov. Copies
of documents filed by Chase and J.P. Morgan with the Securities and Exchange
Commission are also available at the offices of The New York Stock Exchange, 20
Broad Street, New York, New York 10005.

Chase has filed a registration statement on Form S-4 under the Securities
Act with the Securities and Exchange Commission with respect to Chase's common
stock, preferred stock and depositary shares to be issued in the merger. This
joint proxy statement-prospectus constitutes the prospectus of Chase filed as
part of the registration statement. This joint proxy statement-prospectus does
not contain all of the information set forth in the registration statement
because certain parts of the registration statement are omitted in accordance
with the rules and regulations of the Securities and Exchange Commission. The
registration statement and its exhibits are available for inspection and copying
as set forth above.

The Securities and Exchange Commission allows us to "incorporate by
reference" into this joint proxy statement-prospectus documents filed with the
Securities and Exchange Commission by Chase and J.P. Morgan. This means that we
can disclose important information to you by referring you to those documents.
The information incorporated by reference is considered to be a part of this
joint proxy statement-prospectus, and later information that we file with the
Securities and Exchange Commission will update and supersede that information.
We incorporate by reference the documents listed below and any documents filed
by Chase or J.P. Morgan under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act after the date of this joint proxy statement-prospectus
and before the date of our special meetings:

<TABLE>
<CAPTION>
CHASE FILINGS (SEC FILE NUMBER 1-5805): PERIODS
--------------------------------------- -------
<S> <C>
Annual Report on Form 10-K................... Year ended December 31, 1999
Quarterly Reports on Form 10-Q............... Quarters ended March 31, June 30 and
September 30, 2000
Current Reports on Form 8-K.................. Filed January 21, February 9, March
22, April 11, April 19, May 22, June
12, June 20, July 20, August 3,
September 18 and October 19, 2000
The description of Chase's common stock and
preferred stock contained in Chase's
registration statements filed under Section
12 of the Securities Exchange Act
Chase's proxy statement for its 2000 annual
meeting of stockholders
</TABLE>

101
<PAGE>

<TABLE>
<CAPTION>
J.P. MORGAN FILINGS (SEC FILE NUMBER 1-5885): PERIODS
--------------------------------------------- -------
<S> <C>
Annual Report on Form 10-K........................ Year ended December 31, 1999
Quarterly Reports on Form 10-Q.................... Quarters ended March 31, June 30
and September 30, 2000
Current Reports on Form 8-K....................... Filed January 19, March 9, March
14, April 5, April 13, May 19, June
28, July 11, July 14, September 19
and October 19, 2000
The description of J.P. Morgan's common stock and
preferred stock contained in J.P. Morgan's
registration statements filed under Section 12 of
the Securities Exchange Act
J.P. Morgan's proxy statement for its 2000 annual
meeting of stockholders
</TABLE>

You may request a copy of the documents incorporated by reference into this
joint proxy statement-prospectus. Requests for documents should be directed to:

This joint proxy statement-prospectus does not constitute an offer to sell,
or a solicitation of an offer to purchase, the securities offered by this joint
proxy statement-prospectus, or the solicitation of a proxy, in any jurisdiction
to or from any person to whom or from whom it is unlawful to make such offer,
solicitation of an offer or proxy solicitation in such jurisdiction. Neither the
delivery of this joint proxy statement-prospectus nor any distribution of
securities pursuant to this joint proxy statement-prospectus shall, under any
circumstances, create any implication that there has been no change in the
information set forth or incorporated into this joint proxy statement-prospectus
by reference or in our affairs since the date of this joint proxy
statement-prospectus. The information contained in this joint proxy
statement-prospectus with respect to Chase was provided by Chase and the
information contained in this joint proxy statement-prospectus with respect to
J.P. Morgan was provided by J.P. Morgan.

102
<PAGE>

ANNEX A

AGREEMENT AND PLAN OF MERGER

DATED AS OF SEPTEMBER 12, 2000

BETWEEN

THE CHASE MANHATTAN CORPORATION

AND

J.P. MORGAN & CO. INCORPORATED
<PAGE>

TABLE OF CONTENTS(1)

<S> <C> <C>
ARTICLE I THE MERGER............................................... A-2
1.1. Effective Time of the Merger................................ A-2
1.2. Closing..................................................... A-2
1.3. Effects of the Merger....................................... A-2
1.4. Certificate of Incorporation and By-Laws.................... A-2
1.5. Alternative Transaction Structures.......................... A-2
ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES...... A-3
2.1. Effect on Capital Stock..................................... A-3
(a) Cancellation of Treasury Stock and Chase-Owned Stock,
etc. ....................................................... A-3
(b) Conversion of Morgan Common Stock....................... A-3
(c) Conversion of Morgan Preferred Stock................... A-3
(d) Chase Capital Stock..................................... A-4
(e) Appraisal Rights........................................ A-4
2.2. Exchange of Certificates.................................... A-5
(a) Exchange Agent.......................................... A-5
(b) Exchange Procedures..................................... A-5
(c) Distributions with Respect to Unexchanged Shares....... A-6
(d) No Further Ownership Rights in Morgan Common Stock or
Morgan Preferred Stock...................................... A-6
(e) No Fractional Shares.................................... A-6
(f) Termination of Exchange Fund........................... A-7
(g) No Liability............................................ A-7
(h) Withholding............................................. A-7
ARTICLE III REPRESENTATIONS AND WARRANTIES......................... A-8
3.1. Representations and Warranties of Morgan.................... A-8
(a) Organization, Standing and Power........................ A-8
(b) Capital Structure....................................... A-8
(c) Authority.............................................. A-10
(d) SEC Documents; Undisclosed Liabilities.................. A-11
(e) Information Supplied.................................... A-12
(f) Compliance with Applicable Laws........................ A-12
(g) Legal Proceedings....................................... A-12
(h) Taxes................................................... A-12
(i) Certain Agreements..................................... A-13
(j) Benefit Plans.......................................... A-13
</TABLE>

---------------

(1) Except for Exhibits 1.1(a) and 1.1(b) (which are included as Annexes B and
C, respectively, to this joint proxy statement-prospectus), the exhibits to
the merger agreement are excluded here. The excluded exhibits have been
filed with the Securities and Exchange Commission under cover of the
Current Reports on Form 8-K filed by Chase and by Morgan on September 18,
2000, and are incorporated herein by reference.
A-i
<PAGE>

<S> <C> <C>
(k) Subsidiaries............................................ A-14
(l) Agreements with Regulators............................. A-14
(m) Absence of Certain Changes or Events.................... A-14
(n) Board Approval.......................................... A-15
(o) Vote Required........................................... A-15
(p) Accounting Matters...................................... A-15
(q) Properties.............................................. A-15
(r) Interest Rate Risk Management Instruments.............. A-15
(s) Intellectual Property................................... A-16
(t) Brokers or Finders..................................... A-16
(u) Opinion of Morgan Financial Advisor..................... A-16
3.2. Representations and Warranties of Chase..................... A-16
(a) Organization, Standing and Power........................ A-16
(b) Capital Structure....................................... A-17
(c) Authority.............................................. A-18
(d) SEC Documents; Undisclosed Liabilities.................. A-19
(e) Information Supplied.................................... A-20
(f) Compliance with Applicable Laws........................ A-20
(g) Legal Proceedings....................................... A-20
(h) Taxes................................................... A-20
(i) Certain Agreements..................................... A-21
(j) Benefit Plans.......................................... A-21
(k) Subsidiaries............................................ A-22
(l) Agreements with Regulators............................. A-22
(m) Absence of Certain Changes or Events.................... A-22
(n) Board Approval.......................................... A-22
(o) Vote Required........................................... A-23
(p) Accounting Matters...................................... A-23
(q) Properties.............................................. A-23
(r) Interest Rate Risk Management Instruments.............. A-23
(s) Intellectual Property................................... A-23
(t) Brokers or Finders..................................... A-24
(u) Opinion of Chase Financial Advisor...................... A-24
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS............... A-24
4.1. Covenants of Morgan......................................... A-24
(a) Ordinary Course......................................... A-24
(b) Dividends; Changes in Stock............................. A-24
(c) Issuance of Securities................................. A-25
(d) Governing Documents, Etc. .............................. A-25
(e) No Acquisitions......................................... A-25
(f) No Dispositions........................................ A-25
(g) Indebtedness............................................ A-26
</TABLE>

A-ii
<PAGE>

<S> <C> <C>
(h) Other Actions........................................... A-26
(i) Accounting Methods..................................... A-26
(j) Pooling and Tax-Free Reorganization Treatment.......... A-26
(k) Compensation and Benefit Plans.......................... A-26
(l) Tax Elections.......................................... A-27
(m) Investment Portfolio.................................... A-27
(n) No Liquidation.......................................... A-27
(o) Other Agreements........................................ A-27
4.2. Covenants of Chase.......................................... A-27
(a) Ordinary Course......................................... A-27
(b) Dividends; Changes in Stock............................. A-28
(c) Issuance of Securities................................. A-28
(d) Governing Documents..................................... A-28
(e) No Acquisitions......................................... A-28
(f) No Dispositions........................................ A-29
(g) Indebtedness............................................ A-29
(h) Other Actions........................................... A-29
(i) Accounting Methods..................................... A-29
(j) Pooling and Tax-Free Reorganization Treatment.......... A-29
(k) No Liquidation.......................................... A-30
(l) Other Agreements....................................... A-30
4.3. Transition.................................................. A-30
4.4. Advice of Changes; Government Filings....................... A-30
4.5. Control of Other Party's Business........................... A-30
ARTICLE V ADDITIONAL AGREEMENTS.................................... A-31
5.1. Preparation of Proxy Statement; Stockholders Meetings....... A-31
5.2. Access to Information....................................... A-32
5.3. Reasonable Best Efforts..................................... A-33
5.4. Acquisition Proposals....................................... A-33
5.5. Affiliates.................................................. A-35
5.6. Stock Exchange Listing...................................... A-36
5.7. Employee Benefit Plans...................................... A-36
5.8. Stock Options, SARs and Restricted Stock Units.............. A-36
5.9. Fees and Expenses........................................... A-37
5.10. Governance; Name............................................ A-37
5.11. Indemnification; Directors' and Officers' Insurance......... A-38
5.12. Dividends................................................... A-39
5.13. Public Announcements........................................ A-39
5.14. Additional Agreements....................................... A-39
</TABLE>

A-iii
<PAGE>

<S> <C> <C>
ARTICLE VI CONDITIONS PRECEDENT.................................... A-39
6.1. Conditions to Each Party's Obligation To Effect the A-39
Merger......................................................
(a) Stockholder Approval.................................... A-39
(b) NYSE Listing............................................ A-39
(c) Other Approvals........................................ A-39
(d) Form S-4................................................ A-40
(e) No Injunctions or Restraints; Illegality................ A-40
(f) Pooling................................................ A-40
(g) Burdensome Condition.................................... A-40
6.2. Conditions to Obligations of Chase.......................... A-40
(a) Representations and Warranties.......................... A-40
(b) Performance of Obligations of Morgan.................... A-40
(c) Tax Opinion............................................ A-40
6.3. Conditions to Obligations of Morgan......................... A-40
(a) Representations and Warranties.......................... A-40
(b) Performance of Obligations of Chase..................... A-41
(c) Tax Opinion............................................ A-41
ARTICLE VII TERMINATION AND AMENDMENT.............................. A-41
7.1. Termination................................................. A-41
7.2. Effect of Termination....................................... A-42
7.3. Amendment................................................... A-43
7.4. Extension; Waiver........................................... A-43
ARTICLE VIII GENERAL PROVISIONS.................................... A-44
8.1. Non-survival of Representations, Warranties and A-44
Agreements..................................................
8.2. Notices..................................................... A-44
8.3. Interpretation.............................................. A-44
8.4. Counterparts................................................ A-45
8.5. Entire Agreement; No Third Party Beneficiaries.............. A-45
8.6. Governing Law............................................... A-45
8.7. Severability................................................ A-45
8.8. Assignment.................................................. A-45
8.9. Enforcement................................................. A-45
</TABLE>

A-iv
<PAGE>

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:

A-1
<PAGE>

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) 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).

A-2
<PAGE>

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.

(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
A-3
<PAGE>

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 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

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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.

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
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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.

(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 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.
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(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.

(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

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<PAGE>

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 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

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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, 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

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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.

(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
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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
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.

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(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 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
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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.

(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,
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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 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
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<PAGE>

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 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.

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<PAGE>

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 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

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<PAGE>

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 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

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<PAGE>

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.

(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
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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 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,

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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 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
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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 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.

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(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 "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.

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(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".

(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
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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 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

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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 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.

(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
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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 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

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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
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.

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(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 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 such 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

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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.

(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.

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(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.

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
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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
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

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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 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

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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.

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 voting securities
that, if consummated, would result in any person (or the stockholders of such
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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, (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
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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 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)

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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.

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.

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(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 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.
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(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 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.

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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 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 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
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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 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
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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;

(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
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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

(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.

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(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
(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.

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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

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

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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.

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.

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<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

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<PAGE>

ANNEX B

THE TRANSFER OF THIS AGREEMENT IS SUBJECT TO CERTAIN
RESTRICTIONS CONTAINED HEREIN AND TO RESALE RESTRICTIONS UNDER
THE SECURITIES ACT OF 1933, AS AMENDED

STOCK OPTION AGREEMENT

STOCK OPTION AGREEMENT, dated as of September 12, 2000 (this "Agreement"),
by and between J.P. MORGAN & CO. INCORPORATED, a Delaware corporation
("Issuer"), and THE CHASE MANHATTAN CORPORATION, a Delaware corporation
("Grantee").

WHEREAS, Grantee and Issuer are concurrently herewith entering into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), pursuant to which Issuer will be merged with and into Grantee, with
Grantee being the surviving corporation (the "Merger"); and

WHEREAS, as a condition and inducement to Grantee's execution of the Merger
Agreement and the Chase Stock Option Agreement (as defined in the Merger
Agreement), Grantee has required that Issuer agree, and Issuer has agreed, to
grant Grantee the Option (as defined in Section 2).

NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, and intending to be legally bound hereby, Issuer and
Grantee agree as follows:

1. Defined Terms. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Merger
Agreement.

2. Grant of Option. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the
"Option") to purchase up to 31,596,653 shares (as adjusted as set forth
herein, the "Option Shares") of common stock, par value $2.50 per share, of
Issuer (the "Issuer Common Stock") at a purchase price per Option Share (as
adjusted as set forth herein, the "Purchase Price") of $208.13; provided,
that in no event shall the number of Option Shares for which this Option is
exercisable exceed 19.9% of the issued and outstanding shares of Issuer
Common Stock on the date hereof. Issuer shall make proper provision so that
each Option Share issued upon exercise of the Option shall be accompanied
by the applicable number of rights or other benefits as may be provided in
any Issuer rights agreement or similar agreement that may be adopted after
the date hereof.

3. Exercise of Option.

(a) Grantee may exercise the Option, in whole or in part, at any time
and from time to time following the occurrence of a Purchase Event (as
defined in Section 3(b)); provided, that the Option shall terminate and be
of no further force or effect upon the earliest to occur of (A) the
Effective Time, (B) termination of the Merger Agreement in accordance with
the terms thereof so long as, in the case of this clause (B), a Purchase
Event has not occurred and could not occur in the future, (C) the date that
Grantee's Total Profit equals $1.25 billion, and (D) the date which is 90
days after the occurrence of a Purchase Event; and provided, further, that
any purchase of shares upon exercise of the Option shall be subject to
compliance with applicable law; and provided, further, that Grantee shall
have sent the written notice of such exercise (as provided in Section 3(d))
within 90 days following such Purchase Event. Notwithstanding the
termination of the Option, Grantee shall be entitled to purchase those
Option Shares with respect to which it has exercised the Option in
accordance herewith prior to the termination of the Option. The termination
of the Option

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<PAGE>

shall not affect any rights hereunder which by their terms extend beyond
the date of such termination.

(b) As used herein, a "Purchase Event" means any of the following
events:

(i) prior to the termination of the Merger Agreement, without
Grantee's prior written consent, Issuer or any of its Subsidiaries shall
have entered into one or more agreements with any person (other than
Grantee or any Subsidiary of Grantee) to effect, or effected, in a
single transaction or a series of related transactions, any Acquisition
Proposal;

(ii) prior to the termination of the Merger Agreement, any person
(other than Grantee or any Subsidiary of Grantee) shall have acquired
beneficial ownership (as such term is defined in Rule 13d-3 promulgated
under the Exchange Act) of or the right to acquire beneficial ownership
of, or any group (as such term is defined in Section 13(d)(3) of the
Exchange Act), other than a group of which Grantee or any Subsidiary of
Grantee is a member, shall have been formed which beneficially owns or
has the right to acquire beneficial ownership of, shares of Issuer
Common Stock or other voting securities representing 20% or more of the
voting power of Issuer or any of its Significant Subsidiaries (as
defined in Rule 1-02 of Regulation S-X of the SEC); or

(iii) the occurrence of an event the result of which is that the
aggregate fee or fees required to be paid by Issuer pursuant to Section
7.2(c) of the Merger Agreement equals $1.25 billion.

As used in this Agreement, "person" shall have the meaning specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.

(c) Issuer shall notify Grantee promptly in writing of the occurrence of
any Purchase Event, it being understood that the giving of such notice by Issuer
shall not be a condition to the right of Grantee to exercise the Option.

(d) In the event Grantee wishes to exercise the Option, it shall send to
Issuer a written notice (the date of which is herein referred to as the "Notice
Date") specifying (i) the total number of Option Shares it intends to purchase
pursuant to such exercise and (ii) a place and date not earlier than three
business days nor later than 60 business days from the Notice Date for the
closing (the "Closing") of such purchase (the "Closing Date"); provided, that if
the Closing cannot be consummated by reason of any applicable law, rule,
regulation or order or the need to obtain any necessary approvals or consents of
applicable Governmental Entities, the period of time that otherwise would run
pursuant to this sentence shall run instead from the date on which such
restriction on consummation has expired or been terminated; and provided,
further, without limiting the foregoing, that if prior notification or
application to, approval of or authorization by any Governmental Entity is
required in connection with such purchase, Issuer shall use its reasonable best
efforts to cooperate with Grantee in the prompt filing of the required notice or
application for approval or authorization, and the Closing shall occur
immediately following the date on which such approvals have been obtained and
any required notification or waiting periods have expired.

(e) Notwithstanding Section 3(d), in no event shall any Closing Date be
more than six months after the related Notice Date, and if the Closing Date
shall not have occurred within six months after the related Notice Date due to
the failure to obtain any such required approval or consent, the exercise of the
Option effected on the Notice Date shall be deemed to have expired. In the event
(i) Grantee receives official notice that an approval or consent of any
Governmental Entity required for the purchase of Option Shares will not be
issued or granted or (ii) a Closing Date shall not have occurred within six
months after the related Notice Date due to the failure to obtain any such
required approval or consent, Grantee shall be entitled to exercise the Option
(whether or not the Option would have otherwise terminated) in connection with
the resale of
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<PAGE>

Issuer Common Stock or other securities pursuant to a registration statement as
provided in Section 10. The provisions of this Section 3 and Section 4 shall
apply with appropriate adjustments to any such exercise.

4. Payment and Delivery of Certificates.

(a) On each Closing Date, Grantee shall (i) pay to Issuer, in immediately
available funds by wire transfer to a bank account designated by Issuer
(provided that the failure or refusal of Issuer to designate a bank account
shall not preclude Grantee from exercising the Option), an amount equal to the
Purchase Price multiplied by the number of Option Shares to be purchased on such
Closing Date, and (ii) present and surrender this Agreement to Issuer at the
address of Issuer specified in Section 14(f).

(b) At each Closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section 4(a), (i)
Issuer shall deliver to Grantee (A) a certificate or certificates representing
the Option Shares to be purchased at such Closing, which Option Shares shall be
fully paid, validly issued and non-assessable, free and clear of all liens,
claims, charges, security interests or other encumbrances ("Liens") other than
those created by the express terms of this Agreement, and subject to no
preemptive or other similar rights, and (B) if the Option is exercised in part
only, an executed new agreement with the same terms as this Agreement evidencing
the right to purchase the balance of the shares of Issuer Common Stock
purchasable hereunder, and (ii) Grantee shall deliver to Issuer a letter
agreeing that Grantee shall not offer to sell or otherwise dispose of such
Option Shares in violation of applicable federal and state securities laws or of
the provisions of this Agreement.

(c) In addition to any other legend that is required by applicable law,
certificates for the Option Shares delivered at each Closing shall be endorsed
with a restrictive legend which shall read substantially as follows:

THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if such Option Shares have been
registered pursuant to the Securities Act, such Option Shares have been sold in
reliance on and in accordance with Rule 144 under the Securities Act or Grantee
shall have delivered to Issuer a copy of a letter from the staff of the SEC, or
an opinion of counsel in form and substance reasonably satisfactory to Issuer
and its counsel, to the effect that such legend is not required for purposes of
the Securities Act.

(d) Upon the giving by Grantee to Issuer of the written notice of exercise
of the Option provided for under Section 3(d), the tender of the applicable
Purchase Price in immediately available funds and the tender of this Agreement
to Issuer, Grantee shall be deemed to be the holder of record of the shares of
Issuer Common Stock issuable upon such exercise, regardless of whether the stock
transfer books of Issuer are then closed or certificates representing such
shares of Issuer Common Stock are then actually delivered to Grantee. Issuer
shall pay all expenses, and any and all federal, foreign, state, and local taxes
and other charges, that may be payable in connection with the preparation,
issuance and delivery of stock certificates under this Section 4(d) in the name
of Grantee or its assignee, transferee, or designee.

(e) Issuer agrees (i) that it shall at all times maintain, free from Liens
and preemptive or similar rights, sufficient authorized but unissued or treasury
shares of Issuer Common Stock so that the Option may be exercised without
additional authorization of Issuer Common Stock after giving effect to all other
options, warrants, convertible securities and other rights to purchase Issuer
Common Stock then outstanding, (ii) that it will not, by charter amendment or
through reorganization, recapitalization, consolidation, merger, dissolution,
liquidation, spin-off, sale of assets or similar transaction, or by any other
voluntary act, avoid or seek to avoid the
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<PAGE>

observance or performance of any of the covenants, agreements, stipulations or
conditions to be observed or performed hereunder by Issuer and (iii) that it
will promptly take all action as may from time to time be required (including
(A) complying with all premerger notification, reporting and waiting period
requirements and (B) in the event prior approval or authorization of or notice
or application to any Governmental Entity is necessary before the Option may be
exercised, cooperating fully with Grantee in preparing such applications or
notices and providing such information to such Governmental Entities as may be
required) in order to permit Grantee to exercise the Option and Issuer to duly
and effectively issue shares of Issuer Common Stock pursuant hereto on a timely
basis.

5. Representations and Warranties of Issuer. Issuer hereby represents and
warrants to Grantee as follows:

(a) Corporate Authority. Issuer has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby; the execution and delivery of this
Agreement and, subject to receiving any necessary approvals or consents
from Governmental Entities, the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Board of
Directors of Issuer, and no other corporate proceedings on the part of
Issuer are necessary to authorize this Agreement or to consummate the
transactions so contemplated; this Agreement has been duly and validly
executed and delivered by Issuer and (assuming due authorization, execution
and delivery by Grantee) constitutes a valid and binding obligation of
Issuer, enforceable against Issuer in accordance with its terms, except
that (i) such enforcement may be subject to applicable bankruptcy,
insolvency, fraudulent conveyance, moratorium or other similar laws, now or
hereinafter in effect, affecting creditors' rights generally, and (ii) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.

(b) Shares Reserved for Issuance; Capital Stock. Issuer has taken all
necessary corporate action to authorize and reserve and permit it to issue,
and at all times from the date hereof through the termination of this
Agreement in accordance with its terms, will have reserved for issuance,
upon the exercise of the Option, that number of shares of Issuer Common
Stock equal to the maximum number of shares of Issuer Common Stock and
other shares and securities which are at any time and from time to time
purchasable upon exercise of the Option, and all such shares and other
securities, upon issuance pursuant to the Option, will be duly authorized,
validly issued, fully paid and non-assessable, and will be delivered free
and clear of all Liens (other than those created by the express terms of
this Agreement) and not subject to any preemptive or other similar rights.

(c) No Violations. The execution, delivery and performance of this
Agreement does not and will not, and the consummation by Issuer of any of
the transactions contemplated hereby will not, constitute or result in (A)
a breach or violation of, or a default under, its certificate of
incorporation or by-laws, or the comparable governing instruments of any of
its Subsidiaries, or (B) a breach or violation of, or a default under, any
agreement, lease, contract, note, mortgage, indenture, arrangement or other
obligation of it or any of its Subsidiaries (with or without the giving of
notice, the lapse of time or both) or under any law, rule, regulation or
order or governmental or non-governmental permit or license to which it or
any of its Subsidiaries is subject, that would in any case give any other
person the ability to prevent or enjoin Issuer's performance under this
Agreement in any material respect.

(d) Board Action. The Board of Directors of Issuer has approved this
Agreement and the consummation of the transactions contemplated hereby as
required under Section 203 of the DGCL and, to its knowledge, any other
applicable state takeover laws so that any such

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<PAGE>

state takeover laws do not and will not apply to this Agreement or any of
the transactions contemplated hereby (including the purchase of shares of
Issuer Common Stock pursuant to the Option).

(e) No Restrictions. No Delaware law applicable generally to
corporations or, to Issuer's knowledge, other takeover statute applicable
generally to corporations or similar corporate law and no provision of the
certificate of incorporation or by-laws of Issuer or any agreement to which
Issuer is a party (i) would or would purport to impose restrictions which
might adversely affect or delay the consummation of the transactions
contemplated by this Agreement, or (ii) as a result of the consummation of
the transactions contemplated by this Agreement, (A) would or would purport
to restrict or impair the ability of Grantee to vote or otherwise exercise
the rights of a shareholder with respect to securities of Issuer or any of
its Subsidiaries that may be acquired or controlled by Grantee or (B) would
or would purport to entitle any person to acquire securities of Issuer.

6. Representations and Warranties of Grantee. Grantee hereby represents
and warrants to Issuer as follows:

(a) Corporate Authority. Grantee has full corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated by this Agreement; the execution and delivery of this
Agreement and, subject to obtaining any necessary approvals or consents
from Governmental Entities, the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of Grantee; and this Agreement has been duly executed
and delivered by Grantee and (assuming due authorization, execution and
delivery by Issuer) constitutes a valid and binding obligation of Grantee,
enforceable against Grantee in accordance with its terms, except that (i)
such enforcement may be subject to applicable bankruptcy, insolvency,
fraudulent conveyance, moratorium or other similar laws, now or hereinafter
in effect, affecting creditors' rights generally, and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.

(b) Purchase Not for Distribution. Any Option Shares or other
securities acquired by Grantee upon exercise of the Option will not be
acquired with a view to the public distribution thereof in violation of any
federal or state securities laws and will not be transferred or otherwise
disposed of except in a transaction registered or exempt from registration
under the Securities Act and any applicable state securities laws.

7. Adjustment upon Changes in Issuer Capitalization, Etc.

(a) In the event of any change from time to time in Issuer Common Stock or
any other shares or securities subject to the Option by reason of a stock
dividend, subdivision, spinoff, stock split, split-up, merger, consolidation,
recapitalization, combination, exchange of shares, or dividend or distribution,
other than regular cash dividends, on or in respect of the Issuer Common Stock,
the type and number of shares or securities subject to the Option, and the
Purchase Price therefor, shall be adjusted appropriately, and proper provision
shall be made in the agreements governing such transaction, so that Grantee
shall receive, upon exercise of the Option, the number and class of shares or
other securities or property that Grantee would have received in respect of
Issuer Common Stock if the Option had been exercised immediately prior to such
event, or the record date therefor, as applicable. If any additional shares of
Issuer Common Stock are issued or otherwise become outstanding after the date of
this Agreement (other than pursuant to an event described in the first sentence
of this Section 7(a) or upon exercise of the Option), the number of shares of
Issuer Common Stock subject to the Option shall be increased so that, after such
issuance, it, together with any shares of Issuer Common Stock previously issued
pursuant hereto, equals 19.9% of the number of shares of Issuer Common Stock
then issued and outstanding, without giving effect to any shares subject to or
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<PAGE>

issued pursuant to the Option. No provision of this Section 7 shall be deemed to
affect or change, or constitute authorization for any violation of, any of the
covenants, agreements, representations or warranties in the Merger Agreement.

(b) Without limiting the parties' relative rights, remedies, liabilities
and obligations under the Merger Agreement or this Agreement, in the event that,
prior to the termination of the Option, Issuer shall enter into an agreement
(other than the Merger Agreement) (i) to consolidate with or merge into any
person, other than Grantee or one of its Subsidiaries, and shall not be the
continuing or surviving corporation of such consolidation or merger, (ii) to
permit any person, other than Grantee or one of its Subsidiaries, to merge into
Issuer and Issuer shall be the continuing or surviving corporation, but, in
connection with such merger, the then outstanding shares of Issuer Common Stock
shall be changed into or exchanged for another class or series of stock or other
securities of Issuer or any other person or cash or any other property or the
outstanding shares of Issuer Common Stock immediately prior to such merger
shall, after such merger, represent less than 50% of the outstanding shares and
share equivalents having general voting power of the merged company, or (iii) to
sell or otherwise transfer all or substantially all of its assets (or those of
its Subsidiaries taken as a whole) in one transaction or a series of related
transactions, to any person, other than Grantee or one of its Subsidiaries,
then, and in each such case, the agreement governing such transaction shall make
proper provisions so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, an option (the "Substitute Option"), at the election of
Grantee, of either (x) the Acquiring Corporation (as hereinafter defined), (y)
any person that controls the Acquiring Corporation, or (z) in the case of a
merger described in clause (ii), Issuer (such person being referred to as the
"Substitute Option Issuer").

(c) The Substitute Option shall have the same terms as the Option;
provided, that the exercise price therefor and number of shares subject thereto
shall be as set forth in this Section 7 and the repurchase rights relating
thereto shall be as set forth in Section 9; provided, further, that if a
Purchase Event shall have occurred prior to or in connection with the issuance
of such Substitute Option, the Substitute Option shall be exercisable
immediately upon issuance without the occurrence of a further Purchase Event;
and provided, further, that if the terms of the Substitute Option cannot, for
legal reasons, be the same as the Option, such terms shall be as similar as
possible and in no event less advantageous to Grantee. Substitute Option Issuer
shall also enter into an agreement with Grantee in substantially the same form
as this Agreement, which shall be applicable to the Substitute Option.

(d) The Substitute Option shall be exercisable for such number of shares of
Substitute Common Stock (as hereinafter defined) as is equal to the Market/Offer
Price (as hereinafter defined) multiplied by the number of shares of Issuer
Common Stock for which the Option was theretofore exercisable, divided by the
Average Price (as hereinafter defined). The exercise price of the Substitute
Option per share of Substitute Common Stock (the "Substitute Option Price")
shall then be equal to the Purchase Price multiplied by a fraction in which the
numerator is the number of shares of Issuer Common Stock for which the Option
was theretofore exercisable and the denominator is the number of shares of
Substitute Common Stock for which the Substitute Option is exercisable.

(e) The following terms have the meanings indicated:

(i) "Acquiring Corporation" shall mean (x) the continuing or surviving
corporation of a consolidation or merger with Issuer (if other than
Issuer), or at Grantee's election, any person that controls such surviving
corporation, (y) Issuer in a merger in which Issuer is the continuing or
surviving person, or (z) the transferee of all or substantially all of
Issuer's assets (or of the assets of its Subsidiaries taken as a whole).

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(ii) "Market/Offer Price" shall mean the highest of (v) the highest
price per share of Issuer Common Stock at which a Tender Offer or an
Exchange Offer therefor has been made, (w) the highest price per share of
Issuer Common Stock to be paid by any third party pursuant to an agreement
with Issuer, (x) the price per share of Issuer Common Stock received by
holders of Issuer Common Stock in connection with any merger or other
business combination transaction described in Section 7(b)(i), 7(b)(ii) or
7(b)(iii), (y) the highest closing price for shares of Issuer Common Stock
within the 12-month period immediately preceding the date on which the
merger, consolidation, asset sale or other transaction in question is
consummated, and (z) in the event of a sale of all or substantially all of
Issuer's assets (or those of its Subsidiaries taken as a whole) an amount
equal to (I) the sum of the price paid in such sale for such assets and the
current market value of the remaining assets of Issuer, as determined by a
nationally-recognized independent investment banking firm selected by
Grantee, divided by (II) the number of shares of Issuer Common Stock
outstanding at such time. In calculating the Market/Offer Price, in the
event that a Tender Offer or an Exchange Offer is made for Issuer Common
Stock or an agreement is entered into involving consideration other than
cash, the value of the securities or other property issuable or deliverable
in exchange for Issuer Common Stock shall be determined by a
nationally-recognized independent investment banking firm selected by
Grantee.

(iii) "Average Price" shall mean the average closing sales price per
share of a share of Substitute Common Stock quoted on the NYSE (or if
Substitute Common Stock is not quoted on the NYSE, the average closing
sales price per share as quoted on the Nasdaq National Market System or, if
the shares of Substitute Common Stock are not quoted thereon, the highest
bid price per share as quoted on the principal trading market on which such
shares are traded as reported by a recognized source) for the 12-month
period immediately preceding the date of consummation of the consolidation,
merger or sale in question; provided, that if Issuer is the issuer of the
Substitute Option, the Average Price shall be computed with respect to a
share of common stock issued by Issuer, by the person merging into Issuer
or by any company which controls such person, as Grantee may elect.

(iv) "Substitute Common Stock" shall mean the shares of capital stock
(or similar equity interest) with the greatest voting power in respect of
the election of directors (or persons similarly responsible for the
direction of the business and affairs) of the Substitute Option Issuer.

(f) In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than 19.9% of the shares of Substitute
Common Stock outstanding prior to exercise of the Substitute Option. In the
event that the Substitute Option would be exercisable for more than 19.9% of the
shares of Substitute Common Stock but for the limitation in the first sentence
of this Section 7(f), Substitute Option Issuer shall make a cash payment to
Grantee equal to the excess of (i) the value of the Substitute Option without
giving effect to the limitation in the first sentence of this Section 7(f) over
(ii) the value of the Substitute Option after giving effect to the limitation in
the first sentence of this Section 7(f). This difference in value shall be
determined by a nationally-recognized independent investment banking firm
selected by Grantee.

(g) Issuer shall not enter into any transaction described in Section 7(b)
unless the Acquiring Corporation and any person that controls the Acquiring
Corporation assume in writing all the obligations of Issuer hereunder and take
all other actions that may be necessary so that the provisions of this Section 7
are given full force and effect (including, without limitation, any action that
may be necessary so that the holders of the other shares of common stock issued
by Substitute Option Issuer are not entitled to exercise any rights by reason of
the issuance or exercise of the Substitute Option and the shares of Substitute
Common Stock are otherwise in no way distinguishable from or have lesser
economic value (other than any diminution in value resulting from the fact that
the shares of Substitute Common Stock are restricted securities, as
B-7
<PAGE>

defined in Rule 144 under the Securities Act or any successor provision) than
other shares of common stock issued by Substitute Option Issuer).

8. Repurchase at the Option of Grantee.

(a) At the request of Grantee at any time commencing upon the first
occurrence of a Repurchase Event (as defined in Section 8(c)) and prior to the
termination of the Option pursuant to Section 3(a), Issuer (or any successor)
shall repurchase from Grantee (x) the Option and (y) all shares of Issuer Common
Stock purchased by Grantee pursuant hereto with respect to which Grantee then
has beneficial ownership. The date on which Grantee exercises its rights under
this Section 8 is referred to as the "Request Date". Such repurchase shall be at
an aggregate price (the "Section 8 Repurchase Consideration") equal to the sum
of:

(i) the aggregate Purchase Price paid by Grantee for any shares of
Issuer Common Stock acquired pursuant to the Option with respect to which
Grantee then has beneficial ownership;

(ii) the excess, if any, of (x) the Market/Offer Price for each share
of Issuer Common Stock over (y) the Purchase Price (as adjusted pursuant to
Section 7), multiplied by the number of shares of Issuer Common Stock with
respect to which the Option has not been exercised; and

(iii) the excess, if any, of the Market/Offer Price over the Purchase
Price paid (or, in the case of Option Shares with respect to which the
option has been exercised but the Closing Date has not occurred, payable,
as adjusted pursuant to Section 7) by Grantee for each share of Issuer
Common Stock with respect to which the Option has been exercised and with
respect to which Grantee then has beneficial ownership, multiplied by the
number of such shares.

(b) If Grantee exercises its rights under this Section 8, Issuer shall,
within 5 business days after the Request Date, pay the Section 8 Repurchase
Consideration to Grantee in immediately available funds, and contemporaneously
with such payment, Grantee shall surrender to Issuer the Option and the
certificates evidencing the shares of Issuer Common Stock purchased thereunder
with respect to which Grantee then has beneficial ownership, and Grantee shall
warrant that it has sole record and beneficial ownership of such shares and that
the same are then free and clear of all Liens. Notwithstanding the foregoing, to
the extent that prior notification to or approval of any Governmental Entity is
required in connection with the payment of all or any portion of the Section 8
Repurchase Consideration, Grantee shall have the ongoing option to revoke its
request for repurchase pursuant to Section 8, in whole or in part, or to require
that Issuer deliver from time to time that portion of the Section 8 Repurchase
Consideration that it is not then so prohibited from paying and promptly file
the required notice or application for approval and expeditiously process the
same (and each party shall cooperate with the other in the filing of any such
notice or application and the obtaining of any such approval) and the period of
time that would otherwise run pursuant to the preceding sentence for the payment
of the portion of the Section 8 Repurchase Consideration shall run instead from
the date on which, as the case may be, (i) any required notification period has
expired or been terminated or (ii) such approval has been obtained and, in
either event, any requisite waiting period shall have passed. If any
Governmental Entity disapproves of any part of Issuer's proposed repurchase
pursuant to this Section 8, Issuer shall promptly give notice of such fact to
Grantee. If any Governmental Entity prohibits the repurchase (and Issuer hereby
undertakes to use its reasonable best efforts to obtain all required approvals
from Governmental Entities to accomplish such repurchase) in part but not in
whole, then Grantee shall have the right (i) to revoke the repurchase request or
(ii) to the extent permitted by such Governmental Entity, determine whether the
repurchase should apply to the Option and/or Option Shares and to what extent to
each, and Grantee shall thereupon have the right to exercise the Option as to
the number of Option Shares for which the Option was exercisable at the Request
Date less the sum of the
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<PAGE>

number of shares covered by the Option in respect of which payment has been made
pursuant to Section 8(a)(ii) and the number of shares covered by the portion of
the Option (if any) that has been repurchased; whereupon, in the case of clause
(ii), Issuer shall promptly (x) deliver to Grantee that portion of the Section 8
Repurchase Consideration that Issuer is not prohibited from delivering and (y)
deliver to Grantee, as appropriate, either (A) a new Stock Option Agreement
evidencing the right of Grantee to purchase that number of shares of Issuer
Common Stock obtained by multiplying the number of shares of Issuer Common Stock
for which the surrendered Stock Option Agreement was exercisable at the time of
delivery of the notice of repurchase by a fraction, the numerator of which is
the Section 8 Repurchase Consideration less the portion thereof theretofore
delivered to Grantee and the denominator of which is the Section 8 Repurchase
Consideration, or (B) a certificate for the Option Shares it is then so
prohibited from repurchasing; provided, that if the Option shall have terminated
prior to the date of such notice or shall be scheduled to terminate at any time
before the expiration of a period ending on the thirtieth business day after
such date, Grantee shall nonetheless have the right so to exercise the Option or
exercise its rights under this Section 8 until the expiration of such period of
30 business days. Grantee shall notify Issuer of its determination under the
preceding sentence within 10 business days of receipt of notice of disapproval
of the repurchase.

(c) As used herein, a "Repurchase Event" shall occur if (A) (i) any person
(other than Grantee or any Subsidiary of Grantee) shall have acquired beneficial
ownership of (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act), or the right to acquire beneficial ownership of, or any group
shall have been formed which beneficially owns or has the right to acquire
beneficial ownership of, 50% or more of the then outstanding shares of Issuer
Common Stock or (ii) any of the transactions described in Section 7(b)(i),
7(b)(ii) or 7(b)(iii) has been consummated and (B) a Purchase Event shall have
occurred prior to the termination of the Option.

9. Repurchase of Substitute Option.

(a) At the request of Grantee at any time, Substitute Option Issuer (or any
successor) shall repurchase from Grantee (x) the Substitute Option and (y) all
shares of Substitute Common Stock purchased by Grantee pursuant hereto with
respect to which Grantee then has beneficial ownership. The date on which
Grantee exercises its rights under this Section 9 is referred to as the "Section
9 Request Date". Such repurchase shall be at an aggregate price (the "Section 9
Repurchase Consideration") equal to the sum of:

(i) the aggregate purchase price paid by Grantee for any shares of
Substitute Common Stock acquired pursuant to the Option or Substitute
Option with respect to which Grantee then has beneficial ownership;

(ii) the excess, if any, of (x) the Substitute Applicable Price (as
hereinafter defined) for each share of Substitute Common Stock over (y) the
Substitute Option Price (as adjusted pursuant to Section 7) multiplied by
the number of shares of Substitute Common Stock with respect to which the
Substitute Option has not been exercised; and

(iii) the excess, if any, of the Substitute Applicable Price over the
purchase price paid (or in the case of shares with respect to which the
Option or Substitute Option has been exercised but the Closing Date has not
occurred, payable) by Grantee for each share of Substitute Common Stock
with respect to which the Option or Substitute Option has been exercised
and with respect to which Grantee then has beneficial ownership, multiplied
by the number of such shares.

(b) If Grantee exercises its rights under this Section 9, Substitute Option
Issuer shall, within 5 business days after the Section 9 Request Date, pay the
Section 9 Repurchase Consideration to Grantee in immediately available funds,
and contemporaneously with such payment, Grantee shall surrender to Substitute
Option Issuer the Substitute Option and the certificates evidencing

B-9
<PAGE>

the shares of Substitute Common Stock purchased thereunder with respect to which
Grantee then has beneficial ownership, and Grantee shall warrant that it has
sole record and beneficial ownership of such shares and that the same are then
free and clear of all Liens. Notwithstanding the foregoing, to the extent that
prior notification to or approval of any Governmental Entity is required in
connection with the payment of all or any portion of the Section 9 Repurchase
Consideration, Grantee shall have the ongoing option to revoke its request for
repurchase pursuant to Section 9, in whole or in part, or to require that
Substitute Option Issuer deliver from time to time that portion of the Section 9
Repurchase Consideration that it is not then so prohibited from paying and
promptly file the required notice or application for approval and expeditiously
process the same (and each party shall cooperate with the other in the filing of
any such notice or application and the obtaining of any such approval) and the
period of time that would otherwise run pursuant to the preceding sentence for
the payment of the portion of the Section 9 Repurchase Consideration shall run
instead from the date on which, as the case may be, (i) any required
notification period has expired or been terminated or (ii) such approval has
been obtained and, in either event, any requisite waiting period shall have
passed. If any Governmental Entity disapproves of any part of Substitute Option
Issuer's proposed repurchase pursuant to this Section 9, Substitute Option
Issuer shall promptly give notice of such fact to Grantee. If any Governmental
Entity prohibits the repurchase (and Substitute Option Issuer hereby undertakes
to use its reasonable best efforts to obtain all required approvals from
Governmental Entities to accomplish such repurchase) in part but not in whole,
then Grantee shall have the right (i) to revoke the repurchase request or (ii)
to the extent permitted by such Governmental Entity, determine whether the
repurchase should apply to the Substitute Option and/or Option Shares and to
what extent to each, and Grantee shall thereupon have the right to exercise the
Substitute Option as to the number of Option Shares for which the Substitute
Option was exercisable at the Section 9 Request Date less the sum of the number
of shares covered by the Substitute Option in respect of which payment has been
made pursuant to Section 9(a)(ii) and the number of shares covered by the
portion of the Substitute Option (if any) that has been repurchased; whereupon,
in the case of clause (ii), Substitute Option Issuer shall promptly (x) deliver
to Grantee that portion of the Section 9 Repurchase Consideration that
Substitute Option Issuer is not prohibited from delivering and (y) deliver to
Grantee, as appropriate, either (A) a new Stock Option Agreement evidencing the
right of Grantee to purchase that number of shares of Substitute Common Stock
obtained by multiplying the number of shares of Substitute Common Stock for
which the surrendered Stock Option Agreement was exercisable at the time of
delivery of the notice of repurchase by a fraction, the numerator of which is
the Section 9 Repurchase Consideration less the portion thereof theretofore
delivered to Grantee and the denominator of which is the Section 9 Repurchase
Consideration or (B) a certificate for the Option Shares it is then so
prohibited from repurchasing; provided, that if the Substitute Option shall have
terminated prior to the date of such notice or shall be scheduled to terminate
at any time before the expiration of a period ending on the thirtieth business
day after such date, Grantee shall nonetheless have the right so to exercise the
Substitute Option or exercise its rights under Section 9 until the expiration of
such period of 30 business days. Grantee shall notify Substitute Option Issuer
of its determination under the preceding sentence within ten (10) business days
of receipt of notice of disapproval of the repurchase.

(c) For purposes of this Agreement, the "Substitute Applicable Price" means
the highest closing sales price per share of Substitute Common Stock during the
six months preceding the Section 9 Request Date.

(d) Following the conversion of the Option into a Substitute Option, all
references to "Issuer", "Issuer Common Stock" and "Section 8" contained herein
shall also be deemed to be references to "Substitute Option Issuer", "Substitute
Common Stock" and "Section 9", respectively.

B-10
<PAGE>

10. Registration Rights.

(a) Demand Registration Rights. Issuer shall, subject to the conditions of
Section 10(c) below, if requested by any Grantee following a Purchase Event that
occurs prior to the termination of the Option, including Grantee and any
permitted transferee ("Selling Stockholder"), as expeditiously as possible
prepare, file and keep current a registration statement under the Securities Act
if such registration is necessary in order to permit the sale or other
disposition of any or all shares of Issuer Common Stock or other securities that
have been acquired by or are issuable to the Selling Stockholder upon exercise
of the Option in accordance with the intended method of sale or other
disposition stated by the Selling Stockholder in such request, including,
without limitation, a "shelf" registration statement under Rule 415 under the
Securities Act or any successor provision, and Issuer shall use its best efforts
to qualify such shares or other securities for sale under any applicable state
securities laws.

(b) Additional Registration Rights. If Issuer at any time after the
exercise of the Option proposes to register any shares of Issuer Common Stock
under the Securities Act in connection with an underwritten public offering of
such Issuer Common Stock, Issuer will promptly give written notice to Grantee of
its intention to do so and, upon the written request of any Selling Stockholder
given within 30 days after receipt of any such notice (which request shall
specify the number of shares of Issuer Common Stock intended to be included in
such underwritten public offering by the Selling Stockholder), Issuer will cause
all such shares for which a Selling Stockholder requests participation in such
registration to be so registered and included in such underwritten public
offering; provided, however, that Issuer may elect to not cause any such shares
to be so registered (i) if in the reasonable good faith opinion of the
underwriters for such offering, the inclusion of all such shares by the Selling
Stockholder would materially interfere with the marketing of such offering (in
which case Issuer shall register as many shares as possible without materially
interfering with the marketing of the offering), or (ii) in the case of a
registration solely to implement an employee benefit plan or a registration
filed on Form S-4 of the Securities Act or any successor Form. If some but not
all the shares of Issuer Common Stock with respect to which Issuer shall have
received requests for registration pursuant to this Section 10(b) shall be
excluded from such registration, Issuer shall make appropriate allocation of
shares to be registered among the Selling Stockholders desiring to register
their shares pro rata in the proportion that the number of shares requested to
be registered by each such Selling Stockholder bears to the total number of
shares requested to be registered by all such Selling Stockholders then desiring
to have Issuer Common Stock registered for sale.

(c) Conditions to Required Registration. Issuer shall use its reasonable
best efforts to cause each registration statement referred to in Section 10(a)
above to become effective and to obtain all consents or waivers of other parties
which are required therefor and to keep such registration statement effective as
may be reasonably necessary to effect such sale or other disposition; provided,
however, that Issuer may delay any registration of Option Shares required
pursuant to Section 10(a) above for a period not exceeding 90 days provided
Issuer shall in good faith determine that any such registration would adversely
affect an offering or contemplated offering of other securities by Issuer or
would require disclosure of nonpublic information that would materially and
adversely affect Issuer, and Issuer shall not be required to register Option
Shares under the Securities Act pursuant to Section 10(a) above:

(i) prior to the earlier of (a) termination of the Merger Agreement
pursuant to Article VII thereof and (b) a Purchase Event;

(ii) on more than three occasions;

(iii) within 90 days after the effective date of a registration
referred to in Section 10(b) above pursuant to which the Selling
Stockholder or Selling Stockholders concerned were afforded the opportunity
to register all such shares under the Securities Act and shares were
registered to the extent requested; and
B-11
<PAGE>

(iv) unless a request therefor is made to register at least 25% or
more of the aggregate number of Option Shares (including shares of Issuer
Common Stock and other securities issuable upon exercise of the Option)
then outstanding.

In addition to the foregoing, Issuer shall not be required to maintain the
effectiveness of any registration statement after the expiration of three months
from the effective date of such registration statement. Issuer shall use its
reasonable best efforts to make any filings, and take all steps, under all
applicable state securities laws to the extent necessary to permit the sale or
other disposition of the Option Shares so registered in accordance with the
intended method of distribution for such shares; provided, however, that Issuer
shall not be required to consent to general jurisdiction or qualify to do
business in any state where it is not otherwise required to so consent to such
jurisdiction or to so qualify to do business. If requested by any such Grantee
in connection with such registration, Issuer shall become a party to any
underwriting agreement relating to the sale of such shares, but only to the
extent of obligating itself in respect of representations, warranties,
indemnities and other agreements customarily included in secondary offering
underwriting agreements. Upon receiving any request under this Section 10 from
any Grantee, Issuer agrees to send a copy thereof to any other person known to
Issuer to be entitled to registration rights under this Section 10, in each case
by promptly mailing the same, postage prepaid, to the address of record of the
persons entitled to receive such copies.

Notwithstanding anything else in this Section 10, in lieu of complying with
its obligations pursuant to a request made by any Grantee under this Section 10,
Issuer may, at its election, repurchase the Option Shares requested to be
registered by such Grantee at a purchase price per share equal to the average
closing price of such Option Shares during the ten business days preceding the
date on which Issuer gives notice to Grantee of its intention to repurchase such
Option Shares (which notice shall be given no later than fifteen days after
Grantee has given notice to Issuer of its election to exercise its registration
rights under Section 10(a) or 10(b)).

(d) Expenses. Except where applicable state law prohibits such payments
and except for underwriting discounts or commissions and brokers' fees, Issuer
will pay all expenses (including, without limitation, registration fees,
qualification fees, blue sky fees and expenses (including the fees and expenses
of counsel), legal fees and expenses, including the reasonable fees and expenses
of one counsel to the holders whose Option Shares are being registered, printing
expenses and the costs of special audits or "cold comfort" letters, expenses of
underwriters, excluding discounts and commissions but including liability
insurance if Issuer so desires or the underwriters so require, and the
reasonable fees and expenses of any necessary special experts) in connection
with each registration pursuant to Section 10(a) or 10(b) above (including the
related offerings and sales by holders of Option Shares) and all other
qualifications, notifications or exemptions pursuant to Section 10(a) or 10(b)
above.

(e) Indemnification. In connection with any registration under Section
10(a) or 10(b) above, Issuer hereby indemnifies the Selling Stockholders, and
each underwriter thereof, including each person, if any, who controls such
Selling Stockholders or underwriter within the meaning of Section 15 of the
Securities Act, and including each director, officer, stockholder, partner,
member, employee, representative and agent of any thereof, against all expenses,
losses, claims, damages and liabilities caused by any untrue, or alleged untrue,
statement of a material fact contained in any registration statement or
prospectus or notification or offering circular (including any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission,
or alleged omission, to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such expenses, losses, claims, damages or liabilities of such
indemnified party are caused by any untrue statement or alleged untrue statement
that was included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon and in conformity with, information furnished in
writing to Issuer by such indemnified party expressly for use therein, and
Issuer and each
B-12
<PAGE>

person, if any, who controls Issuer within the meaning of Section 15 of the
Securities Act, and each director, officer, stockholder, partner, member,
employee, representative and agent of Issuer shall be indemnified by such
Selling Stockholders, or by such underwriter, as the case may be, for all such
expenses, losses, claims, damages and liabilities caused by any untrue, or
alleged untrue, statement, that was included by Issuer in any such registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) in reliance upon, and in conformity with,
information furnished in writing to Issuer by such Selling Stockholders or such
underwriter, as the case may be, expressly for such use.

Promptly upon receipt by a party indemnified under this Section 10(e) of
notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this Section 10(e), such indemnified party shall notify
the indemnifying party in writing of the commencement of such action, but the
failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
Section 10(e) unless the failure so to notify the indemnified party results in
substantial prejudice thereto. In case notice of commencement of any such action
shall be given to the indemnifying party as above provided, the indemnifying
party shall be entitled to participate in and, to the extent it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense of such action at its own expense, with counsel chosen by it and
satisfactory to such indemnified party. The indemnified party shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel (other than
reasonable costs of investigation) shall be paid by the indemnified party unless
(i) the indemnifying party agrees to pay the same, (ii) the indemnifying party
fails to assume the defense of such action with counsel satisfactory to the
indemnified party, or (iii) the indemnified party has been advised by counsel
that one or more legal defenses may be available to the indemnifying party that
may be contrary to the interest of the indemnified party, in which case the
indemnifying party shall be entitled to assume the defense of such action
notwithstanding its obligation to bear fees and expenses of such counsel. No
indemnifying party shall be liable for any settlement entered into without its
consent, which consent may not be unreasonably withheld.

If the indemnification provided for in this Section 10(e) is unavailable to
a party otherwise entitled to be indemnified in respect of any expenses, losses,
claims, damages or liabilities referred to herein, then the indemnifying party,
in lieu of indemnifying such party otherwise entitled to be indemnified, shall
contribute to the amount paid or payable by such party to be indemnified as a
result of such expenses, losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative benefits received by
Issuer, the Selling Stockholders and the underwriters from the offering of the
securities and also the relative fault of Issuer, the Selling Stockholders and
the underwriters in connection with the statements or omissions which resulted
in such expenses, losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The amount paid or payable by a party as a
result of the expenses, losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim; provided, however, that in no case shall any Selling Stockholder be
responsible, in the aggregate, for any amount in excess of the net offering
proceeds attributable to its Option Shares included in the offering. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Any obligation by any Selling
Stockholder to indemnify shall be several and not joint with other Selling
Stockholders.

In connection with any registration pursuant to Section 10(a) or 10(b)
above, Issuer and each Selling Stockholder (other than Grantee) shall enter into
an agreement containing the indemnification provisions of this Section 10(e).

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<PAGE>

(f) Miscellaneous Reporting. Issuer shall comply with all reporting
requirements and will do all such other things as may be necessary to permit the
expeditious sale at any time of any Option Shares by the Selling Stockholders
thereof in accordance with and to the extent permitted by any rule or regulation
promulgated by the SEC from time to time, including, without limitation, Rule
144. Issuer shall at its expense provide the Selling Stockholders with any
information necessary in connection with the completion and filing of any
reports or forms required to be filed by them under the Securities Act or the
Exchange Act, or required pursuant to any state securities laws or the rules of
the NASD or any stock exchange.

(g) Issue Taxes. Issuer will pay all stamp taxes in connection with the
issuance and the sale of the Option Shares and in connection with the exercise
of the Option, and will save the Selling Stockholders harmless, without
limitation as to time, against any and all liabilities with respect to all such
taxes.

11. Quotation or Listing. If Issuer Common Stock or any other securities
to be acquired in connection with the exercise of the Option are then authorized
for quotation or trading or listing on the NYSE, the Nasdaq National Market
System or any other securities exchange or securities quotation system, Issuer,
upon the request of Grantee, will promptly file an application, if required, to
authorize for quotation or trading or listing the shares of Issuer Common Stock
or any other securities to be acquired upon exercise of the Option on such
securities exchange or securities quotation system and will use its reasonable
best efforts to obtain approval, if required, of such quotation or listing as
soon as practicable.

12. Division of Option. This Agreement (and the Option granted hereby) are
exchangeable, without expense, at the option of Grantee, upon presentation and
surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of Issuer Common
Stock purchasable hereunder. The terms "Agreement" and "Option" as used herein
include any other Stock Option Agreement and related Options for which this
Agreement (and the Option granted hereby) may be exchanged. Upon receipt by
Issuer of evidence reasonably satisfactory to it of the loss, theft, destruction
or mutilation of this Agreement, and (in the case of loss, theft or destruction)
of reasonably satisfactory indemnification to protect Issuer from any loss which
it may suffer if this Agreement is replaced, and upon surrender and cancellation
of this Agreement, if mutilated, Issuer will execute and deliver a new Agreement
of like tenor and date.

13. Limitation of Grantee Profit. (a) Notwithstanding any other provision
herein or in the Merger Agreement, in no event shall Grantee's Total Profit (as
defined below) exceed $1.25 billion (the "Maximum Profit"), and, if it otherwise
would exceed such amount, Grantee, at its sole discretion, shall either (i)
reduce the number of shares subject to the Option (and any Substitute Option),
(ii) deliver to Issuer, or the Substitute Issuer, as the case may be, for
cancellation shares of Issuer Common Stock or Substitute Common Stock, as the
case may be (or other securities into which such Option Shares are converted or
exchanged), (iii) pay cash to Issuer, or the Substitute Issuer, as the case may
be, (iv) reduce the amount of the Section 8 Repurchase Consideration or Section
9 Repurchase Consideration or (v) any combination of the foregoing, so that
Grantee's actually realized Total Profit shall not exceed the Maximum Profit
after taking into account the foregoing actions. Notwithstanding any other
provision of this Agreement, the Option may not be exercised for a number of
shares as would, as of the date of exercise, result in a Notional Total Profit
(as defined below) of more than the Maximum Profit and, if exercise of the
Option would otherwise result in the Notional Total Profit exceeding such
amount, Grantee, in its discretion, may take any of the actions specified in
this Section 13(a) so that the Notional Total Profit shall not exceed the
Maximum Profit; provided, that nothing in this sentence shall restrict any
subsequent exercise of the Option which at such time complies with this
sentence.

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<PAGE>

(b) For purposes of this Agreement, "Total Profit" shall mean: (i) the
aggregate amount (before taxes) of (A) the excess of (x) the net cash amounts or
fair market value of any property received by Grantee pursuant to a sale of
Option Shares (or securities into which such shares are converted or exchanged),
other than to a wholly-owned subsidiary of Grantee, or a repurchase of Option
Shares by Issuer pursuant to Section 8 hereof, after payment of applicable
brokerage or sales commissions and discounts, over (y) Grantee's aggregate
purchase price for such Option Shares (or other securities), plus (B) all
amounts received by Grantee upon the repurchase of the Option by Issuer pursuant
to Section 8 hereof, plus (C) all equivalent net amounts with respect to the
Substitute Option and any amounts paid pursuant to Section 7(f) hereof, plus (D)
all amounts theretofore received by Grantee pursuant to Section 7.2(c) of the
Merger Agreement, minus (ii) all amounts of cash previously paid to Issuer
pursuant to Section 13(a) plus the value of the Option Shares (or other
securities) previously delivered to Issuer for cancellation pursuant to Section
13(a), which value shall be deemed to be the aggregate Purchase Price paid for
such Option Shares (or other securities). For purposes of this Agreement,
"Notional Total Profit" with respect to any number of shares as to which Grantee
may propose to exercise the Option shall be the Total Profit, determined as of
the date of such proposed exercise assuming that the Option were exercised on
such date for such number of shares, and assuming that such shares, together
with all other Option Shares held by Grantee and its affiliates as of such date,
were sold for cash at the closing market price for the Issuer Common Stock as of
the close of business on the preceding trading day (less customary brokerage
commissions). For purposes of this Section 13, transactions by a wholly-owned
subsidiary transferee of Grantee in respect of the Option or Option Shares
transferred to it shall be treated as if made by Grantee.

(c) Notwithstanding any other provision of this Agreement, nothing in this
Agreement shall affect the ability of Grantee to receive, nor relieve Issuer's
obligation to pay, any payment provided for in Section 7.2(c) of the Merger
Agreement; provided, that if and to the extent the Total Profit received by
Grantee would exceed the Maximum Profit following receipt of such payment,
Grantee shall be obligated to comply with the terms of Section 13(a) within 15
days of the date on which Grantee has realized cash and/or property representing
Total Profit in excess of Maximum Profit.

14. Miscellaneous.

(a) Expenses. Except as otherwise provided herein or in the Merger
Agreement, each of the parties hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
hereunder, including, without limitation, fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.

(b) Waiver and Amendment. Any provision of this Agreement may be waived at
any time by the party that is entitled to the benefits of such provision. This
Agreement may not be modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by the parties hereto.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of such rights. No
single or partial exercise of any right, remedy, power or privilege hereunder
shall preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. Any waiver shall be effective only in
the specific instance and for the specific purpose for which given and shall not
constitute a waiver to any subsequent or other exercise of any right, remedy,
power or privilege hereunder.

(c) Entire Agreement; No Third-Party Beneficiaries; Severability. This
Agreement, together with the Merger Agreement and the other documents and
instruments referred to herein and therein, between Grantee and Issuer
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. This Agreement is not intended to confer upon any person
other than the

B-15
<PAGE>

parties hereto (or their respective successors and assigns) (other than any
transferees of the Option Shares or any permitted transferee of this Agreement
pursuant to Section 14(h)) any rights, remedies, obligations or liabilities
hereunder. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or Governmental Entity to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected impaired or invalidated. If for any reason such court or
Governmental Entity determines that the Option does not permit Grantee to
acquire, or does not require Issuer to repurchase, the full number of shares of
Issuer Common Stock as provided in Section 2 (as may be adjusted herein), it is
the express intention of Issuer to allow Grantee to acquire or to require Issuer
to repurchase such lesser number of shares as may be permissible without any
amendment or modification hereof.

(d) 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).

(e) Descriptive Headings. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.

(f) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the addresses set forth in the Merger Agreement (or
at such other address for a party as shall be specified by like notice).

(g) Counterparts. This Agreement and any amendments hereto may be executed
in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed, it
being understood that both parties need not sign the same counterpart.

(h) Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder or under the Option shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party, except that Grantee may assign this
Agreement to a wholly-owned Subsidiary of Grantee (in which event the term
"Grantee" as used herein shall be deemed to refer to such Subsidiary). Subject
to the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
permitted assigns. For the avoidance of doubt, nothing in this paragraph (h)
shall prohibit Issuer from engaging in a transaction contemplated by Section
7(b) in accordance with the provisions of Section 7(b), provided that the terms
of this Agreement and the Merger Agreement shall remain applicable with respect
to any such transaction.

(i) Further Assurances. In the event of any exercise of the Option by
Grantee, Issuer and Grantee shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise.

(j) 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.

B-16
<PAGE>

IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.

J.P. MORGAN & CO. INCORPORATED

By: /s/ DOUGLAS A. WARNER III
------------------------------------
Name: Douglas A. Warner III
Title: Chairman and CEO

THE CHASE MANHATTAN CORPORATION

By: /s/ WILLIAM B. HARRISON, JR.
------------------------------------
Name: William B. Harrison, Jr.
Title: Chairman and CEO

B-17
<PAGE>

ANNEX C

THE TRANSFER OF THIS AGREEMENT IS SUBJECT TO CERTAIN
RESTRICTIONS CONTAINED HEREIN AND TO RESALE RESTRICTIONS UNDER
THE SECURITIES ACT OF 1933, AS AMENDED

STOCK OPTION AGREEMENT

STOCK OPTION AGREEMENT, dated as of September 12, 2000 (this "Agreement"),
by and between THE CHASE MANHATTAN CORPORATION, a Delaware corporation
("Issuer"), and J.P. MORGAN & CO. INCORPORATED, a Delaware corporation
("Grantee").

WHEREAS, Grantee and Issuer are concurrently herewith entering into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), pursuant to which Grantee will be merged with and into Issuer, with
Issuer being the surviving corporation (the "Merger"); and

WHEREAS, as a condition and inducement to Grantee's execution of the Merger
Agreement and the Morgan Stock Option Agreement (as defined in the Merger
Agreement), Grantee has required that Issuer agree, and Issuer has agreed, to
grant Grantee the Option (as defined in Section 2).

1. Defined Terms. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Merger
Agreement.

2. Grant of Option. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the
"Option") to purchase up to 260,464,725 shares (as adjusted as set forth
herein, the "Option Shares") of common stock, par value $1.00 per share, of
Issuer (the "Issuer Common Stock") at a purchase price per Option Share (as
adjusted as set forth herein, the "Purchase Price") of $56.25; provided,
that in no event shall the number of Option Shares for which this Option is
exercisable exceed 19.9% of the issued and outstanding shares of Issuer
Common Stock on the date hereof. Issuer shall make proper provision so that
each Option Share issued upon exercise of the Option shall be accompanied
by the applicable number of rights or other benefits as may be provided in
any Issuer rights agreement or similar agreement that may be adopted after
the date hereof.

3. Exercise of Option.

C-1
<PAGE>

shall not affect any rights hereunder which by their terms extend beyond
the date of such termination.

(b) As used herein, a "Purchase Event" means any of the following
events:

(iii) the occurrence of an event the result of which is that the
aggregate fee or fees required to be paid by Issuer pursuant to Section
7.2(b) of the Merger Agreement equals $1.25 billion.

As used in this Agreement, "person" shall have the meaning specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.

(c) Issuer shall notify Grantee promptly in writing of the occurrence
of any Purchase Event, it being understood that the giving of such notice
by Issuer shall not be a condition to the right of Grantee to exercise the
Option.

(d) In the event Grantee wishes to exercise the Option, it shall send
to Issuer a written notice (the date of which is herein referred to as the
"Notice Date") specifying (i) the total number of Option Shares it intends
to purchase pursuant to such exercise and (ii) a place and date not earlier
than three business days nor later than 60 business days from the Notice
Date for the closing (the "Closing") of such purchase (the "Closing Date");
provided, that if the Closing cannot be consummated by reason of any
applicable law, rule, regulation or order or the need to obtain any
necessary approvals or consents of applicable Governmental Entities, the
period of time that otherwise would run pursuant to this sentence shall run
instead from the date on which such restriction on consummation has expired
or been terminated; and provided, further, without limiting the foregoing,
that if prior notification or application to, approval of or authorization
by any Governmental Entity is required in connection with such purchase,
Issuer shall use its reasonable best efforts to cooperate with Grantee in
the prompt filing of the required notice or application for approval or
authorization, and the Closing shall occur immediately following the date
on which such approvals have been obtained and any required notification or
waiting periods have expired.

(e) Notwithstanding Section 3(d), in no event shall any Closing Date
be more than six months after the related Notice Date, and if the Closing
Date shall not have occurred within six months after the related Notice
Date due to the failure to obtain any such required approval or consent,
the exercise of the Option effected on the Notice Date shall be deemed to
have expired. In the event (i) Grantee receives official notice that an
approval or consent of any Governmental Entity required for the purchase of
Option Shares will not be issued or granted or (ii) a Closing Date shall
not have occurred within six months after the related Notice Date due to
the failure to obtain any such required approval or consent, Grantee shall
be entitled to exercise the Option (whether or not the Option would have
otherwise
C-2
<PAGE>

terminated) in connection with the resale of Issuer Common Stock or other
securities pursuant to a registration statement as provided in Section 10.
The provisions of this Section 3 and Section 4 shall apply with appropriate
adjustments to any such exercise.

4. Payment and Delivery of Certificates.

THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

5. Representations and Warranties of Issuer. Issuer hereby represents and
warrants to Grantee as follows:

C-4
<PAGE>

state takeover laws do not and will not apply to this Agreement or any of
the transactions contemplated hereby (including the purchase of shares of
Issuer Common Stock pursuant to the Option).

6. Representations and Warranties of Grantee. Grantee hereby represents
and warrants to Issuer as follows:

7. Adjustment upon Changes in Issuer Capitalization, Etc.

(e) The following terms have the meanings indicated:

C-6
<PAGE>

defined in Rule 144 under the Securities Act or any successor provision) than
other shares of common stock issued by Substitute Option Issuer).

8. Repurchase at the Option of Grantee.

(i) the aggregate Purchase Price paid by Grantee for any shares of
Issuer Common Stock acquired pursuant to the Option with respect to which
Grantee then has beneficial ownership;

9. Repurchase of Substitute Option.

C-9
<PAGE>

the shares of Substitute Common Stock purchased thereunder with respect to which
Grantee then has beneficial ownership, and Grantee shall warrant that it has
sole record and beneficial ownership of such shares and that the same are then
free and clear of all Liens. Notwithstanding the foregoing, to the extent that
prior notification to or approval of any Governmental Entity is required in
connection with the payment of all or any portion of the Section 9 Repurchase
Consideration, Grantee shall have the ongoing option to revoke its request for
repurchase pursuant to Section 9, in whole or in part, or to require that
Substitute Option Issuer deliver from time to time that portion of the Section 9
Repurchase Consideration that it is not then so prohibited from paying and
promptly file the required notice or application for approval and expeditiously
process the same (and each party shall cooperate with the other in the filing of
any such notice or application and the obtaining of any such approval) and the
period of time that would otherwise run pursuant to the preceding sentence for
the payment of the portion of the Section 9 Repurchase Consideration shall run
instead from the date on which, as the case may be, (i) any required
notification period has expired or been terminated or (ii) such approval has
been obtained and, in either event, any requisite waiting period shall have
passed. If any Governmental Entity disapproves of any part of Substitute Option
Issuer's proposed repurchase pursuant to this Section 9, Substitute Option
Issuer shall promptly give notice of such fact to Grantee. If any Governmental
Entity prohibits the repurchase (and Substitute Option Issuer hereby undertakes
to use its reasonable best efforts to obtain all required approvals from
Governmental Entities to accomplish such repurchase) in part but not in whole,
then Grantee shall have the right (i) to revoke the repurchase request or (ii)
to the extent permitted by such Governmental Entity, determine whether the
repurchase should apply to the Substitute Option and/or Option Shares and to
what extent to each, and Grantee shall thereupon have the right to exercise the
Substitute Option as to the number of Option Shares for which the Substitute
Option was exercisable at the Section 9 Request Date less the sum of the number
of shares covered by the Substitute Option in respect of which payment has been
made pursuant to Section 9(a)(ii) and the number of shares covered by the
portion of the Substitute Option (if any) that has been repurchased; whereupon,
in the case of clause (ii), Substitute Option Issuer shall promptly (x) deliver
to Grantee that portion of the Section 9 Repurchase Consideration that
Substitute Option Issuer is not prohibited from delivering and (y) deliver to
Grantee, as appropriate, either (A) a new Stock Option Agreement evidencing the
right of Grantee to purchase that number of shares of Substitute Common Stock
obtained by multiplying the number of shares of Substitute Common Stock for
which the surrendered Stock Option Agreement was exercisable at the time of
delivery of the notice of repurchase by a fraction, the numerator of which is
the Section 9 Repurchase Consideration less the portion thereof theretofore
delivered to Grantee and the denominator of which is the Section 9 Repurchase
Consideration or (B) a certificate for the Option Shares it is then so
prohibited from repurchasing; provided, that if the Substitute Option shall have
terminated prior to the date of such notice or shall be scheduled to terminate
at any time be fore the expiration of a period ending on the thirtieth business
day after such date, Grantee shall nonetheless have the right so to exercise the
Substitute Option or exercise its rights under Section 9 until the expiration of
such period of 30 business days. Grantee shall notify Substitute Option Issuer
of its determination under the preceding sentence within ten (10) business days
of receipt of notice of disapproval of the repurchase.

C-10
<PAGE>

10. Registration Rights.

(i) prior to the earlier of (a) termination of the Merger Agreement
pursuant to Article VII thereof and (b) a Purchase Event;

(ii) on more than three occasions;

C-13
<PAGE>

C-14
<PAGE>

(b) For purposes of this Agreement, "Total Profit" shall mean: (i) the
aggregate amount (before taxes) of (A) the excess of (x) the net cash amounts or
fair market value of any property received by Grantee pursuant to a sale of
Option Shares (or securities into which such shares are converted or exchanged),
other than to a wholly-owned subsidiary of Grantee, or a repurchase of Option
Shares by Issuer pursuant to Section 8 hereof, after payment of applicable
brokerage or sales commissions and discounts, over (y) Grantee's aggregate
purchase price for such Option Shares (or other securities), plus (B) all
amounts received by Grantee upon the repurchase of the Option by Issuer pursuant
to Section 8 hereof, plus (C) all equivalent net amounts with respect to the
Substitute Option and any amounts paid pursuant to Section 7(f) hereof, plus (D)
all amounts theretofore received by Grantee pursuant to Section 7.2(b) of the
Merger Agreement, minus (ii) all amounts of cash previously paid to Issuer
pursuant to Section 13(a) plus the value of the Option Shares (or other
securities) previously delivered to Issuer for cancellation pursuant to Section
13(a), which value shall be deemed to be the aggregate Purchase Price paid for
such Option Shares (or other securities). For purposes of this Agreement,
"Notional Total Profit" with respect to any number of shares as to which Grantee
may propose to exercise the Option shall be the Total Profit, determined as of
the date of such proposed exercise assuming that the Option were exercised on
such date for such number of shares, and assuming that such shares, together
with all other Option Shares held by Grantee and its affiliates as of such date,
were sold for cash at the closing market price for the Issuer Common Stock as of
the close of business on the preceding trading day (less customary brokerage
commissions). For purposes of this Section 13, transactions by a wholly-owned
subsidiary transferee of Grantee in respect of the Option or Option Shares
transferred to it shall be treated as if made by Grantee.

(c) Notwithstanding any other provision of this Agreement, nothing in this
Agreement shall affect the ability of Grantee to receive, nor relieve Issuer's
obligation to pay, any payment provided for in Section 7.2(b) of the Merger
Agreement; provided, that if and to the extent the Total Profit received by
Grantee would exceed the Maximum Profit following receipt of such payment,
Grantee shall be obligated to comply with the terms of Section 13(a) within 15
days of the date on which Grantee has realized cash and/or property representing
Total Profit in excess of Maximum Profit.

14. Miscellaneous.

C-15
<PAGE>

(d) 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).

(e) Descriptive Headings. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.

C-16
<PAGE>

IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.

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

C-17
<PAGE>

ANNEX D

[CHASE MANHATTAN CORPORATION LETTERHEAD]

November 21, 2000

Board of Directors
The Chase Manhattan Corporation
270 Park Avenue
New York, NY 10017

Members of the Board:

You have informed us that The Chase Manhattan Corporation ("Chase") and
J.P. Morgan & Co. Incorporated ("J.P. Morgan") have entered into an Agreement
and Plan of Merger (the "Merger Agreement"), which provides, among other things,
for the merger of J.P. Morgan with and into Chase (the "Merger"). As set forth
more fully in the Merger Agreement, as a result of the Merger, each share of
Common Stock, par value $2.50 per share, of J.P. Morgan (the "J.P. Morgan Common
Stock"), other than shares owned by J.P. Morgan or by Chase, all of which will
be cancelled, will be converted into 3.7 shares (the "Exchange Ratio") of Common
Stock, par value $1.00 per share, of Chase (the "Chase Common Stock").

You have requested that we render our opinion as to the fairness, from a
financial point of view, to the holders of Chase Common Stock of the Exchange
Ratio in the Merger.

In arriving at the opinion set forth below, we have, among other things:

(a)reviewed the Merger Agreement;

(b)reviewed the joint proxy statement-prospectus of Chase and J.P. Morgan
relating to the Merger (the "Merger Proxy Statement")

(c)reviewed certain publicly available business and financial information
that we deemed relevant relating to Chase and J.P. Morgan and the
respective industries in which they operate;

(d)reviewed certain internal financial and operating data provided to us by
the managements of Chase and J.P. Morgan relating to their respective
businesses, including projections as to the amount and timing of the
cost savings and the related expenses and synergies expected to result
from the Merger (the "Expected Synergies");

(e)discussed with members of the senior managements of Chase and J.P.
Morgan, Chase's and J.P. Morgan's operations, historical financial
statements and future prospects, before and after giving effect to the
Merger, as well as their views of the business, operational and
strategic benefits and other implications of the Merger, including the
Expected Synergies, and such other matters as we deemed necessary or
appropriate;

[CHASE MANHATTAN CORPORATION LETTERHEAD]
D-1
<PAGE>
The Chase Manhattan Corporation
November 21, 2000
Page 2

(f)compared the financial and operating performance of Chase and J.P.
Morgan with publicly available information concerning certain other
companies we deemed comparable and reviewed the relevant historical
stock prices and trading volumes of the Chase Common Stock, J.P. Morgan
Common Stock and certain publicly-traded securities of such other
companies;

(g)reviewed the financial terms of certain recent business combinations and
acquisition transactions we deemed reasonably comparable to the Merger
and otherwise relevant to our inquiry; and

(h)made such other analyses and examinations as we have deemed necessary or
appropriate.

We have assumed and relied upon, without assuming any responsibility for
verification, the accuracy and completeness of all of the financial and other
information provided to, discussed with, or reviewed by or for us, or publicly
available, for purposes of this opinion, and have further relied upon the
assurances of management of Chase and J.P. Morgan that they are not aware of any
facts that would make such information inaccurate or misleading in any material
respect. We have neither made nor obtained any independent evaluations or
appraisals of the assets or liabilities of Chase or J.P. Morgan, nor have we
conducted a physical inspection of the properties and facilities of Chase or
J.P. Morgan. We have assumed that the financial projection information as to the
Expected Synergies provided to or discussed with us by or on behalf of Chase and
J.P. Morgan have been reasonably determined on bases reflecting the best
currently available estimates and judgments of the managements of Chase and J.P.
Morgan as to the Expected Synergies.

We have not been asked to consider, and this opinion does not in any manner
address, the prices at which the Chase Common Stock or J.P. Morgan Common Stock
will actually trade following the announcement or consummation of the Merger.

For purposes of rendering our opinion we have assumed, in all respects
material to our analysis, that the representations and warranties of each party
contained in the Merger Agreement are true and correct, that each party will
perform all of the covenants and agreements required to be performed by it under
the Merger Agreement and that all conditions to the consummation of the Merger
will be satisfied without waiver thereof. We have also assumed that all material
governmental, regulatory or other consents and approvals will be obtained and
that in the course of obtaining any necessary governmental, regulatory or other
consents and approvals, or any amendments, modifications or waivers to any
documents to which either of Chase or J.P. Morgan are party, as contemplated by
the Merger Agreement, no restrictions will be imposed or amendments,
modifications or waivers made that would have any material adverse effect on the
contemplated benefits to Chase of the Merger. We have further assumed that the
Merger will be accounted for as a pooling of interests under U.S. generally
accepted accounting principles and that it will qualify as a tax-free
reorganization for U.S. federal income tax purposes.

Our opinion herein is necessarily based on market, economic and other
conditions as they exist and can be evaluated on the date of this letter. Our
opinion is limited to the fairness, from a financial point of view, to the
holders of Chase Common Stock of the Exchange Ratio in the Merger and we express
no opinion as to the merits of the underlying decision by Chase to engage in the
Merger. This opinion does not constitute a recommendation to any holder of Chase
Common Stock as to how such holder should vote with respect to the Merger or any
matter related thereto.
D-2
<PAGE>
The Chase Manhattan Corporation
November 21, 2000
Page 3

Chase Securities Inc., as part of its financial advisory business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions and valuations for estate, corporate
and other purposes. We have acted as financial advisor to Chase in connection
with the Merger and will receive a fee for our services, including for rendering
this opinion. In addition, Chase has agreed to indemnify us for certain
liabilities arising out of our engagement. Chase Securities Inc. is a
wholly-owned subsidiary of Chase. Chase Securities Inc. and its affiliates have
performed investment banking and other services for Chase in the past and have
been compensated for such services. In the ordinary course of business, we or
our affiliates may trade in the debt and equity securities of Chase and J.P.
Morgan for our own accounts and for the accounts of our customers and,
accordingly, may at any time hold a long or short position in such securities.

Based upon and subject to the foregoing, we are of the opinion, as of the
date hereof, that the Exchange Ratio in the Merger is fair, from a financial
point of view, to the holders of Chase Common Stock.

Very truly yours,
/s/ CHASE SECURITIES INC.
CHASE SECURITIES INC.

D-3
<PAGE>

ANNEX E

[JP MORGAN LOGO]

J.P. Morgan Securities Inc.

60 Wall Street
New York NY
10260-0060
November 21, 2000

The Board of Directors
J.P. Morgan & Co. Incorporated

Attention: Douglas A. Warner III
Chairman of the Board

Ladies and Gentlemen:

You have requested our opinion as to the fairness, from a
financial point of view, to the common stockholders of J.P.
Morgan & Co. Incorporated (the "Company") of the consideration
proposed to be paid to them in connection with the proposed
merger (the "Merger") of the Company with and into The Chase
Manhattan Corporation (the "Buyer"). Pursuant to the Agreement
and Plan of Merger, dated as of September 12, 2000 (the
"Agreement"), between the Company and the Buyer, the Company
will merge with and into the Buyer, and (i) the common
stockholders of the Company will receive for each share of
Common Stock, par value $2.50 per share, of the Company held
by them consideration equal to 3.70 shares of the Buyer (the
"Exchange Ratio") and (ii) holders of preferred stock of the
Company will receive preferred stock of the Buyer having
identical terms to the preferred stock now owned by such
holders.

In arriving at our opinion, we have reviewed (i) the
Agreement; (ii) the Proxy Statement-Prospectus of the Company
and the Buyer relating to the Merger; (iii) certain publicly
available information concerning the business of the Company
and of certain other companies engaged in businesses
comparable to those of the Company, and the reported market
prices for certain other companies' securities deemed
comparable; (iv) publicly available terms of certain
transactions involving companies comparable to the Company and
the consideration received for such companies; (v) current and
historical market prices of the common stock of the Company
and the Buyer; (vi) the audited financial statements of the
Company and the Buyer for the fiscal year ended December 31,
1999, and the unaudited financial statements of the Company
and the Buyer for the period ended September 30, 2000; (vii)
certain agreements with respect to outstanding indebtedness or
obligations of the Company and the Buyer; (viii) certain
internal financial analyses prepared by the Company and the
Buyer and their respective managements; and (ix) the terms of
other business combinations that we deemed relevant.

In addition, we have held discussions with certain
members of the management of the Company and the Buyer with
respect to certain aspects of the Merger, and the past and
current business operations of the Company and the Buyer, the
financial condition and future prospects and operations of the
Company and the Buyer, the effects of the Merger on the
financial condition and future prospects of the Company and
the Buyer, and certain other matters we believed necessary or
appropriate to our inquiry. We have reviewed such other
financial studies and

E-1
<PAGE>

[JP MORGAN LOGO]

analyses and considered such other information as we deemed
appropriate for the purposes of this opinion.

In giving our opinion, we have relied upon and assumed,
without independent verification, the accuracy and
completeness of all information that was publicly available or
was furnished to us by the Company and the Buyer or otherwise
reviewed by us, and we have not assumed any responsibility or
liability therefor. We have not conducted any valuation or
appraisal of any assets or liabilities, nor have any such
valuations or appraisals been provided to us. In relying on
financial analyses provided to us, we have assumed that they
have been reasonably prepared based on assumptions reflecting
the best currently available estimates and judgments by
management as to the expected future results of operations and
financial condition of the Company and the Buyer to which such
analyses relate. We have also assumed that the Merger will be
effected as a tax-free exchange and that the transaction
contemplated by the Agreement and the Proxy
Statement-Prospectus will be consummated as described in the
Agreement and the Proxy Statement-Prospectus. We have relied
as to all legal matters relevant to rendering our opinion upon
the advice of counsel.

Our opinion is necessarily based on economic, market and
other conditions as in effect on, and the information made
available to us as of, the date hereof. It should be
understood that subsequent developments may affect this
opinion and that we do not have any obligation to update,
revise, or reaffirm this opinion. We are expressing no opinion
herein as to the price at which the Buyer's stock will trade
at any future time.

On the basis of and subject to the foregoing, it is our
opinion as of the date hereof that the Exchange Ratio in the
proposed Merger is fair, from a financial point of view, to
the common stockholders of the Company.

This letter is provided to the Board of Directors of the
Company in connection with and for the purposes of its
evaluation of the Merger. This opinion does not constitute a
recommendation to any stockholder of the Company as to how
such stockholder should vote with respect to the Merger. This
opinion may not be disclosed, referred to, or communicated (in
whole or in part) to any third party for any purpose
whatsoever except with our prior written consent in each
instance. This opinion may be reproduced in full in any proxy
or information statement mailed to stockholders of the Company
but may not otherwise be disclosed publicly in any manner
without our prior written approval and must be treated as
confidential.

Very truly yours,

J.P. MORGAN SECURITIES INC.

/s/ EDWARD J. KELLY III

E-2
<PAGE>

ANNEX F

DELAWARE GENERAL CORPORATION LAW

SECTION 262. APPRAISAL RIGHTS.

(a) Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares through
the effective date of the merger or consolidation, who has otherwise complied
with subsection (d) of this section and who has neither voted in favor of the
merger or consolidation nor consented thereto in writing pursuant to sec. 228 of
this title shall be entitled to an appraisal by the Court of Chancery of the
fair value of the stockholder's shares of stock under the circumstances
described in subsections (b) and (c) of this section. As used in this section,
the word "stockholder" means a holder of record of stock in a stock corporation
and also a member of record of a nonstock corporation; the words "stock" and
"share" mean and include what is ordinarily meant by those words and also
membership or membership interest of a member of a nonstock corporation; and the
words "depository receipt" mean a receipt or other instrument issued by a
depository representing an interest in one (1) or more shares, or fractions
thereof, solely of stock of a corporation, which stock is deposited with the
depository.

(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to sec. 251 (other than a merger effected pursuant to sec.
251(g) of this title), sec. 252, sec. 254, sec. 257, sec. 258, sec. 263 or sec.
264 of this title:

(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of sec. 251 of this title.

(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to
sec.sec. 251, 252, 254, 257, 258, 263 and 264 of this title to accept for
such stock anything except:

a. Shares of stock of the corporation surviving or resulting from such
merger or consolidation, or depository receipts in respect thereof;

b. Shares of stock of any other corporation, or depository receipts in
respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national
securities exchange or designated as a national market system
security on an interdealer quotation system by the National
Association of Securities Dealers, Inc. or held of record by more
than 2,000 holders;

c. cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a. and b. of this paragraph;
or

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d. Any combination of the shares of stock, depository receipts and cash
in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a, b and c of this
paragraph.

(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under sec. 253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.

(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.

(d) Appraisal rights shall be perfected as follows:

(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsections (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of such
stockholder's shares shall deliver to the corporation, before the taking of
the vote on the merger or consolidation, a written demand for appraisal of
such stockholder's shares. Such demand will be sufficient if it reasonably
informs the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such stockholder's
shares. A proxy or vote against the merger or consolidation shall not
constitute such a demand. A stockholder electing to take such action must
do so by a separate written demand as herein provided. Within 10 days after
the effective date of such merger or consolidation, the surviving or
resulting corporation shall notify each stockholder of each constituent
corporation who has complied with this subsection and has not voted in
favor of or consented to the merger or consolidation of the date that the
merger or consolidation has become effective; or

(2) If the merger or consolidation was approved pursuant to sec. 228
or sec. 253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten 10 days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within 20 days after the date of mailing
of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such

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constituent corporation shall send a second notice before the effective
date of the merger or consolidation notifying each of the holders of any
class or series of stock of such constituent corporation that are entitled
to appraisal rights of the effective date of the merger or consolidation or
(ii) the surviving or resulting corporation shall send such a second notice
to all such holders on or within 10 days after such effective date;
provided, however, that if such second notice is sent more than 20 days
following the sending of the first notice, such second notice need only be
sent to each stockholder who is entitled to appraisal rights and who has
demanded appraisal of such holder's shares in accordance with this
subsection. An affidavit of the secretary or assistant secretary or of the
transfer agent of the corporation that is required to give either notice
that such notice has been given shall, in the absence of fraud, be prima
facie evidence of the facts stated therein. For purposes of determining the
stockholders entitled to receive either notice, each constituent
corporation may fix, in advance, a record date that shall be not more than
10 days prior to the date the notice is given, provided, that if the notice
is given on or after the effective date of the merger or consolidation, the
record date shall be such effective date. If no record date is fixed and
the notice is given prior to the effective date, the record date shall be
the close of business on the day next preceding the day on which the notice
is given.

(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw such stockholder's demand for appraisal and to accept the terms offered
upon the merger or consolidation. Within 120 days after the effective date of
the merger or consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) hereof, upon written request, shall be
entitled to receive from the corporation surviving the merger or resulting from
the consolidation a statement setting forth the aggregate number of shares not
voted in favor of the merger or consolidation and with respect to which demands
for appraisal have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the stockholder within 10 days
after such stockholder's written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.

(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by publication
shall be approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.

(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for

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notation thereon of the pendency of the appraisal proceedings; and if any
stockholder fails to comply with such direction, the Court may dismiss the
proceedings as to such stockholder.

(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted
such stockholder's certificates of stock to the Register in Chancery, if such is
required, may participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal rights under this
section.

(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation is a corporation of this State or of any state.

(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.

(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the effective date of the merger or consolidation); provided, however, that
if no petition for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder shall deliver to the
surviving or resulting corporation a written withdrawal of such stockholder's
demand for an appraisal and an acceptance of the merger or consolidation, either
within 60 days after the effective date of the merger or consolidation as
provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court
of Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court deems
just.

(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.

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