<DOCUMENT>
<TYPE>424B2
<SEQUENCE>1
<FILENAME>e15720_424b2.txt
<DESCRIPTION>FORM 424B2
<TEXT>

                                             As filed pursuant to Rule 424(b)(2)
                                                         Registration #333-52826

The information in this prospectus supplement and the accompanying prospectus is
not complete and may be changed. The prospectus  supplement and the accompanying
prospectus do not constitute an offer to sell or the solicitation of an offer to
buy and we will not sell  these  securities  in any  jurisdiction  in which such
offer, solicitation or sale would be unlawful.

                              Subject to Completion
                            Dated September 22, 2003

PROSPECTUS SUPPLEMENT
(To Prospectus dated June 20, 2001)
[LOGO] JPMorganChase

$

J.P. Morgan Chase & Co.

Capped Quarterly Observation Notes Linked to the S&P 500(R)Index due
October    , 2008

At maturity, J.P. Morgan Chase & Co. will pay in cash, for each $1,000 principal
amount of notes, the greater of $1,100, which we refer to as the minimum payment
amount,  and $1,000 plus an amount,  which we refer to as the additional amount,
based on the capped  quarterly  upside  performance and full downside  quarterly
performance of the S&P 500(R) Index. In no event,  however,  will the additional
amount exceed $1,000 for each $1,000 principal amount of notes.

      o     The notes  will be issued in  minimum  denominations  of $1,000  and
            integral multiples of $1,000.

      o     The principal amount and issue price of each note is $1,000.

      o     We will not pay any interest on the notes.

      o     The notes will mature on October    , 2008.

      o     At maturity,  you will  receive a cash payment per $1,000  principal
            amount of notes equal to the greater of the minimum  payment  amount
            of $1,100 and $1,000  plus the  additional  amount.  The  additional
            amount will be  calculated by  multiplying  $1,000 by the sum of the
            quarterly  capped  Index  returns  for  each  of  the  20  quarterly
            valuation periods during the five-year term of the notes.

            o     The quarterly capped Index return for any quarterly  valuation
                  period as measured on the relevant  period  valuation  date is
                  equal to the Index closing level at the end of that  quarterly
                  valuation period less the Index closing level at the beginning
                  of that  quarterly  valuation  period,  divided  by the  Index
                  closing  level at the  beginning of that  quarterly  valuation
                  period;  provided  however  that the  quarterly  capped  Index
                  return for any quarterly valuation period shall not exceed .05
                  (or 5%).

            o     This 5% cap on any  quarterly  capped  Index return means that
                  your  ability  to  benefit  from an  increase  in the Index is
                  limited to 5%,  regardless  of how well the Index  performs in
                  any particular quarterly valuation period.  Conversely,  there
                  is no limit to any  decreases  in the  quarterly  capped Index
                  return,  which  means  that  you  have no  protection  against
                  negative   performance  of  the  Index  in   calculating   the
                  additional amount.

            o     Consequently,  the additional amount paid may be significantly
                  less  than  you  might  otherwise  have  earned  by  investing
                  directly  in the  S&P  500(R)  Index  due in  part,  to the 5%
                  quarterly cap on positive quarterly Index returns and the full
                  exposure you have to negative quarterly Index returns.

            o     The  additional  amount will never be greater  than $1,000 for
                  each $1,000  principal amount of notes and may be zero even if
                  the Index has increased over the term of the notes.

      o     The  closing  level  of the  Index  at the  beginning  of the  first
            quarterly  valuation  period is     , which was the closing level of
            the Index on the date we priced the notes.

      o     Investing  in the notes is not  equivalent  to  investing in the S&P
            500(R) Index or any of its component stocks.

      o     We have applied to list the notes on the American Stock Exchange LLC
            under the symbol "JPL.D."

You should read the more  detailed  description  of the notes  contained in this
prospectus supplement.

The notes involve risks not associated with an investment in  conventional  debt
securities. See "Risk Factors" beginning on page S-10.

Neither  the  Securities  and  Exchange  Commission  nor  any  state  securities
commission  has approved or disapproved of the notes or passed upon the accuracy
or the adequacy of this prospectus  supplement or the  accompanying  prospectus.
Any representation to the contrary is a criminal offense.

================================================================================
                           Price to         Underwriting        Proceeds
                           Public           Discounts           to Us
--------------------------------------------------------------------------------
Per note                   $                $                   $
--------------------------------------------------------------------------------
Total                      $                $                   $
--------------------------------------------------------------------------------

The notes are not bank  deposits  and are not  insured  by the  Federal  Deposit
Insurance Corporation or any other governmental agency, nor are they obligations
of, or guaranteed by, a bank.

Our affiliate,  J.P. Morgan Securities Inc., may use this prospectus  supplement
and the accompanying prospectus in connection with offers and sales of the notes
in the secondary  market.  J.P.  Morgan  Securities Inc. may act as principal or
agent in those  transactions.  Secondary  market  sales  will be made at  prices
related to market prices at the time of sale.

                                    JPMorgan

October     , 2003

<PAGE>

      In  making  your  investment  decision,   you  should  rely  only  on  the
information contained or incorporated by reference in this prospectus supplement
and the accompanying  prospectus.  We have not authorized anyone to give you any
additional  or  different  information.   The  information  in  this  prospectus
supplement and the  accompanying  prospectus may only be accurate on the date of
this prospectus supplement.

      The notes described in this prospectus  supplement are not appropriate for
all investors,  and involve  important legal and tax consequences and investment
risks, which should be discussed with your professional  advisers. You should be
aware  that the laws of  certain  jurisdictions  (including  laws  that  require
brokers to ensure that  investments are suitable for their  customers) may limit
the  availability  of notes  in those  jurisdictions.  Neither  this  prospectus
supplement  nor the  accompanying  prospectus  constitutes an offer to sell or a
solicitation  of an offer to buy the notes in any  circumstances  in which  such
offer or solicitation is unlawful.

      In this prospectus supplement and the accompanying prospectus,  "we," "us"
and  "our"  refer  to J.P.  Morgan  Chase & Co.,  unless  the  context  requires
otherwise.

      The notes are not  sponsored,  endorsed,  sold or  promoted  by Standard &
Poor's, a division of the McGraw-Hill Companies, Inc., which we refer to as S&P.
S&P makes no  representation or warranty,  express or implied,  to the owners of
the notes or any member of the public regarding the advisability of investing in
securities  generally  or in the notes  particularly,  or the ability of the S&P
500(R) Index to track general stock market performance.  S&P's only relationship
to J.P.  Morgan  Chase & Co. is the  licensing of certain  trademarks  and trade
names of S&P without regard to J.P. Morgan Chase & Co. or the notes.  S&P has no
obligation  to take the needs of J.P.  Morgan  Chase & Co. or the holders of the
notes into consideration in determining, composing or calculating the S&P 500(R)
Index. S&P is not responsible for and has not participated in the  determination
of  the  timing,  price  or  quantity  of  the  notes  to be  issued  or in  the
determination or calculation of the amount due at maturity of the notes. S&P has
no obligation or liability in connection with the  administration,  marketing or
trading of the notes.

      S&P DOES NOT GUARANTEE  THE ACCURACY  AND/OR THE  COMPLETENESS  OF THE S&P
500(R) INDEX OR ANY DATA  INCLUDED  THEREIN AND S&P SHALL HAVE NO LIABILITY  FOR
ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY,  EXPRESS
OR IMPLIED,  AS TO RESULTS TO BE OBTAINED BY J.P. MORGAN CHASE & CO., HOLDERS OF
THE NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500(R) INDEX OR
ANY DATA  INCLUDED  THEREIN.  S&P MAKES NO EXPRESS OR  IMPLIED  WARRANTIES,  AND
EXPRESSLY   DISCLAIMS  ALL  WARRANTIES  OF  MERCHANTABILITY  OR  FITNESS  FOR  A
PARTICULAR  PURPOSE  OR USE WITH  RESPECT  TO THE S&P  500(R)  INDEX OR ANY DATA
INCLUDED THEREIN.  WITHOUT LIMITING ANY OF THE FOREGOING,  IN NO EVENT SHALL S&P
HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES
(INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

      "STANDARD  & POOR'S",  "S&P",  "S&P 500" AND "500" ARE  TRADEMARKS  OF THE
MCGRAW-HILL  COMPANIES,  INC.  AND HAVE  BEEN  LICENSED  FOR USE BY J.P.  MORGAN
SECURITIES  INC.  AND  SUB-LICENSED  FOR USE BY J. P.  MORGAN  CHASE & CO.  THIS
TRANSACTION IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY S&P AND S&P MAKES NO
REPRESENTATION REGARDING THE ADVISABILITY OF PURCHASING ANY OF THE NOTES.


                                       i

<PAGE>

                                TABLE OF CONTENTS

Prospectus Supplement                                                       Page
---------------------                                                       ----
Summary .............................................................        S-1
Risk Factors ........................................................       S-10
J.P. Morgan Chase & Co. .............................................       S-14
Where You Can Find More Information About Us ........................       S-15
Use of Proceeds .....................................................       S-16
Description of Notes ................................................       S-17
Certain U.S. Federal Income Tax Consequences ........................       S-26
Underwriting ........................................................       S-29
Legal Opinions ......................................................       S-30
ERISA Matters for Pension Plans and Insurance Companies .............       S-30

Prospectus                                                                  Page
----------                                                                  ----
Where You Can Find More Information About Us ..............................    3
J.P. Morgan Chase & Co. ...................................................    4
Consolidated Ratios of Earnings to Fixed Charges ..........................    6
Use of Proceeds ...........................................................    6
Description of Debt Securities ............................................    7
Description of Warrants ...................................................   13
Description of Units ......................................................   17
Forms of Securities .......................................................   19
Plan of Distribution ......................................................   22
Experts ...................................................................   24
Legal Opinions ............................................................   24
ERISA Matters for Pension Plans and Insurance Companies ...................   24


                                       ii

<PAGE>

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

                                     SUMMARY

      The  following  summary  describes  the  notes we are  offering  to you in
general terms only. You should read the summary  together with the more detailed
information  contained  in the  rest  of  this  prospectus  supplement  and  the
accompanying prospectus.  You should carefully consider, among other things, the
matters set forth in "Risk  Factors," as the notes involve risks not  associated
with  conventional  debt  securities.  We urge you to consult  your  investment,
legal, tax, accounting and other advisers before you invest in the notes.

Securities Offered............. Capped Quarterly Observation Notes Linked to the
                                S&P  500(R) Index due October       ,  2008.  At
                                maturity,  we will  pay you a cash  payment  per
                                $1,000  principal  amount of notes  equal to the
                                greater  of  $1,100,  which  we  refer to as the
                                minimum  payment  amount,  and  $1,000  plus the
                                additional amount, calculated in accordance with
                                the formula set out below.

                                The  notes  are not  bank  deposits  and are not
                                insured  by  the   Federal   Deposit   Insurance
                                Corporation  or any other  governmental  agency,
                                nor are they obligations of, or guaranteed by, a
                                bank.

Index.......................... S&P 500(R)Index,  which we sometimes refer to as
                                the Index.

Issuer......................... J.P. Morgan Chase & Co.

Aggregate Principal Amount..... $

Denominations.................. $1,000 and integral multiples thereof.

Pricing Date................... October   , 2003.

Maturity....................... October   , 2008.

Payment at Maturity............ Unlike  ordinary debt  securities,  the notes do
                                not pay or accrue  interest at a stated or fixed
                                rate.  Instead,  at maturity  you will receive a
                                cash  payment  per  $1,000  principal  amount of
                                notes  equal  to  the  greater  of  the  minimum
                                payment  amount and $1,000  plus the  additional
                                amount.

Minimum Payment Amount......... $1,100

Additional Amount.............. The additional  amount will be calculated by the
                                calculation  agent by multiplying  $1,000 by the
                                sum of the  quarterly  capped Index  returns for
                                each  of  the  20  quarterly  valuation  periods
                                during  the  term  of  the  notes.  Because  the
                                quarterly  capped Index return for any quarterly
                                valuation  period is subject to a cap of .05 (or
                                5%), as described below,  the additional  amount
                                will never exceed  $1,000 and the total  payment
                                at maturity for each $1,000  principal amount of
                                notes  will never be greater  than  $2,000.  Any
                                quarterly  capped Index return in any  quarterly
                                valuation  period which is negative  will reduce
                                the sum of the  quarterly  capped Index  returns
                                over  the  five-year  term  of  the  notes,  and
                                therefore the additional amount.

Quarterly Capped Index Return.. The  quarterly   capped  Index  return  for  any
                                quarterly  valuation  period as  measured on the
                                relevant  period  valuation date is equal to the
                                Index closing level at the end of that quarterly
                                valuation period less the Index closing level

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


                                      S-1
<PAGE>

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

                                at the  beginning  of that  quarterly  valuation
                                period,  divided by the Index  closing  level at
                                the  beginning  of  that   quarterly   valuation
                                period; provided, however, that in no event will
                                the  quarterly   capped  Index  return  for  any
                                quarterly valuation period exceed .05 (or 5%).

Quarterly Valuation Periods.... Each quarterly  valuation period will begin on a
                                period valuation date and end on the immediately
                                subsequent  period  valuation date,  except that
                                the first quarterly  valuation period will begin
                                on October  , 2003, the day we priced the notes.
                                The  Index closing level  on  the  first  period
                                valuation date  is           , the closing level
                                of the Index on October  , 2003.

                                The  period  valuation  dates  are  the       of
                                each January, April, July and October, beginning
                                January   2004  through July 2008, and the final
                                quarterly valuation date  is October    ,  2008,
                                in each case subject to  adjustment as described
                                in the  section  of this  prospectus  supplement
                                called  "Description  of  Notes  --  Payment  at
                                Maturity."

Index Closing Level............ The index  closing level on any trading day will
                                equal  the  closing  level  of the  Index or any
                                successor index (as defined below), or alternate
                                calculation   of  the  Index   described   under
                                "Description  of Notes--  Discontinuance  of the
                                S&P   500(R)Index;   Alteration   of  Method  of
                                Calculation,"  at the regular  official  weekday
                                close of the  principal  trading  session of the
                                New York Stock Exchange on that trading day.

Ranking........................ The notes are our unsecured  and  unsubordinated
                                obligations and will rank pari passu with all of
                                our   other    unsecured   and    unsubordinated
                                obligations.

Calculation Agent.............. J.P. Morgan Securities Inc.

Tax Treatment.................. The notes will be treated as "contingent payment
                                debt  instruments"  for U.S.  federal income tax
                                purposes. As a result, regardless of your method
                                of accounting, you will generally be required to
                                accrue  interest on a constant yield to maturity
                                basis at a "comparable yield" of    % compounded
                                semi-annually,  with  the  result  that you will
                                recognize  taxable  income  while  the notes are
                                outstanding,  although  we  will  not  make  any
                                payments  to you  prior to the  maturity  of the
                                notes.  In addition,  any gain recognized upon a
                                sale,  exchange or  retirement of the notes will
                                generally be treated as ordinary interest income
                                for  U.S.  federal  income  tax  purposes.   See
                                "Certain U.S.  Federal Income Tax  Consequences"
                                for additional  discussion  regarding the United
                                States  federal  income  tax  treatment  of  the
                                notes.

                                YOU  ARE  URGED  TO  CONSULT  YOUR  TAX  ADVISER
                                REGARDING  THE TAX  TREATMENT  OF THE  NOTES AND
                                WHETHER A PURCHASE OF THE NOTES IS  ADVISABLE IN
                                LIGHT OF YOUR PARTICULAR SITUATION.

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


                                      S-2
<PAGE>

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

Use of Proceeds................ We will use the net proceeds we receive from the
                                sale of the  notes  offered  by this  prospectus
                                supplement for general corporate purposes and in
                                connection  with hedging our  obligations  under
                                the notes.

Listing........................ We  have  applied  to  list  the  notes  on  the
                                American  Stock  Exchange  LLC under the  symbol
                                "JPL.D."

How to reach us................ You may  contact us at our  principal  executive
                                offices at 270 Park Avenue,  New York,  New York
                                10017-2070 (telephone number (212) 270-4040).

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


                                      S-3
<PAGE>

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

                    Hypothetical Payment At Maturity for each
                        $1,000 Principal Amount of Notes

      The  payment at  maturity  of the notes will be the greater of the minimum
payment amount of $1,100 and $1,000 plus the additional  amount.  The additional
amount is based on the Index  closing  level on the period  valuation  dates for
each quarterly  valuation period.  Because the closing level of the Index may be
subject  to  significant  fluctuations  over  the term of the  notes,  it is not
possible to present a chart or table  illustrating  a complete range of possible
payouts at maturity.

      Therefore,  the examples of the hypothetical payout calculations below are
intended to illustrate  the effect of general  trends in the Index closing level
over the term of the notes on the amount  payable to you. The examples set forth
below are for illustrative  purposes only and the returns set forth in the table
may not be the actual returns applicable to a purchaser of the notes.  Moreover,
the  Index  may not  appreciate  or  depreciate  over the  term of the  notes in
accordance with any of the trends depicted by the  hypothetical  examples below,
and the size and  frequency of any  fluctuations  in the level of the Index over
the term of the notes,  which we refer to as the volatility of the Index, may be
significantly different than the volatility implied by any of these examples.

      The examples  beginning  on page S-5 are based on 20  quarterly  valuation
periods and the following terms and assumptions:

      o  a  closing  Index  level of 1000 at the  start of the  first  quarterly
         valuation period (this is a hypothetical  level only; the closing level
         of the Index for the first  quarterly  valuation  period will be set on
         the day we price the notes);

      o  an issue price of $1,000 per note;

      o  a maximum quarterly capped Index return of .05 (or 5%); and

      o  the notes are held to maturity.

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


                                      S-4
<PAGE>

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

Example 1

              Hypothetical Examples of Amounts Payable at Maturity

      In this  example,  we assume that the Index  increases  by 5% each quarter
over the five-year term of the notes from a  hypothetical  initial Index closing
level of 1000 to 2653 on the  final  quarterly  valuation  date.  The  quarterly
capped Index  return for each  quarterly  valuation  period is 5% and the sum of
those  quarterly  capped Index returns over the 20 quarterly  valuation  periods
during the term of the notes is 100%.  Thus,  the cash  payment at maturity  for
each  $1,000  principal  amount of notes will equal  $2,000,  consisting  of the
$1,000 principal amount plus an additional amount of $1,000 (100% times $1,000).

<TABLE>
<CAPTION>

            --------------------------------  -------------------------------  --------------------------------
                          2003                              2004                             2005
            --------------------------------  -------------------------------  --------------------------------
Quarterly   Hypothetical           Quarterly  Hypothetical          Quarterly  Hypothetical           Quarterly
Valuation      Index    Quarterly   Capped       Index    Quarterly   Capped      Index    Quarterly    Capped
  Period      Closing     Index      Index      Closing     Index      Index     Closing     Index       Index
  Ending:      Level     Return     Return       Level     Return     Return      Level     Return      Return
  -------      -----     ------     ------       -----     ------     ------      -----     ------      ------
<S>             <C>        <C>       <C>          <C>        <C>       <C>         <C>        <C>        <C>
April                                             1103       5.00%     5.00%       1340       5.00%      5.00%
July                                              1158       5.00%     5.00%       1407       5.00%      5.00%
October         1000                              1216       5.00%     5.00%       1477       5.00%      5.00%
January         1050       5.00%     5.00%        1276       5.00%     5.00%       1551       5.00%      5.00%
            --------------------------------  -------------------------------  --------------------------------
</TABLE>

<TABLE>
<CAPTION>

            --------------------------------  -------------------------------  --------------------------------
                          2006                              2007                             2008
            --------------------------------  -------------------------------  --------------------------------
            Hypothetical           Quarterly  Hypothetical          Quarterly  Hypothetical           Quarterly
               Index     Quarterly  Capped       Index     Quarterly  Capped      Index    Quarterly   Capped
              Closing      Index     Index      Closing      Index     Index     Closing     Index      Index
               Level      Return    Return       Level      Return    Return      Level     Return     Return
               -----      ------    ------       -----      ------    ------      -----     ------     ------
<S>             <C>        <C>       <C>          <C>        <C>       <C>         <C>        <C>        <C>
April           1629       5.00%     5.00%        1980       5.00%     5.00%       2407       5.00%      5.00%
July            1710       5.00%     5.00%        2079       5.00%     5.00%       2527       5.00%      5.00%
October         1796       5.00%     5.00%        2183       5.00%     5.00%       2653       5.00%      5.00%
January         1886       5.00%     5.00%        2292       5.00%     5.00%
            --------------------------------  -------------------------------  --------------------------------
</TABLE>

Assumptions:
--------------------------------------------------------------------------------
Issue price per note (your investment):                                $ 1,000
Sum of quarterly capped Index returns for the 20 quarterly
valuation periods:                                                      100.00%
Total return of the Index [(2653 - 1000) / 1000] x 100:                 165.33%

--------------------------------------------------------------------------------
Calculations:
--------------------------------------------------------------------------------
Calculation of payment at maturity per $1,000  principal  amount of the notes
-----------------------------------------------------------------------------
At maturity, you would receive a cash payment equal to the greater of:

       (x)  $1,100                                                     $ 1,100

            and

       (y)  $1,000 plus the additional amount
            $1,000 + ($1,000 x 100%)                                   $ 2,000

Investor  receives  $2,000 at maturity  (100.00%  total return on a hypothetical
investment in the notes)

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

As this  example  illustrates,  due to a lack of  compounding,  investing in the
notes is not the same as  investing  in the Index or the stocks  underlying  the
Index,  even  where  the  Index  consistently  increases  over the 20  quarterly
valuation  periods.  Although  the  hypothetical  increase of the Index for each
quarterly  valuation period in this example is 5%, which is not greater than the
5% cap on each quarterly  capped Index return,  the total return on the notes is
100%, whereas the total return on the Index for the same period is 165%. In this
example,  if you had invested $1,000 directly in the Index instead of the notes,
you would have received  $2,653 instead of the payment at maturity of $2,000 per
note.

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


                                      S-5
<PAGE>

--------------------------------------------------------------------------------
Example 2

      In this example,  we assume that the Index  generally  increases  over the
five-year term of the notes but has some negatively performing quarters. In this
example,  the sum of the  quarterly  capped Index  returns over the 20 quarterly
valuation periods during the term of the notes is 19.67%. Thus, the cash payment
at  maturity  for each  $1,000  principal  amount of notes  will  equal  $1,197,
consisting  of the $1,000  principal  amount plus an  additional  amount of $197
(19.67% times $1,000).

<TABLE>
<CAPTION>
            --------------------------------  -------------------------------  --------------------------------
                          2003                              2004                             2005
            --------------------------------  -------------------------------  --------------------------------
Quarterly   Hypothetical           Quarterly  Hypothetical          Quarterly  Hypothetical           Quarterly
Valuation      Index    Quarterly   Capped       Index    Quarterly   Capped      Index    Quarterly    Capped
  Period      Closing     Index      Index      Closing     Index      Index     Closing     Index       Index
  Ending:      Level     Return     Return       Level     Return     Return      Level     Return      Return
  -------      -----     ------     ------       -----     ------     ------      -----     ------      ------
<S>             <C>        <C>       <C>          <C>        <C>       <C>         <C>        <C>        <C>
April                                             1050       1.74%     1.74%       1328      13.41%      5.00%
July                                              1181      12.48%     5.00%       1355       2.03%      2.03%
October         1000                              1099      -6.94%    -6.94%       1401       3.39%      3.39%
January         1032       3.20%     3.20%        1171       6.55%     5.00%       1380      -1.50%     -1.50%
            --------------------------------  -------------------------------  --------------------------------
</TABLE>

<TABLE>
<CAPTION>
            --------------------------------  -------------------------------  --------------------------------
                          2006                              2007                             2008
            --------------------------------  -------------------------------  --------------------------------
            Hypothetical           Quarterly  Hypothetical          Quarterly  Hypothetical           Quarterly
               Index     Quarterly  Capped       Index     Quarterly  Capped      Index    Quarterly   Capped
              Closing      Index     Index      Closing      Index     Index     Closing     Index      Index
               Level      Return    Return       Level      Return    Return      Level     Return     Return
               -----      ------    ------       -----      ------    ------      -----     ------     ------
<S>             <C>        <C>       <C>          <C>        <C>       <C>         <C>        <C>        <C>
April           1340      -2.90%    -2.90%        1624       0.25%     0.25%       1572      -0.95%     -0.95%
July            1525      13.81%     5.00%        1608      -0.99%    -0.99%       1604       2.04%      2.04%
October         1433      -6.03%    -6.03%        1642       2.11%     2.11%       1645       2.56%      2.56%
January         1620      13.05%     5.00%        1587      -3.35%    -3.35%
            --------------------------------  -------------------------------  --------------------------------
</TABLE>

--------------------------------------------------------------------------------
Assumptions:
Issue price per note (your investment):                                 $ 1,000
Sum of quarterly capped Index returns for the 20 quarterly
valuation periods:             19.67%
Total return of the Index [(1645 - 1000) / 1000] x 100:                  64.50%

--------------------------------------------------------------------------------
Calculations:
--------------------------------------------------------------------------------
Calculation of payment at maturity per $1,000  principal  amount of the notes
-----------------------------------------------------------------------------
At maturity, you would receive a cash payment equal to the greater of:

       (x)  $1,100                                                      $ 1,100

            and

       (y)  $1,000 plus the additional amount
            $1,000 + ($1,000 x 19.67%)                                  $ 1,197

Investor  receives  $1,197 at maturity  (19.67%  total return on a  hypothetical
investment in the notes)

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

As this example illustrates,  the 5% quarterly cap on any increases of the Index
and the full  exposure to any decreases of the Index can result in the return on
the  notes  significantly  trailing  the  return  on the  Index  or  the  stocks
underlying the Index. The 5% cap on positive  quarterly capped Index returns can
result in only a small  participation  in  significant  positive  Index returns.
Combining  this limited upside  participation  with the full exposure to any and
all negative quarterly capped Index returns, this example shows how a payment at
maturity on the notes can be significantly  less than an investment  directly in
the Index or in the stocks  underlying  the Index.  In this example,  if you had
invested  $1,000  directly  in the Index  instead of the  notes,  you would have
received $1,645 instead of the payment at maturity of $1,197 per note.

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


                                      S-6
<PAGE>

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

Example 3

      In this example,  we assume that the Index  experiences  heavy  volatility
over the five-year term of the notes from an initial  hypothetical Index closing
level of 1000 to 1428 on the final  quarterly  valuation  date. In this example,
the sum of the quarterly  capped Index  returns over the 20 quarterly  valuation
periods  during  the term of the notes is  -3.89%.  Thus,  the cash  payment  at
maturity  for each  $1,000  principal  amount of notes  will  equal the  minimum
payment amount of $1,100 because that is greater than $1,000 plus the additional
amount.

<TABLE>
<CAPTION>

            --------------------------------  -------------------------------  --------------------------------
                          2003                              2004                             2005
            --------------------------------  -------------------------------  --------------------------------
Quarterly   Hypothetical           Quarterly  Hypothetical          Quarterly  Hypothetical           Quarterly
Valuation      Index    Quarterly   Capped       Index    Quarterly   Capped      Index    Quarterly    Capped
  Period      Closing     Index      Index      Closing     Index      Index     Closing     Index       Index
  Ending:      Level     Return     Return       Level     Return     Return      Level     Return      Return
  -------      -----     ------     ------       -----     ------     ------      -----     ------      ------
<S>             <C>        <C>       <C>           <C>       <C>       <C>         <C>        <C>        <C>
April                                             1023       0.00%     0.00%       1212      23.05%      5.00%
July                                              1246      21.80%     5.00%       1421      17.24%      5.00%
October         1000                              1297       4.09%     4.09%       1433       0.84%      0.84%
January         1023       2.30%     2.30%         985      -24.06%   -24.06%      1438       0.35%      0.35%
            --------------------------------  -------------------------------  --------------------------------
</TABLE>

<TABLE>
<CAPTION>
            --------------------------------  -------------------------------  --------------------------------
                          2006                              2007                             2008
            --------------------------------  -------------------------------  --------------------------------
            Hypothetical           Quarterly  Hypothetical          Quarterly  Hypothetical           Quarterly
               Index     Quarterly  Capped       Index     Quarterly  Capped      Index    Quarterly   Capped
              Closing      Index     Index      Closing      Index     Index     Closing     Index      Index
               Level      Return    Return       Level      Return    Return      Level     Return     Return
               -----      ------    ------       -----      ------    ------      -----     ------     ------
<S>             <C>        <C>       <C>          <C>        <C>       <C>         <C>        <C>        <C>
April           1444       0.42%     0.42%        1638       0.49%     0.49%       1306       6.44%      5.00%
July            1486       2.91%     2.91%        1678       2.44%     2.44%       1322       1.23%      1.23%
October         1503       1.14%     1.14%        1157      -31.05%   -31.05%      1428       8.02%      5.00%
January         1630       8.45%     5.00%        1227       6.05%     5.00%
            --------------------------------  -------------------------------  --------------------------------
</TABLE>

--------------------------------------------------------------------------------
Assumptions:
--------------------------------------------------------------------------------
Issue price per note (your investment):                                 $ 1,000
Sum of quarterly capped Index returns for the 20 quarterly
valuation periods:                                                        -3.89%
Total return of the Index [(1428 - 1000) / 1000] x 100:                   42.80%

--------------------------------------------------------------------------------
Calculations:
--------------------------------------------------------------------------------
Calculation of payment at maturity per $1,000 principal amount of the notes
---------------------------------------------------------------------------
At maturity, you would receive a cash payment equal to the greater of:

     (x)  $1,100                                                         $ 1,100

          and

     (y)  $1,000 plus the additional amount
          $1,000 + ($1,000 x -3.89%)                                       $ 961

Investor  receives  $1,100 at maturity (10.00%  total  return on a  hypothetical
investment in the notes)

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

As this  example  illustrates,  a few (or even just one)  negative  quarters can
significantly  impact  the return on the notes.  In this  example,  18 of the 20
quarters had positive  quarterly  capped Index returns and only two had negative
returns. However, the two negative quarters were each significantly negative. As
a result, not only does the return on the notes  significantly  trail the return
on the Index,  the notes only  return the minimum  payment  amount of $1,100 (or
10%) while the Index had a 42.80% return.  In this example,  if you had invested
$1,000  directly  in the Index  instead  of the notes,  you would have  received
$1,428, instead of the payment at maturity of $1,100 per note.

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


                                      S-7
<PAGE>

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

Example 4

      In this example,  we assume that the Index  gradually  increases  over the
five-year  term of the notes  without any negative  quarterly  returns.  In this
example,  the sum of the  quarterly  capped Index  returns over the 20 quarterly
valuation periods during the term of the notes is 36.52%. Thus, the cash payment
at  maturity  for each  $1,000  principal  amount  of notes  will  equal  $1,365
consisting  of the $1,000  principal  amount plus an  additional  amount of $365
(36.52% times $1,000).

<TABLE>
<CAPTION>

            --------------------------------  -------------------------------  --------------------------------
                          2003                              2004                             2005
            --------------------------------  -------------------------------  --------------------------------
Quarterly   Hypothetical           Quarterly  Hypothetical          Quarterly  Hypothetical           Quarterly
Valuation      Index    Quarterly   Capped       Index    Quarterly   Capped      Index    Quarterly    Capped
  Period      Closing     Index      Index      Closing     Index      Index     Closing     Index       Index
  Ending:      Level     Return     Return       Level     Return     Return      Level     Return      Return
  -------      -----     ------     ------       -----     ------     ------      -----     ------      ------
<S>             <C>        <C>       <C>          <C>        <C>       <C>         <C>        <C>        <C>
April                                             1031       2.28%     2.28%       1077       1.41%      1.41%
July                                              1040       0.87%     0.87%       1083       0.56%      0.56%
October         1000                              1051       1.06%     1.06%       1086       0.28%      0.28%
January         1008       0.80%     0.80%        1062       1.05%     1.05%       1096       0.92%      0.92%
            --------------------------------  -------------------------------  --------------------------------
</TABLE>

<TABLE>
<CAPTION>
            --------------------------------  -------------------------------  --------------------------------
                          2006                              2007                             2008
            --------------------------------  -------------------------------  --------------------------------
            Hypothetical           Quarterly  Hypothetical          Quarterly  Hypothetical           Quarterly
               Index     Quarterly  Capped       Index     Quarterly  Capped      Index    Quarterly   Capped
              Closing      Index     Index      Closing      Index     Index     Closing     Index      Index
               Level      Return    Return       Level      Return    Return      Level     Return     Return
               -----      ------    ------       -----      ------    ------      -----     ------     ------
<S>             <C>        <C>       <C>          <C>        <C>       <C>         <C>        <C>        <C>
April           1118       2.01%     2.01%        1240       3.77%     3.77%       1386       2.97%      2.97%
July            1123       0.45%     0.45%        1274       2.74%     2.74%       1423       2.67%      2.67%
October         1161       3.38%     3.38%        1286       0.94%     0.94%       1434       0.77%      0.77%
January         1195       2.93%     2.93%        1346       4.67%     4.67%
            --------------------------------  -------------------------------  --------------------------------
</TABLE>

--------------------------------------------------------------------------------
Assumptions:
--------------------------------------------------------------------------------
Issue price per note (your investment):                                 $ 1,000
Sum of quarterly capped Index returns for the 20 quarterly
valuation periods:                                                        36.52%
Total return of the Index [(1434 - 1000) / 1000] x 100:                   43.40%

--------------------------------------------------------------------------------
Calculations:
--------------------------------------------------------------------------------
Calculation of payment at maturity per $1,000 principal amount of the notes
--------------------------------------------------------------------------------

At maturity, you would receive a cash payment equal to the greater of:

     (x)  $1,100                                                         $ 1,100

          and

     (y)  $1,000 plus the additional amount
          $1,000 + ($1,000 x 36.52%)                                     $ 1,365

Investor  receives  $1,365 at maturity  (36.52%  total return on a  hypothetical
investment in the notes)

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

As this example illustrates,  a slow, gradual increase in the level of the Index
over the term of the notes  results in a  potentially  attractive  return on the
notes. In addition to the  assumptions of Example 1 (i.e., no quarterly  returns
exceeding the 5% cap, and no negative quarterly returns),  here, the increase is
even more gradual,  and thus, the effect of not  compounding the returns is less
significant  than in  Example 1. In this  example,  if you had  invested  $1,000
directly  in the Index  instead of the notes,  you would have  received  $1,434,
instead of the payment at maturity of $1,365 per note.

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


                                      S-8
<PAGE>

Example 5

      In this example,  we assume that the Index level remains  relatively  flat
during the first two years and then  declines  over the last three  years of the
term of the  notes.  In this  example,  the sum of the  quarterly  capped  Index
returns over the 20 quarterly  valuation periods during the term of the notes is
-39.02%.  Thus, the cash payment at maturity for each $1,000 principal amount of
notes will equal $1,100, because that is greater than $1,000 plus the additional
amount.

<TABLE>
<CAPTION>

            --------------------------------  -------------------------------  --------------------------------
                          2003                              2004                             2005
            --------------------------------  -------------------------------  --------------------------------
Quarterly   Hypothetical           Quarterly  Hypothetical          Quarterly  Hypothetical           Quarterly
Valuation      Index    Quarterly   Capped       Index    Quarterly   Capped      Index    Quarterly    Capped
  Period      Closing     Index      Index      Closing     Index      Index     Closing     Index       Index
  Ending:      Level     Return     Return       Level     Return     Return      Level     Return      Return
  -------      -----     ------     ------       -----     ------     ------      -----     ------      ------
<S>              <C>       <C>       <C>          <C>        <C>       <C>         <C>        <C>        <C>
April                                              993       0.40%     0.40%       1024       0.69%      0.69%
July                                               993       0.00%     0.00%       1038       1.37%      1.37%
October         1000                              1004       1.11%     1.11%       1051       1.25%      1.25%
January          989      -1.10%    -1.10%        1017       1.29%     1.29%       1069       1.71%      1.71%
            --------------------------------  -------------------------------  --------------------------------
</TABLE>

<TABLE>
<CAPTION>
            --------------------------------  -------------------------------  --------------------------------
                          2006                              2007                             2008
            --------------------------------  -------------------------------  --------------------------------
            Hypothetical           Quarterly  Hypothetical          Quarterly  Hypothetical           Quarterly
               Index     Quarterly  Capped       Index     Quarterly  Capped      Index    Quarterly   Capped
              Closing      Index     Index      Closing      Index     Index     Closing     Index      Index
               Level      Return    Return       Level      Return    Return      Level     Return     Return
               -----      ------    ------       -----      ------    ------      -----     ------     ------
<S>             <C>        <C>       <C>           <C>       <C>       <C>          <C>       <C>        <C>
April           1042      -2.53%    -2.53%         856      -6.65%    -6.65%        747      -2.61%     -2.61%
July             989      -5.09%    -5.09%         817      -4.56%    -4.56%        729      -2.41%     -2.41%
October          908      -8.19%    -8.19%         798      -2.33%    -2.33%        667      -8.50%     -8.50%
January          917       0.99%     0.99%         767      -3.88%    -3.88%
            --------------------------------  -------------------------------  --------------------------------
</TABLE>

--------------------------------------------------------------------------------
Assumptions:
--------------------------------------------------------------------------------
Issue price per note (your investment):                                 $ 1,000
Sum of quarterly capped Index returns for the 20 quarterly
valuation periods:                                                       -39.02%
Total return of the Index [(667 - 1000) / 1000] x 100:                   -33.30%

--------------------------------------------------------------------------------
Calculations:
--------------------------------------------------------------------------------
Calculation of payment at maturity per $1,000 principal amount of the notes
--------------------------------------------------------------------------------
At maturity, you would receive a cash payment equal to the greater of:

     (x)  $1,100                                                         $ 1,100

          and

     (y)  $1,000 plus the additional amount
          $1,000 + ($1,000 x -39.02%)                                      $ 610

Investor  receives  $1,100 at maturity (10.00%  total  return on a  hypothetical
investment in the notes)

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

As this  example  illustrates,  the notes will provide a return in excess of the
return on the Index itself in certain  scenarios  where the Index  closing level
declines over the term of the notes. In this example, if you had invested $1,000
directly  in the Index  instead of the  notes,  you would  have  received  $667,
instead of the payment at maturity of $1,100 per note.

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


                                      S-9
<PAGE>

                                  RISK FACTORS

      Your investment in the notes will involve certain risks.  The notes do not
pay interest.  Investing in the notes is not equivalent to investing directly in
the Index.  In addition,  your  investment  in the notes entails other risks not
associated  with an  investment  in  conventional  debt  securities.  You should
consider  carefully the following  discussion of risks before you decide that an
investment in the notes is suitable for you.

The notes differ from conventional debt securities.

      The notes  combine  features  of equity  and debt.  The terms of the notes
differ  from  those  of  conventional  debt  securities  in that we will not pay
interest on the notes. Because the amount due at maturity may be no greater than
the  minimum  payment  amount of  $1,100,  representing  an  effective  yield to
maturity of 1.92% per annum on the principal  amount of each note, the return on
your  investment  in the notes may be less than the amount that would be paid on
an ordinary  debt  security.  The return of only the minimum  payment  amount at
maturity may not fully compensate you for the loss in value due to inflation and
other factors relating to the value of money over time.

Investing in the notes is not equivalent to investing in the S&P 500(R) Index.

      The exposure you have to upside performance of the Index is limited by a
5% cap  on  each  quarterly  Index  return  observation.  This  is  because  the
calculation of the additional  amount will not take into account any more than a
positive .05 (or 5%) Index return in any quarterly valuation period,  regardless
of how well the Index performs in any quarterly  valuation  period.  Conversely,
you have no protection  against  negative  performance of the Index in regard to
the  calculation  of the  additional  amount.  The  full  extent  of any and all
negative  quarterly  Index returns will be taken into account in the calculation
of the additional  amount.  Your return on the notes may be  significantly  less
than you might otherwise have earned from directly  investing in the Index,  due
in part to the 5% quarterly cap on positive quarterly Index returns and the full
exposure you have to negative quarterly Index returns.

      The quarterly capped Index return will operate to limit your participation
in the increase in the level of the Index during any quarterly  valuation period
to a maximum of .05 (or 5%).  Your  exposure  to any decline in the level of the
Index during any quarterly valuation period, however, will not be limited except
that you will at least  receive a payment  at  maturity  of  $1,100  per  $1,000
principal  amount of notes.  It is possible  that  increases in the level of the
Index during some quarterly  valuation periods will be offset by declines in the
level of the Index during other quarterly  valuation  periods during the term of
the notes.  However,  because of the limits on your  participation  in quarterly
increases  in the level of the Index  resulting  from the 5% cap, it is possible
that  despite  increases in the level of the Index that would  otherwise  offset
declines  in the  level of the  Index,  such  increases  will not in fact do so.
Consequently,  it is possible that the  additional  amount may be less than $100
even if the Index has  increased by more than 10% as of the maturity date of the
notes.  In that case,  you would receive the minimum  payment  amount of $1,100,
which  represents a return on your investment that would be less than the simple
index price return on the Index.

      In  addition,  because  of the  lack of  compounding  in  calculating  the
additional  amount,  the return on the notes may be significantly  less than the
return on the Index or the stocks underlying the Index. As Example 1 illustrates
under "--  Hypothetical  Payment at Maturity for each $1,000 Principal Amount of
Notes" above, this may be the case even where the Index steadily increases every
quarterly valuation period by 5%.

      You can  review  the  historical  closing  levels  of the  Index  for each
calendar quarter  including the historical  quarterly  percentage  change of the
closing levels of the Index in the period from January 1, 1998 through September
    , 2003 in the section of this  prospectus supplement  called "Description of
Notes -- Historical Information."

Your return on the notes will not reflect  dividends on the common stocks of the
companies in the Index.

        Your return on the notes will not  reflect the return you would  realize
if you actually  owned the common stock of the  companies  included in the Index
and received the dividends paid on those stocks. This is because the calculation
agent will calculate the amount payable to you upon maturity by reference to the
closing  levels of the  Index.  The index  closing  levels on each of the period
valuation  dates  reflect the prices of the common  stocks in the Index  without
taking into consideration the value of dividends paid on those stocks.


                                      S-10
<PAGE>

The notes are designed to be held to maturity.

      The notes are not designed to be short-term trading instruments. The price
at which  you will be able to sell  your  notes  prior to  maturity  may be at a
substantial discount from the principal amount of the notes, even in cases where
the Index has  appreciated  since the date of the  issuance  of the  notes.  The
potential returns described in this prospectus supplement assume that your notes
are held to maturity.

The notes are not  designed  to be vehicles  for  achieving  significant  upside
exposure to the Index.

      The  additional  amount  paid on these  notes may be zero or a number  not
significantly  greater than zero due in part to the 5% cap on positive quarterly
capped Index return amounts,  the lack of compounding,  and the full exposure to
any and all negative quarterly Index returns as more fully described herein. The
notes are potentially more appropriately viewed as an investment alternative for
a portion of an investor's bond allocation.

Even though we have  applied to list the notes on the  American  Stock  Exchange
LLC, we cannot assure you that an active trading market will develop.

      We have  applied to list the notes on the  American  Stock  Exchange  LLC,
which we refer to as the AMEX,  under the symbol "JPL.D." Prior to this offering
there has been no market for the notes.  Listing  the notes on the AMEX does not
ensure that a liquid trading  market will develop for the notes.  The specialist
at the AMEX  assigned to trade these notes is not  affiliated  with us. While we
may  provide  indicative  prices  to the  specialist  from  time  to  time,  the
specialist  will  determine the price at which the notes trade on the AMEX.  The
specialist may withdraw or be replaced at any time during the term of the notes.

      If a secondary  market does exist, it may be limited.  Accordingly,  there
may be a limited  number of buyers  if you  decide to sell your  notes  prior to
maturity.  This may affect the price you  receive  upon such sale.  J.P.  Morgan
Securities Inc. currently intends to act as a market-maker for the notes, but is
not required to do so. Consequently,  you should be willing to hold the notes to
maturity.

The value of the notes will be influenced by many unpredictable factors.

      Many economic and market factors will influence the value of the notes. We
expect that  generally,  the level of the Index on any day will affect the value
of the notes more than any other single factor.  However,  you should not expect
the value of the notes in the secondary  market to vary in proportion to changes
in the level of the Index.  The value of the notes will be  affected by a number
of factors that may either offset or magnify each other, including:

      o     the  level  of the  Index  at any  time  and on each  of the  period
            valuation dates;

      o     the time left to maturity of the notes;

      o     the dividend rate on the stocks underlying the Index;

      o     the historical and expected volatility in the Index;

      o     interest and yield rates in the market;

      o     economic, financial,  political,  regulatory or judicial events that
            affect  the  stocks  represented  in  the  Index  or  stock  markets
            generally  and which may affect the closing  level of the Index on a
            period valuation date; and

      o     our creditworthiness.

      Some or all of these  factors may cause the value of notes to be less than
it would otherwise be, at maturity.  For example,  the price at which you may be
able to sell your notes prior to maturity may be at a substantial  discount from
the principal  amount of the notes,  if market  interest rates rise or if at the
time of sale the additional amount calculated to that date is less than or equal
to $100,  indicating  that the  magnitude  of the  decreases in the level of the
Index during previous quarterly  valuation periods is greater than the increases
in the level of the Index during previous quarterly valuation periods.


                                      S-11
<PAGE>

      Neither we nor you can predict  the future  quarterly  performance  of the
Index  based  on its  historical  performance.  We  cannot  guarantee  that  the
quarterly  performance  of the Index  will  result in a payment at  maturity  in
excess of the minimum payment amount.

S&P may  adjust  the  Index  in a way  that  affects  its  level  and S&P has no
obligation to consider your interests.

      S&P is responsible for calculating and maintaining the Index. S&P can add,
delete  or   substitute   the  stocks   underlying   the  Index  or  make  other
methodological  changes  that could  change  the level of the Index.  You should
realize  that the  changing  of  companies  included in the Index may affect the
Index as a newly added  company may perform  significantly  better or worse than
the company or companies  it  replaces.  Additionally,  S&P may  discontinue  or
suspend  calculation or  dissemination  of the Index. Any of these actions could
adversely  affect the value of the notes. S&P has no obligation to consider your
interests in calculating or revising the Index.

We are one of the  companies  that make up the  Index but we are not  affiliated
with any other company included in the Index.

      We are  one of the  companies  that  make  up the  Index,  but we are  not
affiliated  with any of the other  companies  whose stock is  represented in the
Index. As a result, we will have no ability to control or predict the actions of
such other  companies,  including  actions  that  could  affect the value of the
stocks  underlying the Index or your notes. None of the money you pay us will go
to S&P or any of the  other  companies  included  in the Index and none of those
companies will be involved in the offering of the notes in any way. Neither they
nor we will have any  obligation  to consider  your  interest as a holder of the
notes in taking any corporate actions that might affect the value of your notes.

You will have no  shareholder  rights in issuers  of stock  which  comprise  the
Index.

      As a holder of the  notes,  you will not have  voting  rights or rights to
receive  dividends  or other  distributions  or other rights that holders of the
securities composing the Index would have.

We or our affiliates may have adverse  economic  interests to the holders of the
notes.

      J.P. Morgan  Securities Inc. and other affiliates of ours trade the stocks
underlying the Index and other  financial  instruments  related to the Index and
its  component  stocks on a regular  basis,  for  their  accounts  and for other
accounts  under  their  management.   J.P.  Morgan  Securities  Inc.  and  these
affiliates may also issue or underwrite or assist  unaffiliated  entities in the
issuance or  underwriting  of other  securities  or financial  instruments  with
returns  indexed to the Index.  To the extent  that we or one of our  affiliates
serves  as  issuer,  agent  or  underwriter  for such  securities,  our or their
interests  with respect to such  products may be adverse to those of the holders
of the notes. Any of these trading activities could potentially affect the level
of the  Index  and,  accordingly,  could  affect  the value of the notes and the
additional amount, if any, payable to you at maturity.

      We or our affiliates may currently or from time to time engage in business
with companies whose stock is included in the Index,  including  extending loans
to, or making equity  investments  in, or providing  advisory  services to them,
including  merger  and  acquisition  advisory  services.  In the  course of this
business,  we or our affiliates  may acquire  non-public  information  about the
companies,  and in addition,  one or more of our affiliates may publish research
reports  about them.  Any  prospective  purchaser of notes  should  undertake an
independent  investigation  of each  company in the Index as in its  judgment is
appropriate  to make an informed  decision  with respect to an investment in the
notes.

      Additionally,  we or one of our affiliates  may serve as issuer,  agent or
underwriter for additional  issuances of notes with returns linked or related to
changes in the level of the Index or the stocks  which  comprise  the Index.  By
introducing competing products into the marketplace in this manner, we or one or
more of our affiliates could adversely affect the value of the notes.


                                      S-12
<PAGE>

      J.P.  Morgan  Securities  Inc.,  one of our  affiliates,  will  act as the
calculation  agent.  The calculation  agent will determine each quarterly capped
Index return and the additional amount, if any, we will pay you at maturity. The
calculation  agent will also be  responsible  for  determining  whether a market
disruption  event has  occurred,  whether  the Index has been  discontinued  and
whether  there has been a material  change in the method of  calculation  of the
Index.  In  performing  these  duties,  J.P.  Morgan  Securities  Inc.  may have
interests adverse to the interests of the holders of the notes, which may affect
your return on the notes, particularly where J.P. Morgan Securities Inc., as the
calculation agent, is entitled to exercise discretion.

The notes will be contingent  payment debt instruments for United States federal
income tax purposes.

      If you are a U.S. taxable  investor,  you will be subject to annual income
tax based on the "comparable  yield" of the notes, as determined by us, although
we will not make any  payments  to you prior to the  maturity  of the notes.  In
addition,  any gain recognized upon a sale,  exchange or retirement of the notes
will generally be treated as ordinary  interest  income for U.S.  federal income
tax purposes.  Please read  carefully the section called  "Certain U.S.  Federal
Income Tax Consequences."


                                      S-13
<PAGE>

                             J.P. MORGAN CHASE & CO.

      J.P. Morgan Chase & Co. is a financial holding company  incorporated under
Delaware law in 1968.  As of June 30, 2003, we were the second  largest  banking
institution in the United States,  with approximately $803 billion in assets and
approximately $45 billion in stockholders' equity.

      We are a  global  financial  services  firm  with  operations  in  over 50
countries.  Our principal bank  subsidiaries are JPMorgan Chase Bank, which is a
New York banking corporation headquartered in New York City, and Chase Manhattan
Bank  USA,  National  Association,  headquartered  in  Delaware.  Our  principal
non-bank  subsidiary is our investment bank subsidiary,  J.P. Morgan  Securities
Inc.

      Our activities are internally organized for management reporting purposes,
into five major  businesses:  Investment Bank,  Investment  Management & Private
Banking,  Treasury & Securities Services,  JPMorgan Partners and Chase Financial
Services. We have presented a brief description of these businesses below.

Investment Bank

      The  Investment  Bank includes our securities  underwriting  and financial
advisory,  trading,  mergers and acquisitions advisory and corporate lending and
syndication business.

Investment Management & Private Banking

      Investment  Management & Private  Banking  includes  our asset  management
business,  including our mutual funds;  our  institutional  money management and
cash management business; and our private bank, which provides wealth management
solutions for a global client base of high net worth individuals and families.

Treasury & Securities Services

      Treasury & Securities  Services is a recognized  leader in information and
transaction processing services, moving trillions of dollars daily in securities
and cash for its wholesale clients.  Treasury & Securities Services includes our
custody, cash management and trust and other fiduciary services businesses.

JPMorgan Partners

      JPMorgan  Partners  is one of the  world's  largest  and most  diversified
private  equity   investment   firms  with  total  funds  under   management  of
approximately $22 billion.

Chase Financial Services

      Chase  Financial  Services  serves more than 30 million  consumers,  small
businesses and middle-market companies across the United States. Chase Financial
Services  offers a wide range of  financial  products  and  services,  including
consumer banking, credit cards, mortgage services and consumer finance services,
through a diverse  array of  distribution  channels,  including the internet and
branch and ATM networks.


                                      S-14
<PAGE>

                  WHERE YOU CAN FIND MORE INFORMATION ABOUT US

      We file annual,  quarterly and current reports, proxy statements and other
information  with the  Commission.  You may read and copy these documents at the
Commission's  public  reference room at Room 1024,  Judiciary  Plaza,  450 Fifth
Street, N.W.,  Washington,  D.C. 20549, and at the Commission's regional offices
at Northeast Regional Office, 233 Broadway, New York, New York 10279 and Midwest
Regional Office,  Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois  60661.  Copies of this  material can also be obtained  from the Public
Reference Room of the  Commission at Judiciary  Plaza,  450 Fifth Street,  N.W.,
Washington,  D.C.  20549 at  prescribed  rates.  Please call the  Commission  at
1-800-732-0330  for further  information  about the Public  Reference  Room. The
Commission also maintains an Internet website that contains  reports,  proxy and
information   statements  and  other   materials  that  are  filed  through  the
Commission's  Electronic Data Gathering,  Analysis and Retrieval (EDGAR) System.
This website can be accessed at http://www.sec.gov.  You can find information we
have filed with the Commission by reference to file number 1-5805.  In addition,
you may inspect our  reports,  proxy  statements  and other  information  at the
offices of the New York Stock  Exchange,  Inc., 20 Broad Street,  New York,  New
York 10005.

      This prospectus  supplement and the accompanying  prospectus are part of a
registration statement we filed with the Commission.  This prospectus supplement
and  the  accompanying   prospectus  omit  some  information  contained  in  the
registration statement in accordance with Commission rules and regulations.  You
should review the  information  and exhibits in the  registration  statement for
further information on us and our consolidated subsidiaries and the notes we are
offering   Statements  in  this  prospectus   supplement  and  the  accompanying
prospectus  concerning  any document we filed as an exhibit to the  registration
statement or that we otherwise  filed with the Commission are not intended to be
comprehensive and are qualified by reference to these filings. You should review
the complete document to evaluate these statements.

      The  Commission  allows  us  to  incorporate  by  reference  much  of  the
information  we file with  them,  which  means  that we can  disclose  important
information to you by referring you to those publicly available  documents.  The
information  that we incorporate by reference in this prospectus  supplement and
the  accompanying  prospectus  is  considered  to be  part  of  this  prospectus
supplement and the  accompanying  prospectus.  Because we are  incorporating  by
reference future filings with the Commission, this prospectus supplement and the
accompanying  prospectus  are  continually  updated and those future filings may
modify or supersede some of the  information  included or  incorporated  in this
prospectus supplement and the accompanying prospectus.  This means that you must
look at all of the  Commission  filings  that we  incorporate  by  reference  to
determine  if any of the  statements  in  this  prospectus  supplement  and  the
accompanying  prospectus or in any document previously incorporated by reference
have been modified or superseded This prospectus supplement and the accompanying
prospectus  incorporate  by reference the documents  listed below and any future
filings we make with the Commission under Sections 13(a),  13(c), 14 or 15(d) of
the Securities  Exchange Act of 1934 until we complete our offering of the notes
to be issued under the  registration  statement or, if later,  the date on which
any of our affiliates cease offering and selling these securities:

      (a)   our Annual Report on Form 10-K for the year ended  December 31, 2002
            (filed on March 19, 2003);

      (b)   our Quarterly  Report on Form 10-Q for the quarters  ended March 31,
            2003 (filed on May 14,  2003) and June 30, 2003 (filed on August 12,
            2003); and

      (c)   our  Current  Reports on Form 8-K filed on January 2, 2003,  January
            24, 2003,  March 19, 2003,  April 16, 2003, April 18, 2003, July 11,
            2003, July 16, 2003, July 18, 2003, July 25, 2003 and July 28, 2003.

      You may request,  at no cost to you, a copy of these documents (other than
exhibits  to such  documents)  by writing or  telephoning  us at:  Office of the
Secretary,  J.P.  Morgan  Chase & Co.,  270  Park  Avenue,  New  York,  New York
10017-2070 (Telephone: (212) 270-4040).


                                      S-15
<PAGE>

                                 USE OF PROCEEDS

      The net  proceeds  we receive  from the sale of the notes will be used for
general  corporate  purposes  and,  in  part,  by us or by  one or  more  of our
subsidiaries  in connection with hedging our  obligations  under the notes.  See
also "Use of Proceeds" in the accompanying prospectus.

      On or prior to the date of this  prospectus  supplement,  we,  through our
subsidiaries  or others,  may hedge some or all of our  anticipated  exposure in
connection  with  the  notes  by  taking  positions  in the  Index,  the  stocks
underlying the Index,  or  instruments  whose value is derived from the Index or
its underlying  stocks.  Such hedging  activity could  potentially  increase the
level of the Index, and therefore  effectively establish a higher level that the
Index must achieve for you to receive any  additional  amount at maturity.  From
time to time,  prior to maturity of the notes,  we may pursue a dynamic  hedging
strategy  which may involve  taking long or short  positions  in the Index,  the
stocks  underlying  the Index,  or  instruments  whose value is derived from the
Index or its underlying  stocks.  Although we have no reason to believe that any
of these activities will have a material impact on the level of the Index or the
value of the notes,  we cannot  assure you that these  activities  will not have
such an effect.


                                      S-16
<PAGE>

                              DESCRIPTION OF NOTES

      The following description of the particular terms of the notes supplements
the  description of the general terms of the debt securities set forth under the
heading  "Description  of  Debt  Securities"  in  the  accompanying  prospectus.
Capitalized  terms used but not defined in this  prospectus  supplement have the
meanings  assigned in the accompanying  prospectus or the indenture  referred to
below.

General

      The notes are a series of debt securities  referred to in the accompanying
prospectus.  The  notes  will be  issued  by J.P.  Morgan  Chase & Co.  under an
indenture dated May 25, 2001 between us and Deutsche Bank Trust Company Americas
(formerly Bankers Trust Company),  as trustee, and will be initially limited  to
$       aggregate principal amount.

      The notes do not pay interest.  Instead,  each $1,000  principal amount of
notes will pay the greater of the minimum  amount and an amount  equal to $1,000
plus the additional  amount,  calculated in accordance  with the formula set out
below.

      The notes are not bank deposits and are not insured by the Federal Deposit
Insurance  Corporation  or by  any  other  governmental  agency,  nor  are  they
obligations of, or guaranteed by, a bank.

      The notes are our unsecured and  unsubordinated  obligations and will rank
pari passu with all of our other unsecured and unsubordinated obligations.

      The notes will be issued in denominations of $1,000 and integral multiples
thereof.  The notes will be represented  by one or more  permanent  global notes
registered  in the name of DTC or its  nominee,  as  described  under  "Forms of
Securities -- Global Securities" in the accompanying prospectus.

Payment at Maturity

      The notes will mature on  October    , 2008. Your return on the notes will
be linked to the  performance of the Index during the term of the notes.  Unlike
ordinary  debt  securities,  the notes do not pay  interest.  Instead,  you will
receive a cash payment per $1,000 principal amount of notes equal to the greater
of $1,100, which we refer to as the "minimum payment amount" and $1,000 plus the
"additional amount."

      The  "additional  amount" will be calculated by the  calculation  agent by
multiplying  $1,000 by the sum of the quarterly capped Index returns for each of
the 20 quarterly  valuation  periods during the term of the notes.  Because each
quarterly  capped  Index return is subject to a cap of .05 (or 5%), as described
below,  the additional  amount will never exceed $1,000 and the total payment at
maturity  for each $1,000  principal  amount of notes will never be greater than
$2,000.  Any negative  quarterly  capped Index return will reduce the sum of the
quarterly  capped  Index  returns  over the  five-year  term of the  notes,  and
therefore the additional amount.

      The "quarterly capped Index return" for any quarterly valuation period, as
calculated by the calculation  agent on the relevant  period  valuation date, is
equal to the Index closing level at the end of that quarterly  valuation  period
less the Index closing level at the beginning of that quarterly valuation period
divided by the Index closing level at the beginning of that quarterly  valuation
period;  provided,  however,  that in no event will the  quarterly  capped Index
return for any quarterly valuation period exceed .05 (or 5%).

      Each  "quarterly  valuation  period" is the period  from and  including  a
period  valuation  date  to and  including  the  immediately  subsequent  period
valuation  date;  except that the first  quarterly  valuation  period  begins on
October  , 2003.  The first  quarterly  valuation  period  will be less than one
calendar quarter.

      The "period  valuation  dates" are the    of each January, April, July and
October,  beginning  January  2004  through  October  2008 and the final  period
valuation date is October   , 2008, in each such case subject to  adjustment  if
such date is not a trading day or if a market  disruption  event  occurs on such
date as described in the two following paragraphs.


                                      S-17
<PAGE>

      If any  scheduled  period  valuation  date  occurring  from and  including
January  2004 to and  including  July 2008 is not a  trading  day or if a market
disruption event occurs on any such date, such period valuation date will be the
immediately succeeding trading day during which no market disruption event shall
have occurred;  provided that if a market  disruption event occurs on any of the
scheduled  period  valuation dates occurring from and including  January 2004 to
and  including  July  2008  and on each of the  five  trading  days  immediately
succeeding that scheduled  period valuation date, then (i) such fifth succeeding
trading  day  will  be  deemed  to  be  the  relevant  period   valuation  date,
notwithstanding the occurrence of a market disruption event on such day and (ii)
with respect to any such fifth  trading day on which a market  disruption  event
occurs,  the  calculation  agent will  determine the index closing level on such
fifth trading day in accordance  with the formula for and method of  calculating
the index closing level last in effect prior to the  commencement  of the market
disruption  event,  using the  closing  price (or,  if  trading in the  relevant
securities has been materially  suspended or materially limited,  its good faith
estimate of the closing price that would have prevailed but for such  suspension
or limitation) on such trading day of each security most recently comprising the
Index.

      If October    , 2008  (the final  period valuation date) is not a  trading
day or if there is a market  disruption  event on such  day,  the  final  period
valuation date will be the  immediately  succeeding  trading day during which no
market  disruption  event shall have  occurred;  provided that the index closing
level will not be determined on a date later than the second  scheduled  trading
day prior to  maturity,  and if such day is not a trading  day, or if there is a
market  disruption event on such date, the calculation  agent will determine the
Index closing  level on such date in accordance  with the formula for and method
of calculating  the Index closing level last in effect prior to  commencement of
the market disruption event (or prior to the non-trading day), using the closing
price (or, if trading in the relevant  securities has been materially  suspended
or materially  limited,  its good faith estimate of the closing price that would
have prevailed but for such suspension or limitation or non-trading day) on such
date of each security most recently constituting the Index.

      The "index  closing level" on any trading day will equal the closing level
of  the  Index  or  any  successor  index  (as  defined  below)  or  alternative
calculation  of the Index  described  under  "Discontinuance  of the S&P  500(R)
Index;  Alteration of Method of  Calculation"  at the regular  official  weekday
close of the principal trading session of the New York Stock Exchange, Inc. (the
"NYSE"), the AMEX, the Nasdaq National Market or the relevant exchange or market
for the successor index.

      A "trading day" is a day, as determined by the calculation agent, on which
trading is  generally  conducted  on the NYSE,  the AMEX,  the  Nasdaq  National
Market, the Chicago  Mercantile  Exchange and the Chicago Board Options Exchange
and in the over-the-counter market for equity securities in the United States.

      We will  irrevocably  deposit with DTC no later than the close of business
on the maturity date funds  sufficient to make payments of the amount payable at
maturity  with respect to the notes on such date.  We will give DTC  irrevocable
instructions  and  authority  to pay such  amount  to the  holders  of the notes
entitled  thereto.  See "--  Book-Entry  Only Issuance -- The  Depository  Trust
Company."  In the event  that the  maturity  date is not a  business  day,  then
payments  payable on such date will be made on the next succeeding  business day
with the same  force and effect as if made on such date,  except  that,  if such
business  day falls in the next  calendar  year such payment will be made on the
immediately preceding business day. A "business day" is any day other than a day
on which banking institutions in The City of New York are authorized or required
by law or regulation to close or a day on which  transactions in dollars are not
conducted.

      Subject  to  the  foregoing  and to  applicable  law  (including,  without
limitation, United States federal securities laws), we or our affiliates may, at
any time and from time to time,  purchase  outstanding  notes by tender,  in the
open market or by private agreement.

Calculation Agent

      J.P.  Morgan  Securities  Inc.  will  act as the  calculation  agent.  The
calculation  agent  will  determine  the  index  closing  level  on each  period
valuation date, each quarterly capped Index return and the additional  amount of
cash,  if any,  we will pay you at  maturity  of the  notes.  In  addition,  the
calculation  agent will  determine  whether  there has been a market  disruption
event or a  discontinuance  of the Index and  whether  there has been a material
change in


                                      S-18
<PAGE>

the method of calculating the Index. All determinations  made by the calculation
agent will be at the sole discretion of the  calculation  agent and will, in the
absence of manifest error, be conclusive for all purposes and binding on you and
on us. We may appoint a different  calculation agent from time to time after the
date of this prospectus  supplement  without your consent and without  notifying
you.

      The  calculation  agent will calculate the additional  amount on the final
period valuation date. The calculation  agent will provide written notice to the
Trustee at its New York  office,  on which  notice the Trustee may  conclusively
rely,  of the  additional  amount on or prior to 11:00 a.m. on the  business day
preceding the maturity  date.  See "--  Discontinuance  of the S&P 500(R) Index;
Alteration of Method of Calculation" below.

      All calculations  with respect to the quarterly capped Index return or the
Index closing level will be rounded to the nearest one hundred-thousandth,  with
five one-millionths  rounded upward (e.g.,  .876545 would be rounded to .87655);
all dollar amounts related to determination of the additional amount payable per
note  will  be   rounded   to  the   nearest   ten-thousandth,   with  five  one
hundred-thousandths  rounded upward (e.g., .76545 would be rounded up to .7655);
and all dollar amounts paid on the aggregate  number of notes will be rounded to
the nearest cent, with one-half cent rounded upward.

Market Disruption Events

      Certain  events may prevent the  calculation  agent from  calculating  the
Index closing level on a period  valuation date, and consequently the additional
amount,  if any, that we will pay to you at maturity of the notes.  These events
may include  disruptions or suspensions of trading on the markets as a whole. We
refer to these events individually as a "market disruption event."

      With respect to the Index, a "market disruption event" means:

      o     a  suspension,  absence or material  limitation of trading of stocks
            then  constituting  20 percent or more of the level of the Index (or
            the relevant  successor index) on the relevant exchanges (as defined
            below)  for such  securities  for more than two hours of  trading or
            during  the one hour  period  preceding  the close of the  principal
            trading session on such relevant exchange; or

      o     a breakdown or failure in the price and trade  reporting  systems of
            any  relevant  exchange  as a result of which the  reported  trading
            prices for stocks then  constituting 20 percent or more of the level
            of the Index (or the relevant  successor  index) during the one hour
            preceding  the  close  of the  principal  trading  session  on  such
            relevant exchange are materially inaccurate; or

      o     the  suspension,  absence or material  limitation  of trading on any
            major  U.S.  securities  market  for  trading  in futures or options
            contracts related to the Index (or the relevant successor index) for
            more  than two  hours  of  trading  or  during  the one hour  period
            preceding the close of the principal trading session on such market,

      in  each  case  as  determined  by  the  calculation  agent  in  its  sole
      discretion; and

      o     a determination by the calculation agent in its sole discretion that
            the event described above materially  interfered with its ability or
            the  ability of any of our  affiliates  to adjust or unwind all or a
            material portion of any hedge with respect to the notes.

      For the purpose of determining whether a market disruption event exists at
any time, if trading in a security included in the Index is materially suspended
or materially limited at that time, then the relevant percentage contribution of
that security to the level of the Index shall be based on a comparison of:

      o     the portion of the level of the Index  attributable to that security
            relative to

      o     the overall level of the Index,

      in each case immediately before that suspension or limitation.


                                      S-19
<PAGE>

      For  purposes  of  determining  whether  a  market  disruption  event  has
occurred:

      o     a  limitation  on the hours or number  of days of  trading  will not
            constitute a market disruption event if it results from an announced
            change in the regular  business  hours of the  relevant  exchange or
            market;

      o     a  decision  to  permanently  discontinue  trading  in the  relevant
            futures or options contract will not constitute a market  disruption
            event;

      o     limitations  pursuant to the rules of any relevant  exchange similar
            to NYSE Rule 80A (or any  applicable  rule or regulation  enacted or
            promulgated  by  any  other  self-regulatory   organization  or  any
            government agency of scope similar to NYSE Rule 80A as determined by
            the  calculation   agent)  on  trading  during   significant  market
            fluctuations  will  constitute  a  suspension,  absence or  material
            limitation of trading;

      o     a suspension of trading in futures or options contracts on the Index
            by the primary securities market trading in such contracts by reason
            of

      o     a price change exceeding limits set by such exchange or market,

      o     an imbalance of orders relating to such contracts, or

      o     a disparity in bid and ask quotes relating to such contracts

will, in each such case, constitute a suspension, absence or material limitation
of trading in futures or options contracts related to the Index; and

      o     a  "suspension,  absence or material  limitation  of trading" on any
            relevant  exchange  or on the  primary  market on which  futures  or
            options  contracts  related to the Index are traded will not include
            any time  when  such  market  is itself  closed  for  trading  under
            ordinary circumstances.

      "Relevant exchange" means the primary U.S. organized exchange or market of
trading for any security (or any combination thereof) then included in the Index
or any successor index.

S&P 500(R) Index

      We have derived all information  contained in this  prospectus  supplement
regarding  the Index,  including,  without  limitation,  its make-up,  method of
calculation and changes in its components,  from publicly available information.
Such information reflects the policies of, and is subject to change by, S&P. The
Index was developed by S&P and is  calculated,  maintained and published by S&P.
We make no representation or warranty as to the accuracy or completeness of such
information.

      The Index is  intended  to provide a  performance  benchmark  for the U.S.
equity markets.  The calculation of the level of the Index  (discussed  below in
further detail) is based on the relative value of the aggregate Market Value (as
defined below) of the common stocks of 500 companies (the "Component Stocks") as
of a particular  time as compared to the aggregate  average  Market Value of the
common stocks of 500 similar  companies during the base period of the years 1941
through 1943.  The "Market  Value" of any Component  Stock is the product of the
market  price per share and the  number of the then  outstanding  shares of such
Component Stock.  The 500 companies are not the 500 largest  companies listed on
the NYSE and not all 500  companies  are listed on such  exchange.  S&P  chooses
companies for inclusion in the Index with an aim of achieving a distribution  by
broad industry  groupings that  approximates the distribution of these groupings
in the common stock  population of the U.S. equity market.  S&P may from time to
time, in its sole  discretion,  add companies to, or delete  companies from, the
Index to achieve the objectives stated above.  Relevant criteria employed by S&P
include  the  viability  of the  particular  company,  the  extent to which that
company  represents  the industry  group to which it is assigned,  the extent to
which the company's common stock is widely-held and the Market Value and trading
activity of the common stock of that company.

      The Index is calculated using a base-weighted  aggregate methodology:  the
level of the Index  reflects the total Market Value of all 500 Component  Stocks
relative to the Index's base period of 1941-43 (the "Base Period").


                                      S-20
<PAGE>

      An indexed number is used to represent the results of this  calculation in
order to make the value easier to work with and track over time.

      The actual  total  Market Value of the  Component  Stocks  during the Base
Period has been set equal to an indexed value of 10. This is often  indicated by
the notation  1941-43=10.  In practice,  the daily  calculation  of the Index is
computed by dividing the total Market Value of the Component  Stocks by a number
called the Index Divisor.  By itself,  the Index Divisor is an arbitrary number.
However,  in the context of the calculation of the Index, it is the only link to
the original  base period level of the Index.  The Index Divisor keeps the Index
comparable  over time and is the  manipulation  point for all adjustments to the
Index ("Index Maintenance").

      Index Maintenance  includes  monitoring and completing the adjustments for
company additions and deletions,  share changes,  stock splits, stock dividends,
and stock price adjustments due to company restructurings or spinoffs.

      To prevent the level of the Index from changing due to corporate  actions,
all  corporate  actions which affect the total Market Value of the Index require
an Index  Divisor  adjustment.  By adjusting the Index Divisor for the change in
total Market Value, the level of the Index remains constant. This helps maintain
the level of the Index as an accurate  barometer of stock market performance and
ensures that the movement of the Index does not reflect the corporate actions of
individual  companies in the Index. All Index Divisor adjustments are made after
the close of trading and after the calculation of the index closing level.  Some
corporate  actions,  such as stock splits and stock  dividends,  require  simple
changes in the common shares  outstanding  and the stock prices of the companies
in the Index and do not require Index Divisor adjustments.

      The table below summarizes the types of Index maintenance  adjustments and
indicates whether or not an Index Divisor adjustment is required.

                                                                     Divisor
        Type of                                                     Adjustment
   Corporate Action                 Adjustment Factor                Required
-------------------               -----------------------           ----------
 Stock split                      Shares Outstanding                    No
   (i.e. 2x1)                     multiplied by 2; Stock
                                  Price divided by 2

 Share issuance                   Shares Outstanding plus               Yes
   (i.e. Change > or = 5%)        newly issued Shares

 Share repurchase                 Shares Outstanding minus              Yes
   (i.e. Change > or = 5%)        Repurchased Shares

 Special cash dividends           Share Price minus                     Yes
                                  Special Dividend

 Company change                   Add new company                       Yes
                                  Market Value minus
                                  old company Market Value

 Rights offering                  Price of parent company               Yes
                                  minus
                                 (Price of Rights)
                                 -----------------
                                   (Right Ratio)

 Spinoffs                         Price of parent company
                                  minus
                                 (Price of Spinoff Co.)
                                 ---------------------
                                 (Share Exchange Ratio)

      Stock splits and stock  dividends  do not affect the Index  Divisor of the
Index,  because following a split or dividend both the stock price and number of
shares  outstanding are adjusted by S&P so that there is no change in the Market
Value of the Component Stock. All stock split and dividend  adjustments are made
after the close of trading on the day before the ex-date.


                                      S-21
<PAGE>

      Each  of the  corporate  events  exemplified  in the  table  requiring  an
adjustment  to the Index  Divisor has the effect of altering the Market Value of
the Component Stock and  consequently of altering the aggregate  Market Value of
the Component  Stocks (the "Post-Event  Aggregate Market Value").  In order that
the level of the Index (the  "Pre-Event  Index  Value")  not be  affected by the
altered  Market Value (whether  increase or decrease) of the affected  Component
Stock, a new Index Divisor ("New Divisor") is derived as follows:

            Post-Event Aggregate Market Value = Pre-Event Index Value
              -------------------------------
                       New Divisor

                 New Divisor = Post-Event Aggregate Market Value
                               ---------------------------------
                                      Pre-Event Index Value

      A large  part of the  Index  maintenance  process  involves  tracking  the
changes in the number of shares outstanding of each of the Index companies. Four
times a year, on a Friday close to the end of each calendar  quarter,  the share
totals of  companies  in the Index are updated as required by any changes in the
number of shares outstanding. After the totals are updated, the Index Divisor is
adjusted  to  compensate  for the net  change in the total  Market  Value of the
Index. In addition, any changes over 5% in the current common shares outstanding
for the Index  companies  are  carefully  reviewed on a weekly  basis,  and when
appropriate, an immediate adjustment is made to the Index Divisor.

Discontinuance of the S&P 500(R)Index; Alteration of Method of Calculation

      If S&P  discontinues  publication  of the Index and S&P or another  entity
publishes a successor or substitute index that the calculation agent determines,
in its sole discretion,  to be comparable to the discontinued  Index (such Index
being referred to herein as a "successor  index"),  then any index closing level
will be  determined  by  reference to the level of such  successor  index at the
close of  trading  on the NYSE,  the AMEX,  the  Nasdaq  National  Market or the
relevant  exchange  or market for the  successor  index on the  relevant  period
valuation date.

      Upon any  selection by the  calculation  agent of a successor  index,  the
calculation agent will cause written notice thereof to be promptly  furnished to
the Trustee, to us and to the holders of the notes.

      If  S&P  discontinues   publication  of  the  Index  prior  to,  and  such
discontinuance  is continuing on, any period  valuation date and the calculation
agent determines,  in its sole discretion,  that no successor index is available
at such time, then the calculation  agent will determine the index closing level
for such date. The index closing level will be computed by the calculation agent
in accordance  with the formula for and method of calculating  the Index last in
effect prior to such discontinuance,  using the closing price (or, if trading in
the relevant securities has been materially suspended or materially limited, its
good faith  estimate of the closing price that would have prevailed but for such
suspension or limitation) at the close of the principal  trading session on such
date of each security most recently comprising the Index.  Notwithstanding these
alternative arrangements,  discontinuance of the publication of the Index on the
relevant exchange may adversely affect the value of the notes.

      If at any time the method of calculating  the Index or a successor  index,
or the level  thereof,  is changed in a material  respect,  or if the Index or a
successor index is in any other way modified so that such index does not, in the
opinion of the  calculation  agent,  fairly  represent the level of the Index or
such successor index had such changes or modifications not been made, then, from
and after such time, the calculation agent will, at the close of business in New
York City on each date on which the  index  closing  level is to be  determined,
make such  calculations  and  adjustments  as, in the good faith judgment of the
calculation  agent,  may be  necessary  in order to arrive at a level of a stock
index comparable to the Index or such successor index, as the case may be, as if
such changes or modifications  had not been made, and the calculation agent will
calculate the index closing level with  reference to the Index or such successor
index,  as adjusted.  Accordingly,  if the method of calculating  the Index or a
successor  index is  modified  so that the level of such index is a fraction  of
what it would have been if it had not been modified (e.g., due to a split in the
index),  then the calculation agent will adjust such index in order to arrive at
a level of the  Index  or such  successor  index as if it had not been  modified
(e.g., as if such split had not occurred).


                                      S-22
<PAGE>

Historical Information

      The following  table sets forth the  published  high and low index closing
level,  as well as  end-of-quarter  index closing  level,  of the Index for each
quarter in the  period  from  January 1, 1998  through  September   , 2003.  The
index closing level on September   , 2003 was            . Please note that such
quarterly periods do not correspond to quarterly  valuation periods for purposes
of the notes. We obtained the index closing levels and other  information  below
from  Bloomberg  Financial  Markets,  and  we  believe  such  information  to be
accurate.

      The historical levels of the Index should not be taken as an indication of
future performance, and no assurance can be given as to the additional amount or
the closing level of the Index on any period  valuation date. We cannot give you
assurance that the performance of the Index will result in a payment at maturity
in excess of $1,100.

                                                                       Quarterly
                                     High         Low     Period-end    Return
                                     ----         ---     ----------    ------
1998
First Quarter.....................  1105.65      927.69     1101.75      13.5%
Second Quarter....................  1138.49     1077.01     1133.84       2.9%
Third Quarter.....................  1186.75      957.28     1017.01     -10.3%
Fourth Quarter....................  1241.81      959.44     1229.23      20.9%
1999
First Quarter.....................  1316.55     1212.19     1286.37       4.6%
Second Quarter....................  1372.71     1281.41     1372.71       6.7%
Third Quarter.....................  1418.78     1268.37     1282.71      -6.6%
Fourth Quarter....................  1469.25     1247.41     1469.25      14.5%
2000
First Quarter.....................  1527.46     1333.36     1498.58       2.0%
Second Quarter....................  1516.35     1356.56     1454.60      -2.9%
Third Quarter.....................  1520.77     1419.89     1436.51      -1.2%
Fourth Quarter....................  1436.28     1264.74     1320.28      -8.1%
2001
First Quarter.....................  1373.73     1117.58     1160.33     -12.1%
Second Quarter....................  1312.83     1103.25     1224.42       5.5%
Third Quarter.....................  1236.72      965.80     1040.94     -15.0%
Fourth Quarter....................  1170.35     1038.55     1148.08      10.3%
2002
First Quarter.....................  1172.51     1080.17     1147.39      -0.1%
Second Quarter....................  1146.54      973.53      989.82     -13.7%
Third Quarter.....................   994.35      775.96      815.28     -17.6%
Fourth Quarter....................   938.87      776.76      879.82       7.9%
2003
First Quarter.....................   931.66      800.73      848.18      -3.6%
Second Quarter....................  1011.66      858.48      974.50      14.9%
Third Quarter
  (through September   , 2003)...

Events of Default

      Under the heading  "Description  of Debt  Securities -- Events of Default,
Waiver, Debt Securities in Foreign Currencies" in the accompanying prospectus is
a description  of events of default  relating to debt  securities  including the
notes.

Alternate Additional Amount Calculation in Case of an Event of Default

      In case an event of default with respect to the notes shall have  occurred
and be  continuing,  the amount  declared due and payable for each note upon any
acceleration  of the notes will be equal to the greater of $1,100 or


                                      S-23
<PAGE>

$1,000 plus the  additional  amount  determined  as though the Index  closing
level for any  period  valuation  date  scheduled  to occur  after  such date of
acceleration  were  the  Index  closing  level  on  the  date  of  acceleration.
Therefore,  the  quarterly  capped Index  return for the then current  quarterly
valuation  period  would  be  equal to the  Index  closing  level on the date of
acceleration  less the Index closing  level at the  beginning of that  quarterly
valuation  period  divided by the Index  closing  level at the beginning of such
quarterly  valuation  period,  and the  quarterly  capped  Index return for each
remaining quarterly valuation period would be equal to zero.

Modification

      Under the heading  "Description  of Debt Securities -- Modification of the
Indenture; Waiver of Compliance" in the accompanying prospectus is a description
of when the consent of each  affected  holder of debt  securities is required to
modify the indenture.

Defeasance

      The provisions described in the accompanying  prospectus under the heading
"Description   of  Debt   Securities  --  Discharge,   Defeasance  and  Covenant
Defeasance" are not applicable to the notes.

Listing

      We have  applied to list the notes on the AMEX  under the symbol  "JPL.D."
Prior to this offering, there has been no market for the notes.

Book-Entry Only Issuance -- The Depository Trust Company

      The Depository  Trust Company,  or DTC, will act as securities  depositary
for the notes.  The notes  will be issued  only as  fully-registered  securities
registered   in  the  name  of  Cede  &  Co.  (DTC's   nominee).   One  or  more
fully-registered  global notes  certificates,  representing  the total aggregate
principal amount of the notes, will be issued and will be deposited with DTC.

      DTC is a  limited-purpose  trust  company  organized  under  the New  York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning  of the New  York  Uniform  Commercial  Code,  and a  "clearing  agency"
registered  pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended (the  "Exchange  Act").  DTC holds  securities  that its
participants  ("Participants")  deposit  with  DTC.  DTC  also  facilitates  the
settlement among Participants of securities transactions,  such as transfers and
pledges,  in deposited  securities  through electronic  computerized  book-entry
changes in  Participants'  accounts,  thereby  eliminating the need for physical
movement of securities  certificates.  Direct  Participants  include  securities
brokers and dealers,  banks, trust companies,  clearing corporations and certain
other  organizations  ("Direct  Participants").  DTC is owned by a number of its
Direct  Participants  and by the New York Stock  Exchange,  the  American  Stock
Exchange,  Inc. and the National Association of Securities Dealers,  Inc. Access
to the DTC system is also  available to others,  such as securities  brokers and
dealers, banks and trust companies that clear transactions through or maintain a
direct or  indirect  custodial  relationship  with a Direct  Participant  either
directly or indirectly  ("Indirect  Participants").  The rules applicable to DTC
and its Participants are on file with the Commission.

      Purchases  of the notes  within the DTC system  must be made by or through
Direct Participants, which will receive a credit for the notes on DTC's records.
The ownership interest of each actual purchaser of notes ("Beneficial Owner") is
in turn  to be  recorded  on the  Direct  and  Indirect  Participants'  records.
Beneficial  Owners  will  not  receive  written  confirmation  from DTC of their
purchases,  but Beneficial Owners are expected to receive written  confirmations
providing details of the transactions,  as well as periodic  statements of their
holdings,  from the  Participants  or  Direct  Participants  through  which  the
Beneficial Owners purchased the notes.  Transfers of ownership  interests in the
notes are to be accomplished by entries made on the books of Participants acting
on behalf of Beneficial Owners.  Beneficial Owners will not receive certificates
representing  their ownership  interests in the notes,  except in the event that
use of the book-entry system for the notes is discontinued.

      To facilitate  subsequent  transfers,  all notes deposited by Participants
with DTC are registered in the name of DTC's nominee,  Cede & Co. The deposit of
the notes with DTC and their  registration  in the name of Cede & Co.


                                      S-24
<PAGE>

effect no change in  beneficial  ownership.  DTC has no  knowledge of the actual
Beneficial  Owners of the notes.  DTC's records reflect only the identity of the
Direct Participants to whose accounts such notes are credited,  which may or may
not be the Beneficial  Owners.  The  Participants  will remain  responsible  for
keeping account of their holdings on behalf of their customers.

      Conveyance  of  notices  and  other   communications   by  DTC  to  Direct
Participants,  by Direct Participants to Indirect Participants and by Direct and
Indirect  Participants  to  Beneficial  Owners will be governed by  arrangements
among them,  subject to any statutory or regulatory  requirements that may be in
effect from time to time.

      DTC may discontinue  providing its services as securities  depositary with
respect to the notes at any time by giving  reasonable  notice to us. Under such
circumstances,  in the  event  that a  successor  securities  depositary  is not
obtained,   notes  certificates  are  required  to  be  printed  and  delivered.
Additionally,  we may  decide to  discontinue  use of the  system of  book-entry
transfers  through DTC (or any successor  depositary) with respect to the notes.
In that event, certificates for the notes will be printed and delivered.

      The information in this section concerning DTC and DTC's book-entry system
has been  obtained  from sources  that we believe to be reliable,  but we do not
take responsibility for the accuracy thereof.

Registrar, Transfer Agent and Paying Agent

      Payment of amounts  due at  maturity  on the notes will be payable and the
transfer  of the notes will be  registrable  at the  principal  corporate  trust
office of JPMorgan Chase Bank in The City of New York.

      JPMorgan  Chase Bank or one of its  affiliates  will act as registrar  and
transfer agent for the notes.  JPMorgan Chase Bank will also act as paying agent
and may designate additional paying agents.

      Registration of transfers of the notes will be effected  without charge by
or on behalf of JPMorgan  Chase Bank,  but upon payment (with the giving of such
indemnity  as  JPMorgan  Chase Bank may  require) in respect of any tax or other
governmental charges that may be imposed in relation to it.

Governing Law

      The notes will be governed by and  interpreted in accordance with the laws
of the State of New York.

License Agreement between S&P and J.P. Morgan Securities Inc.

      S&P and J.P.  Morgan  Securities  Inc.  have entered into a  non-exclusive
license  agreement  providing  for the  sub-license  to us,  and  certain of our
affiliated or subsidiary  companies,  in exchange for a fee, of the right to use
the Index,  which is owned and  published  by S&P, in  connection  with  certain
securities, including the notes.


                                      S-25
<PAGE>

                  CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

      Based on the advice of Davis Polk & Wardwell,  special tax counsel to J.P.
Morgan Chase & Co., the following is a general  discussion of the principal U.S.
federal income tax consequences of the acquisition, ownership and disposition of
notes.  This  discussion  applies to you if you are an  initial  holder of notes
purchasing  the  notes at the issue  price and if you hold the notes as  capital
assets within the meaning of Section 1221 of the Internal  Revenue Code of 1986,
as amended (the "Code").

      This  summary  is  based  on the  Code,  existing  and  proposed  Treasury
regulations,   revenue  rulings,  administrative  interpretations  and  judicial
decisions,  in each case as  currently  in effect,  all of which are  subject to
change,  possibly  with  retroactive  effect.  This summary does not address all
aspects of the U.S. federal income taxation of the notes that may be relevant to
you in light of your  particular  circumstances  or if you are a holder of notes
who is subject to special treatment under the U.S. federal income tax laws, such
as:

      o     a financial institution;

      o     an insurance company;

      o     a tax-exempt entity, including an "individual retirement account" or
            "Roth IRA" as defined in Sections 408 or 408A, respectively;

      o     a dealer in securities or foreign currencies;

      o     a  person  holding  the  notes  as  part of a  hedging  transaction,
            "straddle,"  synthetic security,  conversion  transaction,  or other
            integrated  transaction,  or who has  entered  into a  "constructive
            sale" with respect to the notes;

      o     a U.S.  Holder (as defined below) whose  functional  currency is not
            the U.S. dollar;

      o     a trader in securities who elects to apply a  mark-to-market  method
            of tax accounting; or

      o     a partnership or other entity  classified as a partnership  for U.S.
            federal income tax purposes.

      As the law applicable to the U.S.  federal income  taxation of instruments
such as the notes is technical and complex,  the  discussion  below  necessarily
represents  only a general  summary.  Moreover,  the  effects of any  applicable
state,  local or foreign  tax laws are not  discussed.  You are urged to consult
your tax adviser  concerning the U.S.  federal income tax consequences of owning
and disposing of the notes,  as well as any  consequences  under the laws of any
state, local or foreign taxing jurisdiction.

Tax Consequences to U.S. Holders

      The following discussion applies to you only if you are a "U.S. Holder" of
notes.  You are a U.S.  Holder if you are a beneficial  owner of a note that is,
for U.S. federal income tax purposes:

      o     a citizen or resident of the United States,

      o     a corporation  or other entity  taxable as a corporation  created or
            organized  under  the laws of the  United  States  or any  political
            subdivision thereof or

      o     an estate or trust the  income  of which is  subject  to the  United
            States federal income taxation regardless of its source.

      The notes will be treated as  "contingent  payment debt  instruments"  for
United States federal income tax purposes. As a result, the notes will generally
be subject to the original issue discount ("OID") provisions of the Code and the
Treasury  regulations issued  thereunder,  and you will be required to accrue as
interest income the OID on the notes as set forth below.


                                      S-26
<PAGE>

      We are  required to  determine  a  "comparable  yield" for the notes.  The
"comparable  yield"  is the  yield at which we  could  issue a fixed  rate  debt
instrument  with terms  similar to those of the  notes,  including  the level of
subordination,  term,  timing of payments  and general  market  conditions,  but
excluding  any  adjustments  for  the  riskiness  of  the  contingencies  or the
liquidity of the notes. We have  determined  that the  "comparable  yield" is an
annual rate of         %, compounded semi-annually.

      Solely for purposes of determining  the amount of interest income that you
will be  required to accrue,  we are also  required  to  construct a  "projected
payment schedule" in respect of the notes  representing a series of payments the
amount and timing of which would  produce a yield to maturity on the notes equal
to the comparable yield. Based on our determination of the comparable yield, the
"projected  payment  schedule"  per $1,000  principal  amount note consists of a
single payment at maturity, equal to $       .

      Assuming an annual (calendar)  accrual period,  the following table states
the amount of interest  that will be deemed to have  accrued  with  respect to a
note during each accrual period,  based upon our determination of the comparable
yield and the  projected  payment  schedule (and assuming that the amount due at
maturity  does not  become  fixed  more than six months  prior to  maturity,  as
described below):

<TABLE>
<CAPTION>
                                                                                          Total Interest Deemed
                                                                                             to Have Accrued
                                                                    Interest Deemed to     from Original Issue
                                                                   Accrue During Accrual   Date per Note as of
                 Accrual Period                                      Period (per Note)    End of Accrual Period
                 --------------                                      -----------------    ---------------------
<S>                                                                   <C>                    <C>
Original Issue Date through December 31, 2003..................       $                      $
January 1, 2004 through December 31, 2004......................       $                      $
January 1, 2005 through December 31, 2005......................       $                      $
January 1, 2006 through December 31, 2006......................       $                      $
January 1, 2007 through December 31, 2007......................       $                      $
January 1, 2008 through                     , 2008.............       $                      $
</TABLE>

      Neither  the  comparable   yield  nor  the  projected   payment   schedule
constitutes a representation  by us regarding the actual amount, if any, that we
will pay on the notes.

      For United States  federal  income tax  purposes,  you are required to use
this comparable  yield and projected  payment  schedule in determining  interest
accruals and  adjustments in respect of a note,  unless you timely  disclose and
justify the use of other estimates to the Internal  Revenue Service (the "IRS").
Regardless of your accounting  method,  you generally will be required to accrue
interest  income  on the  notes at the  comparable  yield,  adjusted  upward  or
downward to reflect the difference, if any, between the actual and the projected
amount of the contingent payment on the note, as set forth below.

      Upon a sale, exchange or retirement of a note (including at its maturity),
you will  generally  recognize  taxable  gain or loss  equal  to the  difference
between the amount  realized on the sale,  exchange or  retirement  and your tax
basis  in the  note.  Your tax  basis in a note  will  equal  the cost  thereof,
increased by the amount of interest income previously  accrued by you in respect
of the note under the projected payment schedule  (including  amounts accrued as
described in the  following  paragraph).  You  generally  will treat any gain as
interest  income and any loss first as ordinary  loss, to the extent of previous
interest inclusions,  and then as a capital loss. Such losses are not subject to
the limitation imposed on miscellaneous  itemized deductions under Section 67 of
the  Code.  The  deductibility  of  capital  losses,   however,  is  subject  to
limitations.

      Special rules will apply if the cash payment at maturity  becomes fixed at
the minimum  payment  amount more than six months  prior to maturity  (or if the
likelihood  that the cash  payment at maturity  will exceed the minimum  payment
amount becomes remote).  Generally speaking,  in this case you would be required
to take into income over the remaining term of the note the  difference  between
$1,100 and your tax basis in the note (determined  without regard to the special
rules).  The  character  of gain or loss on the sale of the note  would  also be
affected. You should consult your tax adviser if you believe these special rules
may become applicable.


                                      S-27
<PAGE>

Tax Consequences to Non-U.S. Holders

      The  following  discussion  applies  to you  only if you  are a  "Non-U.S.
Holder" of notes. You are a "Non-U.S. Holder" if you are a beneficial owner of a
note that is for U.S. federal income tax purposes:

      o     a nonresident alien individual;

      o     a foreign corporation; or

      o     a nonresident alien fiduciary of a foreign estate or trust.

      Payments to you on the notes,  and any gain realized on a sale or exchange
of the notes, will be exempt from U.S. federal income tax (including withholding
tax) provided  generally that you have fulfilled the  certification  requirement
described below and such amounts are not effectively connected with your conduct
of a U.S. trade or business.

      The certification  requirement referred to in the preceding paragraph will
be fulfilled if you certify on IRS Form W-8BEN, under penalties of perjury, that
you are not a  United  States  person  and  provide  your  name and  address  or
otherwise satisfy applicable documentation requirements.

      If you are engaged in a trade or business in the United  States and if the
OID on the note is  effectively  connected  with your  conduct  of such trade or
business,  although  exempt from the  withholding tax discussed in the preceding
paragraph,  you will generally be subject to regular United States income tax on
such OID in the same manner as if you were a U.S. Holder, except that in lieu of
the certificate  described in the preceding  paragraph,  you will be required to
provide a properly  executed IRS Form W-8ECI in order to claim an exemption from
withholding tax. If this paragraph applies to you, you are urged to consult your
own tax adviser with respect to other U.S. tax consequences of the ownership and
disposition  of the notes,  including  the possible  imposition  of a 30% branch
profits tax.

      If you are an  individual,  your notes will not be included in your estate
for United States  federal  estate tax  purposes,  provided that interest on the
notes is not then  effectively  connected  with your conduct of a United  States
trade or business.

Backup Withholding and Information Reporting

      The  proceeds  received  from  a  sale,   exchange  or  other  disposition
(including  the  payment at  maturity)  of notes will be subject to  information
reporting if you are not an "exempt recipient" (such as a domestic  corporation)
and may also be subject to backup withholding at the rates specified in the Code
if you fail to provide  certain  identifying  information  (such as an  accurate
taxpayer identification number, if you are a U.S. Holder). If you are a Non-U.S.
Holder  and you  comply  with the  identification  procedures  described  in the
preceding  section,  you would  generally  establish  an  exemption  from backup
withholding;  however,  we expect that the amount of OID paid to you at maturity
(and  possibly on a sale or exchange of a note) will be reported to you (and the
IRS).

      Amounts  withheld  under the backup  withholding  rules are not additional
taxes and may be refunded or credited  against your United States federal income
tax liability, provided the required information is furnished to the IRS.


                                      S-28
<PAGE>

                                  UNDERWRITING

      We and  J.P.  Morgan  Securities  Inc.  will  enter  into an  underwriting
agreement  relating  to the offer  and sale of the  notes.  In the  underwriting
agreement, we will agree to sell to J.P. Morgan Securities Inc., and J.P. Morgan
Securities  Inc.  will  agree to  purchase  from  us,  notes  with an  aggregate
principal amount of $     .

      The  obligations of J.P.  Morgan  Securities  Inc. under the  underwriting
agreement,  including  its  agreement  to  purchase  the notes from us,  will be
subject to the satisfaction of certain conditions in the underwriting agreement.
J.P.  Morgan  Securities  Inc. will agree to purchase all of the notes if any of
them are purchased.

      J.P.  Morgan  Securities Inc. has advised us that it proposes to offer the
notes to the  public at the price to public  that  appears  on the cover page of
this  prospectus  supplement  and  to  certain  dealers  at  that  price  less a
concession not in excess of $     per $1,000  principal  amount of notes.  After
the initial public offering, J.P. Morgan Securities Inc. may change the offering
price and any other selling terms.

      In the underwriting  agreement,  J.P. Morgan Securities Inc. has agreed to
pay our expenses related to this offering,  which we estimate will be $        ,
and we have agreed to indemnify J.P.  Morgan  Securities  Inc.  against  certain
liabilities, including liabilities under the Securities Act of 1933.

      The  notes  are a new  issue of  securities,  and  there is  currently  no
established  trading market for the notes.  We have applied to list the notes on
the AMEX under the symbol  "JPL.D."  Prior to this  offering,  there has been no
market for the notes. J.P. Morgan Securities Inc. has advised us that it intends
to make a market in the notes.  However,  it is not  obligated  to do so and may
discontinue any  market-making  in the notes at any time in its sole discretion.
Therefore,  we cannot assure you that a liquid trading market for the notes will
develop,  that you will be able to sell your notes at a particular  time or that
the price you receive when you sell will be favorable.

      We own, directly or indirectly,  all of the outstanding  equity securities
of J.P. Morgan  Securities Inc. The underwriting  arrangements for this offering
comply  with the  requirements  of Rule  2720 of the  Conduct  Rules of the NASD
regarding an NASD member firm's  underwriting of securities of an affiliate.  In
accordance with Rule 2720, no underwriter may make sales in this offering to any
discretionary account without the prior approval of the customer.

      Our  affiliate,  J.P.  Morgan  Securities  Inc.,  may use this  prospectus
supplement and the  accompanying  prospectus in connection with offers and sales
of the notes in the secondary  market.  J.P.  Morgan  Securities Inc. may act as
principal or agent in those transactions. Secondary market sales will be made at
prices related to market prices at the time of sale.

      In order to facilitate the offering of the notes,  J.P. Morgan  Securities
Inc. may engage in transactions that stabilize, maintain or otherwise affect the
price of the notes.  Specifically,  J.P.  Morgan  Securities  Inc. may sell more
notes than it is obligated to purchase in connection with the offering, creating
a naked short position in the notes for its own account.  J.P. Morgan Securities
Inc. must close out any naked short position by purchasing the notes in the open
market.  A naked  short  position  is more  likely to be created if J.P.  Morgan
Securities Inc. is concerned that there may be downward pressure on the price of
the notes in the open market after pricing that could adversely affect investors
who  purchase  in the  offering.  As an  additional  means of  facilitating  the
offering,  J.P. Morgan  Securities Inc. may bid for, and purchase,  notes in the
open market to stabilize  the price of the notes.  Any of these  activities  may
raise or maintain the market price of the notes above independent  market levels
or prevent or retard a decline in the  market  price of the notes.  J.P.  Morgan
Securities Inc. is not required to engage in these  activities,  and may end any
of these activities at any time.

      J.P.  Morgan  Securities  Inc.  engages in  transactions  with and perform
services for us and our subsidiaries in the ordinary course of business.

      We will deliver the notes to J.P. Morgan Securities Inc. at the closing of
this offering when it pays us the purchase price for the notes.


                                      S-29
<PAGE>

                                 LEGAL OPINIONS

      Certain legal matters relating to this offering will be passed upon for us
by Simpson  Thacher &  Bartlett.  Davis Polk & Wardwell  will pass upon  certain
legal  matters  relating  to this  offering  for the  underwriter.  Davis Polk &
Wardwell has in the past  represented  J.P.  Morgan Chase & Co. and continues to
represent  J.P.  Morgan  Chase & Co.  on a regular  basis  and in a  variety  of
matters.

             ERISA MATTERS FOR PENSION PLANS AND INSURANCE COMPANIES

      Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the  Employee  Retirement  Income  Security  Act of 1974,  as amended
("ERISA"),  (a "Plan") should  consider the fiduciary  standards of ERISA in the
context of the Plan's particular  circumstances before authorizing an investment
in the notes.  Accordingly,  among other factors,  the fiduciary should consider
whether  the   investment   would  satisfy  the  prudence  and   diversification
requirements of ERISA and would be consistent with the documents and instruments
governing the Plan.

      In addition, we and certain of our subsidiaries and affiliates may each be
considered a "party in interest" within the meaning of ERISA, or a "disqualified
person" within the meaning of the Code,  with respect to many Plans,  as well as
many individual  retirement  accounts and Keogh plans (also "Plans").  Unless an
exemption applies,  prohibited  transactions  within the meaning of ERISA or the
Code could arise,  for example,  if the notes are acquired by or with the assets
of a Plan  with  respect  to  which  we or any of our  affiliates  is a  service
provider.

      We have  obtained  from the  Department  of Labor  an  exemption  from the
prohibited  transaction  rules that will in most cases  cover the  purchase  and
holding  of notes by a Plan for whom we or one of our  affiliates  is a  service
provider.  In order for this  exemption to apply,  the decision to invest in the
notes must be made by a Plan  fiduciary,  or a Plan  participant (in the case of
Plans that provide for  participant-directed  investments),  who is  independent
from us and from our  affiliates.  At the  time of a Plan's  acquisition  of any
notes, no more than 15% of the Plan's assets should be invested in notes.

      Copies of both the proposed and final exemption are available from us upon
request. Purchasers of the notes have exclusive responsibility for ensuring that
their  purchase  and  holding  of  the  notes  do  not  violate  the  prohibited
transaction or other rules of ERISA or the Code.


                                      S-30
<PAGE>

Prospectus

                              [LOGO] JPMorganChase

                             J.P. Morgan Chase & Co.

                                 $1,000,000,000

                                 Debt Securities
                                    Warrants
                                      Units


      We will provide  specific terms of these securities in supplements to this
prospectus.  You should read this prospectus and any supplement carefully before
you invest.

      These  securities are not deposits or other  obligations of a bank and are
not insured by the Federal  Deposit  Insurance  Corporation or any other federal
agency.

      Neither the  Securities and Exchange  Commission nor any state  securities
commission has approved or  disapproved  of these  securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

                                    JPMorgan

                     This Prospectus is dated June 20, 2001

<PAGE>

                              ABOUT THIS PROSPECTUS

      This prospectus is part of a Registration Statement that we filed with the
Securities and Exchange  Commission  utilizing a "shelf"  registration  process.
Under this shelf process, we may, from time to time, sell any combination of the
securities  described in the  prospectus in one or more  offerings up to a total
dollar  amount of  $1,000,000,000  or the  equivalent  of this amount in foreign
currencies or foreign currency units.

      This prospectus  provides you with a general description of the securities
we may  offer.  Each  time we sell  securities,  we will  provide  a  prospectus
supplement  that  will  contain  specific  information  about  the  terms of the
offering.  The prospectus  supplement may also add, update or change information
contained  in this  prospectus.  You should  read both this  prospectus  and any
prospectus  supplement together with additional  information described under the
heading  "Where  You Can  Find  More  Information"  beginning  on page 2 of this
prospectus.

      Following  the initial  distribution  of an offering of  securities,  J.P.
Morgan  Securities  Inc. and other  affiliates  of ours may offer and sell those
securities in the course of their  businesses  as  broker-dealers.  J.P.  Morgan
Securities Inc. and other  affiliates of ours may act as a principal or agent in
these  transactions.  This prospectus and the applicable  prospectus  supplement
will also be used in connection with those  transactions.  Sales in any of those
transactions  will be made at varying prices related to prevailing market prices
and other circumstances at the time of sale.

      No  person  is  authorized  to  give  any   information  or  to  make  any
representations  other than those contained or incorporated by reference in this
prospectus or the  accompanying  prospectus  supplement,  and, if given or made,
such  information  or  representations  must not be relied  upon as having  been
authorized.  This prospectus and the accompanying  prospectus  supplement do not
constitute  an  offer  to  sell  or the  solicitation  of an  offer  to buy  any
securities other than the securities  described in the  accompanying  prospectus
supplement  or an  offer  to sell or the  solicitation  of an  offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful.
Neither  the  delivery  of  this  prospectus  or  the  accompanying   prospectus
supplement,  nor any  sale  made  hereunder  and  thereunder  shall,  under  any
circumstances,  create  any  implication  that  there  has been no change in the
affairs of J.P. Morgan Chase & Co. since the date hereof or that the information
contained or  incorporated  by reference  herein or therein is correct as of any
time subsequent to the date of such information.


                                       2
<PAGE>

                       WHERE YOU CAN FIND MORE INFORMATION

      We file annual,  quarterly and current reports, proxy statements and other
information  with the  Commission.  You may read and copy these documents at the
Commission's  public  reference room at Room 1024,  Judiciary  Plaza,  450 Fifth
Street, N.W.,  Washington,  D.C. 20549, and at the Commission's regional offices
at Northeast  Regional Office,  Seven World Trade Center,  Suite 1300, New York,
New York 10048 and Midwest  Regional Office,  Citicorp Center,  500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of this material can also be
obtained from the Public  Reference Room of the  Commission at Judiciary  Plaza,
450 Fifth Street, N.W., Washington,  D.C. 20549 at prescribed rates. Please call
the  Commission  at  1-800-SEC-0330  for  further  information  about the Public
Reference Room. The Commission also maintains an Internet  website that contains
reports,  proxy and  information  statements and other  materials that are filed
through the  Commission's  Electronic  Data  Gathering,  Analysis and  Retrieval
(EDGAR) System. This website can be accessed at http://www.sec.gov. You can find
information  we have filed  with the  Commission  by  reference  to file  number
1-5805.  In addition,  you may inspect our reports,  proxy  statements and other
information  at the  offices  of the New York  Stock  Exchange,  Inc.,  20 Broad
Street, New York, New York 10005.

      This  prospectus  is part of a  registration  statement  we filed with the
Commission. This prospectus omits some information contained in the registration
statement in accordance with Commission rules and regulations. You should review
the  information  and  exhibits  in  the  registration   statement  for  further
information on us and our  consolidated  subsidiaries  and the securities we are
offering.  Statements in this prospectus  concerning any document we filed as an
exhibit  to the  registration  statement  or that we  otherwise  filed  with the
Commission are not intended to be  comprehensive  and are qualified by reference
to these  filings.  You should  review the complete  document to evaluate  these
statements.

      The  Commission  allows  us  to  incorporate  by  reference  much  of  the
information  we file with  them,  which  means  that we can  disclose  important
information to you by referring you to those publicly available  documents.  The
information that we incorporate by reference in this prospectus is considered to
be part of this  prospectus.  Because we are  incorporating  by reference future
filings with the Commission,  this  prospectus is continually  updated and those
future  filings  may modify or  supersede  some of the  information  included or
incorporated  in this  prospectus.  This  means that you must look at all of the
Commission  filings that we  incorporate by reference to determine if any of the
statements in this  prospectus  or in any document  previously  incorporated  by
reference  have been modified or superseded.  This  prospectus  incorporates  by
reference  the  documents  listed below and any future  filings we make with the
Commission  under Section 13(a),  13(c), 14 or 15(d) of the Securities  Exchange
Act of 1934 until we complete our offering of the  securities to be issued under
the registration statement or, if later, the date on which any of our affiliates
cease offering and selling these securities:

            (a)   our Annual Report on Form 10-K for the year ended December 31,
                  2000, filed on March 22, 2001;

            (b)   our Quarterly  Report on Form 10-Q for the quarter ended March
                  31, 2001, filed on May 15, 2001; and

            (c)   our Reports on Form 8-K filed on April 5, 2001, April 27, 2001
                  and June 6, 2001.

      You may request,  at no cost to you, a copy of these documents (other than
exhibits  to such  documents)  by writing or  telephoning  us at:  Office of the
Secretary,  J.P.  Morgan  Chase & Co.,  270  Park  Avenue,  New  York,  New York
10017-2070 (Telephone: (212) 270-4040).


                                       3
<PAGE>

                             J.P. MORGAN CHASE & CO.

General

      J.P. Morgan Chase & Co. is a financial holding company  incorporated under
Delaware law in 1968. As of December 31, 2000, after giving effect to the merger
referred to below, we were the second largest banking  institution in the United
States, with $715 billion in assets and $42 billion in stockholders' equity.

      On December 31, 2000, we merged with J.P. Morgan & Co. Incorporated.  Upon
completion  of the  merger,  we  changed  our  name  from  The  Chase  Manhattan
Corporation  to "J.P.  Morgan  Chase & Co." The  merger was  accounted  for as a
pooling of interests.

      We are a  global  financial  services  firm  with  operations  in  over 60
countries. Our principal bank subsidiaries are:

            o     The Chase  Manhattan Bank and Morgan Guaranty Trust Company of
                  New  York,  each of which is a New  York  banking  corporation
                  headquartered in New York City, and

            o     Chase Manhattan Bank USA, National Association,  headquartered
                  in Delaware.

      Our principal non-bank subsidiary is our investment bank subsidiary,  J.P.
Morgan  Securities  Inc. We expect The Chase Manhattan Bank to merge with Morgan
Guaranty Trust Company of New York in mid-October 2001.

      Our activities  will be internally  organized,  for  management  reporting
purposes, into five major businesses:

            o     Investment Banking;

            o     Investment Management and Private Banking;

            o     Treasury & Securities Services;

            o     J.P. Morgan Partners; and

            o     Retail and Middle Market Banking.

      Below is a brief description of those businesses.

Investment Banking

      Investment  Banking  includes our  securities  underwriting  and financial
advisory,  trading, mergers and acquisitions advisory, and corporate lending and
syndication businesses.

Investment Management and Private Banking

      Investment  Management and Private Banking  includes our asset  management
businesses,  including our mutual funds; our institutional  money management and
cash  management  businesses;  and  our  private  bank,  which  provides  wealth
management  solutions for a global client base of high net worth individuals and
families.

Treasury & Securities Services

      Treasury & Securities  Services is a recognized  leader in information and
transaction processing services, moving trillions of dollars daily in securities
and cash for its wholesale clients. Treasury & Securities Services also includes
our custody, cash management, trust and other fiduciary services businesses.

J.P. Morgan Partners

      J.P. Morgan  Partners is one of the world's  largest and most  diversified
private equity  investment firms, with total funds under management in excess of
$20 billion.


                                       4
<PAGE>

Retail and Middle Market Banking

      Retail and Middle Market  Banking serves over 30 million  consumer,  small
business  and  middle-market  customers  nationwide.  Retail and  Middle  Market
Banking  offers a wide variety of financial  products  and  services,  including
consumer banking, credit cards, mortgage services and consumer finance services,
through a diverse  array of  distribution  channels,  including the internet and
branch and ATM networks.

      Our principal executive offices are at 270 Park Avenue, New York, New York
10017-2070 and our telephone number is (212) 270-6000.


                                       5
<PAGE>

                CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES

                                             Year ended December 31,
                                  ----------------------------------------------
                                    2000      1999      1998      1997      1996
                                    ----      ----      ----      ----      ----
Excluding Interest on Deposits...   1.52      1.93      1.46      1.53      1.50
Including Interest on Deposits...   1.31      1.54      1.29      1.33      1.29

      For purposes of computing the above ratios,  earnings represent net income
from  continuing  operations plus total taxes based on income and fixed charges.
Fixed charges,  excluding interest on deposits,  include interest expense (other
than on  deposits),  one-third  (the  proportion  deemed  representative  of the
interest  factor)  of  rents,  net of income  from  subleases,  and  capitalized
interest.  Fixed charges,  including interest on deposits,  include all interest
expense, one-third (the proportion deemed representative of the interest factor)
of rents, net of income from subleases, and capitalized interest.

      The above  ratios  reflect  the  combined  results of The Chase  Manhattan
Corporation  and J.P.  Morgan & Co.  Incorporated  as if the  merger had been in
effect for all periods presented.

                                 USE OF PROCEEDS

      We will use the net  proceeds we receive  from the sale of the  securities
offered  by this  prospectus  and the  accompanying  prospectus  supplement  for
general corporate purposes, in connection with hedging our obligations under the
securities,  or for any other  purpose  described in the  applicable  prospectus
supplement. General corporate purposes may include additions to working capital,
repayment of debt,  investments in or extensions of credit to our  subsidiaries,
or redemptions or repurchases of our stock.  We may  temporarily  invest the net
proceeds  or use them to repay  short-term  debt  until  they are used for their
stated purpose.


                                       6
<PAGE>

                         DESCRIPTION OF DEBT SECURITIES

General

      The following  description  of the terms of the debt  securities  contains
certain general terms that may apply to the debt securities.  The specific terms
of any debt securities will be described in the prospectus  supplement  relating
to those debt securities.

      The debt securities will be issued under an Indenture, between J.P. Morgan
Chase & Co. and Bankers Trust Company, as Trustee.

      We have summarized below the material  provisions of the Indenture and the
debt securities, or indicated which material provisions will be described in the
related prospectus supplement.  These descriptions are only summaries,  and each
investor should refer to the Indenture, which describes completely the terms and
definitions  summarized below and contains additional  information regarding the
debt  securities.  Where  appropriate,  we use  parentheses  to refer you to the
particular  sections of the Indenture.  Any reference to particular  sections or
defined terms of the Indenture in any statement under this heading qualifies the
entire  statement  and  incorporates  by  reference  the  applicable  section or
definition into that statement.

      The debt securities will be our direct, unsecured general obligations. The
debt  securities  will  have the same  rank in  liquidation  as all of our other
unsecured and unsubordinated debt.

      The  Indenture  does not limit the amount of debt  securities  that we may
issue.  The  Indenture  provides  that debt  securities  may be issued up to the
principal  amount  authorized  by us  from  time to  time  (Section  2.03 of the
Indenture).  The Indenture  allows us to reopen a previous  issue of a series of
debt securities and issue additional debt securities of that issue.

      We are a holding company and conduct  substantially  all of our operations
through subsidiaries. As a result, claims of holders of the debt securities will
generally  have a junior  position to claims of creditors  of our  subsidiaries,
except  to  the  extent  that  we may  be  recognized  as a  creditor  of  those
subsidiaries.  In addition,  our right to  participate  as a shareholder  in any
distribution of assets of any subsidiary (and thus the ability of holders of the
debt  securities to benefit as creditors of the Company from such  distribution)
is  junior  to  creditors  of  that  subsidiary.  Claims  of  creditors  of  our
subsidiaries include:

      o     substantial amounts of long-term debt;

      o     deposit liabilities;

      o     federal funds purchased;

      o     securities sold under repurchase agreements; and

      o     short-term borrowings.

      In  addition,  various  statutes  and  regulations  restrict  some  of our
subsidiaries  from paying  dividends  or making  loans or advances to us.  These
restrictions could prevent those subsidiaries from paying the cash to us that we
need in order to pay you. These restrictions include:

      o     the net capital  requirements  under the Securities  Exchange Act of
            1934,  as  amended,  and the  rules  of  some  exchanges  and  other
            regulatory  bodies,  which apply to J.P. Morgan  Securities Inc. and
            other broker-dealer affiliates, and

      o     banking regulations, which apply to Morgan Guaranty Trust Company of
            New York, The Chase Manhattan Bank and Chase Manhattan Bank USA.

      We may issue  debt  securities  from  time to time in one or more  series.
(Section 2.03 of the  Indenture)  The debt  securities  may be  denominated  and
payable in U.S. dollars or foreign  currencies.  (Section 2.03 of the Indenture)
We may also issue debt securities, from time to time, with the principal amount,
interest or other amounts payable on any relevant  payment date to be determined
by reference to one or more currency  exchange  rates,  securities or baskets of
securities,  commodity prices, indices or any other financial, economic or other
measure or instrument,  including the occurrence or  non-occurrence of any event
or circumstance. All references in


                                       7
<PAGE>

this  prospectus,  or any  prospectus  supplement  to other amounts will include
premium,  if any,  other  cash  amounts  payable  under the  Indenture,  and the
delivery  of  securities  or baskets of  securities  under the terms of the debt
securities.

      Debt securities may bear interest at a fixed rate, which may be zero, or a
floating rate.

      The  prospectus  supplement  relating  to the  particular  series  of debt
securities  being  offered  will  specify  the  particular  terms of,  and other
information relating to, those debt securities. These terms may include:

      o     the specific designation;

      o     any  limit  on  the  aggregate   principal   amount  and  authorized
            denominations of the debt securities;

      o     the purchase price of the debt securities (expressed as a percentage
            of the principal amount thereof);

      o     the date or dates on which the principal of the debt securities will
            be payable;

      o     the interest rate or rates  (including any interest rates applicable
            to overdue  payments) on the debt securities,  if any, or the method
            by which the calculation agent will determine those rates;

      o     if other than U.S.  dollars,  the currency or currencies  (including
            composite currencies or currency units) in which the debt securities
            may be purchased and in which payments on the debt  securities  will
            be  made  (which   currencies  may  be  different  for  payments  of
            principal, premium, if any, and/or interest, if any);

      o     the dates on which any interest or other amounts will be payable, if
            any;

      o     any repayment,  redemption,  prepayment or sinking fund  provisions,
            including any redemption notice provisions;

      o     information  as  to  the  methods  for  determining  the  amount  of
            principal,  interest or other amounts payable on any date and/or any
            currencies, currency units, composite currencies,  commodity prices,
            securities,  baskets of  securities,  indices,  baskets of  indices,
            interest  rates,  swap  rates,  baskets  of swap  rates or any other
            factors or other financial, economic or other measure or instrument,
            including  the  occurrence  or   non-occurrence   of  any  event  or
            circumstance,  to which  the  amount  payable  with  respect  to the
            principal, interest or other amounts, if any, of the debt securities
            on that date will be linked;

      o     any conversion or exchange  provision  relating to the conversion or
            exchange of the debt  securities  into or for  securities of another
            entity;

      o     the terms on which  holders of the debt  securities  may  convert or
            exchange  these  securities  into or for  stock or other  securities
            issued  by  another  entity,  any  specific  terms  relating  to the
            adjustment  of the  conversion  or  exchange  feature and the period
            during which the holders may make the conversion or exchange;

      o     whether  we will issue the debt  securities  in  registered  form or
            bearer  form or both and,  if we are  offering  debt  securities  in
            bearer form, any restrictions applicable to the exchange of one form
            for  another  and to the  offer,  sale and  delivery  of those  debt
            securities in bearer form;

      o     the place or places for payment of the principal amount, interest or
            other amounts on the debt securities;

      o     whether we will issue the debt  securities  in  definitive  form and
            under what terms and conditions;

      o     any   agents   for  the   debt   securities,   including   trustees,
            depositaries,  authenticating  or paying agents,  transfer agents or
            registrars;

      o     any  applicable  United  States  federal  income  tax  consequences,
            including, but not limited to:

            o     whether and under what  circumstances  we will pay  additional
                  amounts on debt  securities held by a person who is not a U.S.
                  person for any tax, assessment or governmental charge withheld
                  or  deducted  and,  if so,  whether we will have the option to
                  redeem those debt  securities in order to avoid the obligation
                  to pay future additional amounts; and

            o     tax   considerations   applicable   to  any  debt   securities
                  denominated and payable in foreign currencies; and


                                       8
<PAGE>

      o     any  other  specific  terms of the debt  securities,  including  any
            additional events of default or covenants, and any terms required by
            or advisable under applicable laws or regulations.

      Some of the debt  securities may be issued as original issue discount debt
securities (the "Original Issue Discount  Securities").  Original Issue Discount
Securities bear no interest or bear interest at  below-market  rates and will be
sold  at  a  discount  below  their  stated  principal  amount.  The  prospectus
supplement  relating  to an issue of Original  Issue  Discount  Securities  will
contain  information  relating to United States federal income tax,  accounting,
and  other  special   considerations   applicable  to  Original  Issue  Discount
Securities.

      Holders may present  debt  securities  for  exchange or  transfer,  in the
manner,  at the  places  and  subject  to the  restrictions  stated  in the debt
securities  and  described  in the  applicable  prospectus  supplement.  We will
provide these services  without charge except for any tax or other  governmental
charge payable in connection  with these services and subject to any limitations
provided in the Indenture. (Section 2.08 of the Indenture)

      Holders  may  transfer  debt  securities  in bearer  form and the  related
coupons,  if any, by delivery to the  transferee.  If any of the  securities are
held in  global  form,  the  procedures  for  transfer  of  interests  in  those
securities  will depend upon the  procedures of the  depositary for those global
securities. See "Forms of Securities."

      We will generally have no obligation to repurchase,  redeem, or change the
terms of debt  securities  upon any event  (including a change in control)  that
might have an adverse effect on our credit quality.

Events of Default, Waiver, Debt Securities in Foreign Currencies

      An "Event of  Default"  with  respect  to a series of debt  securities  is
defined in the Indenture as:

      o     default  for 30  days  in  the  payment  of  interest  on  any  debt
            securities of that series;

      o     default in payment of principal or other amounts payable on any debt
            securities of that series when due, at maturity, upon redemption, by
            declaration, or otherwise;

      o     failure  by us for  90  days  after  notice  to  perform  any  other
            covenants or  warranties  contained in the  Indenture  applicable to
            that series;

      o     certain events of bankruptcy or reorganization of the Company; and

      o     any other event of default  provided in the applicable  supplemental
            indentures or form of security. (Section 5.01 of the Indenture)

      If a default  in the  payment  of  principal,  interest  or other  amounts
payable  on the  debt  securities,  or in the  performance  of any  covenant  or
agreement,  or in a manner provided in the applicable  supplemental indenture or
form of security,  with respect to one or more series of debt securities  occurs
and is  continuing,  either  the  Trustee  or the  holders  of at  least  25% in
principal amount of the debt securities of such series then outstanding, treated
as one class,  may declare the principal of all  outstanding  debt securities of
such series and any interest accrued thereon, to be due and payable immediately.
In the case of Original Issue Discount  Securities,  only a specified portion of
the principal amount may be accelerated.  If a default in the performance of any
covenant or agreement with respect to all series of debt  securities,  or due to
specified  events of  bankruptcy  or  insolvency  of the Company,  occurs and is
continuing,  either  the  Trustee or the  holders  of at least 25% in  principal
amount of all debt securities then  outstanding,  voting as a single class,  may
declare the  principal  of all  outstanding  debt  securities  and any  interest
accrued  thereon,  to be due and  payable  immediately.  In the case of Original
Issue Discount Securities,  only a specified portion of the principal amount may
be accelerated.  Subject to certain conditions such declarations may be annulled
and past defaults,  except for uncured payment  defaults on the debt securities,
may  be  waived  by  the  holders  of a  majority  in  principal  amount  of the
outstanding debt securities of the series  affected.  (Sections 5.01 and 5.10 of
the Indenture)

      An Event of Default with respect to one series of debt securities does not
necessarily  constitute  an Event of Default with respect to any other series of
debt securities.  The Indenture provides that the Trustee may withhold notice to
the holders of the debt securities of any default if the Trustee considers it in
the interest of the holders of the debt securities to do so. The Trustee may not
withhold  notice of a default in the payment of principal of, interest on or any
other amounts due under, such debt securities. (Section 5.11 of the Indenture)


                                       9
<PAGE>

      The Indenture  provides that the holders of a majority in principal amount
of outstanding  debt securities of any series may direct the time,  method,  and
place of conducting any proceeding for any remedy  available to the Trustee,  or
exercising  any trust or other power  conferred on the Trustee.  The Trustee may
decline  to act if the  direction  is  contrary  to  law  and in  certain  other
circumstances  set forth in the  Indenture.  (Section 5.09 of the Indenture) The
Trustee is not  obligated  to  exercise  any of its  rights or powers  under the
Indenture at the request or direction of the holders of debt  securities  unless
the  holders  offer  the  Trustee  reasonable  indemnity  against  expenses  and
liabilities. (Section 6.02(d) of the Indenture)

      No holder of any Debt  Security  of any series has the right to  institute
any action for remedy  unless  such holder has  previously  given to the Trustee
written  notice of default and the Trustee has failed to take action for 60 days
after  the  holders  of not  less  than  25% in  principal  amount  of the  debt
securities  of such series make  written  request  upon the Trustee to institute
such action. (Section 5.06 of the Indenture)

      The  Indenture  requires  us to file  annually  with the Trustee a written
statement of no default, or specifying any default that exists. (Section 3.05 of
the Indenture)

      Whenever the Indenture  provides for an action by, or the determination of
any of the rights of, or any distribution to, holders of debt securities, in the
absence of any  provision  to the  contrary  in the form of Debt  Security,  any
amount in respect of any debt  security  denominated  in a currency  or currency
unit other than U.S.  dollars may be treated for any such action or distribution
as the  amount of U.S.  dollars  that could  reasonably  be  exchanged  for such
non-U.S.  dollar  amount.  This amount will be  calculated  as of a date that we
specify  to the  Trustee  or, if we fail to  specify a date,  on a date that the
Trustee may determine. (Section 11.11 of the Indenture)

Discharge, Defeasance and Covenant Defeasance

      Discharge of Indenture.  The Indenture  will cease to be of further effect
with  respect  to  debt  securities  of  any  series,  except  as to  rights  of
registration of transfer and exchange, substitution of mutilated or defaced debt
securities,  rights of holders to receive  principal,  interest or other amounts
payable  under the debt  securities,  rights and  immunities  of the Trustee and
rights of holders with respect to property  deposited  pursuant to the following
provisions, if at any time:

      o     the  Company  has  paid the  principal,  interest  or other  amounts
            payable under the debt securities of such series;

      o     the Company has delivered to the Trustee for  cancellation  all debt
            securities of such series; or

      o     the debt  securities of such series not delivered to the Trustee for
            cancellation  have  become due and  payable,  or will become due and
            payable within one year, or are to be called for  redemption  within
            one year under  arrangements  satisfactory  to the Trustee,  and the
            Company has  irrevocably  deposited  with the Trustee as trust funds
            the entire amount in cash or U.S. government  obligations sufficient
            to pay all amounts due with  respect to such debt  securities  on or
            after  the  date of such  deposit,  including  at  maturity  or upon
            redemption  of  all  such  debt  securities,   including  principal,
            interest and other amounts. (Section 10.01 of the Indenture)

      The  Trustee,  on  demand  of  the  Company  accompanied  by an  Officers'
Certificate  and an  Opinion  of  Counsel  and at the  cost and  expense  of the
Company, will execute proper instruments  acknowledging such satisfaction of and
discharging the Indenture with respect to such series.

      Defeasance of a Series of  Securities  at Any Time. We may also  discharge
all of our  obligations,  other than as to transfers  and  exchanges,  under any
series of debt securities at any time, which we refer to as "defeasance".

      We may  be  released  with  respect  to any  outstanding  series  of  debt
securities  from the  obligations  imposed  by Article  9,  which  contains  the
covenant described below limiting  consolidations,  mergers and asset sales, and
elect not to comply with that  provision  without  creating an event of default.
Discharge under these procedures is called "covenant defeasance".

      Defeasance  or covenant  defeasance  may be effected  only if, among other
things:


                                       10
<PAGE>

      o     we irrevocably deposit with the Trustee cash or, in the case of debt
            securities   payable   only  in  U.S.   dollars,   U.S.   government
            obligations,  as trust funds in an amount certified to be sufficient
            to pay on each date that they become due and payable,  the principal
            of , interest on, other amounts due under, and any mandatory sinking
            fund payments  for, all  outstanding  debt  securities of the series
            being defeased;

      o     we deliver to the Trustee an opinion of counsel to the effect that:

            o     the holders of the series of debt  securities  being  defeased
                  will not  recognize  income,  gain or loss for  United  States
                  federal  income tax purposes as a result of the  defeasance or
                  covenant defeasance; and

            o     the defeasance or covenant defeasance will not otherwise alter
                  those  holders'  United States federal income tax treatment of
                  principal or interest  payments or other amounts due under the
                  series of debt securities being defeased;

            in the case of a defeasance,  this opinion must be based on a ruling
            of the Internal Revenue Service or a change in United States federal
            income tax law occurring  after the date of this  prospectus,  since
            that result would not occur under current tax law; and

      o     such  defeasance or covenant  defeasance will not result in a breach
            or violation of, or constitute a default under, the Indenture or any
            other  agreement or instrument to which the Company is a party or by
            which it is bound. (Section 10.01 of the Indenture)

Modification of the Indenture; Waiver of Compliance

      The Indenture contains provisions  permitting us and the Trustee to modify
the Indenture or the rights of the holders of debt  securities  with the consent
of the  holders  of not  less  than a  majority  in  principal  amount  of  each
outstanding series of debt securities affected by the modification.  Each holder
of an affected Debt Security must consent to a modification that would:

      o     change  the  stated  maturity  date of the  principal  of, or of any
            installment of principal of or interest on, any debt security;

      o     reduce the  principal  amount of,  interest on, or any other amounts
            due under any debt security;

      o     change  the  currency  or  currency  unit  of  payment  of any  debt
            security;

      o     change  the  method  in which  amounts  of  payments  of  principal,
            interest or other amounts are determined on any debt security;

      o     reduce the  portion of the  principal  amount of an  Original  Issue
            Discount Security payable upon acceleration of the maturity thereof;

      o     reduce any amount payable upon redemption of any Debt Security;

      o     impair the right of a holder to  institute  suit for the  payment of
            or, if the debt  securities  provide,  any right of repayment at the
            option of the holder of a Debt Security; or

      o     reduce the percentage of debt securities of any series,  the consent
            of the holders of which is required for any  modification.  (Section
            8.02 of the Indenture)

      The  Indenture  also permits us and the Trustee to amend the  Indenture in
certain  circumstances  without the consent of the holders of debt securities to
evidence our merger, the replacement of the Trustee,  to effect changes which do
not  affect any  outstanding  series of Debt  Security,  and for  certain  other
purposes. (Section 8.01 of the Indenture)

Consolidations, Mergers and Sales of Assets

      We may not  merge or  consolidate  with any other  corporation  or sell or
convey all or substantially all of our assets to any other  corporation,  unless
either:

      o     we are the continuing  corporation or the successor corporation is a
            United States corporation which expressly assumes the payment of the
            principal  of, any interest  on, or any other  amounts due under the
            debt  securities  and  the  performance  and  observance  of all the
            covenants and conditions of the Indenture binding upon us, and


                                       11
<PAGE>

      o     we or the successor  corporation  shall not,  immediately  after the
            merger or  consolidation,  sale or conveyance,  be in default in the
            performance  of  any  covenant  or  condition.  (Article  9  of  the
            Indenture)

      There are no covenants or other  provisions  in the  Indenture  that would
afford  holders  of debt  securities  additional  protection  in the  event of a
recapitalization  transaction, a change of control of J.P. Morgan Chase & Co. or
a highly leveraged  transaction.  The merger covenant described above would only
apply if the recapitalization transaction, change of control or highly leveraged
transaction  were structured to include a merger or consolidation of J.P. Morgan
Chase & Co. or a sale or conveyance of all or  substantially  all of our assets.
However, we may provide specific  protections,  such as a put right or increased
interest,  for  particular  debt  securities,  which  we would  describe  in the
applicable prospectus supplement.

Concerning the Trustee, Paying Agent, Registrar and Transfer Agent

      Our  subsidiaries  and we  have  normal  banking  relationships  with  the
Trustee,  Bankers Trust  Company.  Bankers Trust Company will also be the paying
agent, registrar and transfer agent for the debt securities.

Governing Law and Judgments

      The debt securities will be governed by and interpreted  under the laws of
the State of New York.  (Section 11.8 of the  Indenture) In an action  involving
debt securities  denominated in a currency other than U.S. dollars, it is likely
that any judgment  granted by a U.S.  court would be made only in U.S.  dollars.
However,  a New York court should enter a judgment in the denominated  currency.
Such judgment should then be converted into U.S. dollars at the rate of exchange
prevailing on the date of entry of the judgment.


                                       12
<PAGE>

                             DESCRIPTION OF WARRANTS

Offered Warrants

      We may issue warrants that are debt  warrants,  index  warrants,  currency
warrants,  interest rate warrants or universal  warrants.  We may offer warrants
separately or together with one or more additional warrants,  or debt securities
or any combination of those securities in the form of units, as described in the
applicable  prospectus  supplement.  If we issue warrants as part of a unit, the
accompanying  prospectus  supplement  will specify whether those warrants may be
separated  from  the  other  securities  in the  unit  prior  to  the  warrants'
expiration  date.  Universal  warrants issued in the United States may not be so
separated prior to the 91st day after the issuance of the unit, unless otherwise
specified in the applicable prospectus supplement.

      Debt Warrants.  We may issue, together with debt securities or separately,
warrants for the purchase of debt  securities  on terms to be  determined at the
time of sale. We refer to this type of warrant as a "debt warrant".

      Index  Warrants.  We may issue warrants  entitling the holders  thereof to
receive from us, upon  exercise,  an amount in cash  determined  by reference to
decreases  or  increases  in the level of a specific  index or in the levels (or
relative levels) of two or more indices or combinations of indices,  which index
or indices may be based on one or more stocks, bonds or other securities, one or
more  interest  rates,  one  or  more  currencies  or  currency  units,  or  any
combination  of the  foregoing.  We refer to this type of  warrant  as an "index
warrant".

      Currency  Warrants.  We may also  issue  warrants  entitling  the  holders
thereof to receive  from us,  upon  exercise,  an amount in cash  determined  by
reference  to the right to purchase  or the right to sell a specified  amount or
specified amounts of one or more currencies or currency units or any combination
of the  foregoing  for a specified  amount or  specified  amounts of one or more
different  currencies or currency units or any combination of the foregoing.  We
refer to this type of warrant as a "currency warrant".

      Interest  Rate  Warrants.  We may issue  warrants  entitling  the  holders
thereof to receive  from us,  upon  exercise,  an amount in cash  determined  by
reference to decreases or increases in the yield or closing price of one or more
specified debt  instruments or in the interest rates,  interest rate swap rates,
or other rates established from time to time by one or more specified  financial
institutions,  or any  combination  of the  foregoing.  We refer to this type of
warrant as an "interest rate warrant".

      Universal Warrants. We may also issue warrants:

      o     to purchase or sell securities issued by another entity,  securities
            based on the  performance  of such entity,  securities  based on the
            performance  of such  entity  but  excluding  the  performance  of a
            particular  subsidiary or subsidiaries  of such entity,  a basket of
            securities,  any  other  financial,  economic  or other  measure  or
            instrument,  including the occurrence or non-occurrence of any event
            or circumstance, or any combination of the above;

      o     to purchase or sell commodities; or

      o     in  such  other  form  as  shall  be  specified  in  the  applicable
            prospectus supplement.

      We refer to the property in the above  clauses as "warrant  property."  We
refer to this type of warrant  as a  "universal  warrant."  We may  satisfy  our
obligations,  if any, with respect to any universal  warrants by delivering  the
warrant  property or, in the case of warrants to purchase or sell  securities or
commodities,  the cash value of the securities or  commodities,  as described in
the applicable prospectus supplement.

Further Information in Prospectus Supplement

      General  Terms of Warrants.  The  applicable  prospectus  supplement  will
contain, where applicable, the following terms of and other information relating
to the warrants:

      o     the specific  designation and aggregate  number of, and the price at
            which we will issue, the warrants;

      o     the currency with which the warrants may be purchased;

      o     the date on which the right to exercise the warrants  will begin and
            the  date  on  which  that  right  will  expire  or,  if you may not
            continuously  exercise the  warrants  throughout  that  period,  the
            specific date or dates on which you may exercise the warrants;


                                       13
<PAGE>

      o     whether  the  warrants  will be issued in fully  registered  form or
            bearer form, in definitive or global form or in any  combination  of
            these forms,  although,  in any case, the form of a warrant included
            in a unit  will  correspond  to the form of the unit and of any Debt
            Security included in that unit;

      o     any applicable United States federal income tax consequences;

      o     the identity of the warrant  agent for the warrants and of any other
            depositaries,   execution  or  paying   agents,   transfer   agents,
            registrars, determination, or other agents;

      o     the  proposed  listing,  if any, of the  warrants or any  securities
            purchasable   upon  exercise  of  the  warrants  on  any  securities
            exchange;

      o     whether  the  warrants  are to be  sold  separately  or  with  other
            securities as part of units; and

      o     any other terms of the warrants.

      Additional Terms of Debt Warrants. The prospectus supplement will contain,
where  applicable,  the  following  terms of and  other  terms  and  information
relating to any debt warrants:

      o     the designation,  aggregate principal amount,  currency and terms of
            the debt  securities that may be purchased upon exercise of the debt
            warrants;

      o     if applicable, the designation and terms of the debt securities with
            which  the debt  warrants  are  issued  and the  number  of the debt
            warrants issued with each of the debt securities;

      o     if applicable, the date on and after which the debt warrants and the
            related debt securities will be separately transferable; and

      o     the principal amount of debt securities purchasable upon exercise of
            each debt warrant,  the price at which and the currency in which the
            debt securities may be purchased and the method of exercise.

      Additional  Terms of Index,  Currency  and  Interest  Rate  Warrants.  The
applicable prospectus supplement will contain,  where applicable,  the following
terms of and other terms and  information  relating to any index,  currency  and
interest rate warrants:

      o     the exercise price, if any;

      o     the currency or currency unit in which the exercise  price,  if any,
            and the cash settlement value of such warrants is payable;

      o     the index or indices for any index warrants,  which index or indices
            may be based on one or more U.S. or foreign stocks,  bonds, or other
            securities,  one or more U.S. or foreign interest rates, one or more
            currencies or currency  units,  or any combination of the foregoing,
            and may be a preexisting  U.S. or foreign index or an index based on
            one or more securities,  interest rates or currencies selected by us
            solely in connection with the issuance of such index  warrants,  and
            certain  information   regarding  such  index  or  indices  and  the
            underlying securities,  interest rates or currencies (including,  to
            the extent possible, the policies of the publisher of the index with
            respect  to   additions,   deletions  and   substitutions   of  such
            securities, interest rates or currencies);

      o     for index warrants,  the method of providing for a substitute  index
            or indices or otherwise determining the amount payable in connection
            with the  exercise of such index  warrants  if the index  changes or
            ceases to be made available by the publisher of the index;

      o     for index warrants,  any provisions permitting a holder to condition
            any exercise notice on the absence of certain  specified  changes in
            the Spot Value or the Base Value or Spot  Amount (as  defined in the
            applicable prospectus supplement) after the exercise date;

      o     the  base  currency  and the  reference  currency  for any  currency
            warrants;

      o     the  debt  instrument  (which  may be one or more  debt  instruments
            issued  either  by the  United  States  government  or by a  foreign
            government),  the rate (which may be one or more  interest  rates or
            interest  rate swap  rates  established  from time to time by one or
            more specified  financial  institutions) or the other yield or price
            utilized for any interest  rate  warrants,  and certain  information
            regarding such debt instrument, rate, yield or price;


                                       14
<PAGE>

      o     the strike amount, the method of determining the spot amount and the
            method of expressing  movements in the yield or closing price of the
            debt  instrument or in the level of the rate as a cash amount in the
            currency in which the  interest  rate cash  settlement  value of any
            interest rate warrants is payable;

      o     whether  such  warrants  shall be put  warrants,  call  warrants  or
            otherwise;

      o     the  formula  for  determining  the  cash  settlement  value of each
            warrant;

      o     the  circumstances,  if any,  under which a minimum  and/or  maximum
            expiration value is applicable upon the expiration of such warrants;

      o     the effect or  effects,  if any,  of the  occurrence  of an Exercise
            Limitation  Event  or   Extraordinary   Event  (as  defined  in  the
            applicable   prospectus   supplement)  and  the  circumstances  that
            constitute such events;

      o     any minimum  number of warrants  which must be  exercised at any one
            time, other than upon automatic exercise;

      o     the maximum  number,  if any, of such warrants that may,  subject to
            our election, be exercised by all holders on any day;

      o     any  provisions  for the automatic  exercise of such warrants  other
            than at expiration;

      o     whether and under what  circumstances  such warrants may be canceled
            by us prior to the expiration date; and

      o     any other procedures and conditions relating to the exercise of such
            warrants.

      Additional  Terms  of  Universal  Warrants.   The  applicable   prospectus
supplement  will contain,  where  applicable,  the following  terms of and other
terms and information relating to any universal warrants:

      o     whether the universal warrants are put warrants or call warrants and
            whether you or we will be entitled to exercise the warrants;

      o     the  specific  warrant  property,  and the  amount or the method for
            determining  the  amount  of  the  warrant  property,  that  may  be
            purchased or sold upon exercise of each universal warrant;

      o     the  price at which  and the  currency  with  which  the  underlying
            securities or commodities may be purchased or sold upon the exercise
            of each universal warrant, or the method of determining that price;

      o     whether the exercise  price may be paid in cash,  by the exchange of
            any other security  offered with the universal  warrants or both and
            the method of exercising the universal warrants; and

      o     whether the exercise of the  universal  warrants is to be settled in
            cash or by delivery of the  underlying  securities or commodities or
            both.

Significant Provisions of the Warrant Agreements

      We will issue the  warrants  under one or more  warrant  agreements  to be
entered into between us and a bank or trust company, as warrant agent, in one or
more  series,  which will be  described  in the  prospectus  supplement  for the
warrants.  The  forms  of  warrant  agreements  are  filed  as  exhibits  to the
registration statement. The following summaries of significant provisions of the
warrant  agreements  and the warrants are not intended to be  comprehensive  and
holders of  warrants  should  review the  detailed  provisions  of the  relevant
warrant agreement for a full description and for other information regarding the
warrants.

      Modifications without Consent of Warrantholders.  We and the warrant agent
may amend the terms of the  warrants  and the warrant  certificates  without the
consent of the holders to:

      o     cure any ambiguity,

      o     cure, correct or supplement any defective or inconsistent provision,
            or

      o     amend the terms in any other manner  which we may deem  necessary or
            desirable and which will not  adversely  affect the interests of the
            affected holders in any material respect.


                                       15
<PAGE>

      Modifications  with Consent of  Warrantholders.  We and the warrant agent,
with the  consent of the  holders  of not less than a majority  in number of the
then outstanding  unexercised warrants affected, may modify or amend the warrant
agreement.  However,  we and the warrant  agent may not,  without the consent of
each affected warrantholder:

      o     change the exercise price of the warrants;

      o     reduce  the  amount   receivable  upon  exercise,   cancellation  or
            expiration  of the  warrants  other  than  in  accordance  with  the
            antidilution  provisions  or  other  similar  adjustment  provisions
            included in the terms of the warrants;

      o     shorten  the  period  of  time  during  which  the  warrants  may be
            exercised;

      o     materially  and  adversely  affect  the  rights of the owners of the
            warrants; or

      o     reduce the percentage of  outstanding  warrants the consent of whose
            owners is required for the  modification  of the applicable  warrant
            agreement.

      Merger,  Consolidation,  Sale or Other  Disposition.  If at any time there
will be a merger or  consolidation  of J.P.  Morgan Chase & Co. or a transfer of
substantially all of our assets,  the successor  corporation will succeed to and
assume all of our  obligations  under each  warrant  agreement  and the  warrant
certificates.  We will then be relieved of any further  obligation under each of
those warrant agreements and the warrants issued under those warrant agreements.
See  "Description  of Debt  Securities --  Consolidations,  Mergers and Sales of
Assets."

      Enforceability  of Rights of  Warrantholders.  The warrant agents will act
solely as our agents in connection  with the warrant  certificates  and will not
assume any obligation or relationship of agency or trust for or with any holders
of warrant certificates or beneficial owners of warrants.  Any holder of warrant
certificates  and any beneficial  owner of warrants may,  without the consent of
any other person,  enforce by appropriate legal action,  on its own behalf,  its
right to exercise the  warrants  evidenced  by the warrant  certificates  in the
manner  provided  for in that series of  warrants or pursuant to the  applicable
warrant agreement.  No holder of any warrant  certificate or beneficial owner of
any  warrants  will be  entitled  to any of the  rights  of a holder of the debt
securities or any other warrant  property that may be purchased upon exercise of
the warrants,  including,  without limitation, the right to receive the payments
on those debt  securities  or other  warrant  property  or to enforce any of the
covenants or rights in the relevant indenture or any other similar agreement.

      Registration  and  Transfer  of  Warrants.  Subject  to the  terms  of the
applicable warrant  agreement,  warrants in definitive form may be presented for
exchange and for registration of transfer,  at the corporate trust office of the
warrant agent for that series of warrants,  or at any other office  indicated in
the prospectus  supplement relating to that series of warrants,  without service
charge.  However,  the  holder  will be  required  to pay any  taxes  and  other
governmental  charges as  described  in the warrant  agreement.  The transfer or
exchange  will be effected  only if the warrant agent for the series of warrants
is satisfied  with the  documents of title and identity of the person making the
request.

      New York Law to Govern.  The warrants and each warrant  agreement  will be
governed by, and  construed  in  accordance  with,  the laws of the State of New
York.


                                       16
<PAGE>

                              DESCRIPTION OF UNITS

General

      Units will  consist of one or more debt  securities  and  warrants  or any
combination of them. The applicable prospectus supplement will also describe:

      o     the designation and the terms of the units and of any combination of
            debt  securities  and  warrants  constituting  the units,  including
            whether and under what circumstances the debt securities or warrants
            may be traded separately;

      o     any additional terms of the applicable unit agreement;

      o     any  additional  provisions for the issuance,  payment,  settlement,
            transfer  or  exchange  of the  units or of the debt  securities  or
            warrants constituting the units; and

      o     any applicable United States federal income tax consequences.


      The terms and conditions described under "Description of Debt Securities,"
and  "Description  of Warrants" will apply to each unit and to any debt security
or warrant included in each unit,  respectively,  unless otherwise  specified in
the applicable prospectus supplement.

      We will issue the units under one or more unit  agreements,  each referred
to as a unit  agreement,  to be  entered  into  between  us and a bank or  trust
company, as unit agent. We may issue units in one or more series,  which will be
described in the applicable prospectus supplement.  We have filed a form of unit
agreement as an exhibit to the registration statement.

Significant Provisions of the Unit Agreement

      Remedies.  The unit agent will act solely as our agent in connection  with
the units  governed by the unit  agreement and will not assume any obligation or
relationship of agency or trust for or with any holders of units or interests in
those units.  Any holder of units or  interests in those units may,  without the
consent  of the unit  agent or any other  holder or  beneficial  owner of units,
enforce by  appropriate  legal action,  on its own behalf,  its rights under the
unit  agreement.  However,  the holders of units or interests in those units may
only enforce their rights under the debt  securities or warrants issued as parts
of those units in accordance  with the terms of the Indenture and the applicable
warrant agreement.

      Modification.  We and the unit agent may amend the unit agreement  without
the consent of the holders to:

      o     cure any ambiguity;

      o     cure, correct or supplement any defective or inconsistent  provision
            in the agreement; or

      o     amend the terms in any other manner  which we may deem  necessary or
            desirable  and which will not  adversely  affect the interest of the
            affected holders of units in any material respect.

      We and the unit agent,  with the consent of the holders of not less than a
majority of units at the time outstanding, may modify or amend the rights of the
affected  holders  of the  affected  units and the terms of the unit  agreement.
However,  we and the unit agent may not,  without the  consent of each  affected
holder of units, make any modifications or amendments that would:

      o     materially and adversely  affect the exercise rights of the affected
            holders, or

      o     reduce the  percentage  of  outstanding  units the  consent of whose
            owners is required to consent to a modification  or amendment of the
            unit agreement.


      Any debt securities issued as part of units governed by the unit agreement
may be modified only in accordance with the Indenture,  as described above under
"Description  of Debt Securities -- Modification of the Indenture." Any warrants
issued as part of units may be modified only in accordance with the terms of the
applicable  warrant  agreement  as  described  in  "Description  of  Warrants --
Significant Provisions of the Warrant Agreements."


                                       17
<PAGE>

      Merger,  Consolidation,  Sale or Conveyance.  The unit agreement  provides
that we will not merge or consolidate with any other person and will not sell or
convey all or substantially all of our assets to any person unless:

      o     we will be the continuing corporation; or

      o     the   successor   corporation   or  person  that   acquires  all  or
            substantially all of our assets:

            o     will be a corporation  organized  under the laws of the United
                  States,  a state  of the  United  States  or the  District  of
                  Columbia; and

            o     will expressly  assume all of our  obligations  under the unit
                  agreement; and

      o     immediately after the merger, consolidation, sale or conveyance, we,
            that person or that successor  corporation will not be in default in
            the  performance  of  the  covenants  and  conditions  of  the  unit
            agreement applicable to us.

      Replacement   of  Unit   Certificates.   We  will  replace  any  mutilated
certificate  evidencing  a  definitive  unit at the  expense of the holder  upon
surrender of that  certificate to the unit agent.  We will replace  certificates
that have been  destroyed,  lost or stolen at the  expense  of the  holder  upon
delivery  to us and the unit agent of evidence  satisfactory  to us and the unit
agent of the destruction,  loss or theft of the  certificates.  In the case of a
destroyed,  lost or stolen  certificate,  an indemnity  satisfactory to the unit
agent and to us may be  required  at the  expense  of the holder of the units or
prepaid purchase  contracts  evidenced by that certificate  before a replacement
will be issued.

      Title. We, the unit agent, the trustee, the warrant agent and any of their
agents will treat the registered owner of any unit as its owner, notwithstanding
any notice to the contrary, for all purposes.

      New York Law to Govern.  The unit agreement and the units will be governed
by, and construed in accordance with, the laws of the State of New York.


                                       18
<PAGE>

                               FORMS OF SECURITIES

      Each  debt  security,  warrant  and unit will be  represented  either by a
certificate issued in definitive form to a particular investor or by one or more
global  securities   representing  the  entire  issuance  of  securities.   Both
certificated  securities in definitive form and global  securities may be issued
either (1) in registered  form,  where our obligation  runs to the holder of the
security  named on the face of the  security or (2)  subject to the  limitations
explained  below under "--  Limitations  on Issuance  of Bearer  Securities  and
Bearer Debt  Warrants," in bearer form,  where our obligation runs to the bearer
of the security.  Definitive securities name you or your nominee as the owner of
the security (other than definitive bearer securities,  which name the bearer as
owner),  and in order to  transfer or exchange  these  securities  or to receive
payments other than interest or other interim payments, you or your nominee must
physically  deliver the  securities to the trustee,  registrar,  paying agent or
other agent, as applicable.  Global  securities name a depositary or its nominee
as the owner of the debt  securities,  warrants  or units  represented  by these
global securities (other than global bearer securities, which name the bearer as
owner).  The depositary  maintains a computerized  system that will reflect each
investor's  beneficial ownership of the securities through an account maintained
by  the  investor  with  its   broker/dealer,   bank,  trust  company  or  other
representative, as we explain more fully below.

Global Securities

      Registered Global Securities. We may issue the registered debt securities,
warrants and units in the form of one or more fully registered global securities
that will be  deposited  with a  depositary  or its  nominee  identified  in the
applicable  prospectus  supplement and registered in the name of that depositary
or nominee.  In those cases,  one or more registered  global  securities will be
issued in a denomination or aggregate  denominations equal to the portion of the
aggregate  principal  or face  amount of the  securities  to be  represented  by
registered  global  securities.  Unless and until it is  exchanged  in whole for
securities in definitive  registered form, a registered  global security may not
be transferred  except as a whole by and among the depositary for the registered
global  security,  the  nominees  of the  depositary  or any  successors  of the
depositary or those nominees.

      If not described below,  any specific terms of the depositary  arrangement
with respect to any securities to be represented by a registered global security
will be described in the prospectus supplement relating to those securities.  We
anticipate   that  the  following   provisions  will  apply  to  all  depositary
arrangements.

      Ownership of beneficial  interests in a registered global security will be
limited to persons, called participants,  that have accounts with the depositary
or persons that may hold interests through participants.  Upon the issuance of a
registered  global  security,  the  depositary  will credit,  on its  book-entry
registration and transfer system, the participants' accounts with the respective
principal  or  face  amounts  of  the  securities   beneficially  owned  by  the
participants.   Any  dealers,   underwriters  or  agents  participating  in  the
distribution  of the  securities  will  designate  the  accounts to be credited.
Ownership of beneficial  interests in a registered global security will be shown
on, and the  transfer of  ownership  interests  will be effected  only  through,
records maintained by the depositary, with respect to interests of participants,
and on the records of participants, with respect to interests of persons holding
through  participants.  The laws of some states may require that some purchasers
of securities  take physical  delivery of these  securities in definitive  form.
These  laws may  impair  your  ability  to own,  transfer  or pledge  beneficial
interests in registered global securities.

      So long as the depositary,  or its nominee,  is the registered  owner of a
registered global security,  that depositary or its nominee, as the case may be,
will be considered the sole owner or holder of the securities represented by the
registered  global  security for all purposes  under the  applicable  indenture,
warrant  agreement  or unit  agreement.  Except as  described  below,  owners of
beneficial  interests in a registered  global  security  will not be entitled to
have the securities  represented by the registered global security registered in
their names, will not receive or be entitled to receive physical delivery of the
securities in definitive  form and will not be considered  the owners or holders
of the securities  under the  applicable  indenture,  warrant  agreement or unit
agreement. Accordingly, each person owning a beneficial interest in a registered
global  security  must  rely  on the  procedures  of  the  depositary  for  that
registered  global  security  and, if that person is not a  participant,  on the
procedures of the  participant  through  which the person owns its interest,  to
exercise  any  rights  of a  holder  under  the  applicable  indenture,  warrant
agreement  or  unit  agreement.  We  understand  that  under  existing  industry
practices,  if we request  any action of holders or if an owner of a  beneficial
interest in a registered global security desires to give or take


                                       19
<PAGE>

any  action  that a holder is  entitled  to give or take  under  the  applicable
indenture,   warrant  agreement  or  unit  agreement,  the  depositary  for  the
registered global security would authorize the participants holding the relevant
beneficial  interests to give or take that action,  and the  participants  would
authorize  beneficial  owners owning through them to give or take that action or
would otherwise act upon the  instructions of beneficial  owners holding through
them.

      Principal,  interest payments on debt securities,  other amounts due under
debt  securities  and any payments to holders with respect to warrants or units,
represented  by a  registered  global  security  registered  in  the  name  of a
depositary or its nominee will be made to the depositary or its nominee,  as the
case may be, as the registered owner of the registered global security.  None of
J.P. Morgan Chase & Co., the trustees,  the warrant  agents,  the unit agents or
any other agent of J.P.  Morgan  Chase & Co.,  agent of the trustees or agent of
the warrant agents or unit agents will have any  responsibility or liability for
any aspect of the records  relating to  payments  made on account of  beneficial
ownership  interests  in the  registered  global  security  or for  maintaining,
supervising  or reviewing  any records  relating to those  beneficial  ownership
interests.

      We expect that the depositary  for any of the securities  represented by a
registered global security, upon receipt of any payment of principal,  interest,
other amounts or other  distribution of underlying  securities or other property
to  holders  on  that  registered  global  security,   will  immediately  credit
participants'  accounts in amounts  proportionate to their respective beneficial
interests  in that  registered  global  security  as shown on the records of the
depositary. We also expect that payments by participants to owners of beneficial
interests in a registered  global  security  held through  participants  will be
governed by standing customer  instructions and customary  practices,  as is now
the case with the  securities  held for the accounts of customers in bearer form
or  registered  in  "street  name,"  and  will be the  responsibility  of  those
participants.

      If the depositary for any of these securities  represented by a registered
global  security is at any time unwilling or unable to continue as depositary or
ceases to be a clearing agency  registered under the Securities  Exchange Act of
1934,  and a successor  depositary  registered  as a clearing  agency  under the
Securities  Exchange Act of 1934 is not  appointed by us within 90 days, we will
issue  securities  in  definitive  form in exchange  for the  registered  global
security that had been held by the depositary.  In addition,  we may at any time
and in our sole discretion decide not to have any of the securities  represented
by one or more registered global securities.  If we make that decision,  we will
issue securities in definitive form in exchange for all of the registered global
security or securities  representing those securities.  Any securities issued in
definitive form in exchange for a registered  global security will be registered
in the name or names that the depositary gives to the relevant trustee,  warrant
agent, unit agent or other relevant agent of ours or theirs. It is expected that
the  depositary's  instructions  will be based upon  directions  received by the
depositary from participants  with respect to ownership of beneficial  interests
in the registered global security that had been held by the depositary.

      Bearer Global Securities. The securities may also be issued in the form of
one or more  bearer  global  securities  that  will be  deposited  with a common
depositary for the Euroclear System and Clearstream Banking,  societe anonyme or
with a  nominee  for the  depositary  identified  in the  prospectus  supplement
relating to those securities.  The specific terms and procedures,  including the
specific terms of the depositary arrangement,  with respect to any securities to
be represented  by a bearer global  security will be described in the prospectus
supplement relating to those securities.

Limitations on Issuance of Bearer Securities and Bearer Debt Warrants

      In compliance with United States federal income tax laws and  regulations,
bearer  securities,  including bearer securities in global form, and bearer debt
warrants will not be offered, sold, resold or delivered, directly or indirectly,
in the United States or its possessions or to United States persons,  as defined
below,  except as otherwise  permitted  by United  States  Treasury  Regulations
Section 1.163-5(c)(2)(i)(D).  Any underwriters,  agents or dealers participating
in the  offerings  of bearer  securities  or bearer debt  warrants,  directly or
indirectly, must agree that:

      o     they will not,  in  connection  with the  original  issuance  of any
            bearer  securities or during the  restricted  period,  as defined in
            United States Treasury  Regulations Section  1.163-5(c)(2)(i)(D)(7),
            which we refer to as the "restricted period," offer, sell, resell or
            deliver, directly or indirectly, any bearer securities in the United
            States or its possessions or to United States persons, other than as
            permitted by the applicable  Treasury  Regulations  described above,
            and


                                       20
<PAGE>

      o     they will not, at any time, offer, sell, resell or deliver, directly
            or indirectly,  any bearer debt warrants in the United States or its
            possessions or to United States persons,  other than as permitted by
            the applicable Treasury Regulations described above.

      In addition,  any  underwriters,  agents or dealers  must have  procedures
reasonably  designed to ensure that their  employees  or agents who are directly
engaged in selling  bearer  securities  or bearer debt warrants are aware of the
above  restrictions  on  the  offering,  sale,  resale  or  delivery  of  bearer
securities or bearer debt warrants.

      Bearer securities,  other than temporary global debt securities and bearer
securities that satisfy the  requirements of United States Treasury  Regulations
Section  1.163-5(c)(2)(i)(D)(3)(iii)  and any coupons  appertaining thereto will
not be delivered  in  definitive  form,  and no interest  will be paid  thereon,
unless J.P. Morgan Chase & Co. has received a signed certificate in writing,  or
an  electronic  certificate  described  in United  States  Treasury  Regulations
Section 1.163-5(c)(2)(i)(D)(3)(ii), stating that on the date of that certificate
the bearer security:

      o     is owned by a person that is not a United States person;

      o     is owned by a United States person that (a) is a foreign branch of a
            United States financial institution, as defined in applicable United
            States  Treasury  Regulations,  which we  refer  to as a  "financial
            institution,"  purchasing for its own account or for resale,  or (b)
            is  acquiring  the  bearer  security  through a foreign  branch of a
            United  States  financial  institution  and  who  holds  the  bearer
            security through that financial  institution  through that date, and
            in  either  case  (a) or (b)  above,  each of  those  United  States
            financial  institutions  agrees,  on its own behalf or  through  its
            agent,  that J.P.  Morgan  Chase & Co. may be  advised  that it will
            comply with the requirements of Section 165(j)(3)(A),  (B) or (C) of
            the  Internal  Revenue  Code of 1986  and the  Treasury  Regulations
            thereunder; or

      o     is owned by a United States or foreign financial institution for the
            purposes of resale during the restricted  period and, whether or not
            also  described in the first or second clause  above,  the financial
            institution  certifies that it has not acquired the bearer  security
            for purposes of resale  directly or  indirectly  to a United  States
            person or to a person within the United States or its possessions.

      We will not issue bearer debt warrants in definitive form.

      We will make payments on bearer  securities  and bearer debt warrants only
outside the United States and its  possessions  except as permitted by the above
Treasury Regulations.

      Bearer securities, other than temporary global securities, and any coupons
issued with bearer securities will bear the following legend: "Any United States
person who holds this obligation will be subject to limitations under the United
States income tax laws,  including the  limitations  provided in sections 165(j)
and 1287(a) of the  Internal  Revenue  Code." The  sections  referred to in this
legend  provide  that,  with  exceptions,  a United  States  person  will not be
permitted  to  deduct  any  loss,  and will not be  eligible  for  capital  gain
treatment with respect to any gain realized on the sale,  exchange or redemption
of that bearer security or coupon.

      As used in the  preceding  three  paragraphs,  the term bearer  securities
includes  bearer  securities  that are part of units  and the term  bearer  debt
warrants  includes  bearer debt warrants that are part of units. As used herein,
the term "United States person" means a citizen or resident of the United States
for United States  federal income tax purposes,  a corporation  or  partnership,
including an entity treated as a corporation  or  partnership  for United States
federal  income tax  purposes,  created or organized in or under the laws of the
United States, or any state of the United States or the District of Columbia, or
an estate  or trust the  income of which is  subject  to United  States  federal
income taxation regardless of its source.

Form of Securities Included in Units

      The form of any warrant  included in a unit will correspond to the form of
the unit and of any other security included in that unit.


                                       21
<PAGE>

                              PLAN OF DISTRIBUTION

      We may sell the debt securities or warrants:

      o     through agents;

      o     through underwriters;

      o     through dealers; and

      o     directly to  purchasers,  any of whom may be customers of, engage in
            transactions  with,  or perform  services  for,  the  Company in the
            ordinary course of business.

      If we offer and sell  securities  through  an agent,  that  agent  will be
named, and any commissions payable to that agent by us, will be set forth in the
prospectus supplement.  Any agent will be acting on a best efforts basis for the
period of its  appointment  which will usually be five business days or less. An
agent may be deemed to be an underwriter under the federal securities laws.

      If underwriters  are used in the sale of the  securities,  we will sign an
underwriting  agreement with them. The underwriting  agreement will provide that
the obligations of the underwriters  are subject to certain  conditions and that
the underwriters  will be obligated to purchase all of the securities if any are
purchased.  Underwriters  will buy the  securities for their own account and may
resell them from time to time in one or more transactions,  including negotiated
transactions, at fixed public offering prices or at varying prices determined at
the time of  sale.  Securities  may be  offered  to the  public  either  through
underwriting syndicates represented by managing underwriters, or directly by the
managing underwriters.  The name of the managing underwriter or underwriters, as
well as any  other  underwriters,  and the terms of the  transaction,  including
compensation of the underwriters  and dealers,  if any, will be set forth in the
prospectus supplement.  The underwriters named in the prospectus supplement will
be  the  only  underwriters  for  the  securities  offered  by  that  prospectus
supplement.

      If a dealer is  utilized  in the sale of  securities,  we will sell  those
securities to the dealer,  as principal.  The dealer may resell those securities
to the public at varying  prices to be  determined  by the dealer at the time of
resale.  A dealer may be deemed to be an underwriter of those  securities  under
the  securities  laws.  The name of the dealer and the terms of the  transaction
will be set forth in the prospectus supplement.

      Our net  proceeds  will be the  purchase  price  in the case of sales to a
dealer,  the  public  offering  price less  discount  in the case of sales to an
underwriter or the purchase  price less  commission in the case of sales through
an agent -- in each case,  less other  expenses  attributable  to  issuance  and
distribution.

      In order to facilitate the offering of these securities,  the underwriters
may engage in  transactions  that  stabilize,  maintain or otherwise  affect the
price of these  securities  or any other  securities  the prices of which may be
used to determine payments on these securities.  Specifically,  the underwriters
may sell more  securities than they are obligated to purchase in connection with
the offering,  creating a short position for their own accounts. A short sale is
covered  if the  short  position  is no  greater  than the  number  or amount of
securities  available for purchase by the underwriters  under any  overallotment
option.  The  underwriters  can close out a covered short sale by exercising the
overallotment  option or  purchasing  these  securities  in the open market.  In
determining  the source of  securities  to close out a covered  short sale,  the
underwriters will consider,  among other things,  the open market price of these
securities  compared to the price available under the overallotment  option. The
underwriters may also sell these securities or any other securities in excess of
the overallotment option, creating a naked short position. The underwriters must
close out any naked short position by purchasing  securities in the open market.
A naked  short  position is more  likely to be created if the  underwriters  are
concerned that there may be downward  pressure on the price of these  securities
in the open market  after  pricing that could  adversely  affect  investors  who
purchase in the offering.  As an additional  means of facilitating the offering,
the  underwriters  may bid for,  and  purchase,  these  securities  or any other
securities in the open market to stabilize  the price of these  securities or of
any other  securities.  Finally,  in any  offering of the  securities  through a
syndicate of underwriters,  the underwriting  syndicate may also reclaim selling
concessions  allowed  to an  underwriter  or a  dealer  for  distributing  these
securities in the offering, if the syndicate repurchases  previously distributed
securities to cover syndicate short positions or to stabilize the price of these
securities.  Any of these  activities  may raise or maintain the market price of
these securities above independent  market levels or prevent or retard a decline
in the market price of these  securities.  The  underwriters are not required to
engage in these activities, and may end any of these activities at any time.


                                       22
<PAGE>

      We may agree to indemnify agents, underwriters, or dealers against certain
liabilities,  including  liabilities under the securities laws, or to contribute
to  payments  that  agents,  underwriters,  or dealers  may be required to make.
Agents,  underwriters  and dealers may be customers of,  engage in  transactions
with or perform services for us in the ordinary course of business.

      We may directly  solicit  offers to purchase  securities,  and we may sell
securities  directly to institutional  investors or others, who may be deemed to
be underwriters within the meaning of the securities laws. The terms of any such
sales will be described in the prospectus supplement.

      We may authorize  agents,  underwriters,  and dealers to solicit offers by
certain  institutions  to purchase the securities from us at the public offering
price stated in the prospectus supplement pursuant to delayed delivery contracts
providing  for  payment and  delivery  on a specified  date in the future and on
terms described in the prospectus supplement. These contracts will be subject to
only those conditions described in the prospectus supplement, and the prospectus
supplement will state the commission  payable for  solicitation of these offers.
Institutions with whom delayed delivery contracts may be made include commercial
and savings banks,  insurance companies,  pension funds,  investment  companies,
educational and charitable institutions, and other institutions but shall in all
cases be institutions which we have approved.

      These contracts will be subject only to the conditions that:

      o     the  underwriters  purchase  the  securities  at  the  time  of  the
            Contract; and

      o     the purchase is not prohibited under the laws of any jurisdiction in
            the United States to which the purchase is subject.

      We will pay a commission,  as indicated in the prospectus  supplement,  to
agents and  dealers  soliciting  purchases  of  securities  pursuant  to delayed
delivery contracts that we have accepted.

      This prospectus and related prospectus supplement may be used by direct or
indirect  wholly-owned  subsidiaries of ours in connection with offers and sales
related to secondary market  transactions in the securities.  Those subsidiaries
may act as principal or agent in those transactions. Secondary market sales will
be made at prices related to prevailing market prices at the time of sale.

      The offer and sale of the  securities  by an affiliate of ours will comply
with the  requirements  of Rule 2720 of the  Rules of  Conduct  of the  National
Association of Securities Dealers, Inc. regarding  underwriting of securities of
an affiliate and will comply with any restrictions imposed on the underwriter by
the  Governors.  Accordingly,  an affiliate of ours that is a member of the NASD
may  participate  in a public  offering and sale of our debt  securities  if the
offering is of a class of  securities  rated  investment  grade by a  nationally
recognized  statistical rating organization.  In addition,  an affiliate of ours
that is a member of the NASD may  participate in any public offering and sale of
the securities,  including without limitation Warrants, if the price at which an
equity issue is  distributed  to the public is no higher or the yield at which a
debt issue is distributed  to the public is no lower than that  recommended by a
"qualified independent  underwriter"  (determined to be so qualified by the NASD
prior to  commencement  of such  offering),  in each case in compliance with the
Conduct  Rules of the NASD.  Following  the initial  distribution  of any of the
securities,  our affiliates may offer and sell these securities in the course of
their business as broker-dealers. Our affiliates may act as principals or agents
in these  transactions  and may make any  sales at  varying  prices  related  to
prevailing  market prices at the time of sale or otherwise.  Our  affiliates may
use  this  prospectus  in  connection  with  these  transactions.  None  of  our
affiliates  is  obligated  to make a market in any of these  securities  and may
discontinue any market-making activities at any time without notice.

      Any  underwriter,  agent or dealer  utilized  in the  initial  offering of
securities   will  not  confirm  sales  to  accounts  over  which  it  exercises
discretionary  authority  without  the prior  specific  written  approval of its
customer.


                                       23
<PAGE>

                                     EXPERTS

      The audited  financial  statements of J.P. Morgan Chase & Co. contained in
our  Annual  Report on Form  10-K for the year  ended  December  31,  2000,  are
incorporated  by  reference  in this  prospectus  in  reliance on the reports of
PricewaterhouseCoopers  LLP, independent accountants,  given on the authority of
that firm as experts in auditing and accounting.

                                 LEGAL OPINIONS

      The  validity  of the  securities  will be passed  upon by Neila B. Radin,
Senior Vice President and Associate  General  Counsel of J.P. Morgan Chase & Co.
Davis  Polk &  Wardwell  will pass upon some  legal  matters  relating  to these
securities  for  the  underwriters.  Davis  Polk &  Wardwell  has  in  the  past
represented J.P. Morgan Chase & Co. and continues to represent J.P. Morgan Chase
& Co. on a regular basis and in a variety of matters.

             ERISA MATTERS FOR PENSION PLANS AND INSURANCE COMPANIES

      Section 406 of the Employee  Retirement  Income  Security Act of 1974,  as
amended  ("ERISA")  and Section  4975 of the Internal  Revenue Code of 1986,  as
amended, (the "Code") prohibit pension, profit-sharing or other employee benefit
plans,  as well as  individual  retirement  accounts and Keogh plans  subject to
Section  4975 of the Code  ("Plans"),  from  engaging  in  certain  transactions
involving  the "plan  assets" with  persons who are "parties in interest"  under
ERISA or  "disqualified  persons"  under the Code  ("Parties in Interest")  with
respect to such Plans.  As a result of its  business,  the Company is a Party in
Interest  with  respect to many Plans.  Where the Company is a Party in Interest
with  respect to a Plan  (either  directly or by reason of its  ownership of its
subsidiaries), the purchase and holding of the securities by or on behalf of the
Plan would be a prohibited lending  transaction under Section 406(a)(1) of ERISA
and Section 4975(c)(1) of the Code, unless exemptive relief were available under
an applicable  administrative  exemption (as described  below) or there was some
other basis on which the transaction was not prohibited.

      Accordingly,  the securities may not be purchased or held by any Plan, any
entity whose  underlying  assets  include  "plan assets" by reason of any Plan's
investment in the entity (a "Plan Asset Entity") or any person  investing  "plan
assets"  of any Plan,  unless  such  purchaser  or holder  is  eligible  for the
exemptive relief available under Prohibited Transaction Class Exemption ("PTCE")
96-23,  95-60,  91-38,  90-1 or 84-14 issued by the U.S.  Department of Labor or
there was some other basis on which the purchase  and holding of the  securities
by the Plan Asset Entity is not  prohibited.  Unless the  applicable  prospectus
supplement  explicitly  provides  otherwise,  any  purchaser  or  holder  of the
securities  or any interest  therein will be deemed to have  represented  by its
purchase of the  securities  that (a) its purchase and holding of the securities
is not made on behalf of or with "plan  assets" of any Plan or (b) its  purchase
and holding of the  securities  is eligible for the exemptive  relief  available
under PTCE 96-23,  95-60,  91-38,  90-1 or 84-14 or there is some other basis on
which such purchase and holding is not prohibited.

      Employee benefit plans that are governmental  plans (as defined in Section
3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and
foreign  plans (as  described  in Section  4(b)(4) of ERISA) are not  subject to
these "prohibited  transaction"  rules of ERISA or Section 4975 of the Code, but
may be subject to similar rules under other applicable laws or documents.

      Due  to  the  complexity  of  the  applicable  rules,  it is  particularly
important  that  fiduciaries  or  other  persons   considering   purchasing  the
securities  on behalf of or with "plan  assets" of any Plan  consult  with their
counsel  regarding  the  relevant  provisions  of  ERISA  and the  Code  and the
availability of exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-1.


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