<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>e20665_424b3.txt
<DESCRIPTION>PRICING SUPPLEMENT
<TEXT>

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

                              Subject to Completion
                              Dated March 31, 2005

PRICING SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 23, 2004
AND PROSPECTUS SUPPLEMENT DATED SEPTEMBER 23, 2004)

                                                     Pricing Supplement No. 8 to
                                           Registration Statement No. 333-117770
                                                           Dated April____, 2005
                                                                  Rule 424(b)(3)

[LOGO] JPMorganChase

$
JPMorgan Chase & Co.

Principal Protected Notes Linked to a Basket Consisting of the S&P 500(R) Index,
the Nikkei 225 Index and the Dow Jones EURO STOXX  50(SM)  Index due May 1, 2008

General
-------
   o  Senior unsecured  obligations of JPMorgan Chase & Co. maturing May 1, 2008
      (subject to market disruption events).
   o  Cash payment at maturity of principal plus the Additional Amount.
   o  The Additional Amount per $1,000 principal amount note will be the greater
      of (1) zero and (2) $1,000 x the Basket  Return  (calculated  as described
      below) x 80% (which we refer to as the Participation Rate).
   o  Full principal protection if the notes are held to maturity.
   o  No interest or dividend payments during the term of the notes.
   o  Minimum denominations of $1,000 and integral multiples of $1,000.
   o  The notes are  expected  to price on or about April 26, 2005 and to settle
      on or about April 29, 2005.
   o  Investing in the notes is not  equivalent to investing in the Basket,  any
      of the Basket Indices or any of their component stocks.

Key Terms
---------

Basket:                       The Basket will be composed of three indices (each
                              a "Basket  Index").  The Basket  Indices and their
                              initial weight in the Basket are as follows:

                              Basket Index                               Weight
                              -------------------------------------------------
                              S&P 500(R) Index                             1/3
                              Nikkei 225 Index                             1/3
                              Dow Jones EURO STOXX 50(SM) Index            1/3
Payment at Maturity:          At maturity,  you will receive a cash payment, for
                              each $1,000  principal amount note, of $1,000 plus
                              the Additional Amount, which may be zero.
Additional Amount:            The  Additional  Amount  per  $1,000  note paid at
                              maturity  will  equal  $1,000  x  Basket  Return x
                              Participation  Rate,  but  will  not be less  than
                              zero.
Basket Return:                (Ending Basket Level - Starting Basket Level)
                              ---------------------------------------------
                                          Starting Basket Level
Starting Basket Level:        Set equal to 100 on the pricing date,  which is on
                              or about April 26, 2005.
Ending Basket Level:          The arithmetic average of the Basket Closing Level
                              on the Averaging  Dates as set forth below,  which
                              are five consecutive  trading days near the end of
                              the term of the notes.
Participation Rate:           80%

Basket Closing Level          The Basket  Closing Level for each  Averaging Date
                              will be calculated as follows:

                              100 x [1+  (1/3  of the  S&P  Return  + 1/3 of the
                              Nikkei Return+ 1/3 of the EURO STOXX Return)]

                              The S&P  Return,  Nikkei  Return  and  EURO  STOXX
                              Return  are  the  performance  of  the  respective
                              Basket  Indices,  expressed as a percentage,  from
                              the  closing  level  on the  pricing  date  to the
                              closing level on the relevant  Averaging Date. For
                              additional information,  see "Description of Notes
                              -- Payment at Maturity."
Averaging Dates:              April 22, 2008*, April 23, 2008*, April 24, 2008*,
                              April 25,  2008* and April 28,  2008*  (the  final
                              Averaging Date).

*Subject  to  postponement  in the  event of a market  disruption  event  and as
described under "Description of Notes -- Payment at Maturity."

The notes involve risks not associated with an investment in  conventional  debt
securities. See "Risk Factors" beginning on page PS-8.

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  pricing  supplement  or the  accompanying  prospectus
supplement  and  prospectus.  Any  representation  to the contrary is a criminal
offense.

================================================================================
                      Price to               Agent's                Proceeds
                      Public                 Commission (1)         to Us
--------------------------------------------------------------------------------
Per note              $                      $                      $
--------------------------------------------------------------------------------
Total                 $                      $                      $
--------------------------------------------------------------------------------

(1) The agent will receive a  commission  of $20.00 per note and may pay selling
concessions to other dealers. See "Underwriting" on page PS-38.

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 pricing supplement and
the accompanying  prospectus supplement and 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

April   , 2005


<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  pricing   supplement  and  the
accompanying   prospectus  supplement  and  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.

What are the Notes?

      The notes are senior  unsecured  notes of JPMorgan Chase & Co.  ("JPMorgan
Chase")  that are  linked to an equally  weighted  basket  comprised  of the S&P
500(R)  Index,  the Nikkei 225 Index and the Dow Jones EURO STOXX 50(SM)  Index.
The notes do not pay interest or a fixed amount at maturity.  Instead,  you will
receive a payment in cash at maturity equal to the principal amount of the notes
plus the Additional Amount. The Additional Amount per $1,000 note will be $1,000
x the  Basket  Return  (as  described  below)  x 80%  (which  we refer to as the
Participation  Rate). In no event will the Additional  Amount be less than zero.
The Basket Return is the  performance of the Basket,  expressed as a percentage,
from the  Starting  Basket  Level set at the market close on the pricing date of
the  notes  to the  arithmetic  average  of the  Basket  Closing  Level  on five
consecutive  trading  days  near  the end of the  term of the  notes.  The  five
Averaging Dates are April 22, 2008,  April 23, 2008,  April 24, 2008,  April 25,
2008 and April 28, 2008  (subject to  adjustment  as  described  in this pricing
supplement).

      The "Basket  Return,"  as  calculated  by the  calculation  agent,  is the
percentage  change  of the  Basket  comparing  the  Ending  Basket  Level to the
Starting Basket Level. The Basket Return is calculated as follows:

                             Ending Basket Level - Starting Basket Level
            Basket Return =  -------------------------------------------
                                      Starting Basket Level

      The "Starting Basket Level" is set to equal 100 on the pricing date, which
is on or about  April  26,  2005.  The  "Ending  Basket  Level"  is equal to the
arithmetic  average of the Basket  Closing Level on the  Averaging  Dates as set
forth below, which are five consecutive trading days near the end of the term of
the notes.

     The "Basket  Closing  Level" for each  Averaging Date will be calculated as
follows:

100 x [1+ (1/3 of the S&P  Return + 1/3 of the  Nikkei  Return+  1/3 of the EURO
STOXX Return)]

      The S&P Return, Nikkei Return and EURO STOXX Return are the performance of
the respective Basket Indices, expressed as a percentage, from the closing level
on the pricing date to the closing level on the relevant Averaging Date.

      The "S&P Return" is calculated as follows:

                         S&P Ending Level - S&P Starting Level
            S&P Return = -------------------------------------
                                  S&P Starting Level

where the "S&P  Starting  Level" is the closing level of the S&P 500(R) Index on
the  pricing  date and the "S&P Ending  Level" is the  closing  level of the S&P
500(R) Index on the relevant Averaging Date.

      The "Nikkei Return" is calculated as follows:

                            Nikkei Ending Level - Nikkei Starting Level
            Nikkei Return = -------------------------------------------
                                       Nikkei Starting Level

where the "Nikkei  Starting  Level" is the closing level of the Nikkei 225 Index
on the pricing date and the "Nikkei  Ending  Level" is the closing  level of the
Nikkei 225 Index on the relevant Averaging Date.

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


                                      PS-1
<PAGE>

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

      The "EURO STOXX Return" is calculated as follows:

                             EURO STOXX Ending Level - EURO STOXX Starting Level
         EURO STOXX Return = ---------------------------------------------------
                                       EURO STOXX Starting Level

where the "EURO STOXX Starting Level" is the closing level of the Dow Jones EURO
STOXX 50(SM) Index on the pricing date and the "EURO STOXX Ending  Level" is the
closing level of the Dow Jones EURO STOXX 50(SM) Index on the relevant Averaging
Date.

What is the S&P 500(R) Index?

      The S&P 500(R) Index is intended to provide a  performance  benchmark  for
the U.S. equity markets. The calculation of the level of the S&P 500(R) Index is
based on the  relative  aggregate  market  value  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.  For  purposes  of the
Index,  historically  the market value of any component  stock was calculated as
the product of the market price per share and the number of  outstanding  shares
of such  component  stock.  On March 21, 2005 Standard & Poor's ("S&P") began to
transition to a fully  float-adjusted basis to calculate the market value of the
component stocks. The float-adjusted calculation excludes certain stocks that do
not publicly  trade,  such as significant  blocks of stock held by affiliates of
the issuer or by governments.  See "The S&P 500(R) Index." The component  stocks
are not  stocks  of the 500  largest  companies  listed  on the New  York  Stock
Exchange  ("NYSE),  nor are all component  stocks 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 this objective.  For additional  discussion
of the S&P 500(R) Index, see "The S&P 500(R) Index."

What is the Nikkei 225 Index?

      The Nikkei  Stock  Average  (the  "Nikkei  225  Index")  is a stock  index
published by Nihon Keizai  Shimbun,  Inc.  ("NKS") that  measures the  composite
price  performance  of 225 common stocks traded on the Tokyo Stock Exchange (the
"TSE")  representing  a  broad  cross  section  of  Japanese  industry.  All 225
underlying stocks are listed in the First Section of the TSE and, therefore, are
among the most  actively  traded  stocks on the TSE.  The  Nikkei 225 Index is a
modified,  price-weighted  Index, which means that a stock's weight in the Index
is based on its price per share rather than the total market  capitalization  of
the issuer of that  stock.  NKS may from time to time,  in its sole  discretion,
change the  companies  included  in the Nikkei 225 Index.  However,  to maintain
continuity in the Nikkei 225 Index,  the policy of NKS is generally not to alter
the  composition  of the  Nikkei  225 Index  except  when a stock is  deleted in
accordance with certain criteria.

      An  investment  in the  notes  does not  reflect  a direct  investment  in
Japanese  yen.  Thus,  although the level of the Nikkei 225 Index may  generally
fluctuate  because of various economic factors,  including  without  limitation,
currency movement or foreign exchange rates, the notes are not otherwise subject
to currency  conversion,  direct fluctuation due to currency movement or foreign
exchange  rates.  For  additional  discussion of the Nikkei 225 Index,  see "The
Nikkei 225 Index."

What is the Dow Jones EURO STOXX 50(SM) Index?

      The  Dow  Jones  EURO  STOXX   50(SM)   Index  is  a  free  float   market
capitalization-weighted  index sponsored and published by STOXX Limited, a joint
venture  between  Deutsche Borse AG, Dow Jones & Company and SWX Swiss Exchange.
The Dow Jones EURO STOXX  50(SM)  Index is  composed of 50  component  stocks of
market sector  leaders from within the Eurozone,  which refers to the collective
group of countries  belonging  to the European  Union that use the Euro as their
common  currency.  For additional  discussion of the Dow Jones EURO STOXX 50(SM)
Index, see "The Dow Jones EURO STOXX 50(SM) Index."

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


                                      PS-2
<PAGE>

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

      An investment  in the notes does not reflect a direct  investment in euro.
Thus,  although the level of the Dow Jones EURO STOXX 50(SM) Index may generally
fluctuate  because of various economic factors,  including  without  limitation,
currency movement or foreign exchange rates, the notes are not otherwise subject
to currency  conversion,  direct fluctuation due to currency movement or foreign
exchange  rates.  For  additional  discussion of the Dow Jones EURO STOXX 50(SM)
Index, see "The Dow Jones EURO STOXX 50(SM) Index."

Selected Purchase Considerations

      o     PRESERVATION  OF CAPITAL AT  MATURITY  -- You will  receive at least
            100% of the principal  amount of your notes if you hold the notes to
            maturity, regardless of the performance of the Basket.

      o     APPRECIATION POTENTIAL -- If the Ending Basket Level is greater than
            the  Starting  Basket  Level,  at  maturity,  in  addition  to  your
            principal,  for each $1,000  principal  amount note you will receive
            $1,000  x  the  Basket  Return  (as  defined   herein)  x  80%  (the
            Participation Rate).

      o     DIVERSIFICATION  OF THE BASKET INDICES -- The return on the notes is
            linked to a basket  consisting of the S&P 500(R)  Index,  the Nikkei
            225 Index and the Dow Jones EURO STOXX 50(SM) Index.  The S&P 500(R)
            Index consists of 500 stocks chosen for market size, liquidity,  and
            industry group representation.  The Nikkei 225 Index consists of 225
            stocks listed on the first  section of the Tokyo Stock  Exchange and
            therefore are among the most actively  traded on that exchange.  The
            Dow Jones EURO STOXX 50(SM) Index consists of 50 component stocks of
            market sector  leaders from within the Eurozone.  The Dow Jones EURO
            STOXX  50(SM)  Index is a  market-value  weighted  index,  with each
            stock's  weight  in the index  proportionate  to its  market  value.
            Historically,  the S&P  500(R)  Index  was a  market-value  weighted
            index,  with each stock's weight in the index  proportionate  to its
            market  value.  On  March  21,  2005  S&P  began  to  use a  revised
            methodology for  calculating the Index.  See "The S&P 500(R) Index."
            The Nikkei 225 Index is a price-weighted average of stocks issued by
            225  Japanese  companies   representing  a  broad  cross-section  of
            Japanese  industries.  The  "S&P  500(R)"  Index  is one of the most
            widely  used  benchmarks  of U.S.  equity  market  performance,  the
            "Nikkei 225" Index is one of the most widely used  benchmarks of TSE
            performance  and the "Dow Jones EURO STOXX  50SM"  Index is a widely
            used benchmark for Eurozone equity market performance.

      o     TAXED AS DEBT -- Due to several factors, including that the original
            investors  in the  notes  will  have 100%  principal  protection  at
            maturity,  for U.S.  federal income tax purposes,  the notes will be
            treated  as debt.  You  will  generally  be  required  to  recognize
            interest income in each year at a comparable  yield,  even though we
            will not make any payments with respect to the notes until maturity.
            Interest  included in income will  increase  your basis in the note.
            Generally, amounts received at maturity in excess of your basis will
            be  treated as  additional  interest  income  while any loss will be
            treated as an ordinary loss, which will be deductible  against other
            income (e.g.,  employment  and interest  income).  See "Certain U.S.
            Federal  Income Tax  Consequences"  on page PS-35 for more  detailed
            information.

      o     MINIMUM DENOMINATION -- $1,000 principal amount per note.

Selected Risk Considerations

      An investment in the notes involves  risks.  Selected risks are summarized
here,  but we urge you to read the more detailed  explanation  of risks in "Risk
Factors" beginning on page PS-8.

      o     MARKET RISK -- The return on the notes is linked to the  performance
            of the Basket, and will depend on whether,  and the extent to which,
            the Basket  Return is  positive.  YOU WILL  RECEIVE NO MORE THAN THE
            FULL PRINCIPAL  AMOUNT OF YOUR NOTES IF THE BASKET RETURN IS ZERO OR
            NEGATIVE.

      o     THE  NOTES  MAY NOT PAY MORE  THAN THE  PRINCIPAL  AMOUNT -- You may
            receive a lower  payment at maturity than you would have received if
            you had invested in the Basket Indices

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


                                      PS-3
<PAGE>

            individually,  the stocks comprising the Basket Indices or contracts
            related to the Basket  Indices.  If the Ending Basket Level does not
            exceed the Starting  Basket  Level,  the  Additional  Amount will be
            zero.  This will be true even if the value of the  Basket was higher
            than the  Starting  Basket Level at some time during the life of the
            notes but later falls below the Starting Basket Level.

      o     THE PARTICIPATION RATE COULD LIMIT RETURNS -- Your investment in the
            notes may not perform as well as an investment  in a security  whose
            return  is based  solely  on the  performance  of the  Basket.  Your
            ability to participate in any appreciation of the Basket as measured
            by the Ending  Basket  Level and the  Starting  Basket Level will be
            limited  by the  Participation  Rate.  Accordingly,  you  will  only
            participate  in 80% of any Basket  appreciation  above the  Starting
            Basket Level.

      o     NO INTEREST OR  DIVIDEND  PAYMENTS -- As a holder of the notes,  you
            will not  receive  interest  payments,  and you will not have voting
            rights or rights to receive cash dividends or other distributions or
            other rights that holders of underlying  securities composing any of
            the Basket Indices would have.

      o     NO PRINCIPAL  PROTECTION UNLESS YOU HOLD THE NOTES TO MATURITY -- At
            maturity  you will be entitled to receive for each $1,000  principal
            amount note a minimum payment of $1,000 plus the Additional  Amount,
            if any.  If you sell your  notes in the  secondary  market  prior to
            maturity,  you may  have to sell  them at a  substantial  loss.  YOU
            SHOULD BE WILLING TO HOLD YOUR NOTES TO MATURITY.

      o     LACK OF LIQUIDITY -- The notes will not be listed on any  securities
            exchange.  J.P.  Morgan  Securities  Inc.  may offer to purchase the
            notes in the secondary market but is not required to do so.

      o     NOT FDIC INSURED -- The notes are not deposits insured or guaranteed
            by the  Federal  Deposit  Insurance  Corporation  or any  government
            authority.

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


                                      PS-4
<PAGE>

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

Sensitivity  Analysis  --  Hypothetical  Payment  at  Maturity  for Each  $1,000
Principal Amount Note

      The table below  illustrates  the payment at  maturity  (including,  where
relevant,  the payment of the Additional  Amount) for a $1,000  principal amount
note for a hypothetical  range of performance for the Basket Return from -80% to
+80%. The following results are based solely on the hypothetical  example cited.
You should consider  carefully whether the notes are suitable to your investment
goals.  The numbers  appearing  in the table below have been rounded for ease of
analysis.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                           Basket Return x
                                          Participation Rate      Additional                               Payment at
Ending Basket Level    Basket Return            (80%)               Amount              Principal           Maturity
-----------------------------------------------------------------------------------------------------------------------
<S>     <C>                <C>                  <C>                  <C>                 <C>                 <C>
        180                80.0%                64.0%                $640         +      $1,000       =      $1,640
        170                70.0%                56.0%                $560         +      $1,000       =      $1,560
        160                60.0%                48.0%                $480         +      $1,000       =      $1,480
        150                50.0%                40.0%                $400         +      $1,000       =      $1,400
        140                40.0%                32.0%                $320         +      $1,000       =      $1,320
        130                30.0%                24.0%                $240         +      $1,000       =      $1,240
        120                20.0%                16.0%                $160         +      $1,000       =      $1,160
        110                10.0%                 8.0%                 $80         +      $1,000       =      $1,080
-----------------------------------------------------------------------------------------------------------------------
        100                0.0%                  0.0%                 $0          +      $1,000       =      $1,000
-----------------------------------------------------------------------------------------------------------------------
        90                -10.0%                 0.0%                 $0          +      $1,000       =      $1,000
        80                -20.0%                 0.0%                 $0          +      $1,000       =      $1,000
        70                -30.0%                 0.0%                 $0          +      $1,000       =      $1,000
        60                -40.0%                 0.0%                 $0          +      $1,000       =      $1,000
        50                -50.0%                 0.0%                 $0          +      $1,000       =      $1,000
        40                -60.0%                 0.0%                 $0          +      $1,000       =      $1,000
        30                -70.0%                 0.0%                 $0          +      $1,000       =      $1,000
        20                -80.0%                 0.0%                 $0          +      $1,000       =      $1,000
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

      The table  above  assumes a  Starting  Basket  Level of 100.  Because  the
Additional  Amount per note will not be less than zero,  you will always receive
at maturity at least $1,000 per $1,000 principal amount note.

      The notes are intended to be long term investments and, as such, should be
held to maturity.  They are not intended 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 Basket  has  appreciated  since the  pricing  date of the  notes.  The
potential returns described here assume that your notes are held to maturity.

      The following chart illustrates the hypothetical  simple return (i.e., not
compounded) on the notes for a range of movements in the Basket.  The notes only
make one payment at the maturity  date and limit the return to purchasers of the
Notes to 80% of any Basket  performance  above the Starting  Basket  Level.  The
hypothetical returns set forth below may not be the actual returns applicable to
a purchaser of the notes.

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


                                      PS-5
<PAGE>

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

[The following information was depicted as a line chart in the printed material]

                      Basket Return    Payment at Maturity
                      -------------    -------------------
                          80.0%              $1,640
                          70.0%              $1,560
                          60.0%              $1,480
                          50.0%              $1,400
                          40.0%              $1,320
                          30.0%              $1,240
                          20.0%              $1,160
                          10.0%              $1,080
                           0.0%              $1,000
                         -10.0%              $1,000
                         -20.0%              $1,000
                         -30.0%              $1,000
                         -40.0%              $1,000
                         -50.0%              $1,000
                         -60.0%              $1,000
                         -70.0%              $1,000
                         -80.0%              $1,000

Hypothetical Examples of Amounts Payable At Maturity

      The following examples  illustrate the payment at maturity of the notes on
a hypothetical  investment of $1,000 under various  three-year  scenarios.  Each
scenario assumes a hypothetical  Starting Basket Level of 100 and that the notes
are held to maturity.  In all instances,  if you hold the notes until  maturity,
you will receive at least $1,000 per $1,000  principal amount note. The examples
are simplified and the calculations are rounded for ease of analysis.

      Example  1: The level of the Basket  increases  from the  Starting  Basket
Level to an Ending Basket Level of 125.

<TABLE>
<CAPTION>
<S>   <C>
                                                                               [125-100]
      Payment at maturity per $1,000 principal amount note = $1,000 + $1,000 x --------- x 80% = $1,200.00
                                                                               [  100  ]
</TABLE>

      Because the Ending Basket Level of 125 is greater than the Starting Basket
Level,  the Basket Return is equal to 25% and the Additional  Amount is equal to
$200.00.  The  final  payment  at  maturity  is the  principal  amount  plus the
Additional Amount, equal to $1,200.00 per $1,000 principal amount note.

      Example  2: The level of the Basket  decreases  from the  Starting  Basket
Level to an Ending Basket Level of 75.

      Payment at maturity per $1,000 principal amount note = $1,000

      Because the Ending  Basket Level of 75 is lower than the  Starting  Basket
Level,  the final  payment at  maturity  is the  principal  amount of $1,000 per
$1,000 principal amount note.

      Example  3: The level of the Basket  increases  from the  Starting  Basket
Level to an Ending Basket Level of 105.

<TABLE>
<CAPTION>
<S>   <C>
                                                                               [1 5-100]
      Payment at maturity per $1,000 principal amount note = $1,000 + $1,000 x --------- x 80% = $1,040.00
                                                                               [  100  ]
</TABLE>

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


                                      PS-6
<PAGE>

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

      Because the Ending Basket Level of 105 is greater than the Starting Basket
Level,  the Basket Return is equal to 5% and the  Additional  Amount is equal to
$40.00.  The  final  payment  at  maturity  is the  principal  amount  plus  the
Additional Amount, equal to $1,040.00 per $1,000 principal amount note.

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.

Historical Performance

      You can review the  historical  performance  of the S&P 500(R) Index,  the
Nikkei 225 Index and the Dow Jones EURO STOXX 50(SM) Index under the  respective
headings "The S&P 500(R) Index -- Historical Information," "The Nikkei 225 Index
--  Historical  Information"  and "The Dow  Jones  EURO  STOXX  50(SM)  Index --
Historical  Information"  in  this  pricing  supplement.   You  can  review  the
historical  performance  of the  Basket  under the  heading  "Historical  Basket
Values."

Listing

      The notes will not be listed on any securities exchange.

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).

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


                                      PS-7
<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 Basket or the Basket  Indices.  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.  If the Ending  Basket Level does not exceed the Starting
Basket Level, at maturity you will receive only $1,000 for each $1,000 principal
amount note.  Therefore,  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 at
maturity of only the principal  amount of each note will not  compensate you for
any loss in value due to inflation  and other  factors  relating to the value of
money over time.

The notes may not pay more than the principal amount at maturity.

      If the Ending  Basket Level is less than or equal to the  Starting  Basket
Level,  you will receive only $1,000 for each $1,000  principal  amount note you
hold at  maturity.  This will be true even if the value of the Basket was higher
than the  Starting  Basket  Level at some time  during the life of the notes but
later falls below the Starting Basket Level.

      Because the Ending  Basket  Level will be  calculated  based on the Basket
Closing  Level on five days near the end of the term of the notes,  the level of
the Basket at various  other times  during the term of the notes could be higher
than the Ending Basket Level.  This difference  could be  particularly  large if
there is a  significant  decrease  in the level of the Basket  during the latter
portion of the term of the notes or if there is  significant  volatility  in the
Basket  Closing Level during the term of the notes.  For example,  if the Basket
Closing Levels  steadily  increase during the initial term of the notes and then
steadily decrease back to the Starting Basket Level, the Ending Basket Level may
be  significantly  less than the Basket  Closing Level at its peak.  Under these
circumstances,  you may receive a lower  payment at maturity than you would have
received if you had  invested  in the Basket  Indices,  component  stocks of the
Basket Indices or contracts related to the Basket Indices.

You will only  participate in 80% of any Basket  performance  above the Starting
Basket Level.

      If the  Ending  Basket  Level  exceeds  the  Starting  Basket  Level,  the
Additional  Amount  you  receive at  maturity  will equal only 80% of the Basket
performance  above the Starting  Basket Level.  Under these  circumstances,  the
Additional Amount you receive at maturity will not fully reflect the performance
of the Basket.

Changes in the value of the Basket Indices may offset each other.

      The notes are linked to an equally  weighted  Basket  composed  of the S&P
500(R)  Index,  the Nikkei 225 Index and the Dow Jones EURO STOXX 50(SM)  Index.
Price  movements in the Basket Indices may not correlate  with each other.  At a
time when the value of some of the Basket Indices  increase,  the value of other
Basket Indices may not increase as much or may even decline in value. Therefore,
in  calculating  the Ending Basket Level,  increases in the value of some of the
Basket  Indices may be moderated,  or more than offset,  by lesser  increases or
declines  in  the  level  of  the  other  Basket  Indices.  For  example,  a 10%
appreciation  of each of the Nikkei  225 Index and the S&P  500(R)  Index on the
Averaging  Dates  would be  completely  offset by a 20% decline in the Dow Jones
EURO STOXX 50(SM) Index on the Averaging Dates.

      You can review a graph of historical levels for each of the Basket Indices
for the period from January 1, 2000  through  March 25, 2005 (in the case of the
Dow Jones EURO STOXX  50(SM)  Index,  through  March 24,  2005) in this  pricing
supplement under "The S&P 500 Index -- Historical  Information," "The Nikkei 225
Index --  Historical  Information"  and "The Dow Jones EURO STOXX  50(SM)  Index
--Historical Information".  You can also review a graph of historical levels for
the Basket for the period  from  January 1, 2000  through  March 25,  2005 under
"Historical  Basket Values." You cannot predict the future performance of any of
the Basket Indices or of the Basket


                                      PS-8
<PAGE>

as a whole,  or  whether  increases  in the  levels of one or two of the  Basket
Indices will be offset by a decrease in the level of other Basket Indices, based
on their historical performance. In addition, there can be no assurance that the
Ending Basket Level will be higher than the Starting Basket Level. If the Basket
Return is flat or negative,  you will only receive the principal  amount of your
notes at maturity.

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

      Your return on the notes will not reflect the return you would  realize if
you actually  owned the common  stocks of the  companies  included in the Basket
Indices 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 Ending  Basket  Level.  The Ending  Basket  Level  reflects the
prices  of  the  common  stocks  in  the  Basket  Indices  without  taking  into
consideration the value of dividends paid on those stocks.

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 Basket has  appreciated  since the date of the  issuance  of the notes.  The
potential  returns  described in this pricing  supplement assume that your notes
are held to maturity.

Secondary trading may be limited.

      The notes will not be listed on an organized  securities  exchange.  There
may be little or no secondary market for the notes. Even if there is a secondary
market,  it may not provide  enough  liquidity to allow you to trade or sell the
notes easily.

      J.P. Morgan  Securities Inc. may act as a market maker for the notes,  but
is not required to do so. Because we do not expect that other market makers will
participate  significantly  in the secondary  market for the notes, the price at
which you may be able to trade your  notes is likely to depend on the price,  if
any, at which J.P. Morgan Securities Inc. is willing to transact. If at any time
J.P. Morgan  Securities Inc. was not acting as a market maker, it is likely that
there would be little or no secondary market for the notes.

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 Basket Indices and interest rates 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 Basket. The value of the notes
will be affected by a number of other  factors that may either offset or magnify
each other, including:

      o     the expected volatility in the Basket Indices;

      o     the time to maturity of the notes;

      o     the  dividend  rate  on the  common  stocks  underlying  the  Basket
            Indices;

      o     interest and yield rates in the market  generally as well as in each
            of the markets of the  securities  comprising  the S&P 500(R) Index,
            the Nikkei 225 Index and the Dow Jones EURO STOXX 50(SM) Index;

      o     the exchange  rate and the  volatility  of the exchange rate between
            euro and the yen;

      o     economic, financial,  political,  regulatory or judicial events that
            affect the stocks represented in the Basket Indices or stock markets
            generally and which may affect the Ending Basket Level; and

      o     our creditworthiness.


                                      PS-9
<PAGE>

      You  cannot  predict  the future  performance  of any or all of the Basket
Indices based on their  historical  performance.  The Ending Basket Level may be
flat or negative as compared to the Starting  Basket  Level,  in which event you
will only receive the principal amount of your notes at maturity.

The Basket  Return for the notes will not be  adjusted  for  changes in exchange
rates  that might  affect  the Nikkei 225 Index and Dow Jones EURO STOXX  50(SM)
Index.

      Although most of the stocks  comprising the Nikkei 225 Index and Dow Jones
EURO STOXX 50(SM) Index are traded in currencies  other than U.S.  dollars,  and
the notes,  which are  linked to the Basket  Indices,  are  denominated  in U.S.
dollars,  the amount  payable on the notes at maturity  will not be adjusted for
changes in the exchange rate between the U.S.  dollar and each of the currencies
upon which the stocks  comprising  the Nikkei 225 Index and Dow Jones EURO STOXX
50(SM) Index are denominated.  Changes in exchange rates,  however,  may reflect
changes in various non-U.S.  economies that in turn may affect the Basket Return
for the  notes.  The  amount  we pay in  respect  of the  notes  (including  the
Additional  Amount,  if any) on the maturity date will be  determined  solely in
accordance with the procedures  described in "Description of  Notes--Payment  at
Maturity."

The inclusion in the original issue price of the agent's commission and the cost
of hedging our obligations under the notes through one or more of our affiliates
is likely to adversely affect the value of the notes prior to maturity.

      The original issue price of the notes includes the agent's  commission and
the cost of hedging our  obligations  under the notes through one or more of our
affiliates.  Such cost includes our affiliates'  expected cost of providing such
hedge, as well as the profit our affiliates  expect to realize in  consideration
for assuming the risks inherent in providing such hedge.  As a result,  assuming
no change in market conditions or any other relevant factors, the price, if any,
at which J.P Morgan  Securities  Inc. will be willing to purchase notes from you
in  secondary  market  transactions,  if at all,  will  likely be lower than the
original  issue  price.  In  addition,  any such  prices may differ  from values
determined by pricing models used by J.P. Morgan Securities Inc., as a result of
such compensation or other transaction costs.

S&P may adjust the S&P 500(R) 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 S&P 500(R) Index.
S&P can add, delete or substitute the stocks  underlying the S&P 500(R) Index or
make other methodological  changes that could change the level of the S&P 500(R)
Index. On March 21, 2005, S&P began to use a revised methodology for calculating
the S&P 500(R) Index.  See "The S&P 500(R)  Index." You should  realize that the
changing of companies included in the S&P 500(R) Index may affect the S&P 500(R)
Index as a newly added  company may perform  significantly  better or worse than
the company or companies it replaces.  Additionally,  S&P may alter, discontinue
or suspend  calculation or  dissemination  of the S&P 500(R) 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 S&P 500(R) Index.

NKS may adjust the Nikkei 225 Index in a way that affects its level, and NKS has
no obligation to consider your interests.

      NKS is responsible  for  calculating and maintaining the Nikkei 225 Index.
NKS can add, delete or substitute the stocks  underlying the Nikkei 225 Index or
make other methodological  changes that could change the level of the Nikkei 225
Index. You should realize that the changing of companies  included in the Nikkei
225 Index may affect the Nikkei 225 Index as a newly  added  company may perform
significantly  better  or worse  than the  company  or  companies  it  replaces.
Additionally, NKS may alter, discontinue or suspend calculation or dissemination
of the Nikkei 225 Index.  Any of these actions could adversely  affect the value
of the notes. NKS has no obligation to consider your interests in calculating or
revising the Nikkei 225 Index.


                                     PS-10
<PAGE>

STOXX  Limited  may adjust the Dow Jones EURO STOXX  50(SM)  Index in a way that
affects  its  level,  and STOXX  Limited  has no  obligation  to  consider  your
interests.

      STOXX  Limited,  a joint venture  between  Deutsche  Borse AG, Dow Jones &
Company and SWX Swiss  Exchange,  is responsible for calculating and maintaining
the Dow  Jones  EURO  STOXX  50(SM)  Index.  STOXX  Limited  can add,  delete or
substitute  the stocks  underlying the Dow Jones EURO STOXX 50(SM) Index or make
other  methodological  changes that could change the level of the Dow Jones EURO
STOXX 50(SM) Index.  You should realize that the changing of companies  included
in the Dow Jones  EURO  STOXX  50(SM)  Index may affect the Dow Jones EURO STOXX
50(SM) Index as a newly added company may perform  significantly better or worse
than the company or  companies  it  replaces.  Additionally,  STOXX  Limited may
alter, discontinue or suspend calculation or dissemination of the Dow Jones EURO
STOXX 50(SM) Index.  Any of these actions  could  adversely  affect the value of
your notes.  STOXX  Limited has no  obligation  to consider  your  interests  in
calculating or revising the Dow Jones EURO STOXX 50(SM) Index.

We are one of the  companies  that make up the S&P  500(R)  Index but we are not
affiliated with any other company included in the Basket.

      We are one of the companies that make up the S&P 500(R) Index,  but we are
not affiliated with any of the other companies whose stock is represented in the
Basket.  As a result,  we will have no ability to  control  the  actions of such
other  companies,  including  actions  that could affect the value of the stocks
underlying  the  Basket or your  notes.  None of the money you pay us will go to
S&P, NKS, or STOXX Limited or any of the other companies  included in the Basket
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 interests as
a holder of the notes in taking any  corporate  actions  that  might  affect the
value of your notes.

      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 S&P 500(R) Index, the Nikkei 225 Index or the Dow Jones
EURO STOXX 50(SM) 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 Basket  Indices and other  financial  instruments  related to the
Basket Indices and their 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  linked to the S&P 500(R)  Index,  the Nikkei 225 Index or the Dow Jones
EURO STOXX 50(SM) 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 S&P
500(R) Index, the Nikkei 225 Index or the Dow Jones EURO STOXX 50(SM) Index and,
accordingly,  could  affect  the value of the notes  and the  Additional  Amount
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 S&P 500(R) Index,  the Nikkei 225
Index or the Dow Jones EURO STOXX 50(SM) 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 we
will not disclose any such  information to you. In addition,  one or more of our
affiliates may publish  research reports about companies whose stock is included
in the S&P 500(R) Index, the Nikkei 225 Index or the Dow Jones EURO STOXX 50(SM)
Index.  Any  prospective  purchaser  of notes should  undertake  an  independent
investigation  of each  company in the  Basket  Indices  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 S&P 500(R)  Index,  the Nikkei 225 Index  and/or the
Dow Jones EURO STOXX 50(SM)  Index or the stocks  which  comprise the S&P 500(R)
Index, the Nikkei 225 Index or


                                     PS-11
<PAGE>

the Dow Jones EURO STOXX 50(SM) 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.

      We may have  hedged  our  obligations  under  the  notes  through  certain
affiliates, who would expect to make a profit on such hedge. Because hedging our
obligations  entails risk and may be  influenced  by market forces beyond our or
our  affiliates'  control,  such  hedging may result in a profit that is more or
less than expected, or it may result in a loss.

      J.P.  Morgan  Securities  Inc.,  one of our  affiliates,  will  act as the
calculation agent. The calculation agent will determine the Ending Basket Level,
the Basket Return,  the Additional  Amount,  if any, we will pay you at maturity
and the Basket  Closing Level,  including the S&P Return,  the S&P Ending Level,
the Nikkei Return,  the Nikkei Ending Level,  the EURO STOXX Return and the EURO
STOXX  Ending  Level.  The  calculation  agent  will  also  be  responsible  for
determining  whether a market disruption event has occurred,  whether any of the
Basket  Indices  have been  discontinued  and whether  there has been a material
change in the method of calculation of any of the Basket Indices.  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.

Market disruptions may adversely affect your return.

      The calculation agent may, in its sole discretion, decide that the markets
have been affected in a manner that prevents it from properly valuing the Basket
Return and  calculating the Additional  Amount,  if any, that we are required to
pay you.  These events may include  disruptions or suspensions of trading in the
markets as a whole. If the calculation agent, in its sole discretion, determines
that these events prevent us or any of our affiliates from properly  hedging our
obligations  under the notes,  it is  possible  that the  maturity  date will be
postponed and your return will be adversely affected.

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

      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
required to accrue as ordinary income amounts 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."

An  investment  in the  notes is  subject  to  risks  associated  with  non-U.S.
securities markets.

      The  underlying  stocks that  constitute  the Nikkei 225 Index and the Dow
Jones  EURO  STOXX  50(SM)  Index  have  been  issued  by  non-U.S.   companies.
Investments  in  securities  indexed  to  the  value  of  such  non-U.S.  equity
securities  involve  risks  associated  with  the  securities  markets  in those
countries,   including  risks  of  volatility  in  those  markets,  governmental
intervention  in those markets and cross  shareholdings  in companies in certain
countries.  Also, there is generally less publicly  available  information about
companies  in some of these  jurisdictions  than about U.S.  companies  that are
subject  to the  reporting  requirements  of the  SEC,  and  generally  non-U.S.
companies are subject to accounting,  auditing and financial reporting standards
and requirements and securities trading rules different from those applicable to
U.S. reporting companies.

      The prices of  securities  in  non-U.S.  jurisdictions  may be affected by
political,  economic,  financial and social  factors in such markets,  including
changes  in a  country's  government,  economic  and fiscal  policies,  currency
exchange laws or other foreign laws or restrictions.  Moreover, the economies in
such countries may differ  favorably or unfavorably from economies in the United
States in such respects as growth of gross national product,  rate of inflation,
capital  reinvestment,  resources and self  sufficiency.  Such  countries may be
subjected to different and, in some cases,  more adverse economic  environments,
such as the  recession  experienced  by the Japanese  economy and certain  other
Asian economies.


                                     PS-12
<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.  The
original issue price of the notes includes the agent's  commissions (as shown on
the cover page of this  pricing  supplement)  paid with respect to the notes and
the cost of  hedging  our  obligations  under  the  notes.  The cost of  hedging
includes  the  projected  profit  that  our  affiliates  expect  to  realize  in
consideration  for assuming the risks inherent in hedging our obligations  under
the notes. Because hedging our obligations entails risk and may be influenced by
market forces beyond our or our affiliates' control,  such hedging may result in
a profit that is more or less than expected, or could result in a loss. See also
"Use of Proceeds" in the accompanying prospectus.

      On or  prior to the  date of this  pricing  supplement,  we,  through  our
affiliates  or others,  may hedge  some or all of our  anticipated  exposure  in
connection  with the notes by taking  positions  in the S&P  500(R)  Index,  the
Nikkei  225 Index  and/or  the Dow Jones EURO  STOXX  50(SM)  Index,  the stocks
underlying the S&P 500(R) Index,  the Nikkei 225 Index and/or the Dow Jones EURO
STOXX 50(SM) Index,  or  instruments  whose value is derived from the S&P 500(R)
Index,  the Nikkei 225 Index  and/or  the Dow Jones EURO STOXX  50(SM)  Index or
their underlying  stocks.  Such hedging activity could potentially  increase the
level of the S&P 500(R) Index,  the Nikkei 225 Index or the Dow Jones EURO STOXX
50(SM) Index, and therefore effectively establish a higher level that the Basket
must achieve for you to receive at maturity of the notes more than the principal
amount of your notes.  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 S&P 500(R)  Index,  the Nikkei 225 Index  and/or the Dow Jones
EURO STOXX 50(SM) Index, the stocks  underlying the S&P 500(R) Index, the Nikkei
225 Index and/or the Dow Jones EURO STOXX 50(SM)  Index,  or  instruments  whose
value is derived from the S&P 500(R) Index,  the Nikkei 225 Index and/or the Dow
Jones EURO STOXX 50(SM) Index or their  underlying  stocks.  Although we have no
reason to believe that any of these  activities  will have a material  impact on
the level of the S&P  500(R)  Index,  the Nikkei 225 Index or the Dow Jones EURO
STOXX  50(SM) Index or the value of the notes,  we cannot  assure you that these
activities will not have such an effect.


                                     PS-13
<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
headings  "Description of Notes" in the accompanying  prospectus  supplement and
"Description of Debt  Securities" in the  accompanying  prospectus.  Capitalized
terms used but not defined in this pricing supplement have the meanings assigned
in the accompanying prospectus supplement and prospectus. The term "note" refers
to each $1,000  principal  amount of our Principal  Protected  Notes Linked to a
Basket  Consisting  of the S&P  500(R)  Index,  the Nikkei 225 Index and the Dow
Jones EURO STOXX 50(SM) Index due May 1, 2008.

General

      The notes  are a series  of  securities  referred  to in the  accompanying
prospectus supplement and prospectus. The notes will be issued by JPMorgan 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 or a fixed amount at maturity.  Instead,  at
maturity  you will  receive a payment  in cash,  the  amount of which  will vary
depending  upon the  performance  of the  Basket  over  the  term of the  notes,
calculated  in  accordance  with the formula  set out below.  We will pay you at
maturity  at least the  principal  amount of $1,000  for each  $1,000  principal
amount note.

      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 principal amount and issue price of each note is $1,000. The notes
will be represented by one or more permanent global notes registered in the name
of DTC or its nominee,  as  described  under  "Description  of Notes -- Forms of
Notes"  in  the  prospectus  supplement  and  "Forms  of  Securities  --  Global
Securities" in the prospectus.

Payment at Maturity

      The notes will mature on May 1, 2008,  subject to  adjustment in the event
of a market  disruption event, as described below. Your return on the notes will
be linked to the performance during the life of the notes of an equally weighted
Basket  consisting  of the S&P  500(R)  Index,  the Nikkei 225 Index and the Dow
Jones EURO STOXX 50(SM) Index. Unlike ordinary debt securities, the notes do not
pay  interest.  Instead,  at maturity  you will  receive a cash payment for each
$1,000 principal amount note of $1,000 plus the Additional Amount,  which may be
zero.  You will not receive  less than $1,000 for each $1,000  principal  amount
note if you hold the notes to maturity.

      The "Additional Amount" paid at maturity will equal $1,000 x Basket Return
x Participation Rate, but will not be less than zero.

      The "Basket  Return,"  as  calculated  by the  calculation  agent,  is the
percentage  change  of the  Basket  comparing  the  Ending  Basket  Level to the
Starting Basket Level. The Basket Return is calculated as follows:

                            Ending Basket Level - Starting Basket Level
            Basket Return = -------------------------------------------
                                     Starting Basket Level

      The "Starting Basket Level" is set to equal 100 on the pricing date, which
is on or about  April  26,  2005.  The  "Ending  Basket  Level"  is equal to the
arithmetic  average of the Basket  Closing Level on the  Averaging  Dates as set
forth below, which are five consecutive trading days near the end of the term of
the notes.

      The "Basket  Closing  Level" for each Averaging Date will be calculated as
follows:


                                     PS-14
<PAGE>

      100 x [1+ (1/3 of the S&P  Return + 1/3 of the Nikkei  Return+  1/3 of the
EURO STOXX Return)]

      The S&P Return, Nikkei Return and EURO STOXX Return are the performance of
each Basket  Indices,  expressed as a percentage,  from the closing level on the
pricing date to the closing level on the relevant Averaging Date.

      The "S&P Return" is calculated as follows:

                         S&P Ending Level - S&P Starting Level
            S&P Return = -------------------------------------
                                 S&P Starting Level

where the "S&P  Starting  Level" is the closing level of the S&P 500(R) Index on
the  pricing  date and the "S&P Ending  Level" is the  closing  level of the S&P
500(R) Index on the relevant Averaging Date.

      The "Nikkei Return" is calculated as follows:

                            Nikkei Ending Level - Nikkei Starting Level
            Nikkei Return = -------------------------------------------
                                     Nikkei Starting Level

where the "Nikkei  Starting  Level" is the closing level of the Nikkei 225 Index
on the pricing date and the "Nikkei  Ending  Level" is the closing  level of the
Nikkei 225 Index on the relevant Averaging Date.

      The "EURO STOXX Return" is calculated as follows:

                             EURO STOXX Ending Level - EURO STOXX Starting Level
        EURO STOXX  Return = ---------------------------------------------------
                                        EURO STOXX Starting Level

where the "EURO STOXX Starting Level" is the closing level of the Dow Jones EURO
STOXX 50(SM) Index on the pricing date and the "EURO STOXX Ending  Level" is the
closing level of the Dow Jones EURO STOXX 50(SM) Index on the relevant Averaging
Date.

      With respect to the S&P 500(R) Index,  the "closing  level" on any trading
day for such Index will equal the closing  level of the S&P 500(R)  Index or any
S&P successor  index (as defined below) or alternative  calculation of the Index
described under  "Discontinuation 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 NYSE, the American  Stock  Exchange LLC (the "AMEX"),  the NASDAQ
National Market or the relevant  exchange or market for the S&P successor index.
With respect to the Nikkei 225 Index or the Dow Jones EURO STOXX  50(SM)  Index,
the "closing level" on any trading day will equal the official  closing value of
the Nikkei 225 Index or the Dow Jones EURO STOXX 50(SM) Index, respectively,  or
in each case,  any  successor  index  thereto  (as  described  below)  published
following  the regular  official  weekday  close of trading for each such Basket
Index on that trading day. In certain circumstances, the "closing level" will be
based on the  alternate  calculation  of the  Nikkei 225 Index and the Dow Jones
EURO STOXX 50(SM) Index described under "The Nikkei 225 Index -- Discontinuation
of the Nikkei 225 Index; Alteration of Method of Calculation" and "The Dow Jones
EURO STOXX  50(SM) Index --  Discontinuation  of the Dow Jones EURO STOXX 50(SM)
Index; Alteration of Method of Calculation."

      The "Participation Rate" is 80%.

      With  respect  to the S&P  500(R)  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
Inc.  and  the  Chicago  Board  Options   Exchange,   Incorporated  and  in  the
over-the-counter market for equity securities in the United States. With respect
to the Nikkei 225 Index or the Dow Jones EURO  STOXX  50(SM)  Index,  a "trading
day" is a day, as  determined  by the  calculation  agent,  on which  trading is
generally  conducted  on (i) the  relevant  exchanges  (as  defined  below)  for
securities  underlying  the Nikkei 225 Index and the Dow Jones EURO STOXX 50(SM)
Index and (ii) the  exchanges on which futures or options  contracts  related to
the Nikkei 225 Index or the Dow Jones EURO STOXX 50(SM) Index are traded,  other
than a day on which trading on such relevant  exchange or exchange on which such
futures  or options  contracts  are traded is  scheduled  to close  prior to its
regular weekday closing time.


                                     PS-15
<PAGE>

      The five  Averaging  Dates are April 22, 2008,  April 23, 2008,  April 24,
2008, April 25, 2008, and April 28, 2008 (this is the "final  Averaging  Date"),
subject to adjustment in the event of a market  disruption  event,  as described
below under "-- Market Disruption Events."

      If a market  disruption  event occurs on any Averaging Date other than the
final  Averaging  Date,  the  Basket  Closing  Level will be  determined  on the
immediately  succeeding  trading day on which no market disruption event occurs.
The final  Averaging Date will be the fifth  scheduled  trading day prior to the
maturity date,  unless the calculation agent determines that a market disruption
event  occurred or is continuing on that day. In that event the final  Averaging
Date will be the first  succeeding  trading day on which the  calculation  agent
determines  that  a  market  disruption  event  has  not  occurred  and  is  not
continuing.  In no event,  however,  shall the final Averaging Date be postponed
more than ten business days. If the final  Averaging Date has been postponed ten
business days and the business day  immediately  succeeding  such tenth business
day is not a  trading  day,  or if there is a  market  disruption  event on such
succeeding  business day, the calculation agent will determine the Ending Basket
Level on such  succeeding  business day in  accordance  with the formula for and
method  of  calculating  the  Ending  Basket  Level  last  in  effect  prior  to
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 or non-trading  day) on such date of each
security most recently constituting the Basket.

      The  maturity  date will be May 1, 2008  unless that day is not a business
day, in which case the date will be the next succeeding  business day,  provided
that if the fifth  scheduled  trading day before this  applicable day is not the
final  Averaging  Date,  then the maturity  date will be the fifth  business day
following the final Averaging Date. The calculation agent may postpone the final
Averaging Date -- and therefore  maturity date -- if a market  disruption  event
occurs or is  continuing  on a day that would  otherwise be the final  Averaging
Date. We describe market disruption  events under "-- Market Disruption  Events"
below.

      We will irrevocably deposit with DTC no later than the opening 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.  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 laws),  we or our affiliates may, at any time
and from time to time,  purchase  outstanding notes by tender, in 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 Basket Closing Level on each Averaging Date
including the S&P Return,  the S&P Ending Level,  the Nikkei Return,  the Nikkei
Ending  Level,  the EURO STOXX Return and the EURO STOXX Ending Level as well as
the Ending Basket Level, the Basket 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 any of the  Basket  Indices  and  whether  there  has  been a
material  change in the method of  calculating  any of the Basket  Indices.  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 provide  written notice to the trustee at its
New York  office,  on which  notice the Trustee may  conclusively  rely,  of the
amount to be paid at  maturity  on or prior to 11:00 a.m.  on the  business  day
preceding the maturity date.

      All  calculations  with  respect to the Ending  Basket  Level,  the Basket
Return or the Basket Closing Level (including the S&P Return, the Nikkei Return,
and  the   EURO   STOXX   Return)   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


                                     PS-16
<PAGE>

amounts  related to  determination  of the Additional  Amount payable per $1,000
principal amount 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
Basket Closing Level on an Averaging  Date, and  consequently  the Basket Return
and 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 any of the Basket  Indices,  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 S&P 500(R)
            Index, the Nikkei 225 Index or the Dow Jones EURO STOXX 50(SM) Index
            (or the relevant  successor  indices) on the relevant  exchanges (as
            defined  below)  for  such  securities  for more  than two  hours of
            trading during 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 S&P 500(R) Index,  the Nikkei 225 Index or the Dow Jones EURO
            STOXX 50(SM) Index (or the relevant  successor  indices)  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 securities  market for trading in futures or options contracts
            related  to the S&P  500(R)  Index,  the Nikkei 225 Index or the Dow
            Jones EURO STOXX 50(SM) Index (or the  relevant  successor  indices)
            for more than two hours of or during the one hour  period  preceding
            the close of, the principal trading session on such market; or

      o     a  decision  to  permanently  discontinue  trading  in the  relevant
            futures or options contracts;

      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 S&P 500(R) Index, the Nikkei
225 Index or the Dow Jones EURO STOXX  50(SM) Index is  materially  suspended or
materially  limited at that time, then the relevant  percentage  contribution of
that security to the level of the disrupted index shall be based on a comparison
of:

      o     the portion of the level of the disrupted index attributable to that
            security relative to

      o     the overall level of the disrupted index,

      in each case immediately before that suspension or limitation.

      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     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


                                     PS-17
<PAGE>

            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 S&P
            500(R)  Index,  the  Nikkei  225 Index or the Dow Jones  EURO  STOXX
            50(SM)  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 S&P 500(R) Index, the
Nikkei 225 Index or the Dow Jones EURO STOXX 50(SM) 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 S&P 500(R) Index,  the Nikkei 225
            Index or the Dow Jones EURO STOXX  50(SM)  Index are traded will not
            include any time when such market is itself closed for trading under
            ordinary circumstances.

      "Relevant  exchange"  means the  primary  organized  exchange or market of
trading for any security (or any  combination  thereof) then included in the S&P
500(R)  Index,  the Nikkei 225 Index or the Dow Jones EURO STOXX 50(SM) Index or
any successor indices.

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 $1,000 plus the  Additional  Amount,
determined as though the Basket  Closing Level for any Averaging  Date scheduled
to occur on or after such date of acceleration  were the Basket Closing Level on
the date of acceleration.

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

      The notes will not be listed on any securities exchange.

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


                                     PS-18
<PAGE>

will be deposited with DTC. See the  descriptions  contained in the accompanying
prospectus  supplement  under  the  headings  "Description  of Notes -- Forms of
Notes" and "The Depositary."

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.


                                     PS-19
<PAGE>

                              THE S&P 500(R) INDEX

      We have  derived all  information  contained  in this  pricing  supplement
regarding  the S&P 500(R) 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 S&P 500(R) 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 S&P 500(R) Index is intended to provide a  performance  benchmark  for
the U.S.  equity  markets.  The calculation of the level of the S&P 500(R) 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 "S&P 500(R)  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. Historically, the "Market
Value" of any S&P 500(R)  Component  Stock was  calculated as the product of the
market price per share and the number of the then outstanding shares of such S&P
500(R)  Component Stock. As discussed below, on March 21, 2005, S&P began to use
a new methodology to calculate the Market Value of the Component Stocks. 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 S&P 500(R) 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 S&P 500(R)
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.

      On March 21,  2005,  S&P  began to  calculate  the  Index  based on a half
float-adjusted  formula,  and on or about  September  16, 2005 the Index will be
fully float adjusted. S&P's criteria for selecting stocks for the Index will not
be changed by the shift to float  adjustment.  However,  the adjustment  affects
each company's weight in the Index (i.e., its Market Value).

      Under float  adjustment,  the share counts used in  calculating  the Index
will  reflect only those shares that are  available to  investors,  not all of a
company's  outstanding  shares.  S&P defines three groups of shareholders  whose
holdings are subject to float adjustment:

      o     holdings by other  publicly  traded  corporations,  venture  capital
            firms, private equity firms, strategic partners, or leveraged buyout
            groups;

      o     holdings by government entities,  including all levels of government
            in the United States or foreign countries; and

      o     holdings by current or former officers and directors of the company,
            founders of the company, or family trusts of officers, directors, or
            founders, as well as holdings of trusts, foundations, pension funds,
            employee  stock  ownership  plans,  or  other  investment   vehicles
            associated with and controlled by the company.

      However,   treasury  stock,  stock  options,   restricted  shares,  equity
participation units,  warrants,  preferred stock,  convertible stock, and rights
are not part of the float.  In cases where holdings in a group exceed 10% of the
outstanding  shares of a company,  the  holdings  of that group will be excluded
from the  float-adjusted  count of shares  to be used in the Index  calculation.
Mutual funds,  investment  advisory  firms,  pension funds,  or foundations  not
associated with the company and investment funds in insurance companies,  shares
of a United States company  traded in Canada as  "exchangeable  shares,"  shares
that trust  beneficiaries  may buy or sell  without  difficulty  or  significant
additional expense beyond typical brokerage fees, and, if a company has multiple
classes of stock outstanding,  shares in an unlisted or non-traded class if such
shares are  convertible by  shareholders  without undue delay and cost, are also
part of the float.

      For each stock,  an  investable  weight  factor  ("IWF") is  calculated by
dividing the  available  float shares,  defined as the total shares  outstanding
less shares held in one or more of the three groups listed above where the group
holdings exceed 10% of the outstanding  shares, by the total shares outstanding.
(On March 21, 2005, the Index moved half way to float  adjustment,  meaning that
if a stock has an IWF of 0.80, the IWF used to calculate the Index


                                     PS-20
<PAGE>

between March 21, 2005 and September 16, 2005 will be 0.90.) The  float-adjusted
Index will then be calculated by dividing the sum of the IWF  multiplied by both
the price and the total shares  outstanding for each stock by the index divisor.
For companies  with multiple  classes of stock,  S&P will calculate the weighted
average  IWF for each stock using the  proportion  of the total  company  market
capitalization of each share class as weights.

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

      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 S&P 500(R)  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
S&P 500(R)  Index is  computed  by dividing  the total  Market  Value of the S&P
500(R)  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 S&P 500(R)  Index,  it is the only link to the original Base Period level
of the S&P 500(R) Index. The Index Divisor keeps the S&P 500(R) 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 S&P  500(R)  Index  from  changing  due to
corporate actions,  all corporate actions which affect the total Market Value of
the S&P 500(R) Index require an Index Divisor adjustment. By adjusting the Index
Divisor for the change in total Market Value,  the level of the S&P 500(R) Index
remains  constant.  This helps  maintain the level of the S&P 500(R) Index as an
accurate  barometer of stock market performance and ensures that the movement of
the S&P 500(R)  Index  does not  reflect  the  corporate  actions of  individual
companies in the S&P 500(R) Index. All Index Divisor  adjustments are made after
the close of trading and after the calculation of the Basket 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  multiplied         No
(e.g., 2-for-1)              by 2; Stock Price divided by 2

Share Issuance               Shares Outstanding plus newly          Yes
(i.e., change greater than   issued Shares
or equal to 5%)

Share Repurchase             Shares Outstanding minus               Yes
(i.e., change greater than   Repurchased Shares
or equal to 5%)

Special Cash Dividends       Share Price minus Special              Yes
                             Dividend

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

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

Spinoffs                     Price of parent company minus          Yes


                                     PS-21
<PAGE>

                             (  Price of Spinoff Co. )
                               ---------------------
                             ( Share Exchange Ratio  )

      Stock splits and stock  dividends  do not affect the Index  Divisor of the
S&P 500(R) 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 S&P 500(R) Component Stock. All stock split and dividend
adjustments are made after the close of trading on the day before the ex-date.

      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 S&P 500(R) Component Stock and consequently of altering the aggregate Market
Value of the S&P 500(R)  Component  Stocks  (the  "Post-Event  Aggregate  Market
Value").  In order that the level of the S&P 500(R) Index (the "Pre-Event  Index
Value")  not be  affected  by the  altered  Market  Value  (whether  increase or
decrease) of the affected S&P 500(R)  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 S&P  500(R)  Index
companies.  Four  times a year,  on a Friday  close to the end of each  calendar
quarter,  the share  totals of  companies in the S&P 500(R) 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.

License Agreement with S&P

      We have entered into an agreement with S&P providing us and certain of our
affiliates or  subsidiaries  identified in that agreement  with a  non-exclusive
license and,  for a fee,  with the right to use the S&P 500(R)  Index,  which is
owned and published by S&P, in connection with certain securities, including the
notes.

      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 JPMorgan  Chase & Co. is the licensing of certain  trademarks and trade names
of S&P  without  regard  to  JPMorgan  Chase  & Co.  or the  notes.  S&P  has no
obligation to take the needs of JPMorgan 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 JPMORGAN  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


                                     PS-22
<PAGE>

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  JPMORGAN  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.

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

      If S&P discontinues publication of the S&P 500(R) 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 S&P
500(R) 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 Averaging 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 S&P 500(R) Index prior to, and such
discontinuance  is continuing  on, an Averaging 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 S&P 500(R) Index closing
level for such  date.  The S&P 500(R)  closing  level  will be  computed  by the
calculation  agent in accordance  with the formula for and method of calculating
the S&P 500(R)  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 S&P 500(R) Index. Notwithstanding these alternative arrangements,
discontinuance  of the  publication  of the S&P  500(R)  Index  on the  relevant
exchange may adversely affect the value of the notes.

      If at any  time  the  method  of  calculating  the S&P  500(R)  Index or a
successor index, or the level thereof,  is changed in a material respect,  or if
the S&P 500(R)  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 S&P 500(R)  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
S&P 500(R) 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 S&P
500(R) 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
closing level with reference to the S&P 500(R) Index or such successor index, as
adjusted.  Accordingly,  if the method of calculating  the S&P 500(R) Index or a
successor  index is modified so that the level of such Index or successor  index
is a fraction of what it would have been if there had been no such  modification
(e.g., due to a split in the S&P 500(R) Index),  then the calculation agent will
adjust  such S&P  500(R)  Index in order to arrive at a level of the S&P  500(R)
Index or such successor index as if there had been no such  modification  (e.g.,
as if such split had not occurred).


                                     PS-23
<PAGE>

Historical Information for the S&P 500(R) Index

      The  following  graph sets  forth the  historical  performance  of the S&P
500(R) Index based on the weekly S&P 500(R) Index  closing level from January 1,
2000 through  March 25, 2005.  The S&P 500(R) Index  closing  level on March 30,
2005 was 1,181.41.  We obtained the closing levels and other  information  below
from Bloomberg  Financial  Markets.  We make no representation or warranty as to
the accuracy or  completeness  of the  information  so obtained  from  Bloomberg
Financial Markets.

      The  historical  levels of the S&P 500(R)  Index should not be taken as an
indication  of  future  performance,  and no  assurance  can be  given as to the
closing  level on any  Averaging  Date.  We cannot give you  assurance  that the
performance of the S&P 500(R) Index, in conjunction  with the performance of the
other Basket  Indices,  will result in a payment at maturity in excess of $1,000
per note.

[The following information was depicted as a line chart in the printed material]

                                          S&P 500(R)
                            Date            Index
                         ---------        ----------
                          7-Jan-00         1,441.47
                         14-Jan-00         1,465.15
                         21-Jan-00         1,441.36
                         28-Jan-00         1,360.16
                          4-Feb-00         1,424.37
                         11-Feb-00         1,387.12
                         18-Feb-00         1,346.09
                         25-Feb-00         1,333.36
                          3-Mar-00         1,409.17
                         10-Mar-00         1,395.07
                         17-Mar-00         1,464.47
                         24-Mar-00         1,527.46
                         31-Mar-00         1,498.58
                          7-Apr-00         1,516.35
                         14-Apr-00         1,356.56
                         21-Apr-00         1,434.54
                         28-Apr-00         1,452.43
                          5-May-00         1,432.63
                         12-May-00         1,420.96
                         19-May-00         1,406.95
                         26-May-00         1,378.02
                          2-Jun-00         1,477.26
                          9-Jun-00         1,456.95
                         16-Jun-00         1,464.46
                         23-Jun-00         1,441.48
                         30-Jun-00         1,454.60
                          7-Jul-00         1,478.90
                         14-Jul-00         1,509.98
                         21-Jul-00         1,480.19
                         28-Jul-00         1,419.89
                          4-Aug-00         1,462.93
                         11-Aug-00         1,471.84
                         18-Aug-00         1,491.72
                         25-Aug-00         1,506.45
                          1-Sep-00         1,520.77
                          8-Sep-00         1,494.50
                         15-Sep-00         1,465.81
                         22-Sep-00         1,448.72
                         29-Sep-00         1,436.51
                          6-Oct-00         1,408.99
                         13-Oct-00         1,374.17
                         20-Oct-00         1,396.93
                         27-Oct-00         1,379.58
                          3-Nov-00         1,426.69
                         10-Nov-00         1,365.98
                         17-Nov-00         1,367.72
                         24-Nov-00         1,341.77
                          1-Dec-00         1,315.23
                          8-Dec-00         1,369.89
                         15-Dec-00         1,312.15
                         22-Dec-00         1,305.97
                         29-Dec-00         1,320.28
                          5-Jan-01         1,298.35
                         12-Jan-01         1,318.32
                         19-Jan-01         1,342.55
                         26-Jan-01         1,354.95
                          2-Feb-01         1,349.47
                          9-Feb-01         1,314.76
                         16-Feb-01         1,301.53
                         23-Feb-01         1,245.86
                          2-Mar-01         1,234.18
                          9-Mar-01         1,233.42
                         16-Mar-01         1,150.53
                         23-Mar-01         1,139.83
                         30-Mar-01         1,160.33
                          6-Apr-01         1,128.43
                         13-Apr-01         1,183.50
                         20-Apr-01         1,242.98
                         27-Apr-01         1,253.05
                          4-May-01         1,266.61
                         11-May-01         1,245.67
                         18-May-01         1,291.96
                         25-May-01         1,277.89
                          1-Jun-01         1,260.67
                          8-Jun-01         1,264.96
                         15-Jun-01         1,214.36
                         22-Jun-01         1,225.35
                         29-Jun-01         1,224.42
                          6-Jul-01         1,190.59
                         13-Jul-01         1,215.68
                         20-Jul-01         1,210.85
                         27-Jul-01         1,205.82
                          3-Aug-01         1,214.35
                         10-Aug-01         1,190.16
                         17-Aug-01         1,161.97
                         24-Aug-01         1,184.93
                         31-Aug-01         1,133.58
                          7-Sep-01         1,085.78
                         14-Sep-01         1,092.54
                         21-Sep-01           965.80
                         28-Sep-01         1,040.94
                          5-Oct-01         1,071.38
                         12-Oct-01         1,091.65
                         19-Oct-01         1,073.48
                         26-Oct-01         1,104.61
                          2-Nov-01         1,087.20
                          9-Nov-01         1,120.31
                         16-Nov-01         1,138.65
                         23-Nov-01         1,150.34
                         30-Nov-01         1,139.45
                          7-Dec-01         1,158.31
                         14-Dec-01         1,123.09
                         21-Dec-01         1,144.89
                         28-Dec-01         1,161.02
                          4-Jan-02         1,172.51
                         11-Jan-02         1,145.60
                         18-Jan-02         1,127.58
                         25-Jan-02         1,133.28
                          1-Feb-02         1,122.20
                          8-Feb-02         1,096.22
                         15-Feb-02         1,104.18
                         22-Feb-02         1,089.84
                          1-Mar-02         1,131.78
                          8-Mar-02         1,164.31
                         15-Mar-02         1,166.16
                         22-Mar-02         1,148.70
                         29-Mar-02         1,147.39
                          5-Apr-02         1,122.73
                         12-Apr-02         1,111.01
                         19-Apr-02         1,125.17
                         26-Apr-02         1,076.32
                          3-May-02         1,073.43
                         10-May-02         1,054.99
                         17-May-02         1,106.59
                         24-May-02         1,083.82
                         31-May-02         1,067.14
                          7-Jun-02         1,027.53
                         14-Jun-02         1,007.27
                         21-Jun-02           989.14
                         28-Jun-02           989.82
                          5-Jul-02           989.03
                         12-Jul-02           921.39
                         19-Jul-02           847.76
                         26-Jul-02           852.84
                          2-Aug-02           864.24
                          9-Aug-02           908.64
                         16-Aug-02           928.77
                         23-Aug-02           940.86
                         30-Aug-02           916.07
                          6-Sep-02           893.92
                         13-Sep-02           889.81
                         20-Sep-02           845.39
                         27-Sep-02           827.37
                          4-Oct-02           800.58
                         11-Oct-02           835.32
                         18-Oct-02           884.39
                         25-Oct-02           897.65
                          1-Nov-02           900.96
                          8-Nov-02           894.74
                         15-Nov-02           909.83
                         22-Nov-02           930.55
                         29-Nov-02           936.31
                          6-Dec-02           912.23
                         13-Dec-02           889.48
                         20-Dec-02           895.75
                         27-Dec-02           875.40
                          3-Jan-03           908.59
                         10-Jan-03           927.57
                         17-Jan-03           901.78
                         24-Jan-03           861.40
                         31-Jan-03           855.70
                          7-Feb-03           829.69
                         14-Feb-03           834.89
                         21-Feb-03           848.17
                         28-Feb-03           841.15
                          7-Mar-03           828.89
                         14-Mar-03           833.27
                         21-Mar-03           895.79
                         28-Mar-03           863.50
                          4-Apr-03           878.85
                         11-Apr-03           868.30
                         18-Apr-03           893.58
                         25-Apr-03           898.81
                          2-May-03           930.08
                          9-May-03           933.41
                         16-May-03           944.30
                         23-May-03           933.22
                         30-May-03           963.59
                          6-Jun-03           987.76
                         13-Jun-03           988.61
                         20-Jun-03           995.69
                         27-Jun-03           976.22
                          4-Jul-03           985.70
                         11-Jul-03           998.14
                         18-Jul-03           993.32
                         25-Jul-03           998.68
                          1-Aug-03           980.15
                          8-Aug-03           977.59
                         15-Aug-03           990.67
                         22-Aug-03           993.06
                         29-Aug-03         1,008.01
                          5-Sep-03         1,021.39
                         12-Sep-03         1,018.63
                         19-Sep-03         1,036.30
                         26-Sep-03           996.85
                          3-Oct-03         1,029.85
                         10-Oct-03         1,038.06
                         17-Oct-03         1,039.32
                         24-Oct-03         1,028.91
                         31-Oct-03         1,050.71
                          7-Nov-03         1,053.21
                         14-Nov-03         1,050.35
                         21-Nov-03         1,035.28
                         28-Nov-03         1,058.20
                          5-Dec-03         1,061.50
                         12-Dec-03         1,074.14
                         19-Dec-03         1,088.67
                         26-Dec-03         1,095.89
                          2-Jan-04         1,108.48
                          9-Jan-04         1,121.86
                         16-Jan-04         1,139.83
                         23-Jan-04         1,141.55
                         30-Jan-04         1,131.13
                          6-Feb-04         1,142.76
                         13-Feb-04         1,145.81
                         20-Feb-04         1,144.11
                         27-Feb-04         1,144.94
                          5-Mar-04         1,156.86
                         12-Mar-04         1,120.57
                         19-Mar-04         1,109.78
                         26-Mar-04         1,108.06
                          2-Apr-04         1,141.81
                          9-Apr-04         1,139.32
                         16-Apr-04         1,134.61
                         23-Apr-04         1,140.60
                         30-Apr-04         1,107.30
                          7-May-04         1,098.70
                         14-May-04         1,095.70
                         21-May-04         1,093.56
                         28-May-04         1,120.68
                          4-Jun-04         1,122.50
                         11-Jun-04         1,136.47
                         18-Jun-04         1,135.02
                         25-Jun-04         1,134.43
                          2-Jul-04         1,125.38
                          9-Jul-04         1,112.81
                         16-Jul-04         1,101.39
                         23-Jul-04         1,086.20
                         30-Jul-04         1,101.72
                          6-Aug-04         1,063.97
                         13-Aug-04         1,064.80
                         20-Aug-04         1,098.35
                         27-Aug-04         1,107.77
                          3-Sep-04         1,113.63
                         10-Sep-04         1,123.92
                         17-Sep-04         1,128.55
                         24-Sep-04         1,110.11
                          1-Oct-04         1,131.50
                          8-Oct-04         1,122.14
                         15-Oct-04         1,108.20
                         22-Oct-04         1,095.74
                         29-Oct-04         1,130.20
                          5-Nov-04         1,166.17
                         12-Nov-04         1,184.17
                         19-Nov-04         1,170.34
                         26-Nov-04         1,182.65
                          3-Dec-04         1,191.17
                         10-Dec-04         1,188.00
                         17-Dec-04         1,194.22
                         24-Dec-04         1,210.13
                         31-Dec-04         1,211.92
                          7-Jan-05         1,186.19
                         14-Jan-05         1,184.52
                         21-Jan-05         1,167.87
                         28-Jan-05         1,171.36
                          4-Feb-05         1,203.03
                         11-Feb-05         1,205.30
                         18-Feb-05         1,201.59
                         25-Feb-05         1,211.37
                          4-Mar-05         1,222.12
                         11-Mar-05         1,200.08
                         18-Mar-05         1,189.65
                         25-Mar-05         1,171.42


                                     PS-24
<PAGE>

                              THE NIKKEI 225 INDEX

      We have derived all  information  regarding the Nikkei 225 Index contained
in this pricing supplement,  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 NKS.  NKS has no  obligation  to  continue to  publish,  and may  discontinue
publication of, the Nikkei 225 Index.

      The  Nikkei  225  Index  is  a  stock  index  calculated,   published  and
disseminated  by NKS that measures the composite  price  performance of selected
Japanese  stocks.  The Nikkei  225 Index  currently  is based on 225  underlying
stocks (the "Nikkei Underlying  Stocks") trading on the TSE representing a broad
cross-section  of  Japanese  industries.  All 225 Nikkei  Underlying  Stocks are
stocks  listed  in the  First  Section  of the TSE.  Stocks  listed in the First
Section of the TSE are among the most  actively  traded  stocks on the TSE.  NKS
rules require that the 75 most liquid issues  (one-third of the component  count
of the Nikkei 225 Index) be included in the Nikkei 225 Index.

      The 225  companies  included in the Nikkei 225 Index are divided  into six
sector categories:  Technology,  Financials,  Consumer Goods, Materials, Capital
Goods/Others and Transportation  and Utilities.  These six sector categories are
further divided into 36 industrial classifications as follows:

      o     Technology -- Pharmaceuticals,  Electrical  Machinery,  Automobiles,
            Precision Machinery, Telecommunications;

      o     Financials -- Banks, Miscellaneous Finance, Securities, Insurance;

      o     Consumer Goods -- Marine Products, Food, Retail, Services;

      o     Materials  --  Mining,  Textiles,  Paper and Pulp,  Chemicals,  Oil,
            Rubber, Ceramics, Steel, Nonferrous Metals, Trading House;

      o     Capital  Goods/Others  --  Construction,   Machinery,  Shipbuilding,
            Transportation Equipment,  Miscellaneous Manufacturing, Real Estate;
            and

      o     Transportation  and  Utilities  --  Railroads  and Buses,  Trucking,
            Shipping, Airlines, Warehousing, Electric Power, Gas.

      The Nikkei 225 Index is a modified,  price-weighted index (i.e., an Nikkei
Underlying  Stock's  weight in the index is based on its price per share  rather
than the total market  capitalization  of the issuer) which is calculated by (i)
multiplying  the  per  share  price  of  each  Nikkei  Underlying  Stock  by the
corresponding  weighting  factor  for such  Nikkei  Underlying  Stock (a "Weight
Factor"), (ii) calculating the sum of all these products and (iii) dividing such
sum by a divisor (the  "Divisor").  The Divisor was initially set at 225 for the
date of May 16, 1949 using  historical  numbers from May 16,  1949,  the date on
which the TSE was reopened.  The Divisor was 23.154 as of October 1, 2003 and is
subject to  periodic  adjustments  as set forth  below.  Each  Weight  Factor is
computed by dividing  (Y)50 by the par value of the relevant  Nikkei  Underlying
Stock, so that the share price of each Nikkei  Underlying  Stock when multiplied
by its Weight Factor  corresponds  to a share price based on a uniform par value
of (Y)50.  The stock prices used in the  calculation of the Nikkei 225 Index are
those reported by a primary market for the Nikkei  Underlying  Stocks (currently
the TSE). The level of the Nikkei 225 Index is calculated once per minute during
TSE trading hours.

      In order to  maintain  continuity  in the Nikkei 225 Index in the event of
certain  changes  due to  non-market  factors  affecting  the Nikkei  Underlying
Stocks,  such as the  addition or deletion  of stocks,  substitution  of stocks,
stock splits or  distributions  of assets to  stockholders,  the Divisor used in
calculating the Nikkei 225 Index is adjusted in a manner designed to prevent any
instantaneous  change or  discontinuity  in the level of the  Nikkei  225 Index.
Thereafter,  the Divisor remains at the new value until a further  adjustment is
necessary as the result of another change.  As a result of such change affecting
any Nikkei  Underlying Stock, the Divisor is adjusted in such a way that the sum
of all share prices  immediately  after such change multiplied by the applicable
Weight Factor and divided by the new Divisor (i.e.,  the level of the Nikkei 225
Index  immediately  after  such  change)  will equal the level of the Nikkei 225
Index immediately prior to the change.

      A Nikkei  Underlying  Stock  may be  deleted  or added by NKS.  Any  stock
becoming  ineligible  for listing in the First  Section of the TSE due to any of
the following reasons will be deleted from the Nikkei Underlying Stocks: (i)


                                     PS-25
<PAGE>

bankruptcy of the issuer,  (ii) merger of the issuer with, or acquisition of the
issuer by, another company, (iii) delisting of such stock, (iv) transfer of such
stock to the "Seiri-Post" because of excess debt of the issuer or because of any
other reason or (v) transfer of such stock to the Second Section. In addition, a
component  stock  transferred  to  the  "Kanri-Post"  (Posts  for  stocks  under
supervision) is in principle a candidate for deletion.  Nikkei Underlying Stocks
with  relatively  low  liquidity,  based  on  trading  value  and  rate of price
fluctuation  over the past five years, may be deleted by NKS. Upon deletion of a
stock from the Nikkei Underlying  Stocks, NKS will select a replacement for such
deleted  Nikkei  Underlying  Stock in accordance  with certain  criteria.  In an
exceptional  case, a newly listed stock in the First  Section of the TSE that is
recognized  by NKS to be  representative  of a market may be added to the Nikkei
Underlying Stocks. In such a case, an existing Underlying Stock with low trading
volume and deemed not to be representative of a market will be deleted by NKS.

      A list of the issuers of the Nikkei  Underlying  Stocks  constituting  the
Nikkei 225 Index is  available  from the  Nikkei  Economic  Electronic  Databank
System and from the Stock  Market  Indices  Data Book  published by NKS. NKS may
delete,  add or substitute any stock  underlying the Nikkei 225 Index. NKS first
calculated and published the Nikkei 225 Index in 1970.

License Agreement with NKS

      We have entered into an agreement with NKS providing us and certain of our
affiliates or  subsidiaries  identified in that agreement  with a  non-exclusive
license  and,  for a fee,  with the right to use the Nikkei 225 Index,  which is
owned and published by NKS, in connection with certain securities, including the
notes.

      Our license agreement with NKS provides that NKS will assume no obligation
or  responsibility  for use of the Nikkei 225 Index by us or our  affiliates and
that all use and  implementation  relating  to the  license  agreement  shall be
conducted exclusively at the risk of JPMorgan Chase.

"NIKKEI 225 INDEX" AND "NIKKEI" ARE SERVICE  MARKS OF NKS AND HAVE BEEN LICENSED
FOR USE FOR CERTAIN  PURPOSES BY JPMORGAN  CHASE.  THE NOTES ARE NOT  SPONSORED,
ENDORSED, SOLD OR PROMOTED BY NKS, AND NKS MAKES NO REPRESENTATION REGARDING THE
ADVISABILITY OF INVESTING IN THE NOTES.

Discontinuation of the Nikkei 225 Index; Alteration of Method of Calculation

      If NKS discontinues publication of the Nikkei 225 Index and NKS or another
entity  publishes a successor or  substitute  index that the  calculation  agent
determines,  in its sole discretion, to be comparable to the discontinued Nikkei
225 Index (such index being referred to herein as a "successor index"), then any
Nikkei 225 Index  closing  level will be determined by reference to the level of
such  successor  index at the close of trading on the TSE (2nd  session)  or the
relevant  exchange or market for the successor  index on the relevant  Averaging
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 NKS discontinues publication of the Nikkei 225 Index prior to, and such
discontinuance  is continuing  on, an Averaging 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 Nikkei 225 Index closing
level for the Nikkei 225 Index for such date. The Nikkei 225 Index closing level
for the Nikkei 225 Index will be computed by the calculation agent in accordance
with the  formula  for and  method of  calculating  the Nikkei 225 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  Nikkei  225  Index.
Notwithstanding   these   alternative   arrangements,   discontinuance   of  the
publication  of the  Nikkei 225 Index on the  relevant  exchange  may  adversely
affect the value of the notes.

      If at any time  the  method  of  calculating  the  Nikkei  225  Index or a
successor index, or the level thereof,  is changed in a material respect,  or if
the Nikkei 225 Index or a successor  index is in any other way  modified so that
the Nikkei 225 Index or such  successor  index does not,  in the  opinion of the
calculation  agent,  fairly  represent the level of the Nikkei 225 Index or such
successor index had such changes or modifications  not been made, then, from


                                     PS-26
<PAGE>

and after such time, the calculation agent will, at the close of business in New
York City on each  date on which the  Nikkei  225 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 Nikkei  225 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 Nikkei 225 Index closing
level  with  reference  to the  Nikkei  225 Index or such  successor  index,  as
adjusted.  Accordingly,  if the method of calculating  the Nikkei 225 Index or a
successor  index is  modified  so that the level of the Nikkei 225 Index or such
successor  index is a  fraction  of what it would have been if there had been no
such  modification  (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 Nikkei 225
Index or such successor index as if there had been no such  modification  (e.g.,
as if such split had not occurred).

The Tokyo Stock Exchange

      The TSE is one of the world's  largest  securities  exchanges  in terms of
market capitalization.  Trading hours are currently from 9:00 a.m. to 11:00 a.m.
and from 12:30 p.m. to 3:00 p.m., Tokyo time, Monday through Friday.

      Due to the time zone  difference,  on any normal  trading day the TSE will
close prior to the  opening of  business  in New York City on the same  calendar
day. Therefore,  the closing level of the Nikkei 225 Index on a trading day will
generally be  available  in the United  States by the opening of business on the
same calendar day.

      The TSE has adopted  certain  measures,  including  daily price floors and
ceilings on individual stocks,  intended to prevent any extreme short-term price
fluctuations  resulting from order imbalances.  In general,  any stock listed on
the TSE cannot be traded at a price  lower than the  applicable  price  floor or
higher than the applicable  price  ceiling.  These price floors and ceilings are
expressed in absolute  Japanese yen, rather than percentage  limits based on the
closing price of the stock on the previous trading day. In addition,  when there
is a major  order  imbalance  in a listed  stock,  the TSE posts a "special  bid
quote" or a "special asked quote" for that stock at a specified  higher or lower
price level than the stock's last sale price in order to solicit  counter-orders
and balance supply and demand for the stock.  Prospective  investors should also
be aware that the TSE may suspend the  trading of  individual  stocks in certain
limited and extraordinary circumstances, including, for example, unusual trading
activity  in that  stock.  As a result,  changes  in the Nikkei 225 Index may be
limited by price limitations or special quotes, or by suspension of trading,  on
individual stocks that make up the Nikkei 225 Index, and these  limitations,  in
turn, may adversely affect the value of the notes.


                                     PS-27
<PAGE>

Historical Information for the Nikkei 225 Index

      The following  graph sets forth the  historical  performance of the Nikkei
225 Index based on the weekly  Nikkei 225 Index closing  level,  from January 1,
2000 through  March 25, 2005.  The Nikkei 225 Index  closing  level on March 30,
2005 was  11,565.88.  We obtained the Nikkei 225 Index closing  levels and other
information below from Bloomberg Financial Markets. We make no representation or
warranty as to the accuracy or  completeness of the information so obtained from
Bloomberg Financial Markets.

      Since its  inception,  the  Nikkei 225 Index has  experienced  significant
fluctuations.  The historical levels of the Nikkei 225 Index should not be taken
as an indication of future performance,  and no assurance can be given as to the
Nikkei  225 Index  closing  level on any  Averaging  Date.  We  cannot  give you
assurance that the performance of the Nikkei 225 Index, in conjunction  with the
performance of the other Basket Indices,  will result in the return of more than
the principal amount of your initial investment.

[The following information was depicted as a line chart in the printed material]

                                          Nikkei
                          Date          225 Index
                       ---------        ---------
                        7-Jan-00        18,193.41
                       14-Jan-00        18,956.55
                       21-Jan-00        18,878.09
                       28-Jan-00        19,434.78
                        4-Feb-00        19,763.13
                       11-Feb-00        19,710.02
                       18-Feb-00        19,789.03
                       25-Feb-00        19,817.88
                        3-Mar-00        19,927.54
                       10-Mar-00        19,750.40
                       17-Mar-00        19,566.32
                       24-Mar-00        19,958.08
                       31-Mar-00        20,337.32
                        7-Apr-00        20,252.81
                       14-Apr-00        20,434.68
                       21-Apr-00        18,252.68
                       28-Apr-00        17,973.70
                        5-May-00        18,439.36
                       12-May-00        17,357.86
                       19-May-00        16,858.17
                       26-May-00        16,008.14
                        2-Jun-00        16,800.06
                        9-Jun-00        16,861.91
                       16-Jun-00        16,318.31
                       23-Jun-00        16,963.21
                       30-Jun-00        17,411.05
                        7-Jul-00        17,398.24
                       14-Jul-00        17,142.90
                       21-Jul-00        16,811.49
                       28-Jul-00        15,838.57
                        4-Aug-00        15,667.36
                       11-Aug-00        16,117.50
                       18-Aug-00        16,280.49
                       25-Aug-00        16,911.33
                        1-Sep-00        16,739.78
                        8-Sep-00        16,501.55
                       15-Sep-00        16,213.28
                       22-Sep-00        15,818.25
                       29-Sep-00        15,747.26
                        6-Oct-00        15,994.24
                       13-Oct-00        15,330.31
                       20-Oct-00        15,198.73
                       27-Oct-00        14,582.20
                        3-Nov-00        14,837.78
                       10-Nov-00        14,988.54
                       17-Nov-00        14,544.30
                       24-Nov-00        14,315.35
                        1-Dec-00        14,835.33
                        8-Dec-00        14,696.51
                       15-Dec-00        14,552.29
                       22-Dec-00        13,427.08
                       29-Dec-00        13,785.69
                        5-Jan-01        13,867.61
                       12-Jan-01        13,347.74
                       19-Jan-01        13,989.12
                       26-Jan-01        13,696.06
                        2-Feb-01        13,703.63
                        9-Feb-01        13,422.83
                       16-Feb-01        13,175.49
                       23-Feb-01        13,246.00
                        2-Mar-01        12,261.80
                        9-Mar-01        12,627.90
                       16-Mar-01        12,232.98
                       23-Mar-01        13,214.54
                       30-Mar-01        12,999.70
                        6-Apr-01        13,383.76
                       13-Apr-01        13,385.72
                       20-Apr-01        13,765.67
                       27-Apr-01        13,934.32
                        4-May-01        14,421.64
                       11-May-01        14,043.92
                       18-May-01        13,877.77
                       25-May-01        13,765.92
                        1-Jun-01        13,261.84
                        8-Jun-01        13,430.22
                       15-Jun-01        12,790.38
                       22-Jun-01        13,044.61
                       29-Jun-01        12,969.05
                        6-Jul-01        12,306.08
                       13-Jul-01        12,355.15
                       20-Jul-01        11,908.39
                       27-Jul-01        11,798.08
                        3-Aug-01        12,241.97
                       10-Aug-01        11,735.06
                       17-Aug-01        11,445.54
                       24-Aug-01        11,166.31
                       31-Aug-01        10,713.51
                        7-Sep-01        10,516.79
                       14-Sep-01        10,008.89
                       21-Sep-01         9,554.99
                       28-Sep-01         9,774.68
                        5-Oct-01        10,205.87
                       12-Oct-01        10,632.35
                       19-Oct-01        10,538.79
                       26-Oct-01        10,795.16
                        2-Nov-01        10,383.78
                        9-Nov-01        10,215.71
                       16-Nov-01        10,649.09
                       23-Nov-01        10,696.82
                       30-Nov-01        10,697.44
                        7-Dec-01        10,796.89
                       14-Dec-01        10,511.65
                       21-Dec-01        10,335.45
                       28-Dec-01        10,542.62
                        4-Jan-02        10,871.49
                       11-Jan-02        10,441.59
                       18-Jan-02        10,293.32
                       25-Jan-02        10,144.14
                        1-Feb-02         9,791.43
                        8-Feb-02         9,686.06
                       15-Feb-02        10,048.10
                       22-Feb-02        10,356.78
                        1-Mar-02        10,812.00
                        8-Mar-02        11,885.79
                       15-Mar-02        11,648.01
                       22-Mar-02        11,345.08
                       29-Mar-02        11,024.94
                        5-Apr-02        11,335.49
                       12-Apr-02        10,962.98
                       19-Apr-02        11,512.01
                       26-Apr-02        11,541.39
                        3-May-02        11,551.01
                       10-May-02        11,531.11
                       17-May-02        11,847.32
                       24-May-02        11,976.28
                       31-May-02        11,763.70
                        7-Jun-02        11,438.53
                       14-Jun-02        10,920.63
                       21-Jun-02        10,354.35
                       28-Jun-02        10,621.84
                        5-Jul-02        10,826.09
                       12-Jul-02        10,601.45
                       19-Jul-02        10,202.36
                       26-Jul-02         9,591.03
                        2-Aug-02         9,709.66
                        9-Aug-02         9,999.79
                       16-Aug-02         9,788.13
                       23-Aug-02         9,867.45
                       30-Aug-02         9,619.30
                        6-Sep-02         9,129.07
                       13-Sep-02         9,241.93
                       20-Sep-02         9,481.08
                       27-Sep-02         9,530.44
                        4-Oct-02         9,027.55
                       11-Oct-02         8,529.61
                       18-Oct-02         9,086.13
                       25-Oct-02         8,726.29
                        1-Nov-02         8,685.72
                        8-Nov-02         8,690.77
                       15-Nov-02         8,503.59
                       22-Nov-02         8,772.56
                       29-Nov-02         9,215.56
                        6-Dec-02         8,863.26
                       13-Dec-02         8,516.07
                       20-Dec-02         8,406.88
                       27-Dec-02         8,714.05
                        3-Jan-03         8,578.95
                       10-Jan-03         8,470.45
                       17-Jan-03         8,690.25
                       24-Jan-03         8,731.65
                       31-Jan-03         8,339.94
                        7-Feb-03         8,448.16
                       14-Feb-03         8,701.92
                       21-Feb-03         8,513.54
                       28-Feb-03         8,363.04
                        7-Mar-03         8,144.12
                       14-Mar-03         8,002.69
                       21-Mar-03         8,195.05
                       28-Mar-03         8,280.16
                        4-Apr-03         8,074.12
                       11-Apr-03         7,816.49
                       18-Apr-03         7,874.51
                       25-Apr-03         7,699.50
                        2-May-03         7,907.19
                        9-May-03         8,152.16
                       16-May-03         8,117.29
                       23-May-03         8,184.76
                       30-May-03         8,424.51
                        6-Jun-03         8,785.87
                       13-Jun-03         8,980.64
                       20-Jun-03         9,120.39
                       27-Jun-03         9,104.06
                        4-Jul-03         9,547.73
                       11-Jul-03         9,635.35
                       18-Jul-03         9,527.73
                       25-Jul-03         9,648.01
                        1-Aug-03         9,611.67
                        8-Aug-03         9,327.53
                       15-Aug-03         9,863.47
                       22-Aug-03        10,281.17
                       29-Aug-03        10,343.55
                        5-Sep-03        10,650.77
                       12-Sep-03        10,712.81
                       19-Sep-03        10,938.42
                       26-Sep-03        10,318.44
                        3-Oct-03        10,709.29
                       10-Oct-03        10,786.04
                       17-Oct-03        11,037.89
                       24-Oct-03        10,335.70
                       31-Oct-03        10,559.59
                        7-Nov-03        10,628.98
                       14-Nov-03        10,167.06
                       21-Nov-03         9,852.83
                       28-Nov-03        10,100.57
                        5-Dec-03        10,373.46
                       12-Dec-03        10,169.66
                       19-Dec-03        10,284.54
                       26-Dec-03        10,417.41
                        2-Jan-04        10,676.64
                        9-Jan-04        10,965.05
                       16-Jan-04        10,857.20
                       23-Jan-04        11,069.01
                       30-Jan-04        10,783.61
                        6-Feb-04        10,460.92
                       13-Feb-04        10,557.69
                       20-Feb-04        10,720.69
                       27-Feb-04        11,041.92
                        5-Mar-04        11,537.29
                       12-Mar-04        11,162.75
                       19-Mar-04        11,418.51
                       26-Mar-04        11,770.65
                        2-Apr-04        11,815.95
                        9-Apr-04        11,897.51
                       16-Apr-04        11,824.56
                       23-Apr-04        12,120.66
                       30-Apr-04        11,761.79
                        7-May-04        11,438.82
                       14-May-04        10,849.63
                       21-May-04        11,070.25
                       28-May-04        11,309.57
                        4-Jun-04        11,128.05
                       11-Jun-04        11,526.82
                       18-Jun-04        11,382.08
                       25-Jun-04        11,780.40
                        2-Jul-04        11,721.49
                        9-Jul-04        11,423.53
                       16-Jul-04        11,436.00
                       23-Jul-04        11,187.33
                       30-Jul-04        11,325.78
                        6-Aug-04        10,972.57
                       13-Aug-04        10,757.20
                       20-Aug-04        10,889.14
                       27-Aug-04        11,209.59
                        3-Sep-04        11,022.49
                       10-Sep-04        11,083.23
                       17-Sep-04        11,082.49
                       24-Sep-04        10,895.16
                        1-Oct-04        10,985.17
                        8-Oct-04        11,349.35
                       15-Oct-04        10,982.95
                       22-Oct-04        10,857.13
                       29-Oct-04        10,771.42
                        5-Nov-04        11,061.77
                       12-Nov-04        11,019.98
                       19-Nov-04        11,082.84
                       26-Nov-04        10,833.75
                        3-Dec-04        11,074.89
                       10-Dec-04        10,756.80
                       17-Dec-04        11,078.32
                       24-Dec-04        11,365.48
                       31-Dec-04        11,488.76
                        7-Jan-05        11,433.24
                       14-Jan-05        11,438.39
                       21-Jan-05        11,238.37
                       28-Jan-05        11,320.58
                        4-Feb-05        11,360.40
                       11-Feb-05        11,553.56
                       18-Feb-05        11,660.12
                       25-Feb-05        11,658.25
                        4-Mar-05        11,873.05
                       11-Mar-05        11,923.89
                       18-Mar-05        11,879.81
                       25-Mar-05        11,761.10


                                     PS-28
<PAGE>

                      THE DOW JONES EURO STOXX 50(SM) INDEX

      We have  derived all  information  contained  in this  pricing  supplement
regarding  the Dow Jones EURO STOXX  50(SM)  Index ("Dow Jones EURO STOXX 50(SM)
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, STOXX  Limited.  The Dow
Jones EURO STOXX 50(SM) Index is  calculated,  maintained and published by STOXX
Limited.   We  make  no  representation  or  warranty  as  to  the  accuracy  or
completeness of such information.

      The Dow Jones EURO STOXX  50(SM)  Index was  created by STOXX  Limited,  a
joint  venture  between  Deutsche  Borse AG,  Dow Jones & Company  and SWX Swiss
Exchange. Publication of the Dow Jones EURO STOXX 50(SM) Index began on February
26,  1998,  based on an initial Dow Jones EURO STOXX 50(SM) Index value of 1,000
at December 31, 1991.  The Dow Jones EURO STOXX 50(SM) Index is published in The
Wall  Street   Journal  and   disseminated   on  the  STOXX   Limited   website:
http://www.stoxx.com.  Information contained in the STOXX Limited website is not
incorporated  by  reference  in, and should not be  considered  a part of,  this
pricing supplement.

Dow Jones EURO STOXX 50(SM) Index Composition and Maintenance

      The Dow Jones EURO STOXX 50(SM)  Index is composed of 50 component  stocks
of market sector leaders from within the Dow Jones EURO STOXX(SM)  Index,  which
includes  stocks  selected from the Eurozone.  The component  stocks have a high
degree of  liquidity  and  represent  the  largest  companies  across all market
sectors defined by the Dow Jones Global Classification Standard. Set forth below
are the country  weightings and industrial  sector  weightings of the securities
currently  included in the Dow Jones EURO STOXX  50(SM) Index as of December 31,
2004:

     Country Weightings             Sector Weightings
     ---------------------------    ------------------------------------
     France                31.3%    Banks                          20.8%
     Germany               22.6%    Oil & Gas                      16.2%
     The Netherlands       17.2%    Telecommunication              12.1%
     Spain                 13.8%    Insurance                      10.6%
     Italy                 11.6%    Utilities                      9.0%
     Finland               3.5%     Technology                     6.2%
                                    Chemicals                      4.0%
                                    Healthcare                     3.8%
                                    Personal & Household Goods     3.7%
                                    Industrial Goods & Services    3.4%
                                    Food & Beverage                2.9%
                                    Retail                         1.9%
                                    Automobiles                    1.9%
                                    Construction                   1.8%
                                    Media                          1.6%

      The  composition  of the Dow Jones EURO  STOXX  50(SM)  Index is  reviewed
annually, based on the closing stock data on the last trading day in August. The
component  stocks are announced  the first trading day in September.  Changes to
the component  stocks are  implemented  on the third Friday in September and are
effective the following trading day. Changes in the composition of the Dow Jones
EURO STOXX  50(SM) Index are made to ensure that the Dow Jones EURO STOXX 50(SM)
Index  includes  the 50 market  sector  leaders  from  within the Dow Jones EURO
STOXX(SM)  Index. A current list of the issuers that comprise the Dow Jones EURO
STOXX   50(SM)   Index   is   available   on   the   STOXX   Limited    website:
http://www.stoxx.com.  Information contained in the STOXX Limited website is not
incorporated  by  reference  in, and should not be  considered  a part of,  this
pricing supplement.

      The free float factors for each component  stock used to calculate the Dow
Jones EURO STOXX 50(SM) Index, as described below, are reviewed,  calculated and
implemented on a quarterly basis and are fixed until the next quarterly review.


                                     PS-29
<PAGE>

      The Dow Jones  EURO  STOXX  50(SM)  Index is also  reviewed  on an ongoing
basis.  Corporate  actions  (including  initial  public  offerings,  mergers and
takeovers,  spin-offs, delistings and bankruptcy) that affect the Dow Jones EURO
STOXX  50(SM)  Index  composition  are  immediately  reviewed.  Any  changes are
announced,  implemented and effective in line with the type of corporate  action
and the magnitude of the effect.

Dow Jones EURO STOXX 50(SM) Index Calculation

      The Dow Jones EURO STOXX 50(SM) Index is  calculated  with the  "Laspeyres
formula,"  which  measures the aggregate  price changes in the component  stocks
against a fixed base quantity weight.  The formula for calculating the Dow Jones
EURO STOXX 50(SM) Index value can be expressed as follows:

Index =      free float market capitalization of the Dow Jones EURO      x 1,000
                               STOXX 50(SM) Index
         ---------------------------------------------------------------
            adjusted base date market capitalization of the Dow Jones
                            EURO STOXX 50(SM) Index

      The "free float market  capitalization  of the Dow Jones EURO STOXX 50(SM)
Index"  is  equal  to the  sum of the  products  of the  closing  price,  market
capitalization and free float factor for each component stock as of the time the
Dow Jones EURO STOXX 50(SM) Index is being calculated.

      The Dow Jones EURO STOXX 50(SM) Index is also subject to a divisor,  which
is adjusted to maintain  the  continuity  of Dow Jones EURO STOXX  50(SM)  Index
values despite changes due to corporate  actions.  The following is a summary of
the adjustments to any component stock made for corporate actions and the effect
of such  adjustment on the divisor,  where  shareholders  of the component stock
will receive "B" number of shares for every "A" share held (where applicable).

<TABLE>
<CAPTION>
<S>                                                                   <C>
------------------------------------------------------------------------------------------------------------------------------------

(1) Split and reverse split:                                          (2) Rights offering:

Adjusted price = closing price * A/B                                  Adjusted price = (closing price * A + subscription price *
                                                                                       B) / (A + B)
New number of shares = old number of shares * B/A
                                                                      New number of shares = old number of shares * (A + B) / A
Divisor: no change
                                                                      Divisor: increases

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

(3) Stock dividend:                                                   (4) Stock dividend of another company:

Adjusted price = closing price * A / (A + B)                          Adjusted price = (closing price * A - price of other
                                                                                       company * B) / A
New number of shares = old number of shares * (A + B) / A
                                                                      Divisor: decreases
Divisor: no change

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

(5) Return of capital and share consideration:                        (6) Repurchase shares / self tender:

Adjusted price = (closing price - dividend announced by company *     Adjusted price = ((price before tender * old number of
                 (1-withholding tax)) * A / B                                          shares ) - (tender price * number of
                                                                                       tendered shares)) / (old number of shares -
New number of shares = old number of shares * B / A                                    number of tendered shares)

Divisor: decreases                                                    New number of shares = old number of shares - number of
                                                                                             tendered shares

                                                                      Divisor: decreases

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                     PS-30
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                   <C>
------------------------------------------------------------------------------------------------------------------------------------

(7) Spin-off: Adjusted price = (closing price * A - price of spun-off shares *B) / A

Divisor: decreases

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

(8) Combination stock distribution (dividend or split) and rights offering:

For this corporate action, the following additional assumptions apply:

Shareholders receive B new shares from the distribution and C new shares from
the rights offering for every A shares held If A is not equal to one share, all
the following "new number of shares" formulae need to be divided by A:

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

- If rights are applicable after stock distribution (one action       - If stock distribution is applicable after rights (one action
applicable to other):                                                 applicable to other):

Adjusted price = (closing price * A + subscription price * C *        Adjusted price = (closing price * A + subscription price * C)
                 (1 + B / A)) / ((A + B) * ( 1 + C / A))                               / ((A + C) * (1 + B / A))

New number of shares = old number of shares * ((A + B) * (1 + C       New number of shares = old number of shares * ((A + C) *
                       / A)) / A                                                             (1 + B / A))

Divisor: increases                                                    Divisor: increases

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

- Stock distribution and rights (neither action is applicable to the other):

Adjusted price = (closing price * A + subscription price * C) / (A + B + C)

New number of shares = old number of shares * (A + B + C) / A

Divisor: increases

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

License Agreement with STOXX Limited

      We have  entered  into an agreement  with STOXX  Limited  providing us and
certain of our  affiliates or  subsidiaries  identified in that agreement with a
non-exclusive  license and, for a fee,  with the right to use the Dow Jones EURO
STOXX 50(SM) Index, which is owned and published by STOXX Limited, in connection
with certain securities, including the notes.

      The notes are not sponsored,  endorsed,  sold or promoted by STOXX Limited
(including its affiliates) (collectively referred to as "STOXX Limited").  STOXX
Limited has not passed on the  legality or  suitability  of, or the  accuracy or
adequacy of descriptions  and disclosures  relating to the notes.  STOXX Limited
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 EURO
STOXX 50(SM) Index to track general stock market performance.  STOXX Limited has
no relationship to JPMorgan Chase other than the licensing of the Dow Jones EURO
STOXX 50(SM) Index and the related  trademarks  for use in  connection  with the
notes,  which index is  determined,  composed and  calculated  by STOXX  Limited
without regard to JPMorgan  Chase or the notes.  STOXX Limited has no obligation
to  take  the  needs  of  JPMorgan  Chase  or  the  owners  of  the  notes  into
consideration in determining,  composing or calculating the Dow Jones EURO STOXX
50(SM) Index.  STOXX Limited is not responsible for and has not  participated in
the  determination of the timing of, prices at, or quantities of the notes to be
issued or in the determination or calculation of the equation by which the notes
are to be converted into cash. STOXX Limited has no liability in connection with
the administration, marketing or trading of the notes.

      STOXX LIMITED DOES NOT GUARANTY THE ACCURACY  AND/OR THE  COMPLETENESS  OF
THE DOW JONES EURO STOXX  50(SM)  INDEX OR ANY DATA  INCLUDED  THEREIN AND STOXX
LIMITED  SHALL HAVE NO  LIABILITY  FOR ANY ERRORS,  OMISSIONS  OR  INTERRUPTIONS
THEREIN.  STOXX LIMITED MAKES NO WARRANTY,  EXPRESS OR IMPLIED, AS TO RESULTS TO
BE OBTAINED  BY JPMORGAN  CHASE,  HOLDERS OF THE NOTES,  OR ANY OTHER  PERSON OR
ENTITY IN  CONNECTION  WITH THE USE OF THE DOW JONES EURO STOXX  50(SM) INDEX OR


                                     PS-31
<PAGE>

ANY DATA INCLUDED THEREIN. STOXX LIMITED 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 DOW JONES EURO STOXX 50(SM) INDEX
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT
SHALL  STOXX  LIMITED  HAVE ANY  LIABILITY  FOR ANY  LOST  PROFITS  OR  SPECIAL,
INCIDENTAL,  PUNITIVE,  INDIRECT, OR CONSEQUENTIAL  DAMAGES, EVEN IF NOTIFIED OF
THE POSSIBILITY  THEREOF.  THE LICENSING  AGREEMENT  BETWEEN  JPMORGAN CHASE AND
STOXX  LIMITED IS SOLELY FOR THEIR BENEFIT AND NOT FOR THE BENEFIT OF THE OWNERS
OF THE NOTES OR ANY THIRD PARTIES.

      "DOW JONES EURO STOXX 50(SM)" AND  "STOXX(SM)"  ARE SERVICE MARKS OF STOXX
LIMITED AND HAVE BEEN LICENSED FOR CERTAIN PURPOSES BY JPMORGAN CHASE. THE NOTES
ARE NOT  SPONSORED,  ENDORSED,  SOLD OR  PROMOTED  BY STOXX  LIMITED,  AND STOXX
LIMITED MAKES NO  REPRESENTATION  REGARDING THE ADVISABILITY OF INVESTING IN THE
NOTES.

Discontinuation  of the Dow Jones EURO STOXX 50(SM) Index;  Alteration of Method
of Calculation

      If STOXX  Limited  discontinues  publication  of the Dow Jones  EURO STOXX
50(SM)  Index and STOXX  Limited or another  entity  publishes  a  successor  or
substitute index that the calculation agent determines,  in its sole discretion,
to be  comparable  to the  discontinued  Dow Jones EURO STOXX 50(SM) Index (such
index being referred to herein as a "EURO STOXX successor index"),  then any Dow
Jones EURO STOXX 50(SM) Index  closing  level will be determined by reference to
the level of such EURO  STOXX  successor  index at the close of  trading  on the
relevant  exchange or market for the EURO STOXX  successor index on the relevant
Averaging Date.

      Upon any  selection  by the  calculation  agent of a EURO STOXX  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 STOXX  Limited  discontinues  publication  of the Dow Jones  EURO STOXX
50(SM) Index prior to, and such  discontinuance  is continuing  on, an Averaging
Date and the calculation agent determines, in its sole discretion,  that no EURO
STOXX successor index is available at such time, then the calculation agent will
determine the Dow Jones EURO STOXX 50(SM) Index closing level for such date. The
Dow Jones  EURO  STOXX  50(SM)  Index  closing  level  will be  computed  by the
calculation  agent in accordance  with the formula for and method of calculating
the  Dow  Jones  EURO  STOXX   50(SM)   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 Dow Jones EURO STOXX 50(SM) Index.
Notwithstanding   these   alternative   arrangements,   discontinuance   of  the
publication  of the Dow Jones EURO STOXX 50(SM)  Index on the relevant  exchange
may adversely affect the value of the notes.

      If at any time the method of  calculating  the Dow Jones EURO STOXX 50(SM)
Index or a EURO STOXX  successor  index,  or the level thereof,  is changed in a
material  respect,  or if the Dow Jones EURO STOXX  50(SM) Index or a EURO STOXX
successor  index is in any other way  modified  so that the Dow Jones EURO STOXX
50(SM) Index or such EURO STOXX  successor index does not, in the opinion of the
calculation agent, fairly represent the level of the Dow Jones EURO STOXX 50(SM)
Index or such EURO STOXX successor index had such changes or  modifications  not
been made, then the calculation agent will, at the close of business in New York
City on the relevant  Averaging Date, 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 Dow Jones  EURO STOXX
50(SM) Index or such EURO STOXX successor  index, as the case may be, as if such
changes or  modifications  had not been  made,  and the  calculation  agent will
calculate the Dow Jones EURO STOXX 50(SM) Index closing level with  reference to
the Dow Jones EURO STOXX 50(SM)  Index or such EURO STOXX  successor  index,  as
adjusted.  Accordingly,  if the method of  calculating  the Dow Jones EURO STOXX
50(SM)  Index or a EURO STOXX  successor  index is modified so that the level of
such Dow Jones  EURO  STOXX  50(SM)  Index or EURO  STOXX  successor  index is a
fraction  of what it  would  have  been if there  had been no such  modification
(e.g.,  due to a split in the Dow  Jones  EURO  STOXX  50(SM)  Index),  then the
calculation agent will adjust such Dow Jones EURO STOXX 50(SM)


                                     PS-32
<PAGE>

Index in order to arrive at a level of the Dow Jones EURO STOXX  50(SM) Index or
such EURO STOXX successor index as if there had been no such modification (e.g.,
as if such split had not occurred).

Historical Information for the Dow Jones EURO STOXX 50(SM) Index

      The following graph sets forth the historical performance of the Dow Jones
EURO STOXX  50(SM)  Index based on the weekly Dow Jones EURO STOXX  50(SM) Index
closing  level from January 1, 2000 through  March 24, 2005.  The Dow Jones EURO
STOXX 50(SM) Index closing level on March 30, 2005 was 3,056.25. We obtained the
Dow Jones EURO STOXX 50(SM) Index  closing  levels and other  information  below
from Bloomberg  Financial  Markets.  We make no representation or warranty as to
the  accuracy  or  completeness  of  the  information  obtained  from  Bloomberg
Financial Markets.

      The historical  levels of the Dow Jones EURO STOXX 50(SM) Index should not
be taken as an indication of future  performance,  and no assurance can be given
as to the  Dow  Jones  EURO  STOXX  50(SM)  Index  closing  level  on any of the
Averaging  Dates.  We cannot give you assurance that the  performance of the Dow
Jones EURO STOXX 50(SM) Index, in conjunction  with the performance of the other
Basket Indices, will allow you to receive more than the principal amount of your
initial investment.

[The following information was depicted as a line chart in the printed material]

                                         Dow Jones Euro
                         Date          Stoxx 50(SM) Index
                      ---------        ------------------
                       7-Jan-00             4,648.27
                      14-Jan-00             4,829.36
                      21-Jan-00             4,719.29
                      28-Jan-00             4,781.94
                       4-Feb-00             5,119.79
                      11-Feb-00             5,195.67
                      18-Feb-00             5,079.59
                      25-Feb-00             5,208.87
                       3-Mar-00             5,450.22
                      10-Mar-00             5,416.81
                      17-Mar-00             5,231.35
                      24-Mar-00             5,379.75
                      31-Mar-00             5,249.55
                       7-Apr-00             5,259.52
                      14-Apr-00             5,034.25
                      21-Apr-00             5,117.78
                      28-Apr-00             5,303.95
                       5-May-00             5,351.71
                      12-May-00             5,238.42
                      19-May-00             5,063.46
                      26-May-00             5,007.97
                       2-Jun-00             5,428.27
                       9-Jun-00             5,292.97
                      16-Jun-00             5,281.57
                      23-Jun-00             5,240.58
                      30-Jun-00             5,145.35
                       7-Jul-00             5,251.65
                      14-Jul-00             5,320.06
                      21-Jul-00             5,238.02
                      28-Jul-00             5,061.83
                       4-Aug-00             5,049.45
                      11-Aug-00             5,179.68
                      18-Aug-00             5,180.70
                      25-Aug-00             5,175.65
                       1-Sep-00             5,298.64
                       8-Sep-00             5,229.04
                      15-Sep-00             5,199.14
                      22-Sep-00             4,945.37
                      29-Sep-00             4,915.18
                       6-Oct-00             4,958.37
                      13-Oct-00             4,782.74
                      20-Oct-00             4,889.51
                      27-Oct-00             4,965.92
                       3-Nov-00             5,101.40
                      10-Nov-00             4,934.47
                      17-Nov-00             4,961.54
                      24-Nov-00             4,940.22
                       1-Dec-00             4,839.27
                       8-Dec-00             4,889.72
                      15-Dec-00             4,718.00
                      22-Dec-00             4,655.87
                      29-Dec-00             4,772.39
                       5-Jan-01             4,734.48
                      12-Jan-01             4,737.95
                      19-Jan-01             4,720.03
                      26-Jan-01             4,760.20
                       2-Feb-01             4,665.19
                       9-Feb-01             4,583.76
                      16-Feb-01             4,519.95
                      23-Feb-01             4,236.82
                       2-Mar-01             4,300.35
                       9-Mar-01             4,334.23
                      16-Mar-01             4,106.79
                      23-Mar-01             4,002.56
                      30-Mar-01             4,185.00
                       6-Apr-01             4,145.85
                      13-Apr-01             4,338.12
                      20-Apr-01             4,383.59
                      27-Apr-01             4,473.95
                       4-May-01             4,416.79
                      11-May-01             4,479.90
                      18-May-01             4,546.41
                      25-May-01             4,498.11
                       1-Jun-01             4,414.84
                       8-Jun-01             4,450.97
                      15-Jun-01             4,236.90
                      22-Jun-01             4,194.96
                      29-Jun-01             4,243.91
                       6-Jul-01             4,076.47
                      13-Jul-01             4,044.42
                      20-Jul-01             3,947.49
                      27-Jul-01             3,986.48
                       3-Aug-01             4,024.90
                      10-Aug-01             3,828.68
                      17-Aug-01             3,759.69
                      24-Aug-01             3,890.55
                      31-Aug-01             3,743.97
                       7-Sep-01             3,456.52
                      14-Sep-01             3,091.21
                      21-Sep-01             2,877.68
                      28-Sep-01             3,296.66
                       5-Oct-01             3,348.02
                      12-Oct-01             3,498.66
                      19-Oct-01             3,406.94
                      26-Oct-01             3,611.88
                       2-Nov-01             3,503.26
                       9-Nov-01             3,665.78
                      16-Nov-01             3,743.44
                      23-Nov-01             3,772.19
                      30-Nov-01             3,658.27
                       7-Dec-01             3,792.85
                      14-Dec-01             3,568.73
                      21-Dec-01             3,696.44
                      28-Dec-01             3,806.13
                       4-Jan-02             3,820.42
                      11-Jan-02             3,696.66
                      18-Jan-02             3,639.27
                      25-Jan-02             3,701.30
                       1-Feb-02             3,682.69
                       8-Feb-02             3,507.46
                      15-Feb-02             3,555.15
                      22-Feb-02             3,430.18
                       1-Mar-02             3,645.33
                       8-Mar-02             3,787.25
                      15-Mar-02             3,755.75
                      22-Mar-02             3,744.37
                      29-Mar-02             3,784.05
                       5-Apr-02             3,677.72
                      12-Apr-02             3,611.79
                      19-Apr-02             3,709.01
                      26-Apr-02             3,561.08
                       3-May-02             3,496.44
                      10-May-02             3,465.12
                      17-May-02             3,554.77
                      24-May-02             3,477.06
                      31-May-02             3,425.79
                       7-Jun-02             3,210.50
                      14-Jun-02             3,054.50
                      21-Jun-02             3,036.29
                      28-Jun-02             3,133.39
                       5-Jul-02             3,165.47
                      12-Jul-02             2,886.30
                      19-Jul-02             2,695.46
                      26-Jul-02             2,536.93
                       2-Aug-02             2,547.12
                       9-Aug-02             2,750.16
                      16-Aug-02             2,713.96
                      23-Aug-02             2,821.04
                      30-Aug-02             2,709.29
                       6-Sep-02             2,618.18
                      13-Sep-02             2,530.80
                      20-Sep-02             2,308.03
                      27-Sep-02             2,343.22
                       4-Oct-02             2,224.74
                      11-Oct-02             2,351.81
                      18-Oct-02             2,527.38
                      25-Oct-02             2,456.91
                       1-Nov-02             2,487.66
                       8-Nov-02             2,450.42
                      15-Nov-02             2,535.73
                      22-Nov-02             2,648.14
                      29-Nov-02             2,656.85
                       6-Dec-02             2,531.66
                      13-Dec-02             2,429.42
                      20-Dec-02             2,438.97
                      27-Dec-02             2,364.99
                       3-Jan-03             2,502.19
                      10-Jan-03             2,489.01
                      17-Jan-03             2,390.36
                      24-Jan-03             2,234.56
                      31-Jan-03             2,248.17
                       7-Feb-03             2,133.60
                      14-Feb-03             2,199.97
                      21-Feb-03             2,208.25
                      28-Feb-03             2,140.73
                       7-Mar-03             1,992.45
                      14-Mar-03             2,079.71
                      21-Mar-03             2,249.11
                      28-Mar-03             2,132.11
                       4-Apr-03             2,223.17
                      11-Apr-03             2,247.47
                      18-Apr-03             2,324.27
                      25-Apr-03             2,271.92
                       2-May-03             2,321.90
                       9-May-03             2,314.10
                      16-May-03             2,349.13
                      23-May-03             2,246.58
                      30-May-03             2,330.06
                       6-Jun-03             2,421.92
                      13-Jun-03             2,440.32
                      20-Jun-03             2,515.33
                      27-Jun-03             2,453.49
                       4-Jul-03             2,408.18
                      11-Jul-03             2,477.72
                      18-Jul-03             2,458.92
                      25-Jul-03             2,442.13
                       1-Aug-03             2,479.70
                       8-Aug-03             2,460.14
                      15-Aug-03             2,548.86
                      22-Aug-03             2,593.55
                      29-Aug-03             2,556.71
                       5-Sep-03             2,614.81
                      12-Sep-03             2,546.78
                      19-Sep-03             2,582.47
                      26-Sep-03             2,447.92
                       3-Oct-03             2,516.48
                      10-Oct-03             2,518.44
                      17-Oct-03             2,550.82
                      24-Oct-03             2,482.56
                      31-Oct-03             2,575.04
                       7-Nov-03             2,657.60
                      14-Nov-03             2,656.94
                      21-Nov-03             2,578.24
                      28-Nov-03             2,630.47
                       5-Dec-03             2,672.02
                      12-Dec-03             2,685.39
                      19-Dec-03             2,725.26
                      26-Dec-03             2,721.57
                       2-Jan-04             2,797.56
                       9-Jan-04             2,800.16
                      16-Jan-04             2,865.96
                      23-Jan-04             2,892.54
                      30-Jan-04             2,839.13
                       6-Feb-04             2,833.63
                      13-Feb-04             2,860.88
                      20-Feb-04             2,904.36
                      27-Feb-04             2,893.18
                       5-Mar-04             2,945.63
                      12-Mar-04             2,834.03
                      19-Mar-04             2,769.86
                      26-Mar-04             2,763.75
                       2-Apr-04             2,885.08
                       9-Apr-04             2,858.92
                      16-Apr-04             2,866.95
                      23-Apr-04             2,894.18
                      30-Apr-04             2,787.48
                       7-May-04             2,756.85
                      14-May-04             2,694.92
                      21-May-04             2,697.46
                      28-May-04             2,736.83
                       4-Jun-04             2,767.87
                      11-Jun-04             2,797.05
                      18-Jun-04             2,822.06
                      25-Jun-04             2,818.86
                       2-Jul-04             2,783.99
                       9-Jul-04             2,776.25
                      16-Jul-04             2,713.27
                      23-Jul-04             2,673.44
                      30-Jul-04             2,720.05
                       6-Aug-04             2,618.68
                      13-Aug-04             2,580.04
                      20-Aug-04             2,624.96
                      27-Aug-04             2,704.53
                       3-Sep-04             2,739.43
                      10-Sep-04             2,745.86
                      17-Sep-04             2,788.64
                      24-Sep-04             2,740.06
                       1-Oct-04             2,796.08
                       8-Oct-04             2,816.42
                      15-Oct-04             2,773.39
                      22-Oct-04             2,788.89
                      29-Oct-04             2,811.72
                       5-Nov-04             2,874.80
                      12-Nov-04             2,907.45
                      19-Nov-04             2,893.08
                      26-Nov-04             2,898.95
                       3-Dec-04             2,911.59
                      10-Dec-04             2,903.96
                      17-Dec-04             2,891.48
                      24-Dec-04             2,950.92
                      31-Dec-04             2,951.24
                       7-Jan-05             2,979.82
                      14-Jan-05             2,948.22
                      21-Jan-05             2,940.87
                      28-Jan-05             2,955.89
                       4-Feb-05             3,037.13
                      11-Feb-05             3,080.08
                      18-Feb-05             3,072.04
                      25-Feb-05             3,062.72
                       4-Mar-05             3,106.86
                      11-Mar-05             3,060.36
                      18-Mar-05             3,053.54
                      25-Mar-05             3,060.67


                                     PS-33
<PAGE>

                            HISTORICAL BASKET VALUES

      The following  graph sets forth the  historical  performance of the Basket
based on the weekly Basket closing level, from January 1, 2000 through March 25,
2005, assuming that the S&P 500(R) Index, the Nikkei 225 Index and the Dow Jones
EURO STOXX 50(SM)  Index were  balanced as of January 1, 2000 so that each Index
was equally  weighted  (i.e.,  each Basket Index would have a 1/3 weight) in the
Basket.  We obtained the S&P 500(R) Index closing  levels,  the Nikkei 225 Index
closing  levels,  the Dow Jones EURO STOXX 50(SM) Index closing levels and other
information  used by us in order to create the graph found below from  Bloomberg
Financial  Markets.  We make no representation or warranty as to the accuracy or
completeness of the information obtained from Bloomberg Financial Markets.

      The  historical  levels of the Basket should not be taken as an indication
of future  performance,  and no assurance  can be given as to the Ending  Basket
Level.  We cannot give you  assurance  that the  performance  of the Basket will
allow you to receive more than the principal amount of your initial investment.

[The following information was depicted as a line chart in the printed material]

                                           Historical
                             Date            Basket
                          ---------        ----------
                           7-Jan-00          100.00
                          14-Jan-00          103.24
                          21-Jan-00          101.76
                          28-Jan-00          101.35
                           4-Feb-00          105.86
                          11-Feb-00          105.45
                          18-Feb-00          103.81
                          25-Feb-00          104.50
                           3-Mar-00          108.18
                          10-Mar-00          107.29
                          17-Mar-00          107.23
                          24-Mar-00          110.47
                          31-Mar-00          109.56
                           7-Apr-00          109.89
                          14-Apr-00          104.91
                          21-Apr-00          103.32
                          28-Apr-00          104.55
                           5-May-00          105.29
                          12-May-00          102.23
                          19-May-00           99.73
                          26-May-00           97.11
                           2-Jun-00          103.87
                           9-Jun-00          102.54
                          16-Jun-00          101.64
                          23-Jun-00          101.99
                          30-Jun-00          102.43
                           7-Jul-00          103.74
                          14-Jul-00          104.48
                          21-Jul-00          102.59
                          28-Jul-00           98.15
                           4-Aug-00           98.75
                          11-Aug-00          100.71
                          18-Aug-00          101.48
                          25-Aug-00          102.94
                           1-Sep-00          103.83
                           8-Sep-00          102.29
                          15-Sep-00          100.89
                          22-Sep-00           97.95
                          29-Sep-00           97.32
                           6-Oct-00           97.44
                          13-Oct-00           94.16
                          20-Oct-00           95.21
                          27-Oct-00           94.23
                           3-Nov-00           96.76
                          10-Nov-00           94.43
                          17-Nov-00           93.86
                          24-Nov-00           92.68
                           1-Dec-00           92.30
                           8-Dec-00           93.67
                          15-Dec-00           90.84
                          22-Dec-00           88.19
                          29-Dec-00           90.01
                           5-Jan-01           89.38
                          12-Jan-01           88.92
                          19-Jan-01           90.52
                          26-Jan-01           90.56
                           2-Feb-01           89.77
                           9-Feb-01           87.87
                          16-Feb-01           86.65
                          23-Feb-01           83.46
                           2-Mar-01           81.84
                           9-Mar-01           82.74
                          16-Mar-01           78.47
                          23-Mar-01           79.27
                          30-Mar-01           80.66
                           6-Apr-01           80.35
                          13-Apr-01           83.00
                          20-Apr-01           85.40
                          27-Apr-01           86.59
                           4-May-01           87.39
                          11-May-01           86.66
                          18-May-01           87.91
                          25-May-01           87.03
                           1-Jun-01           85.11
                           8-Jun-01           85.78
                          15-Jun-01           81.90
                          22-Jun-01           82.32
                          29-Jun-01           82.51
                           6-Jul-01           79.31
                          13-Jul-01           79.75
                          20-Jul-01           78.13
                          27-Jul-01           78.09
                           3-Aug-01           79.37
                          10-Aug-01           76.48
                          17-Aug-01           74.80
                          24-Aug-01           75.76
                          31-Aug-01           72.69
                           7-Sep-01           69.16
                          14-Sep-01           65.77
                          21-Sep-01           60.48
                          28-Sep-01           65.62
                           5-Oct-01           67.48
                          12-Oct-01           69.81
                          19-Oct-01           68.56
                          26-Oct-01           71.22
                           2-Nov-01           69.29
                           9-Nov-01           70.91
                          16-Nov-01           72.69
                          23-Nov-01           73.25
                          30-Nov-01           72.18
                           7-Dec-01           73.77
                          14-Dec-01           70.82
                          21-Dec-01           71.92
                          28-Dec-01           73.46
                           4-Jan-02           74.43
                          11-Jan-02           72.13
                          18-Jan-02           71.03
                          25-Jan-02           71.33
                           1-Feb-02           70.30
                           8-Feb-02           68.25
                          15-Feb-02           69.44
                          22-Feb-02           68.78
                           1-Mar-02           72.12
                           8-Mar-02           75.86
                          15-Mar-02           75.24
                          22-Mar-02           74.20
                          29-Mar-02           73.87
                           5-Apr-02           73.10
                          12-Apr-02           71.68
                          19-Apr-02           73.71
                          26-Apr-02           71.57
                           3-May-02           71.06
                          10-May-02           70.37
                          17-May-02           72.79
                          24-May-02           71.94
                          31-May-02           70.80
                           7-Jun-02           67.74
                          14-Jun-02           65.21
                          21-Jun-02           63.62
                          28-Jun-02           64.82
                           5-Jul-02           65.41
                          12-Jul-02           61.43
                          19-Jul-02           57.63
                          26-Jul-02           55.49
                           2-Aug-02           56.04
                           9-Aug-02           59.05
                          16-Aug-02           58.87
                          23-Aug-02           60.07
                          30-Aug-02           58.24
                           6-Sep-02           56.17
                          13-Sep-02           55.66
                          20-Sep-02           53.47
                          27-Sep-02           53.40
                           4-Oct-02           51.01
                          11-Oct-02           51.81
                          18-Oct-02           55.22
                          25-Oct-02           54.36
                           1-Nov-02           54.59
                           8-Nov-02           54.19
                          15-Nov-02           54.80
                          22-Nov-02           56.58
                          29-Nov-02           57.59
                           6-Dec-02           55.49
                          13-Dec-02           53.59
                          20-Dec-02           53.61
                          27-Dec-02           53.17
                           3-Jan-03           54.67
                          10-Jan-03           54.82
                          17-Jan-03           53.92
                          24-Jan-03           51.94
                          31-Jan-03           51.19
                           7-Feb-03           49.96
                          14-Feb-03           51.03
                          21-Feb-03           51.05
                          28-Feb-03           50.13
                           7-Mar-03           48.38
                          14-Mar-03           48.85
                          21-Mar-03           51.86
                          28-Mar-03           50.43
                           4-Apr-03           51.06
                          11-Apr-03           50.52
                          18-Apr-03           51.76
                          25-Apr-03           51.18
                           2-May-03           52.65
                           9-May-03           53.12
                          16-May-03           53.55
                          23-May-03           52.69
                          30-May-03           54.43
                           6-Jun-03           56.31
                          13-Jun-03           56.82
                          20-Jun-03           57.77
                          27-Jun-03           56.85
                           4-Jul-03           57.56
                          11-Jul-03           58.50
                          18-Jul-03           58.06
                          25-Jul-03           58.28
                           1-Aug-03           58.06
                           8-Aug-03           57.34
                          15-Aug-03           59.26
                          22-Aug-03           60.40
                          29-Aug-03           60.60
                           5-Sep-03           61.88
                          12-Sep-03           61.45
                          19-Sep-03           62.52
                          26-Sep-03           59.51
                           3-Oct-03           61.48
                          10-Oct-03           61.83
                          17-Oct-03           62.55
                          24-Oct-03           60.53
                          31-Oct-03           62.11
                           7-Nov-03           62.89
                          14-Nov-03           61.97
                          21-Nov-03           60.48
                          28-Nov-03           61.84
                           5-Dec-03           62.71
                          12-Dec-03           62.73
                          19-Dec-03           63.56
                          26-Dec-03           63.95
                           2-Jan-04           65.26
                           9-Jan-04           66.11
                          16-Jan-04           66.80
                          23-Jan-04           67.42
                          30-Jan-04           66.27
                           6-Feb-04           65.91
                          13-Feb-04           66.36
                          20-Feb-04           66.93
                          27-Feb-04           67.45
                           5-Mar-04           69.01
                          12-Mar-04           66.69
                          19-Mar-04           66.45
                          26-Mar-04           67.01
                           2-Apr-04           68.74
                           9-Apr-04           68.65
                          16-Apr-04           68.46
                          23-Apr-04           69.34
                          30-Apr-04           67.14
                           7-May-04           66.13
                          14-May-04           64.54
                          21-May-04           64.91
                          28-May-04           66.26
                           4-Jun-04           66.19
                          11-Jun-04           67.46
                          18-Jun-04           67.34
                          25-Jun-04           68.03
                           2-Jul-04           67.46
                           9-Jul-04           66.57
                          16-Jul-04           65.88
                          23-Jul-04           64.79
                          30-Jul-04           65.73
                           6-Aug-04           63.49
                          13-Aug-04           62.83
                          20-Aug-04           64.17
                          27-Aug-04           65.55
                           3-Sep-04           65.59
                          10-Sep-04           65.99
                          17-Sep-04           66.40
                          24-Sep-04           65.28
                           1-Oct-04           66.34
                           8-Oct-04           66.94
                          15-Oct-04           65.64
                          22-Oct-04           65.23
                          29-Oct-04           66.03
                           5-Nov-04           67.85
                          12-Nov-04           68.42
                          19-Nov-04           68.12
                          26-Nov-04           67.99
                           3-Dec-04           68.72
                          10-Dec-04           68.00
                          17-Dec-04           68.65
                          24-Dec-04           69.97
                          31-Dec-04           70.24
                           7-Jan-05           69.75
                          14-Jan-05           69.49
                          21-Jan-05           68.69
                          28-Jan-05           69.03
                           4-Feb-05           70.41
                          11-Feb-05           71.13
                          18-Feb-05           71.18
                          25-Feb-05           71.34
                           4-Mar-05           72.29
                          11-Mar-05           71.54
                          18-Mar-05           71.17
                          25-Mar-05           70.59


                                     PS-34
<PAGE>

                  CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

      Based on the  advice of Davis  Polk &  Wardwell,  special  tax  counsel to
JPMorgan  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 Section 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.


                                     PS-35
<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 a semi-annual  accrual  period,  the  following  table states the
amount of interest  that will be deemed to have  accrued  with respect to a note
during each calendar  period,  based upon our  determination  of the  comparable
yield and the projected payment schedule:

                                                                  Total Interest
                                                                  Deemed to Have
                                                   Interest        Accrued from
                                                   Deemed to      Original Issue
                                                 Accrue During    Date per Note
                                                Calendar Period   as of End of
Calendar Period                                    (per Note)    Calendar Period
----------------------------------------------- ---------------  ---------------

Original Issue Date through December 31, 2005..    $               $
January 1, 2006 through December 31, 2006......    $               $
January 1, 2007 through December 31, 2007......    $               $
January 1, 2008 through May 1, 2008............    $               $

      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 will be required to accrue as interest
income OID 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 above.

      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  received from 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. 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.
Additionally,  if you  recognize  a loss above  certain  thresholds,  you may be
required to file a disclosure  statement  with the IRS. You are urged to consult
your tax adviser regarding these limitations and reporting obligations.

      Special  rules will apply if the  Additional  Amount  payable at  maturity
becomes  fixed more than six  months  prior to  maturity.  For  purposes  of the
preceding sentence, the Additional Amount will be treated as fixed if (and when)
all remaining  contingencies  with respect to it are remote or incidental within
the meaning of the applicable Treasury regulations.  Generally, in this case you
would be required to make adjustments to account for the difference  between the
amount so treated as fixed and the projected payment at maturity in a reasonable
manner over the remaining  term of the note.  Your tax basis in the note and the
character  of any gain or loss on the sale of the note would  also be  affected.
You are urged to consult your tax adviser  concerning  the  application of these
special rules.


                                     PS-36
<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
income 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  U.S.  income tax on such
income 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 U.S. 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 will 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) or meet certain other
conditions.  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 to 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.


                                     PS-37
<PAGE>

                                  UNDERWRITING

      Under the terms and  subject  to the  conditions  contained  in the Master
Agency  Agreement  entered into  between  JPMorgan  Chase & Co. and J.P.  Morgan
Securities  Inc. as agent,  the Agent,  acting as principal for its own account,
has agreed to  purchase,  and we have agreed to sell,  the  principal  amount of
notes set  forth on the cover of this  pricing  supplement.  The Agent  proposes
initially to offer the notes directly to the public at the public offering price
set forth on the cover page of this pricing  supplement.  The Agent will allow a
concession  of 2% of the  principal  amount  of the notes to other  dealers.  We
expect to deliver the notes against  payment  therefor in New York,  New York on
April 29, 2005.  After the initial offering of the notes, the Agent may vary the
offering price and other selling terms from time to time.

      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  pricing
supplement  and  the  accompanying   prospectus  supplement  and  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.


                                     PS-38
<PAGE>

             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 Code prohibit pension,  profit-sharing
or other employee  benefit plans,  that are subject to Title I of ERISA,  or any
entity whose  underlying  assets  include  "plan assets" by reason of any Plan's
investment  in the  entity  (a  "Plan  Asset  Entity"),  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 notes 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 or statutory
exemption  (as  described  below)  or there  was some  other  basis on which the
transaction was not prohibited.

      Accordingly,  the  notes may not be  purchased  or held by any Plan or any
person investing "plan assets" of any Plan,  unless such purchase and holding 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 notes by the Plan  Asset  Entity is not  prohibited.  Unless the
applicable prospectus supplement explicitly provides otherwise, any purchaser or
holder of the notes or any interest  therein will be deemed to have  represented
by its  purchase of the notes that (a) its  purchase and holding of the notes is
not made on behalf of or with "plan  assets" of any Plan or (b) its purchase and
holding  of the notes is  eligible  and  satisfied  all the  conditions  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
("Similar  Laws").  Accordingly,  each purchaser or holder of the notes shall be
required to  represent  (and deemed to  constitute a  representation)  that such
purchase and holding is not prohibited under applicable Similar Laws or rules.

      Due  to  the  complexity  of  the  applicable  rules,  it is  particularly
important that fiduciaries or other persons considering  purchasing the notes 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 84-14 or any Similar Laws.

      Each  purchaser and holder of the notes has exclusive  responsibility  for
ensuring  that its  purchase  and  holding  of the notes  does not  violate  the
fiduciary  or  prohibited  transaction  rules of ERISA,  the Code or any Similar
Laws. The sale of any notes to a Plan or US governmental plan is in no respect a
representation  by us or any of our affiliates or  representatives  that such an
investment meets all relevant legal  requirements with respect to investments by
such plans  generally or any particular  Plan or US  governmental  plan, or that
such an investment is  appropriate  for such plans  generally or any  particular
Plan or US governmental plan.


                                     PS-39
<PAGE>

PROSPECTUS SUPPLEMENT
(To Prospectus Dated September 23, 2004)

JPMorgan Chase & Co.
270 Park Avenue, New York, New York 10017 (212) 270-6000

Global Medium-Term Notes, Series E
Global Warrants, Series E
Global Units, Series E

We may offer our global medium-term notes, at one or more times. We describe the
terms that will generally apply to those notes in this prospectus supplement and
the attached  prospectus.  We will describe the specific terms of any particular
notes we are offering in an attached pricing supplement.

The following terms may apply to particular notes we may offer:

      MATURITY:  The notes will  mature  more than nine  months from the date of
      issue.

      INTEREST:  The  notes  will  bear  interest  at  either a fixed  rate or a
      floating  rate that  varies  during the  lifetime of the  relevant  notes,
      which,  in either case may be zero.  Floating rates will be based on rates
      specified in the applicable pricing supplement.

      FLOATING RATES:
      o   CD Rate                  o   Treasury Rate              o   Prime Rate
      o   Federal Funds Rate       o   Commercial Paper Rate      o   CMT Rate
      o   EURIBOR                  o   LIBOR

      Any  floating  interest  rate may be adjusted by adding or  subtracting  a
      specified spread or margin or by applying a spread multiplier.

      CURRENCIES:  The applicable  pricing  supplement  will specify whether the
      notes will be denominated in U.S. dollars or some other currency.

      REDEMPTION: The notes may be either callable by us or puttable by you.

      EXCHANGEABLE:  The notes may be optionally or mandatorily exchangeable for
      securities of an entity that is affiliated or not affiliated  with us, for
      a basket  or index of  those  securities,  or for the cash  value of those
      securities.

      PAYMENTS:  Payments  on  the  notes  may be  linked  to  currency  prices,
      commodities,  rates,  debt or equity  securities  or other  debt or equity
      instruments of entities  affiliated or not affiliated  with us, baskets of
      those securities or an index or indices of those securities,  quantitative
      measures  associated  with an  occurrence,  extent  of an  occurrence,  or
      contingency   associated  with  a  financial,   commercial,   or  economic
      consequence,  or economic or financial  indices or measures of economic or
      financial risk or value.

      OTHER TERMS:  As  specified  under  "Description  of the Notes" and in the
      attached pricing supplement.

We may offer from time to time global warrants that are debt warrants,  currency
warrants, interest rate warrants or universal warrants. Each warrant will either
entitle or require you to purchase or sell (1) securities  issued by us or by an
entity  affiliated or not affiliated with us, a basket of those  securities,  an
index or indices  of those  securities  or any  combination  of the  above,  (2)
currencies or (3) commodities.  The specific terms of any warrants that we offer
will be included in the applicable pricing supplement.

We may offer from time to time  global  units that  include any  combination  of
notes or warrants.  The specific terms of any units we offer will be included in
the applicable pricing supplement.

Investing  in the  securities  involves  risks.  See  "Foreign  Currency  Risks"
beginning on page S-6.

Unless otherwise specified in the applicable pricing supplement,  the securities
will not be listed on any securities exchange.

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

These  securities  have not been  approved  by the SEC or any  state  securities
commission,  nor  have  these  organizations  determined  that  this  prospectus
supplement  is accurate or  complete.  Any  representation  to the contrary is a
criminal offense.

J.P.  Morgan  Securities  Inc. has agreed to use  reasonable  efforts to solicit
offers to purchase  these  securities  as our selling  agent to the extent it is
named in the applicable pricing  supplement.  Certain other selling agents to be
named in the  applicable  pricing  supplement  may also be used to solicit  such
offers on a  reasonable  efforts  basis.  The  agents  may also  purchase  these
securities  as  principal  at prices to be agreed upon at the time of sale.  The
agents may resell any securities they purchase as principal at prevailing market
prices, or at other prices, as the agents determine.

J.P.  Morgan  Securities  Inc.  may  use  this  prospectus  supplement  and  the
accompanying prospectus in connection with offers and sales of the securities in
market-making transactions.

                                    JPMorgan

September 23, 2004

<PAGE>

                               TABLE OF CONTENTS

Prospectus Supplement                                                       Page
--------------------                                                        ----
About this Prospectus Supplement ..................................          S-1
Where You Can Find Out More About Us ..............................          S-2
JPMorgan Chase & Co. ..............................................          S-3
Consolidated Ratios of Earnings to Fixed Charges ..................          S-5
Foreign Currency Risks ............................................          S-6
Description of Notes ..............................................          S-8
Description of Warrants ...........................................         S-26
Description of Units ..............................................         S-27
The Depositary ....................................................         S-29
Series E Securities Offered on a Global Basis .....................         S-31
United States Federal Taxation ....................................         S-35
Plan of Distribution ..............................................         S-43
Legal Matters .....................................................         S-44


Prospectus                                                                  Page
----------                                                                  ----
Where You Can Find More Information About Us ......................            1
JPMorgan Chase & Co. ..............................................            2
Consolidated Ratios of Earnings to Fixed Charges ..................            4
Use of Proceeds ...................................................            4
Description of Debt Securities ....................................            5
Description of Warrants ...........................................           11
Description of Units ..............................................           15
Forms of Securities ...............................................           17
Plan of Distribution ..............................................           20
Experts ...........................................................           22
Legal Opinions ....................................................           22
ERISA Matters for Pension Plans and Insurance
   Companies ......................................................           22

      You should  rely only on the  information  contained  or  incorporated  by
reference  in  this  prospectus  supplement,  the  prospectus  and  any  pricing
supplement.  We have not authorized anyone else to provide you with different or
additional  information.  We are offering to sell these  securities  and seeking
offers to buy these securities only in jurisdictions  where offers and sales are
permitted.

      You should not assume that the information in this prospectus  supplement,
the prospectus,  the applicable pricing supplement or any document  incorporated
by reference is accurate as of any date other than their respective dates.


                                       i
<PAGE>


                        ABOUT THIS PROSPECTUS SUPPLEMENT

      We may offer  from  time to time up to  $1,000,000,000,  less the  initial
public offering price of any other debt securities, warrants or units previously
issued and to be issued or the equivalent of this amount in other currencies, of
the  medium-term  notes,   warrants  and  units  described  in  this  prospectus
supplement.  We will sell the notes, the warrants and the units primarily in the
United  States,  but we may also sell them outside the United  States or both in
and outside the United States  simultaneously.  We refer to the notes,  warrants
and units offered under this prospectus  supplement as our "Series E medium-term
notes,  " our  "Series E  warrants"  and our  "Series E units."  We refer to the
offering of the Series E medium-term notes, the Series E warrants and the Series
E units as our "Series E Program."

      As used in this prospectus supplement, the "Company," "we," "us," or "our"
refer to JPMorgan Chase & Co.


                                      S-1
<PAGE>

                      WHERE YOU CAN FIND OUT MORE 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, 2003
            (filed on February 18, 2004 as amended on June 28, 2004);

      (b)   our  Quarterly  Reports on Form 10-Q for the quarter ended March 31,
            2004  (filed on May 10,  2004) and June 30, 2004 (filed on August 9,
            2004); and

      (c)   our Current Reports on Form 8-K filed on January 28, 2004,  February
            3, 2004,  March 1, 2004,  March 4,  2004,  April 21,  2004 (but only
            Exhibit 12.1 thereto),  May 3, 2004, May 11, 2004, May 14, 2004, May
            27, 2004,  June 3, 2004,  June 8, 2004,  June 15, 2004, July 1, 2004
            (as  amended on July 30,  2004 and August 13,  2004),  July 8, 2004,
            July 21, 2004 (two reports  filed),  September 8, 2004 and September
            23, 2004 (two reports filed) (other than, in each case, the portions
            of those documents not deemed to be filed).

      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,  JPMorgan Chase & Co., 270 Park Avenue, New York, New York 10017-2070
(Telephone: (212) 270-4040).


                                      S-2
<PAGE>

                              JPMORGAN CHASE & Co.

      On July 1, 2004, J.P. Morgan Chase & Co.  ("JPMorgan  Chase") and Bank One
Corporation  consummated  the  merger  of Bank  One  Corporation  with  and into
JPMorgan Chase.

      JPMorgan Chase is a financial holding company  incorporated under Delaware
law in 1968.  JPMorgan Chase is one of the largest  banking  institutions in the
United States,  with more than $1 trillion in assets and operations in more than
50 countries.  Its principal  bank  subsidiaries  are JPMorgan Chase Bank, a New
York banking corporation,  Chase Manhattan Bank USA, National Association,  Bank
One Ohio,  N.A., Bank One Illinois,  N.A. and Bank One Delaware,  N.A.  JPMorgan
Chase's  principal  nonbank  subsidiary is its  investment  banking  subsidiary,
JPMorgan Securities. The bank and nonbank subsidiaries of JPMorgan Chase operate
nationally as well as through overseas branches and subsidiaries, representative
offices and affiliated banks.

      JPMorgan  Chase's  activities  are  internally  organized,  for management
reporting purposes, into six major business segments:  Investment Bank; Treasury
& Securities  Services;  Asset & Wealth  Management;  Card Services;  Commercial
Banking; and Retail Financial Services.  The following is a brief description of
those businesses.

Investment Bank

      The Investment  Bank is one of the world's leading  investment  banks with
broad client relationships and product capabilities.  JPMorgan Chase's customers
are  corporations,   financial   institutions,   governments  and  institutional
investors  worldwide.  The Investment Bank provides a complete  platform for its
clients, including advising on corporate strategy and structure, equity and debt
capital raising,  sophisticated  risk management,  research and market-making in
cash securities and derivative instruments around the world. The Investment Bank
also participates in proprietary investing and trading.

Treasury & Securities Services

      Treasury  &   Securities   Services  is  a  global   leader  in  providing
transaction, investment and information services to support the needs of issuers
and  investors  worldwide.  JPMorgan  Chase is one of the world's  largest  cash
management providers and one of the world's largest custodians.

Asset & Wealth Management

      Asset &  Wealth  Management  provides  investment  and  wealth  management
services  to  institutional,  high net  worth  and  retail  investors  and their
advisors.   For  wealthy   individuals  and  families,   JPMorgan  Chase  offers
personalized financial solutions that integrate investment  management,  capital
markets,  trust and banking  products.  JPMorgan Chase provides  retirement plan
services and brokerage for retail clients.

Card Services

      JPMorgan  Chase is the second largest issuer of credit cards in the United
States and the largest merchant  acquirer.  JPMorgan Chase offers a wide variety
of cards to satisfy  the needs of its  cardmembers,  including  cards  issued on
behalf of major airlines, hotels,  universities,  top retailers, other financial
institutions and other well-known brands.

Commercial Banking

      Commercial Banking includes three client segments:  Middle Market Banking,
which  serves  companies  with  revenues  between $10 million and $500  million;
Mid-Corporate Banking, which focuses on clients with more significant Investment
Banking  needs;  and  Commercial  Real Estate.  Commercial  Banking also has two
product segments: Asset Based Lending and Commercial Leasing.


                                      S-3
<PAGE>

Retail Financial Services

      Retail  Financial  Services  provides  consumer  banking,  small  business
banking,  auto and  education  finance,  insurance  and home  finance.  JPMorgan
Chase's  extensive  branch network of 2,400 retail banking  centers in 17 states
makes it the fourth-largest retail bank in the United States.  JPMorgan Chase is
one of the industry's  leading  providers of mortgages and home equity loans and
is the largest U.S. bank originator of auto loans and leases.

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


                                      S-4
<PAGE>

                CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>
                                                 Six Months                Year Ended December 31,
                                               Ended June 30,    ----------------------------------------
                                                    2004         2003     2002    2001     2000     1999
                                               --------------    ----     ----    ----     ----     ----
<S>                                                 <C>          <C>      <C>     <C>      <C>      <C>
Earnings to Fixed Charges:
   Excluding Interest on Deposits ..........        1.46         2.27     1.28    1.18     1.52     1.93
   Including Interest on Deposits ..........        1.32         1.87     1.17    1.11     1.31     1.54
</TABLE>

      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.


                                      S-5
<PAGE>

                             FOREIGN CURRENCY RISKS

      You should  consult your  financial and legal  advisors as to any specific
risks entailed by an investment in notes, warrants or units that are denominated
or  payable  in, or the  payment  of which is  linked  to the value of,  foreign
currency.  These notes,  warrants or units are not  appropriate  investments for
investors who are not sophisticated in foreign currency transactions.

      The  information  set forth in this  prospectus  supplement is directed to
prospective  purchasers  who  are  United  States  residents.  We  disclaim  any
responsibility to advise  prospective  purchasers who are residents of countries
other than the United  States of any matters  arising under foreign law that may
affect the  purchase of or holding of, or the receipt of payments on, the notes,
warrants or units.  These persons  should  consult their own legal and financial
advisors concerning these matters.

Exchange Rates and Exchange Controls May Affect the Securities' Value or Return

      General Exchange Rate and Exchange Control Risks. An investment in a note,
warrant or unit that is  denominated  or payable  in, or the payment of which is
linked to the value of,  currencies other than U.S. dollars entails  significant
risks.  These risks include the  possibility of significant  changes in rates of
exchange  between the U.S.  dollar and the relevant  foreign  currencies and the
possibility of the imposition or modification of exchange controls by either the
U.S. or foreign  governments.  These  risks  generally  depend on  economic  and
political events over which we have no control.

      Exchange  Rates Will Affect Your  Investment.  In recent  years,  rates of
exchange  between  U.S.  dollars and some  foreign  currencies  have been highly
volatile and this  volatility  may continue in the future.  Fluctuations  in any
particular  exchange  rate that have  occurred  in the past are not  necessarily
indicative, however, of fluctuations that may occur during the term of any note,
warrant or unit. Depreciation against the U.S. dollar of the currency in which a
note,  warrant or unit is payable  would  result in a decrease in the  effective
yield of the note below its coupon rate or in the payout of the note, warrant or
unit and could  result in an  overall  loss to you on a U.S.  dollar  basis.  In
addition,  depending on the specific terms of a currency-linked note, changes in
exchange  rates  relating to any of the  relevant  currencies  could result in a
decrease in its effective yield and in your loss of all or a substantial portion
of the value of that note.

      There  May  Be  Specific  Exchange  Rate  Risks  Applicable  to  Warrants.
Fluctuations  in the  rates of  exchange  between  U.S.  dollars  and any  other
currency (i) in which the exercise price of a warrant is payable,  (ii) in which
the  value  of the  property  underlying  a  warrant  is  quoted  or (iii) to be
purchased or sold by exercise of a warrant or in the rates of exchange among any
of these  foreign  currencies  may  change the value of a warrant or a unit that
includes a warrant. You could lose money on your investment as a result of these
fluctuations, even if the spot price of the property underlying the warrant were
such that the warrant appeared to be "in the money."

      We Have No Control Over Exchange Rates.  Foreign exchange rates can either
float or be fixed by sovereign governments.  Exchange rates of most economically
developed  nations are  permitted  to  fluctuate  in value  relative to the U.S.
dollar  and to each  other.  However,  from time to time  governments  may use a
variety of techniques,  such as  intervention  by a country's  central bank, the
imposition  of  regulatory  controls  or taxes or changes in  interest  rates to
influence the exchange rates of their  currencies.  Governments may also issue a
new  currency to replace an  existing  currency  or alter the  exchange  rate or
relative exchange characteristics by a devaluation or revaluation of a currency.
These  governmental  actions could change or interfere with currency  valuations
and currency  fluctuations  that would  otherwise  occur in response to economic
forces, as well as in response to the movement of currencies across borders.  As
a  consequence,  these  government  actions  could  adversely  affect  the  U.S.
dollar-equivalent  yields or  payouts  for (i) notes  denominated  or payable in
currencies other than U.S. dollars,  (ii) currency-linked  notes, (iii) warrants
where the exercise price is denominated in a foreign currency or where the value
of the property underlying the warrants is quoted in a foreign currency and (iv)
warrants to purchase or sell foreign currency.

      We will not make any  adjustment  or  change  in the  terms of the  notes,
warrants or units in the event that exchange  rates should  become fixed,  or in
the event of any  devaluation  or revaluation or imposition of exchange or other
regulatory  controls or taxes, or in the event of other  developments  affecting
the U.S. dollar or any applicable foreign currency. You will bear those risks.


                                      S-6
<PAGE>

      Some Foreign Currencies May Become  Unavailable.  Governments have imposed
from time to time,  and may in the future impose,  exchange  controls that could
also affect the availability of a specified foreign currency.  Even if there are
no actual exchange controls, it is possible that the applicable currency for any
security not denominated in U.S. dollars would not be available when payments on
that security are due.

      Alternative  Payment Method Used if Payment Currency Becomes  Unavailable.
If a payment  currency is unavailable,  we would make required  payments in U.S.
dollars on the basis of the market  exchange  rate.  However,  if the applicable
currency for any security is not available because the euro has been substituted
for that currency, we would make the payments in euro. The mechanisms for making
payments in these alternative  currencies are explained in "Description of Notes
-- Interest and Principal Payments" below.

      We Will Provide Currency Exchange Information in Pricing Supplements.  The
applicable  pricing  supplement  will  include  information   regarding  current
applicable exchange controls, if any, and historic exchange rate information for
any note,  warrant  or unit  denominated  or payable  in a foreign  currency  or
requiring  payments  that are related to the value of a foreign  currency.  That
information  will be furnished  only for  information  purposes.  You should not
assume that any historic information  concerning currency exchange rates will be
representative  of the range of or trends in fluctuations  in currency  exchange
rates that may occur in the future.

Currency Conversions May Affect Payments on Some Securities

      The  applicable  pricing  supplement  may  provide  for (i)  payments on a
non-U.S.  dollar denominated note, warrant or unit to be made in U.S. dollars or
(ii) payments on a U.S. dollar denominated note, warrant or unit to be made in a
currency  other than U.S.  dollars.  In these  cases,  the  exchange  rate agent
identified in the pricing supplement will convert the currencies.  You will bear
the costs of conversion through deductions from those payments.


Exchange  Rates May Affect the Value of a New York Judgment  Involving  Non-U.S.
Dollar Securities

      The  notes,  warrants  and units  will be  governed  by and  construed  in
accordance  with the laws of the State of New York.  Unlike  many  courts in the
United States outside the State of New York, the courts in the State of New York
customarily enter judgments or decrees for money damages in the foreign currency
in which notes, warrants and units are denominated.  These amounts would then be
converted  into U.S.  dollars at the rate of  exchange in effect on the date the
judgment or decree is entered.  You would bear the foreign  currency risk during
litigation.

Additional  risks  specific to particular  securities  issued under our Series E
Program will be detailed in the applicable pricing supplements.


                                      S-7
<PAGE>

                              DESCRIPTION OF NOTES

      Investors  should  carefully  read the general terms and provisions of our
debt  securities in "Description  of Debt  Securities" in the  prospectus.  This
section  supplements that description.  The pricing supplement will add specific
terms  for  each  issuance  of  notes  and  may  modify  or  replace  any of the
information  in this  section and in  "Description  of Debt  Securities"  in the
prospectus. If a note is offered as part of a unit, investors should also review
the  information  in  "Description  of  Units"  in the  prospectus  and in  this
prospectus supplement.

General Terms of Notes

      We may issue notes under an Indenture  dated May 25, 2001,  between us and
Deutsche  Bank Trust  Company  Americas,  formerly  Bankers  Trust  Company,  as
trustee. We refer to the Indenture, as may be supplemented from time to time, as
the "Indenture." The Series E medium-term  notes issued under the Indenture will
constitute a single series under the  Indenture,  together with any  medium-term
notes  we have  issued  in the past or that we issue  in the  future  under  the
Indenture  that we  designate  as being part of that  series.  We may create and
issue  additional  notes with the same terms as previous  issuances  of Series E
medium-term  notes,  so that the additional  notes will be considered as part of
the same issuance as the earlier notes.

      Outstanding  Indebtedness of the Company. The Indenture does not limit the
amount of additional  indebtedness  that we may incur.  At June 30, 2004, we had
approximately   $197,846,000  aggregate  principal  amount  of  debt  securities
outstanding under the Indenture.

      Ranking.  Notes issued under the Indenture will  constitute  unsecured and
unsubordinated  obligations  of the  Company  and rank pari  passu  without  any
preference  among  them and with all other  present  and  future  unsecured  and
unsubordinated obligations of the Company.

      Terms Specified in Pricing Supplements.  A pricing supplement will specify
the  following  terms of any issuance of our Series E  medium-term  notes to the
extent applicable:

      o  the specific designation of the notes;

      o  the issue price (price to public);

      o  the aggregate principal amount;

      o  the denominations or minimum denominations;

      o  the original issue date;

      o  the stated  maturity date and any terms related to any extension of the
         maturity date;

      o  whether  the notes are fixed rate notes,  floating  rate notes or notes
         with original issue discount;

      o  for fixed  rate  notes,  the rate per year at which the notes will bear
         interest,  if any, or the method of calculating that rate and the dates
         on which interest will be payable;

      o  for floating rate notes, the base rate, the index maturity, the spread,
         the spread  multiplier,  the initial  interest rate, the interest reset
         periods,  the interest  payment dates,  the maximum  interest rate, the
         minimum  interest rate and any other terms  relating to the  particular
         method of calculating the interest rate for the note;

      o  whether the notes may be redeemed,  in whole or in part,  at our option
         or repaid at your option,  prior to the stated  maturity  date, and the
         terms of any redemption or repayment;

      o  whether the notes are  currency-linked  notes  and/or  notes  linked to
         commodities,  rates,  debt or equity securities or other debt or equity
         instruments of entities  affiliated or not affiliated  with us, baskets
         of  those  securities  or an  index or  indices  of  those  securities,
         quantitative  measures  associated  with an  occurrence,  extent  of an
         occurrence, or contingency associated with a financial,  commercial, or
         economic  consequence,  or economic or financial indices or measures of
         economic or financial risk or value;

      o  the terms on which  holders of the notes may convert or  exchange  them
         into or for stock or other  securities  of entities  affiliated  or not
         affiliated with us, or for the cash value of any of these securities or
         for any


                                      S-8
<PAGE>

         other  property,  any specific  terms relating to the adjustment of the
         conversion or exchange  feature and the period during which the holders
         may effect the conversion or exchange;

      o  if any  note  is not  denominated  and  payable  in U.S.  dollars,  the
         currency or currencies  in which the  principal,  premium,  if any, and
         interest,  if any,  will be paid,  which we refer to as the  "specified
         currency,"  along with any other terms relating to the non-U.S.  dollar
         denomination,  including  exchange rates as against the U.S.  dollar at
         selected  times  during the last five years and any  exchange  controls
         affecting that specified currency;

      o  whether and under what  circumstances we will pay additional amounts on
         the notes for any tax,  assessment or  governmental  charge withheld or
         deducted  and, if so,  whether we will have the option to redeem  those
         debt securities rather than pay the additional amounts;

      o  whether the notes will be listed on any stock exchange;

      o  whether the notes will be issued in book-entry or certificated form;

      o  if the notes are in book-entry form,  whether the notes will be offered
         on a global  basis to  investors  through  Euroclear  and  Clearstream,
         Luxembourg as well as through the Depositary  (each as defined  below);
         and

      o  any other terms on which we will issue the notes.

      Some Definitions. We have defined some of the terms that we use frequently
in this prospectus supplement below:

      A "business day" means any day, other than a Saturday or Sunday,  (i) that
is  neither  a  legal  holiday  nor a day  on  which  banking  institutions  are
authorized or required by law or  regulation to close (a) for all notes,  in The
City of New York, (b) for notes  denominated in a specified  currency other than
U.S. dollars,  euro or Australian  dollars, in the principal financial center of
the country of the specified currency or (c) for notes denominated in Australian
dollars, in Sydney; and (ii) for notes denominated in euro, a day that is also a
TARGET Settlement Day.

      "Clearstream, Luxembourg" means Clearstream Banking, societe anonyme.

      "Depositary" means The Depository Trust Company, New York, New York.

      "Euro  LIBOR  notes"  means  LIBOR  notes for which the index  currency is
euros.

      "Euroclear  operator" means  Euroclear Bank S.A./N.V.,  as operator of the
Euroclear System.

      An "interest  payment date" for any note means a date on which,  under the
terms of that note, regularly scheduled interest is payable.

      "London  banking  day" means any day on which  dealings in deposits in the
relevant index currency are transacted in the London interbank market.

      The "record  date" for any  interest  payment date is the date 15 calendar
days prior to that interest payment date, whether or not that date is a business
day, unless another date is specified in the applicable pricing supplement.

      "TARGET  Settlement  Day"  means  any  day  on  which  the  Trans-European
Automated Real-time Gross Settlement Express Transfer System ("TARGET") is open.

      References in this prospectus  supplement to "U.S.  dollar," or "U.S.$" or
"$" are to the currency of the United States of America.

Forms of Notes

      We will offer the notes on a continuing basis and will issue notes only in
fully  registered form either as book-entry  notes or as certificated  notes. We
may issue the notes either alone or as part of a unit.  References  to "holders"
mean those who own notes  registered in their own names, on the books that we or
the  trustee  maintain  for  this  purpose,  and not  those  who own  beneficial
interests in notes  registered  in street name or in notes issued in  book-entry
form through one or more depositaries.


                                      S-9
<PAGE>

      Book-Entry  Notes. For notes in book-entry form, we will issue one or more
global certificates  representing the entire issue of notes. Except as set forth
in the prospectus under "Forms of Securities -- Global  Securities," you may not
exchange  book-entry  notes or interests in  book-entry  notes for  certificated
notes.

      Each  global  note  certificate  representing  book-entry  notes  will  be
deposited  with, or on behalf of, the  Depositary  and registered in the name of
the  Depositary  or  nominee  of the  Depositary.  These  certificates  name the
Depositary or its nominee as the owner of the notes. The Depositary  maintains a
computerized  system that will reflect the interests held by its participants in
the global  notes.  An investor's  beneficial  interest will be reflected in the
records of the Depositary's direct or indirect  participants  through an account
maintained by the investor with its broker/dealer,  bank, trust company or other
representative.  A further description of the Depositary's procedures for global
notes representing  book-entry notes is set forth in the prospectus under "Forms
of Securities -- Global  Securities."  The  Depositary  has confirmed to us, the
agents and the trustee that it intends to follow these procedures.

      Certificated   Notes.  If  we  issue  notes  in  certificated   form,  the
certificate will name the investor or the investor's nominee as the owner of the
note.  The person named in the note register will be considered the owner of the
note for all purposes  under the Indenture.  For example,  if we need to ask the
holders of the notes to vote on a proposed  amendment  to the notes,  the person
named in the note register will be asked to cast any vote  regarding  that note.
If you have chosen to have some other entity hold the certificates for you, that
entity  will be  considered  the owner of your note in our  records  and will be
entitled to cast the vote regarding your note. You may not exchange certificated
notes for book-entry notes or interests in book-entry notes.

      Denominations. We will issue the notes:

      o  for U.S.  dollar-denominated  notes, in  denominations of $1,000 or any
         amount greater than $1,000 that is an integral multiple of $1,000; or

      o  for notes denominated in a specified  currency other than U.S. dollars,
         in  denominations  of the equivalent of $1,000,  rounded to an integral
         multiple  of  1,000  units of the  specified  currency,  or any  larger
         integral  multiple  of  1,000  units  of  the  specified  currency,  as
         determined by reference to the market  exchange  rate, as defined under
         "--  Interest  and  Principal  Payments  --  Unavailability  of Foreign
         Currency" below, on the business day immediately  preceding the date of
         issuance.

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

Interest and Principal Payments

      Payments,  Exchanges and Transfers.  Holders may present notes for payment
of principal,  premium,  if any, and interest,  if any, register the transfer of
the notes and  exchange  the notes at JPMorgan  Chase Bank,  acting  through its
corporate  trust office at 4 New York Plaza,  New York,  New York 10004,  as our
current agent for the payment,  transfer and exchange of the notes.  We refer to
JPMorgan  Chase Bank,  acting in this  capacity,  as the paying agent.  However,
holders of global  notes may  transfer  and  exchange  global  notes only in the
manner  and to the  extent  set  forth  under  "Forms  of  Securities  -- Global
Securities" in the prospectus.

      We will not be required to:

      o  register  the  transfer  or  exchange  of any  note if the  holder  has
         exercised the holder's  right,  if any, to require us to repurchase the
         note, in whole or in part,  except the portion of the note not required
         to be repurchased;

      o  register  the transfer or exchange of notes to be redeemed for a period
         of fifteen  calendar days preceding the mailing of the relevant  notice
         of redemption; or

      o  register the transfer or exchange of any  registered  note selected for
         redemption in whole or in part, except the unredeemed or unpaid portion
         of that registered note being redeemed in part.

      No  service  charge  will be made  for any  registration  or  transfer  or
exchange of notes,  but we may require  payment of a sum sufficient to cover any
tax or other governmental  charge payable in connection with the registration of
transfer or exchange of notes.


                                      S-10
<PAGE>

      Although we anticipate making payments of principal,  premium, if any, and
interest,  if any, on most notes in U.S.  dollars,  some notes may be payable in
foreign currencies as specified in the applicable pricing supplement. Currently,
few facilities  exist in the United States to convert U.S.  dollars into foreign
currencies  and vice versa.  In addition,  most U.S. banks do not offer non-U.S.
dollar denominated checking or savings account facilities.  Accordingly,  unless
alternative  arrangements are made, we will pay principal,  premium, if any, and
interest,  if any, on notes that are payable in a foreign currency to an account
at a bank  outside the United  States,  which,  in the case of a note payable in
euro,  will be made by credit or transfer  to a euro  account  specified  by the
payee in a country for which the euro is the lawful currency.

      Recipients  of Payments.  The paying agent will pay interest to the person
in whose name the note is registered at the close of business on the  applicable
record date. However, upon maturity,  redemption or repayment,  the paying agent
will pay any  interest  due to the person to whom it pays the  principal  of the
note.  The  paying  agent  will  make the  payment  of  interest  on the date of
maturity,  redemption  or  repayment,  whether  or not that date is an  interest
payment date. The paying agent will make the initial  interest payment on a note
on the first  interest  payment date falling after the date of issuance,  unless
the date of issuance is less than 15  calendar  days before an interest  payment
date.  In that case,  the paying agent will pay interest on the next  succeeding
interest  payment date to the holder of record on the record date  corresponding
to the succeeding interest payment date.

      Book-Entry  Notes.  The paying  agent  will make  payments  of  principal,
premium,  if any, and  interest,  if any, to the account of the  Depositary,  as
holder of book-entry notes, by wire transfer of immediately  available funds. We
expect that the Depositary, upon receipt of any payment, will immediately credit
its  participants'   accounts  in  amounts  proportionate  to  their  respective
beneficial  interests  in the  book-entry  notes as shown on the  records of the
Depositary.  We also expect that payments by the  Depositary's  participants  to
owners of  beneficial  interests  in the  book-entry  notes will be  governed by
standing  customer   instructions  and  customary  practices  and  will  be  the
responsibility of those participants.

      Certificated  Notes. Except as indicated below for payments of interest at
maturity,  redemption  or  repayment,  the paying  agent  will make U.S.  dollar
payments of interest either:

      o  by check  mailed to the  address of the person  entitled  to payment as
         shown on the note register; or

      o  for a holder of at least  $10,000,000 in aggregate  principal amount of
         certificated  notes  having the same  interest  payment  date,  by wire
         transfer  of  immediately  available  funds,  if the  holder  has given
         written  notice to the  paying  agent not later than 15  calendar  days
         prior to the applicable interest payment date.

      U.S. dollar payments of principal,  premium, if any, and interest, if any,
upon  maturity,  redemption  or repayment on a note will be made in  immediately
available funds against presentation and surrender of the note.

      Payment Procedures for Book-Entry Notes Denominated in a Foreign Currency.
Book-entry  notes payable in a specified  currency other than U.S.  dollars will
provide that a beneficial owner of interests in those notes may elect to receive
all or a portion of the payments of principal,  premium, if any, or interest, if
any, in U.S.  dollars.  In those cases, the Depositary will elect to receive all
payments with respect to the  beneficial  owner's  interest in the notes in U.S.
dollars, unless the beneficial owner takes the following steps:

      o  The beneficial  owner must give complete  instructions to the direct or
         indirect participant through which it holds the book-entry notes of its
         election to receive those payments in the specified currency other than
         U.S. dollars by wire transfer to an account specified by the beneficial
         owner with a bank located  outside the United States.  In the case of a
         note  payable in euro,  the account must be a euro account in a country
         for which the euro is the lawful currency.

      o  The  participant  must notify the Depositary of the beneficial  owner's
         election  on or prior to the third  business  day after the  applicable
         record date,  for payments of interest,  and on or prior to the twelfth
         business day prior to the maturity date or any  redemption or repayment
         date, for payment of principal or premium.

      o  The Depositary  will notify the paying agent of the beneficial  owner's
         election  on or prior to the fifth  business  day after the  applicable
         record date,  for  payments of  interest,  and on or prior to the tenth
         business day prior to the maturity date or any  redemption or repayment
         date, for payment of principal or premium.


                                      S-11
<PAGE>

      Beneficial owners should consult their  participants in order to ascertain
the deadline for giving  instructions  to  participants  in order to ensure that
timely notice will be delivered to the Depositary.

      Payment  Procedures  for  Certificated  Notes  Denominated  in  a  Foreign
Currency. For certificated notes payable in a specified currency other than U.S.
dollars,  the notes may  provide  that the holder may elect to receive  all or a
portion of the  payments  on those notes in U.S.  dollars.  To do so, the holder
must send a written request to the paying agent:

      o  for payments of interest,  on or prior to the fifth  business day after
         the applicable record date; or

      o  for  payments of  principal,  at least ten  business  days prior to the
         maturity date or any redemption or repayment date.

      To revoke  this  election  for all or a  portion  of the  payments  on the
certificated notes, the holder must send written notice to the paying agent:

      o  at least five business days prior to the  applicable  record date,  for
         payment of interest; or

      o  at least ten calendar days prior to the maturity date or any redemption
         or repayment date, for payments of principal.

      If the holder does not elect to be paid in U.S. dollars,  the paying agent
will  pay  the  principal,  premium,  if  any,  or  interest,  if  any,  on  the
certificated notes:

      o  by wire  transfer  of  immediately  available  funds  in the  specified
         currency to the holder's  account at a bank located  outside the United
         States,  and in the case of a note  payable in euro,  in a country  for
         which the euro is the lawful currency, if the paying agent has received
         the  holder's  written  wire  transfer  instructions  not less  than 15
         calendar days prior to the applicable payment date; or

      o  by check payable in the specified currency mailed to the address of the
         person  entitled to payment that is specified in the note register,  if
         the holder has not provided wire instructions.

However, the paying agent will pay only the principal of the certificated notes,
any premium and  interest,  if any, due at  maturity,  or on any  redemption  or
repayment date, upon surrender of the certificated notes at the office or agency
of the paying agent.

      Determination  of Exchange  Rate for  Payments  in U.S.  Dollars for Notes
Denominated  in a Foreign  Currency.  The exchange rate agent  identified in the
relevant  pricing  supplement  will  convert the  specified  currency  into U.S.
dollars  for  holders  who elect to receive  payments  in U.S.  dollars  and for
beneficial  owners of book-entry notes that do not follow the procedures we have
described  immediately  above.  The conversion  will be based on the highest bid
quotation  in The  City of New  York  received  by the  exchange  rate  agent at
approximately  11:00  a.m.,  New York City  time,  on the  second  business  day
preceding the applicable  payment date from three  recognized  foreign  exchange
dealers for the purchase by the quoting dealer:

      o  of the  specified  currency  for U.S.  dollars  for  settlement  on the
         payment date;

      o  in the  aggregate  amount of the  specified  currency  payable to those
         holders or beneficial owners of notes; and

      o  at which the applicable dealer commits to execute a contract.

One of the dealers  providing  quotations  may be the exchange rate agent unless
the  exchange  rate  agent is our  affiliate.  If those bid  quotations  are not
available,  payments  will be made in the  specified  currency.  The  holders or
beneficial  owners of notes will pay all currency  exchange  costs by deductions
from the amounts payable on the notes.

      Unavailability of Foreign Currency.  The relevant  specified  currency may
not be available to us for making payments of principal of, premium,  if any, or
interest,  if any,  on any  note.  This  could  occur due to the  imposition  of
exchange controls or other circumstances  beyond our control or if the specified
currency  is no  longer  used by the  government  of the  country  issuing  that
currency or by public  institutions  within the international  banking community
for the settlement of transactions. If the specified currency is unavailable, we
may satisfy our


                                      S-12
<PAGE>

obligations  to holders  of the notes by making  those  payments  on the date of
payment in U.S.  dollars on the basis of the noon dollar buying rate in The City
of New York for cable transfers of the currency or currencies in which a payment
on any note was to be made,  published by the Federal  Reserve Bank of New York,
which we refer to as the "market exchange rate." If that rate of exchange is not
then available or is not published for a particular payment currency, the market
exchange rate will be based on the highest bid quotation in The City of New York
received by the exchange rate agent at  approximately  11:00 a.m., New York City
time,  on the second  business day preceding  the  applicable  payment date from
three  recognized  foreign  exchange  dealers  for the  purchase  by the quoting
dealer:

      o  of the  specified  currency  for U.S.  dollars  for  settlement  on the
         payment date;

      o  in the  aggregate  amount of the  specified  currency  payable to those
         holders or beneficial owners of notes; and

      o  at which the applicable dealer commits to execute a contract.

One of the dealers  providing  quotations  may be the exchange rate agent unless
the  exchange  rate  agent is our  affiliate.  If those bid  quotations  are not
available,  the exchange rate agent will  determine the market  exchange rate at
its sole discretion.

      These  provisions  do not apply if a  specified  currency  is  unavailable
because it has been replaced by the euro. If the euro has been substituted for a
specified  currency,  we may at our option,  or will,  if required by applicable
law, without the consent of the holders of the affected notes, pay the principal
of,  premium,  if any,  or  interest,  if any,  on any note  denominated  in the
specified currency in euro instead of the specified currency, in conformity with
legally  applicable  measures  taken  pursuant  to, or by virtue  of, the Treaty
establishing the European Community, as amended by the treaty on European Union.
Any  payment  made in U.S.  dollars  or in euro as  described  above  where  the
required payment is in an unavailable  specified currency will not constitute an
event of default.

      Discount  Notes.  Some notes may be  considered to be issued with original
issue  discount,  which must be  included  in income for United  States  federal
income tax purposes at a constant yield.  See "United States Federal Taxation --
Notes -- Discount  Notes" below. If the principal of any note that is considered
to be issued  with  original  issue  discount  is declared to be due and payable
immediately  as described  under  "Description  of Debt  Securities -- Events of
Default" in the prospectus, the amount of principal due and payable on that note
will be limited to:

      o  the aggregate  principal  amount of the note multiplied by the sum of

      o  its issue price,  expressed as a percentage of the aggregate  principal
         amount, plus

      o  the original  issue  discount  amortized  from the date of issue to the
         date  of  declaration,  expressed  as a  percentage  of  the  aggregate
         principal amount.

The  amortization  will be calculated using the "interest  method,"  computed in
accordance with generally accepted  accounting  principles in effect on the date
of  declaration.   See  the  applicable   pricing  supplement  for  any  special
considerations applicable to these notes.

Fixed Rate Notes

      Each fixed rate note will bear  interest  from the date of issuance at the
annual rate stated on its face until the principal is paid or made available for
payment.

      How Interest Is Calculated.  Interest on fixed rate notes will be computed
on the basis of a 360-day year of twelve 30-day months.

      How  Interest  Accrues.  Interest on fixed rate notes will accrue from and
including the most recent interest  payment date to which interest has been paid
or duly  provided  for, or, if no interest has been paid or duly  provided  for,
from and  including  the issue  date or any other  date  specified  in a pricing
supplement  on which  interest  begins to accrue.  Interest  will  accrue to but
excluding the next interest payment date, or, if earlier,  the date on which the
principal has been paid or duly made available for payment,  except as described
below under "-- If a Payment Date Is Not a Business Day."


                                      S-13
<PAGE>

      When  Interest  Is Paid.  Payments of interest on fixed rate notes will be
made  on  the  interest  payment  dates  specified  in  the  applicable  pricing
supplement.  However,  if the first  interest  payment date is less than 15 days
after the date of  issuance,  interest  will not be paid on the  first  interest
payment date, but will be paid on the second interest payment date.

      Amount of Interest  Payable.  Interest  payments for fixed rate notes will
include  accrued  interest  from  and  including  the  date of issue or from and
including the last date in respect of which  interest has been paid, as the case
may be, to but excluding the relevant  interest payment date or date of maturity
or earlier redemption or repayment, as the case may be.

      If a Payment Date Is Not a Business Day. If any scheduled interest payment
date is not a business  day, we will pay interest on the next  business day, but
interest on that  payment  will not accrue  during the period from and after the
scheduled  interest  payment  date.  If the  scheduled  maturity date or date of
redemption or repayment is not a business day, we may pay interest,  if any, and
principal and premium, if any, on the next succeeding business day, but interest
on that payment will not accrue  during the period from and after the  scheduled
maturity date or date of redemption or repayment.

Floating Rate Notes

      Each  floating  rate  note  will  mature  on  the  date  specified  in the
applicable pricing supplement.

      Each floating  rate note will bear interest at a floating rate  determined
by reference to an interest rate or interest rate formula,  which we refer to as
the "base rate." The base rate may be one or more of the following:

      o  the CD rate,

      o  the commercial paper rate,

      o  EURIBOR,

      o  the federal funds rate,

      o  LIBOR,

      o  the prime rate,

      o  the Treasury rate,

      o  the CMT rate, or

      o  any other rate or interest  rate formula  specified  in the  applicable
         pricing supplement and in the floating rate note.

      Formula for Interest  Rates.  The interest rate on each floating rate note
will be calculated by reference to:

      o  the specified base rate based on the index maturity,

      o  plus or minus the spread, if any, and/or

      o  multiplied by the spread multiplier, if any.

      For any floating rate note,  "index maturity" means the period of maturity
of the instrument or obligation  from which the base rate is calculated and will
be specified in the applicable pricing supplement. The "spread" is the number of
basis  points  (one  one-hundredth  of a  percentage  point)  specified  in  the
applicable  pricing  supplement to be added to or subtracted  from the base rate
for a floating rate note. The "spread multiplier" is the percentage specified in
the applicable  pricing supplement to be applied to the base rate for a floating
rate note.  The  interest  rate on any inverse  floating  rate note will also be
calculated by reference to a fixed rate.

      Limitations on Interest Rate. A floating rate note may also have either or
both of the following limitations on the interest rate:

      o  a maximum  limitation,  or ceiling,  on the rate of interest  which may
         accrue  during any interest  period,  which we refer to as the "maximum
         interest rate"; and/or


                                      S-14
<PAGE>

      o  a minimum limitation, or floor, on the rate of interest that may accrue
         during any interest period,  which we refer to as the "minimum interest
         rate."

Any applicable  maximum interest rate or minimum interest rate will be set forth
in the applicable pricing supplement.

      In addition,  the interest  rate on a floating rate note may not be higher
than the maximum rate permitted by New York law, as that rate may be modified by
United  States law of  general  application.  Under  current  New York law,  the
maximum rate of interest,  subject to some exceptions, for any loan in an amount
less than $250,000 is 16% and for any loan in the amount of $250,000 or more but
less than $2,500,000 is 25% per annum on a simple  interest basis.  These limits
do not apply to loans of $2,500,000 or more.

      How Floating  Interest  Rates Are Reset.  The interest rate in effect from
the date of issue to the first interest reset date for a floating rate note will
be the initial interest rate specified in the applicable pricing supplement.  We
refer to this rate as the "initial  interest  rate." The  interest  rate on each
floating rate note may be reset daily, weekly, monthly, quarterly,  semiannually
or annually.  This period is the  "interest  reset  period" and the first day of
each  interest  reset  period  is  the  "interest  reset  date."  The  "interest
determination date" for any interest reset date is the day the calculation agent
identified in the applicable  pricing  supplement will refer to when determining
the new interest rate at which a floating rate will reset,  and is applicable as
follows:

      o  for  federal  funds  rate  notes and prime  rate  notes,  the  interest
         determination  date will be on the  business  day prior to the interest
         rate reset date;

      o  for CD rate notes,  commercial  paper rate notes,  prime rate notes and
         CMT rate  notes,  the  interest  determination  date will be the second
         business day prior to the interest reset date;

      o  for EURIBOR notes or Euro LIBOR notes, the interest  determination date
         will be the second  TARGET  Settlement  Day, as defined above under "--
         General  Terms  of Notes -- Some  Definitions,"  prior to the  interest
         reset date;

      o  for  LIBOR  notes   (other  than  Euro  LIBOR   notes),   the  interest
         determination  date will be the second London  banking day prior to the
         interest  reset  date,  except  that the  interest  determination  date
         pertaining  to an  interest  reset  date for a LIBOR note for which the
         index currency is pounds sterling will be the interest reset date; and

      o  for Treasury rate notes,  the interest  determination  date will be the
         day of the  week in  which  the  interest  reset  date  falls  on which
         Treasury bills would normally be auctioned.

Treasury bills are normally sold at auction on Monday of each week,  unless that
day is a legal  holiday,  in which  case the  auction  is  normally  held on the
following  Tuesday,  but the auction may be held on the preceding Friday. If, as
the result of a legal holiday, the auction is held on the preceding Friday, that
Friday will be the interest  determination date pertaining to the interest reset
date occurring in the next succeeding week. If an auction falls on a day that is
an interest  reset date,  that  interest  reset date will be the next  following
business day.

      The  interest  reset dates will be  specified  in the  applicable  pricing
supplement.  If an interest reset date for any floating rate note falls on a day
that is not a business day, it will be postponed to the following  business day,
except that, in the case of a EURIBOR note or a LIBOR note, if that business day
is in the next calendar  month,  the interest reset date will be the immediately
preceding business day.

      The interest rate in effect for the ten calendar days immediately prior to
maturity,  redemption  or  repayment  will be the  one in  effect  on the  tenth
calendar day preceding the maturity, redemption or repayment date.

      In the detailed  descriptions of the various base rates which follow,  the
"calculation  date"  pertaining  to an  interest  determination  date  means the
earlier of (i) the tenth  calendar day after that interest  determination  date,
or, if that day is not a business  day, the next  succeeding  business  day, and
(ii) the business day immediately preceding the applicable interest payment date
or maturity  date or, for any  principal  amount to be  redeemed or repaid,  any
redemption or repayment date.

      How Interest Is  Calculated.  Interest on floating  rate notes will accrue
from and including the most recent  interest  payment date to which interest has
been  paid or duly


                                      S-15
<PAGE>

provided  for, or, if no interest has been paid or duly  provided  for, from and
including the issue date or any other date specified in a pricing  supplement on
which interest begins to accrue.  Interest will accrue to but excluding the next
interest  payment date or, if earlier,  the date on which the principal has been
paid or duly made available for payment,  except as described below under "-- If
a Payment Date Is Not a Business Day."

      The applicable pricing supplement will specify a calculation agent for any
issue of  floating  rate notes.  Upon the request of the holder of any  floating
rate note, the  calculation  agent will provide the interest rate then in effect
and, if  determined,  the interest  rate that will become  effective on the next
interest reset date for that floating rate note.

      For  a  floating  rate  note,  accrued  interest  will  be  calculated  by
multiplying  the  principal  amount  of the  floating  rate  note by an  accrued
interest  factor.  This accrued  interest  factor will be computed by adding the
interest  factors  calculated  for each day in the period for which  interest is
being  paid.  The  interest  factor for each day is  computed  by  dividing  the
interest rate applicable to that day:

      o  by 360,  in the case of CD rate  notes,  commercial  paper rate  notes,
         EURIBOR notes,  federal funds rate notes, LIBOR notes (except for LIBOR
         notes denominated in pounds sterling) and prime rate notes;

      o  by 365, in the case of LIBOR notes denominated in pounds sterling; or

      o  by the actual  number of days in the year, in the case of Treasury rate
         notes and CMT rate notes.

For these  calculations,  the interest rate in effect on any interest reset date
will be the applicable  rate as reset on that date. The interest rate applicable
to any other day is the interest rate from the  immediately  preceding  interest
reset date or, if none, the initial interest rate.

      All  percentages  used in or resulting from any calculation of the rate of
interest on a floating rate note will be rounded,  if necessary,  to the nearest
one  hundred-thousandth  of a  percentage  point (with  0.000005%  rounded up to
0.00001%),  and  all  U.S.  dollar  amounts  used  in or  resulting  from  these
calculations  on floating  rate notes will be rounded to the nearest  cent (with
one-half  cent  rounded  upward).  All Japanese Yen amounts used in or resulting
from  these  calculations  will be  rounded  downward  to the next  lower  whole
Japanese Yen amount.  All amounts  denominated  in any other currency used in or
resulting  from these  calculations  will be rounded to the  nearest two decimal
places in that currency with 0.005 being rounded upward to 0.01.

      When  Interest Is Paid. We will pay interest on floating rate notes on the
interest payment dates specified in the applicable pricing supplement.  However,
if the  first  interest  payment  date is less  than 15 days  after  the date of
issuance, interest will not be paid on the first interest payment date, but will
be paid on the second interest payment date.

      If a Payment Date Is Not a Business Day. If any scheduled interest payment
date, other than the maturity date or any earlier  redemption or repayment date,
for any floating rate note falls on a day that is not a business day, it will be
postponed to the following  business day,  except that, in the case of a EURIBOR
note or a LIBOR  note,  if that  business  day would  fall in the next  calendar
month, the interest payment date will be the immediately preceding business day.
If the scheduled  maturity date or any earlier redemption or repayment date of a
floating  rate note falls on a day that is not a business  day,  the  payment of
principal,  premium,  if any,  and  interest,  if any,  will be made on the next
succeeding business day, but interest on that payment will not accrue during the
period from and after the maturity, redemption or repayment date.

Base Rate Notes

      CD Rate Notes

      CD rate notes will bear interest at the interest rates specified in the CD
rate notes and in the applicable pricing  supplement.  Those interest rates will
be based on the CD rate and any  spread  and/or  spread  multiplier  and will be
subject to the minimum interest rate and the maximum interest rate, if any.

      The "CD rate" means, for any interest determination date, the rate on that
date for  negotiable  U.S.  dollar  certificates  of  deposit  having  the index
maturity  specified in the  applicable  pricing  supplement  as published by the
Board of  Governors  of the  Federal  Reserve  System  in  "Statistical  Release
H.15(519),  Selected Interest Rates," or


                                      S-16
<PAGE>

any  successor  publication  of the Board of  Governors  of the Federal  Reserve
System ("H.15(519)") under the heading "CDs (Secondary Market)."

      The  following  procedures  will  be  followed  if the CD rate  cannot  be
determined as described above:

      o  If the above rate is not published in H.15(519) by 3:00 p.m.,  New York
         City time,  on the  calculation  date,  the CD rate will be the rate on
         that  interest  determination  date set  forth in the  daily  update of
         H.15(519),  available  through  the world wide  website of the Board of
         Governors  of the Federal  Reserve  System,  or any  successor  site or
         publication,  which is commonly referred to as the "H.15 Daily Update,"
         for the interest  determination date for certificates of deposit having
         the index  maturity  specified in the  applicable  pricing  supplement,
         under the caption "CDs (Secondary Market)."

      o  If the above rate is not yet published in either  H.15(519) or the H.15
         Daily Update by 3:00 p.m., New York City time, on the calculation date,
         the  calculation  agent will determine the CD rate to be the arithmetic
         mean of the secondary  market  offered rates as of 10:00 a.m., New York
         City time, on that interest determination date of three leading nonbank
         dealers in negotiable U.S.  dollar  certificates of deposit in The City
         of New York,  which may include the agent and its affiliates,  selected
         by the calculation  agent,  after  consultation with us, for negotiable
         U.S. dollar certificates of deposit of major U.S. money center banks of
         the highest credit  standing in the market for negotiable  certificates
         of deposit  with a  remaining  maturity  closest to the index  maturity
         specified in the  applicable  pricing  supplement  in an amount that is
         representative for a single transaction in that market at that time.

      o  If the dealers selected by the calculation agent are not quoting as set
         forth  above,  the CD rate for that  interest  determination  date will
         remain the CD rate for the immediately preceding interest reset period,
         or, if there was no interest reset period, the rate of interest payable
         will be the initial interest rate.

      Commercial Paper Rate Notes

      Commercial  paper rate  notes will bear  interest  at the  interest  rates
specified  in the  commercial  paper  rate notes and in the  applicable  pricing
supplement.  Those interest rates will be based on the commercial paper rate and
any spread and/or spread  multiplier and will be subject to the minimum interest
rate and the maximum interest rate, if any.

      The "commercial  paper rate" means, for any interest  determination  date,
the money market yield,  calculated as described below, of the rate on that date
for  commercial  paper having the index  maturity  specified  in the  applicable
pricing  supplement,  as that rate is published in H.15(519),  under the heading
"Commercial Paper -- Nonfinancial."

      The following  procedures  will be followed if the  commercial  paper rate
cannot be determined as described above:

      o  If the above rate is not published by 3:00 p.m., New York City time, on
         the calculation  date, then the commercial paper rate will be the money
         market  yield  of the  rate on that  interest  determination  date  for
         commercial  paper of the index  maturity  specified  in the  applicable
         pricing  supplement  as  published in the H.15 Daily  Update,  or other
         recognized  electronic  source used for the purpose of  displaying  the
         applicable rate, under the heading "Commercial Paper -- Nonfinancial."

      o  If by 3:00 p.m., New York City time, on that  calculation date the rate
         is not yet published in either H.15(519) or the H.15 Daily Update, then
         the  calculation  agent will determine the commercial  paper rate to be
         the money market yield of the  arithmetic  mean of the offered rates as
         of 11:00 a.m., New York City time, on that interest  determination date
         of three leading dealers of U.S. dollar commercial paper in The City of
         New York,  which may include the agent and its affiliates,  selected by
         the calculation agent, after consultation with us, for commercial paper
         of the index maturity specified in the applicable  pricing  supplement,
         placed  for an  industrial  issuer  whose  bond  rating is "AA," or the
         equivalent, from a nationally recognized statistical rating agency.

      o  If the dealers selected by the calculation agent are not quoting as set
         forth above, the commercial paper rate for that interest  determination
         date  will  remain  the  commercial  paper  rate  for  the  immediately


                                      S-17
<PAGE>

         preceding  interest  reset period,  or, if there was no interest  reset
         period, the rate of interest payable will be the initial interest rate.

      The "money market yield" will be a yield calculated in accordance with the
following formula:

                  money market yield =     D x 360
                                        ------------   x 100
                                        360 - (D x M)

where "D" refers to the applicable per year rate for commercial  paper quoted on
a bank  discount  basis and  expressed as a decimal and "M" refers to the actual
number of days in the interest period for which interest is being calculated.

      EURIBOR Notes

      EURIBOR  notes will bear interest at the interest  rates  specified in the
EURIBOR notes and in the applicable pricing supplement.  That interest rate will
be based on EURIBOR and any spread and/or spread  multiplier and will be subject
to the minimum interest rate and the maximum interest rate, if any.

      "EURIBOR"  means,  for any  interest  determination  date,  the  rate  for
deposits in euros as sponsored, calculated and published jointly by the European
Banking Federation and ACI -- The Financial Market  Association,  or any company
established by the joint sponsors for purposes of compiling and publishing those
rates, for the index maturity  specified in the applicable pricing supplement as
that rate  appears  on the  display  on  Moneyline  Telerate,  or any  successor
service,  on page 248 or any other page as may replace page 248 on that service,
which is commonly referred to as "Telerate Page 248," as of 11:00 a.m. (Brussels
time).

      The following procedures will be followed if the rate cannot be determined
as described above:

      o  If the above rate does not appear,  the calculation  agent will request
         the  principal  Euro-zone  office  of each of four  major  banks in the
         Euro-zone interbank market, as selected by the calculation agent, after
         consultation with us, to provide the calculation agent with its offered
         rate for deposits in euros, at approximately 11:00 a.m. (Brussels time)
         on the interest  determination  date,  to prime banks in the  Euro-zone
         interbank  market for the index  maturity  specified in the  applicable
         pricing  supplement  commencing on the applicable  interest reset date,
         and in a  principal  amount  not less  than the  equivalent  of  U.S.$1
         million in euro that is representative of a single transaction in euro,
         in that market at that time. If at least two  quotations  are provided,
         EURIBOR will be the arithmetic mean of those quotations.

      o  If  fewer  than  two  quotations  are  provided,  EURIBOR  will  be the
         arithmetic  mean  of the  rates  quoted  by  four  major  banks  in the
         Euro-zone interbank market, as selected by the calculation agent, after
         consultation with us, at approximately  11:00 a.m.  (Brussels time), on
         the  applicable  interest  reset  date  for  loans  in euro to  leading
         European  banks for a period of time  equivalent to the index  maturity
         specified  in the  applicable  pricing  supplement  commencing  on that
         interest reset date in a principal  amount not less than the equivalent
         of U.S.$1 million in euro.

      o  If the banks so  selected by the  calculation  agent are not quoting as
         set forth  above,  EURIBOR for that  interest  determination  date will
         remain EURIBOR for the immediately preceding interest reset period, or,
         if there was no interest  reset  period,  the rate of interest  payable
         will be the initial interest rate.

      "Euro-zone"  means the region  comprising  member  states of the  European
Union that have  adopted the single  currency in  accordance  with the  relevant
treaty of the European Union, as amended.

      Federal Funds Rate Notes

      Federal  funds  rate  notes  will  bear  interest  at the  interest  rates
specified  in the  federal  funds  rate  notes  and in  the  applicable  pricing
supplement. Those interest rates will be based on the federal funds rate and any
spread and/or spread multiplier and will be subject to the minimum interest rate
and the maximum interest rate, if any.

      The "federal funds rate" means, for any interest  determination  date, the
rate on that date for federal funds as published in H.15(519)  under the heading
"Federal Funds (Effective)" as displayed on Moneyline Telerate, or any successor
service,  on page 120 or any other page as may  replace the  applicable  page on
that service, which is commonly referred to as "Telerate Page 120."


                                      S-18
<PAGE>

      The following procedures will be followed if the federal funds rate cannot
be determined as described above:

      o  If the above rate is not published by 3:00 p.m., New York City time, on
         the  calculation  date, the federal funds rate will be the rate on that
         interest  determination  date as published in the H.15 Daily Update, or
         other recognized  electronic  source used for the purpose of displaying
         the applicable rate, under the heading "Federal Funds/Effective Rate."

      o  If the above rate is not yet published in either  H.15(519) or the H.15
         Daily Update by 3:00 p.m., New York City time, on the calculation date,
         the  calculation  agent will determine the federal funds rate to be the
         arithmetic mean of the rates for the last transaction in overnight U.S.
         dollar  federal funds by each of three leading  brokers of U.S.  dollar
         federal funds  transactions in The City of New York,  which may include
         the agent and its affiliates,  selected by the calculation agent, after
         consultation  with us, prior to 9:00 a.m.,  New York City time, on that
         interest determination date.

      o  If the brokers selected by the calculation agent are not quoting as set
         forth above,  the federal  funds rate for that  interest  determination
         date will remain the federal funds rate for the  immediately  preceding
         interest reset period,  or, if there was no interest reset period,  the
         rate of interest payable will be the initial interest rate.

      LIBOR Notes

      LIBOR notes will bear  interest at the  interest  rates  specified  in the
LIBOR notes and in the applicable pricing supplement. That interest rate will be
based on  London  Interbank  Offered  Rate,  which is  commonly  referred  to as
"LIBOR,"  and any spread  and/or  spread  multiplier  and will be subject to the
minimum interest rate and the maximum interest rate, if any.

      The   calculation   agent  will   determine   "LIBOR"  for  each  interest
determination date as follows:

      o  As of the interest determination date, LIBOR will be either:

         o   if  "LIBOR   Reuters"  is  specified  in  the  applicable   pricing
             supplement,  the arithmetic  mean of the offered rates for deposits
             in the index currency  having the index maturity  designated in the
             applicable  pricing  supplement,  commencing  on the second  London
             banking day immediately following that interest determination date,
             that appear on the Designated  LIBOR Page, as defined below,  as of
             11:00 a.m., London time, on that interest determination date, if at
             least two offered rates appear on the Designated LIBOR Page; except
             that if the specified  Designated LIBOR Page, by its terms provides
             only for a single rate, that single rate will be used; or

         o   if  "LIBOR  Telerate"  is  specified  in  the  applicable   pricing
             supplement,  the rate for deposits in the index currency having the
             index  maturity  designated in the applicable  pricing  supplement,
             commencing on the second London banking day  immediately  following
             that  interest  determination  date or, if pounds  sterling  is the
             index  currency,  commencing on that interest  determination  date,
             that appears on the Designated  LIBOR Page at  approximately  11:00
             a.m., London time, on that interest determination date.

      o  If (i) fewer than two  offered  rates  appear and  "LIBOR  Reuters"  is
         specified in the applicable pricing supplement, or (ii) no rate appears
         and the  applicable  pricing  supplement  specifies  either  (a) "LIBOR
         Telerate" or (b) "LIBOR  Reuters" and the Designated  LIBOR Page by its
         terms provides only for a single rate, then the calculation  agent will
         request the principal  London  offices of each of four major  reference
         banks in the London  interbank  market,  as selected by the calculation
         agent after consultation with us, to provide the calculation agent with
         its offered quotation for deposits in the index currency for the period
         of the index maturity  specified in the applicable  pricing  supplement
         commencing on the second London banking day  immediately  following the
         interest  determination  date  or,  if  pounds  sterling  is the  index
         currency,  commencing  on that  interest  determination  date, to prime
         banks in the  London  interbank  market at  approximately  11:00  a.m.,
         London time,  on that  interest  determination  date and in a principal
         amount that is  representative  of a single  transaction  in that index
         currency in that market at that time.

      o  If at least two  quotations  are  provided,  LIBOR  determined  on that
         interest  determination  date  will be the  arithmetic  mean  of  those
         quotations.  If fewer than two quotations  are provided,  LIBOR will be


                                      S-19
<PAGE>

         determined  for the  applicable  interest  reset date as the arithmetic
         mean of the rates quoted at approximately  11:00 a.m.,  London time, or
         some other time specified in the applicable pricing supplement,  in the
         applicable  principal  financial  center  for the  country of the index
         currency  on that  interest  reset  date,  by three major banks in that
         principal  financial  center selected by the calculation  agent,  after
         consultation  with us,  for  loans in the  index  currency  to  leading
         European banks,  having the index maturity  specified in the applicable
         pricing  supplement and in a principal amount that is representative of
         a single  transaction  in that index  currency  in that  market at that
         time.

      o  If the banks so  selected by the  calculation  agent are not quoting as
         set forth above, LIBOR for that interest determination date will remain
         LIBOR for the immediately preceding interest reset period, or, if there
         was no interest reset period,  the rate of interest payable will be the
         initial interest rate.

      The  "index  currency"  means the  currency  specified  in the  applicable
pricing  supplement as the currency for which LIBOR will be  calculated,  or, if
the euro is substituted for that currency,  the index currency will be the euro.
If that  currency is not specified in the  applicable  pricing  supplement,  the
index currency will be U.S. dollars.

      "Designated  LIBOR Page" means either (i) if "LIBOR Reuters" is designated
in the applicable pricing  supplement,  the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London  interbank rates of major
banks for the applicable index currency or its designated successor,  or (ii) if
"LIBOR Telerate" is designated in the applicable pricing supplement, the display
on Moneyline  Telerate,  or any successor service,  on the page specified in the
applicable  pricing  supplement,  or any other page as may replace  that page on
that service,  for the purpose of displaying the London interbank rates of major
banks for the applicable index currency.

      If neither LIBOR Reuters nor LIBOR Telerate is specified in the applicable
pricing  supplement,  LIBOR for the applicable index currency will be determined
as if LIBOR  Telerate  were  specified,  and,  if the U.S.  dollar  is the index
currency, as if Page 3750, had been specified.

      Prime Rate Notes

      Prime rate notes will bear interest at the interest rates specified in the
prime rate notes and in the applicable  pricing  supplement.  That interest rate
will be based on the prime rate and any spread  and/or  spread  multiplier,  and
will be subject to the minimum  interest rate and the maximum  interest rate, if
any.

      The "prime rate" means, for any interest  determination  date, the rate on
that date as published in H.15(519) under the heading "Bank Prime Loan."

      The  following  procedures  will be  followed  if the prime rate cannot be
determined as described above:

      o  If the above rate is not  published  prior to 3:00 p.m.,  New York City
         time, on the calculation  date, then the prime rate will be the rate on
         that  interest  determination  date as  published  in H.15 Daily Update
         under the heading "Bank Prime Loan."

      o  If the rate is not  published  in either  H.15(519)  or the H.15  Daily
         Update by 3:00 p.m., New York City time, on the calculation  date, then
         the  calculation  agent  will  determine  the  prime  rate  to  be  the
         arithmetic  mean of the rates of interest  publicly  announced  by each
         bank that  appears on the  Reuters  Screen  USPRIME 1 Page,  as defined
         below,  as that bank's prime rate or base lending rate as in effect for
         that interest determination date.

      o  If fewer than four rates appear on the Reuters Screen USPRIME 1 Page by
         3:00 p.m.,  New York City time, for that interest  determination  date,
         the  calculation  agent  will  determine  the  prime  rate  to  be  the
         arithmetic  mean of the prime  rates  quoted on the basis of the actual
         number of days in the year  divided by 360 as of the close of  business
         on that  interest  determination  date by at least three major banks in
         The City of New  York,  which  may  include  affiliates  of the  agent,
         selected by the calculation agent, after consultation with us.

      o  If the banks selected by the  calculation  agent are not quoting as set
         forth above, the prime rate for that interest  determination  date will
         remain  the prime rate for the  immediately  preceding  interest  reset
         period, or, if there was no interest reset period, the rate of interest
         payable will be the initial interest rate.


                                      S-20
<PAGE>

      "Reuters  Screen  USPRIME 1 Page"  means the  display  designated  as page
"USPRIME  1" on the  Reuters  Monitor  Money  Rates  Service,  or any  successor
service, or any other page as may replace the USPRIME 1 Page on that service for
the purpose of displaying prime rates or base lending rates of major U.S. banks.

      Treasury Rate Notes

      Treasury rate notes will bear interest at the interest rates  specified in
the Treasury rate notes and in the applicable pricing supplement.  That interest
rate will be based on the Treasury rate and any spread and/or spread  multiplier
and will be subject to the minimum  interest rate and the maximum interest rate,
if any.

      The "Treasury rate" means:

      o  the rate from the auction held on the applicable interest determination
         date, which we refer to as the "auction," of direct  obligations of the
         United  States,  which are commonly  referred to as  "Treasury  Bills,"
         having  the  index  maturity   specified  in  the  applicable   pricing
         supplement as that rate appears under the caption  "INVESTMENT RATE" on
         the display on Moneyline Telerate, or any successor service, on page 56
         or any other  page as may  replace  page 56 on that  service,  which we
         refer to as  "Telerate  Page 56," or page 57 or any  other  page as may
         replace page 57 on that  service,  which we refer to as "Telerate  Page
         57"; or

      o  if the rate  described in the first  bullet  point is not  published by
         3:00  p.m.,  New York City  time,  on the  calculation  date,  the bond
         equivalent  yield  of the  rate for the  applicable  Treasury  Bills as
         published  in the H.15 Daily  Update,  or other  recognized  electronic
         source used for the purpose of displaying  the applicable  rate,  under
         the caption "U.S. Government  Securities/Treasury  Bills/Auction High";
         or

      o  if the rate  described in the second  bullet point is not  published by
         3:00 p.m.,  New York City time, on the related  calculation  date,  the
         bond  equivalent  yield of the auction rate of the applicable  Treasury
         Bills, announced by the United States Department of the Treasury; or

      o  if the rate  referred to in the third bullet point is not  announced by
         the United States Department of the Treasury,  or if the auction is not
         held, the bond equivalent yield of the rate on the applicable  interest
         determination   date  of  Treasury  Bills  having  the  index  maturity
         specified in the applicable pricing  supplement  published in H.15(519)
         under the caption "U.S. Government Securities/Treasury Bills/ Secondary
         Market"; or

      o  if the rate  referred to in the fourth bullet point is not so published
         by 3:00 p.m., New York City time, on the related  calculation date, the
         rate on the applicable  interest  determination  date of the applicable
         Treasury Bills as published in H.15 Daily Update,  or other  recognized
         electronic  source used for the purpose of  displaying  the  applicable
         rate,   under  the   caption   "U.S.   Government   Securities/Treasury
         Bills/Secondary Market"; or

      o  if the rate  referred to in the fifth  bullet point is not so published
         by 3:00 p.m., New York City time, on the related  calculation date, the
         rate on the applicable  interest  determination  date calculated by the
         calculation  agent as the bond equivalent  yield of the arithmetic mean
         of the secondary market bid rates, as of  approximately  3:30 p.m., New
         York City time, on the applicable interest determination date, of three
         primary U.S. government securities dealers, which may include the agent
         and its affiliates, selected by the calculation agent, for the issue of
         Treasury Bills with a remaining  maturity closest to the index maturity
         specified in the applicable pricing supplement; or

      o  if the dealers selected by the calculation agent are not quoting as set
         forth above,  the Treasury  rate for that interest  determination  date
         will remain the Treasury rate for the  immediately  preceding  interest
         reset period,  or, if there was no interest  reset period,  the rate of
         interest payable will be the initial interest rate.

      The "bond  equivalent  yield" means a yield  calculated in accordance with
the following formula and expressed as a percentage:

                bond equivalent yield =      D x N
                                         -------------  x 100
                                         360 - (D x M)


                                      S-21
<PAGE>

In this formula,  "D" refers to the applicable per annum rate for Treasury Bills
quoted on a bank discount  basis,  "N" refers to 365 or 366, as the case may be,
and "M" refers to the  actual  number of days in the  interest  period for which
interest is being calculated.

      CMT Rate Notes

      CMT rate notes will bear interest at the interest  rates  specified in the
CMT rate notes and in the applicable pricing supplement. That interest rate will
be based on the CMT rate and any spread  and/or  spread  multiplier  and will be
subject to the minimum interest rate and the maximum interest rate, if any.

      The "CMT  rate"  means,  for any  interest  determination  date,  the rate
displayed on the  Designated  CMT Telerate  Page,  as defined  below,  under the
caption ". . . Treasury Constant  Maturities . . . Federal Reserve Board Release
H.15 . . . Mondays Approximately 3:45 p.m.," under the column for the Designated
CMT Maturity Index, as defined below, for:

      o  the rate on that interest  determination  date, if the  Designated  CMT
         Telerate Page is 7051; and

      o  the week or the month, as applicable,  ended immediately  preceding the
         week in which the related interest  determination  date occurs,  if the
         Designated CMT Telerate Page is 7052.

      The  following  procedures  will be  followed  if the CMT rate  cannot  be
determined as described above:

      o  If the above rate is no longer  displayed on the relevant  page,  or if
         not  displayed  by 3:00  p.m.,  New  York  City  time,  on the  related
         calculation  date,  then the CMT  rate  will be the  Treasury  Constant
         Maturity rate for the Designated CMT Maturity Index as published in the
         relevant H.15(519).

      o  If the above  rate  described  in the first  bullet  point is no longer
         published, or if not published by 3:00 p.m., New York City time, on the
         related  calculation  date,  then  the CMT  rate  will be the  Treasury
         Constant  Maturity rate for the  Designated CMT Maturity Index or other
         U.S.  Treasury  rate  for the  Designated  CMT  Maturity  Index  on the
         interest  determination  date as may then be  published  by either  the
         Board of Governors of the Federal  Reserve  System or the United States
         Department of the Treasury that the calculation  agent determines to be
         comparable  to  the  rate  formerly  displayed  on the  Designated  CMT
         Telerate Page and published in the relevant H.15(519).

      o  If the information described in the second bullet point is not provided
         by 3:00 p.m., New York City time, on the related calculation date, then
         the  calculation  agent  will  determine  the CMT rate to be a yield to
         maturity,  based on the arithmetic mean of the secondary market closing
         offer side prices as of approximately 3:30 p.m., New York City time, on
         the interest  determination date, reported,  according to their written
         records, by three leading primary U.S.  government  securities dealers,
         which we refer to as a  "reference  dealer,"  in The City of New  York,
         which may include the agent or another  affiliate of ours,  selected by
         the  calculation  agent as described  in the  following  sentence.  The
         calculation   agent  will  select   five   reference   dealers,   after
         consultation  with us, and will eliminate the highest  quotation or, in
         the event of equality, one of the highest, and the lowest quotation or,
         in the event of  equality,  one of the  lowest,  for the most  recently
         issued direct  noncallable fixed rate obligations of the United States,
         which are commonly  referred to as  "Treasury  notes," with an original
         maturity  of  approximately   the  Designated  CMT  Maturity  Index,  a
         remaining  term to  maturity of no more than 1 year  shorter  than that
         Designated  CMT  Maturity  Index  and in a  principal  amount  that  is
         representative  for a  single  transaction  in the  securities  in that
         market at that time. If two Treasury notes with an original maturity as
         described above have remaining  terms to maturity  equally close to the
         Designated  CMT Maturity  Index,  the quotes for the Treasury note with
         the shorter remaining term to maturity will be used.

      o  If the calculation  agent cannot obtain three Treasury notes quotations
         as described in the immediately preceding bullet point, the calculation
         agent will  determine  the CMT rate to be a yield to maturity  based on
         the  arithmetic  mean of the  secondary  market offer side prices as of
         approximately   3:30  p.m.,   New  York  City  time,  on  the  interest
         determination  date of three reference dealers in The City of New York,
         selected using the same method  described in the immediately  preceding
         bullet point, for Treasury notes with an original maturity equal to the
         number  of years  closest  to but not  less  than  the  Designated  CMT
         Maturity  Index  and a  remaining  term  to  maturity  closest  to  the
         Designated  CMT  Maturity


                                      S-22
<PAGE>

         Index and in a  principal  amount that is  representative  for a single
         transaction in the securities in that market at that time.

      o  If three or four (and not five) of the reference dealers are quoting as
         described above, then the CMT rate will be based on the arithmetic mean
         of the offer prices  obtained and neither the highest nor the lowest of
         those quotes will be eliminated.

      o  If fewer than three reference dealers selected by the calculation agent
         are  quoting  as  described  above,  the CMT  rate  for  that  interest
         determination  date  will  remain  the CMT  rate  for  the  immediately
         preceding  interest  reset period,  or, if there was no interest  reset
         period, the rate of interest payable will be the initial interest rate.

      "Designated CMT Telerate Page" means the display on Moneyline Telerate, or
any  successor  service,  on  the  page  designated  in the  applicable  pricing
supplement  or any other page as may replace  that page on that  service for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519).  If
no page is specified in the applicable  pricing  supplement,  the Designated CMT
Telerate Page will be 7052, for the most recent week.

      "Designated  CMT Maturity  Index" means the original period to maturity of
the U.S. Treasury securities, which is either 1, 2, 3, 5, 7, 10, 20 or 30 years,
specified in the  applicable  pricing  supplement for which the CMT rate will be
calculated.  If no maturity is specified in the applicable  pricing  supplement,
the Designated CMT Maturity Index will be two years.

Exchangeable Notes

      We may issue notes,  which we refer to as  "exchangeable  notes," that are
optionally or mandatorily exchangeable into:

      o  the securities of an entity affiliated or not affiliated with us;

      o  a basket of those securities;

      o  an index or indices of those securities; or

      o  any combination of, or the cash value of, the above.

      The  exchangeable  notes may or may not bear  interest  or be issued  with
original issue discount or at a premium.  The general terms of the  exchangeable
notes are described below.

      Optionally  Exchangeable  Notes. The holder of an optionally  exchangeable
note may, during a period, or at a specific time or times, exchange the note for
the  underlying  property at a specified  rate of exchange.  If specified in the
applicable pricing supplement,  we will have the option to redeem the optionally
exchangeable note prior to maturity. If the holder of an optionally exchangeable
note does not elect to exchange  the note prior to  maturity  or any  applicable
redemption  date, the holder will receive the principal  amount of the note plus
any accrued interest at maturity or upon redemption.

      Mandatorily  Exchangeable Notes. At maturity,  the holder of a mandatorily
exchangeable  note  must  exchange  the note for the  underlying  property  at a
specified  rate of exchange,  and,  therefore,  depending  upon the value of the
underlying property at maturity,  the holder of a mandatorily  exchangeable note
may  receive  less  than the  principal  amount of the note at  maturity.  If so
indicated in the applicable  pricing  supplement,  the specified rate at which a
mandatorily  exchangeable  note may be exchanged may vary depending on the value
of the underlying property so that, upon exchange,  the holder participates in a
percentage, which may be less than, equal to, or greater than 100% of the change
in value of the underlying property.  Mandatorily exchangeable notes may include
notes where we have the right,  but not the  obligation,  to require  holders of
notes to exchange their notes for the underlying property.

      Payments upon Exchange.  The applicable  pricing  supplement  will specify
whether upon exchange,  at maturity or otherwise,  the holder of an exchangeable
note may receive, at the specified exchange rate, either the underlying property
or the cash value of the underlying property. The underlying property may be the
securities of either U.S. or foreign  entities or both. The  exchangeable  notes
may or may not provide for protection against  fluctuations in the exchange rate
between  the  currency  in which that note is  denominated  and the  currency or


                                      S-23
<PAGE>

currencies in which the market prices of the  underlying  security or securities
are quoted.  Exchangeable notes may have other terms, which will be specified in
the applicable pricing supplement.

      Special  Requirements for Exchange of Global Securities.  If an optionally
exchangeable note is represented by a global note, the Depositary's nominee will
be the  holder  of that  note and  therefore  will be the only  entity  that can
exercise a right to exchange.  In order to ensure that the Depositary's  nominee
will timely  exercise a right to exchange a particular  note or any portion of a
particular  note, the  beneficial  owner of the note must instruct the broker or
other direct or indirect  participant through which it holds an interest in that
note to notify the  Depositary  of its desire to  exercise a right to  exchange.
Different firms have different  deadlines for accepting  instructions from their
customers.  Each beneficial owner should consult the broker or other participant
through  which it holds an interest in a note in order to ascertain the deadline
for ensuring that timely notice will be delivered to the Depositary.

      Payments upon Acceleration of Maturity. If the principal amount payable at
maturity of any exchangeable note is declared due and payable prior to maturity,
the amount payable on:

      o  an optionally  exchangeable note will equal the face amount of the note
         plus accrued  interest,  if any, to but  excluding the date of payment,
         except that if a holder has exchanged an optionally  exchangeable  note
         prior to the date of  acceleration  without having  received the amount
         due upon  exchange,  the amount payable will be an amount in cash equal
         to the amount due upon  exchange  and will not  include any accrued but
         unpaid interest; and

      o  a mandatorily  exchangeable  note will equal an amount determined as if
         the date of acceleration  were the maturity date plus accrued interest,
         if any, to but excluding the date of payment.

Notes Linked to Commodities,  Rates,  Single Securities,  Baskets of Securities,
Indices and other Quantitative Measures

      We may issue  notes with the  principal  amount  payable on any  principal
payment date and/or the amount of interest  payable on any interest payment date
is determined  by reference to one or more  commodities,  rates,  debt or equity
securities,  or other debt or equity  instruments of entities  affiliated or not
affiliated with us, baskets of those  securities or an index or indices of those
securities,  quantitative  measures associated with an occurrence,  extent of an
occurrence, or contingency associated with a financial,  commercial, or economic
consequence,  or  economic  or  financial  indices or  measures  of  economic or
financial  risk or value.  These notes may include  other  terms,  which will be
specified in the relevant pricing supplement.

Currency-Linked Notes

      We may issue  notes with the  principal  amount  payable on any  principal
payment date and/or the amount of interest  payable on any interest payment date
to be determined by reference to the value of one or more currencies as compared
to  the  value  of  one  or  more  other  currencies,   which  we  refer  to  as
"currency-linked notes." The pricing supplement will specify the following:

      o  information  as to the one or more  currencies  to which the  principal
         amount payable on any principal  payment date or the amount of interest
         payable on any interest payment date is linked or indexed;

      o  the  currency in which the face amount of the  currency-linked  note is
         denominated, which we refer to as the "denominated currency;"

      o  the  currency in which  principal on the  currency-linked  note will be
         paid, which we refer to as the "payment currency;"

      o  the  interest  rate per  annum  and the  dates  on  which we will  make
         interest payments;

      o  specific  historic  exchange rate  information  and any currency  risks
         relating to the specific currencies selected; and

      o  additional tax considerations, if any.

      The denominated currency and the payment currency may be the same currency
or different  currencies.  Interest on currency-linked notes will be paid in the
denominated currency.


                                      S-24
<PAGE>

Redemptions and Repurchases of Notes

      Optional Redemption. The pricing supplement will indicate the terms of our
option to redeem the notes,  if any. We will mail a notice of redemption to each
holder  or, in the case of global  notes,  to the  Depositary,  as holder of the
global notes, by first-class  mail,  postage  prepaid,  at least 30 days and not
more  than 60 days  prior  to the date  fixed  for  redemption,  or  within  the
redemption notice period designated in the applicable pricing supplement, to the
address of each holder as that address appears upon the books  maintained by the
paying agent. The notes will not be subject to any sinking fund.

      Repayment  at Option of Holder.  If  applicable,  the  pricing  supplement
relating  to each note will  indicate  that the holder has the option to have us
repay the note on a date or dates  specified  prior to its  maturity  date.  The
repayment  price  will be equal to 100% of the  principal  amount  of the  note,
together with accrued  interest to the date of repayment.  For notes issued with
original issue discount,  the pricing supplement will specify the amount payable
upon repayment.

      For us to repay a note,  the paying  agent must  receive the  following at
least 15 days but not more than 30 days prior to the repayment date:

      o  the note with the form  entitled  "Option  to Elect  Repayment"  on the
         reverse of the note duly completed; or

      o  a telegram,  telex, facsimile transmission or a letter from a member of
         a  national  securities  exchange,   or  the  National  Association  of
         Securities  Dealers,  Inc. or a commercial bank or trust company in the
         United  States  setting  forth the name of the holder of the note,  the
         principal  amount of the note,  the principal  amount of the note to be
         repaid,  the certificate number or a description of the tenor and terms
         of the note,  a statement  that the option to elect  repayment is being
         exercised and a guarantee that the note to be repaid, together with the
         duly completed form entitled "Option to Elect Repayment" on the reverse
         of the note,  will be received  by the paying  agent not later than the
         fifth  business day after the date of that telegram,  telex,  facsimile
         transmission  or  letter.  However,  the  telegram,   telex,  facsimile
         transmission  or letter  will only be  effective  if that note and form
         duly  completed are received by the paying agent by the fifth  business
         day after the date of that telegram,  telex,  facsimile transmission or
         letter.

      Exercise  of  the  repayment  option  by the  holder  of a  note  will  be
irrevocable.  The holder may  exercise  the  repayment  option for less than the
entire  principal amount of the note but, in that event, the principal amount of
the  note  remaining   outstanding   after   repayment  must  be  an  authorized
denomination.

      Special  Requirements for Optional Repayment of Global Notes. If a note is
represented by a global note, the Depositary or the Depositary's nominee will be
the holder of the note and therefore will be the only entity that can exercise a
right to repayment. In order to ensure that the Depositary's nominee will timely
exercise a right to repayment of a particular  note, the beneficial owner of the
note must  instruct the broker or other direct or indirect  participant  through
which it holds an interest in the note to notify the Depositary of its desire to
exercise a right to repayment.  Different firms have different cut-off times for
accepting  instructions from their customers and,  accordingly,  each beneficial
owner should consult the broker or other direct or indirect  participant through
which it holds an interest in a note in order to  ascertain  the cut-off time by
which an instruction must be given in order for timely notice to be delivered to
the Depositary.

      Open  Market  Purchases.  We may  purchase  notes at any price in the open
market or otherwise. Notes so purchased by us may, at our discretion, be held or
resold or surrendered to the relevant trustee for cancellation.

Replacement of Notes

      At the expense of the holder, we may, in our discretion  replace any notes
that become mutilated,  destroyed,  lost or stolen or are apparently  destroyed,
lost or stolen. The mutilated notes must be delivered to the applicable trustee,
the  paying  agent  and the  registrar,  in the  case of  registered  notes,  or
satisfactory  evidence  of the  destruction,  loss or theft of the notes must be
delivered to us, the paying  agent,  the  registrar,  in the case of  registered
notes, and the applicable  trustee.  At the expense of the holder,  an indemnity
that is satisfactory to us, the principal  paying agent,  the registrar,  in the
case of registered  notes,  and the applicable  trustee may be required before a
replacement note will be issued.


                                      S-25
<PAGE>

                             DESCRIPTION OF WARRANTS

      Investors  should  carefully  read the general terms and provisions of our
warrants  in  "Description   of  Warrants"  in  the  prospectus.   This  section
supplements that description. The pricing supplement will add specific terms for
each  issuance of warrants and may modify or replace any of the  information  in
this section and in "Description of Warrants" in the prospectus. If a warrant is
offered as part of a unit,  investors  should  also  review the  information  in
"Description of Units" in the prospectus and in this prospectus supplement.

      Warrants will entitle or require you to purchase from us or sell to us:

      o  securities  issued by us or by an entity  affiliated or not  affiliated
         with us, a basket of those  securities,  an index or  indices  of those
         securities or any combination of the above;

      o  currencies; or

      o  commodities.


                                      S-26
<PAGE>

                              DESCRIPTION OF UNITS

      Investors  should  carefully  read the general terms and provisions of our
units in "Description of Units" in the prospectus. This section supplements that
description. The pricing supplement will add specific terms for each issuance of
units and may modify or replace any of the  information  in this  section and in
"Description  of Units" in the  prospectus.  If a note is  offered  as part of a
unit,  investors  should also review the  information  in  "Description  of Debt
Securities" in the prospectus and in  "Description  of Notes" in this prospectus
supplement.  If a warrant is offered as part of a unit,  investors  should  also
review the  information in  "Description of Warrants" in both the prospectus and
this prospectus supplement.

      The  following  terms used in this  section are  defined in the  indicated
sections of the accompanying prospectus:

      o  Unit Agreement ("Description of Units")

      o  warrant ("Description of Warrants -- Offered Warrants")

      o  warrant agent ("Description of Warrants-- Significant Provisions of the
         Warrant Agreements")

      o  warrant property ("Description of Warrants-- Offered Warrants")

Further Information on Units

      Terms  Specified  in  Pricing  Supplement.  We may issue from time to time
units that may include one or more notes or warrants.

      The applicable pricing supplement will describe:

      o  the designation and the terms of the units and of the notes or warrants
         or any  combination  of notes or  warrants,  included  in those  units,
         including whether and under what circumstances  those notes or warrants
         may be separately traded;

      o  any additional terms of the Unit Agreement; and

      o  any  additional  provisions  for  the  issuance,  payment,  settlement,
         transfer  or  exchange  of the  units,  or of  the  notes  or  warrants
         constituting those units.

      Units will be issued only in fully  registered  form, in  denominations of
whole units only,  with face  amounts as  indicated  in the  applicable  pricing
supplement.

      Payments on Units and Securities  Comprised by Units. At the office of the
unit agent in the Borough of Manhattan,  The City of New York,  maintained by us
for that purpose, the holder may:

      o  present the units, accompanied by each of the securities then comprised
         by that unit, for payment or delivery of warrant  property or any other
         amounts due;

      o  register the transfer of the units; and

      o  exchange the units,  except that book-entry  units will be exchangeable
         only  in the  manner  and to the  extent  set  forth  under  "Forms  of
         Securities -- Global Securities" in the prospectus.

      The holder will not pay a service charge for any  registration of transfer
or  exchange of the units or of any  security  included in a unit or interest in
the  unit  or  security  included  in a  unit,  except  for  any  tax  or  other
governmental charge that may be imposed.

      Although we anticipate making payments of principal,  premium, if any, and
interest,  if any, on most units in U.S.  dollars,  some units may be payable in
foreign currencies as specified in the applicable pricing supplement. Currently,
few facilities  exist in the United States to convert U.S.  dollars into foreign
currencies  and vice versa.  In addition,  most U.S. banks do not offer non-U.S.
dollar denominated checking or savings account facilities.  Accordingly,  unless
alternative  arrangements are made, we will pay principal,  premium, if any, and
interest,  if any, on units that are payable in a foreign currency to an account
at a bank  outside the United  States,  which,  in the case of a note payable in
euro will be made by credit or transfer to a euro account specified by the payee
in a country for which the euro is the lawful currency.


                                      S-27
<PAGE>

Book-Entry Units

      Book-Entry  System. For each issuance of units in book-entry form, we will
issue a single  registered  global unit  representing the entire issue of units.
Each  registered  global unit  representing  book-entry  units,  and each global
security  included in that unit,  will be deposited  with,  or on behalf of, the
Depositary,  and registered in the name of a nominee of the Depositary.  You may
not exchange  certificated units for book-entry units or interests in book-entry
units.  In  addition,  except as  described  in the  prospectus  under "Forms of
Securities  -- Global  Securities,"  you may not  exchange  book-entry  units or
interests in book-entry units for certificated units.

      Special  Requirements  for  Exercise  of Rights  for  Global  Units.  If a
book-entry unit represented by a registered global unit:

      o  includes a warrant  entitling  the holder to  exercise  the  warrant to
         purchase or sell warrant property,

      o  includes  any note that  entitles the holder to redeem,  accelerate  or
         take any other action concerning that note, or

      o  otherwise  entitles the holder of the unit to take any action under the
         unit or any security included in that unit,

then, in each of the cases listed above,  the  Depositary's  nominee will be the
only entity that can exercise those rights.

      In order to ensure that the  Depositary's  nominee will timely  exercise a
right  conferred  by a unit or by the  securities  included  in that  unit,  the
beneficial  owner of that  unit must  instruct  the  broker  or other  direct or
indirect  participant  through which it holds an interest in that unit to notify
the  Depositary  of its desire to  exercise  that  right.  Different  firms have
different  deadlines  for  accepting  instructions  from their  customers.  Each
beneficial  owner  should  consult  the  broker  or  other  direct  or  indirect
participant  through  which it holds an interest in a unit in order to ascertain
the  deadline  for  ensuring  that  timely  notice  will  be  delivered  to  the
Depositary.

      A further description of the Depositary's procedures for registered global
securities representing book-entry securities, including registered global units
and the other registered  global  securities  included in the registered  global
units, is set forth in this prospectus  supplement  under "The  Depositary." The
Depositary has confirmed to us, the unit agent, the collateral agent, the paying
agent,  the  warrant  agent and each  trustee  that it intends  to follow  those
procedures.


                                      S-28
<PAGE>

                                 THE DEPOSITARY

      The Depository Trust Company, New York, New York will be designated as the
depositary for any registered  global security.  Each registered global security
will be registered in the name of Cede & Co., the Depositary's nominee.

      The   Depositary   has  advised  us  as  follows:   the  Depositary  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  Depositary  holds  securities  deposited  with it by its
participants,  and it  facilitates  the  settlement  of  transactions  among its
participants in those  securities  through  electronic  computerized  book-entry
changes in participants' accounts, eliminating the need for physical movement of
securities certificates.  The Depositary's direct participants include both U.S.
and non-U.S. securities brokers and dealers (including the agents), banks, trust
companies,  clearing  corporations and other organizations,  some of whom and/or
their representatives own the Depositary.  Access to the Depositary's book-entry
system is also  available  to  others,  such as banks,  both U.S.  and  non-U.S.
brokers,  dealers,  trust companies and clearing corporations that clear through
or maintain a custodial  relationship  with a  participant,  either  directly or
indirectly.  The rules  applicable to the Depositary and its participants are on
file with the SEC.

      Purchases of the securities under the Depositary's  system must be made by
or  through  its  direct  participants,  which  will  receive  a credit  for the
securities on the Depositary's  records.  The ownership  interest of each actual
purchaser of each security (the "beneficial owner") is in turn to be recorded on
the  records of direct and  indirect  participants.  Beneficial  owners will not
receive  written  confirmation  from  the  Depositary  of  their  purchase,  but
beneficial  owners are  expected  to  receive  written  confirmations  providing
details of the  transaction,  as well as periodic  statements of their holdings,
from the direct or indirect  participants  through  which the  beneficial  owner
entered into the transaction. Transfers of ownership interests in the securities
are to be made by  entries  on the books of  direct  and  indirect  participants
acting  on behalf of  beneficial  owners.  Beneficial  owners  will not  receive
certificates representing their ownership interests in securities, except in the
event that use of the book-entry system for the securities is discontinued.

      To facilitate  subsequent  transfers,  all  securities  deposited with the
Depositary are registered in the name of the Depositary's  partnership  nominee,
Cede & Co, or such other name as may be requested by the Depositary. The deposit
of securities  with the Depositary and their  registration in the name of Cede &
Co.  or such  other  nominee  of the  Depositary  do not  effect  any  change in
beneficial  ownership.  The Depositary has no knowledge of the actual beneficial
owners of the securities;  the Depositary's records reflect only the identity of
the direct participants to whose accounts the securities 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 the Depositary to direct
participants,  by direct  participants to indirect  participants,  and by direct
participants and indirect  participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory  requirements as
may be in effect from time to time.

      Neither  the  Depositary  nor Cede & Co.  (nor such  other  nominee of the
Depositary)  will  consent  or  vote  with  respect  to  the  securities  unless
authorized  by  a  direct   participant  in  accordance  with  the  Depositary's
procedures. Under its usual procedures, the Depositary mails an omnibus proxy to
us as soon as possible  after the  applicable  record  date.  The omnibus  proxy
assigns Cede & Co.'s  consenting or voting  rights to those direct  participants
identified  in a listing  attached to the omnibus  proxy to whose  accounts  the
securities are credited on the record date.

      Redemption   proceeds,   distributions,   and  dividend  payments  on  the
securities  will be made to Cede & Co or such other  nominee as may be requested
by the Depositary.  The Depositary's  practice is to credit direct participants'
accounts  upon the  Depositary's  receipt  of  funds  and  corresponding  detail
information from us or any agent of ours, on the date payable in accordance with
their  respective  holdings  shown  on the  Depositary's  records.  Payments  by
participants to beneficial owners will be governed by standing  instructions and
customary  practices,  as is the case with  securities  held for the accounts of
customers  in  bearer  form or  registered  in  "street  name,"  and


                                      S-29
<PAGE>

will be the  responsibility of such participant and not of the Depositary or its
nominee,  the trustee,  any agent of ours,  or us,  subject to any  statutory or
regulatory  requirements  as may be in  effect  from time to time.  Payments  of
redemption proceeds,  distributions, and dividend payments to Cede & Co. or such
other nominee as may be requested by the Depositary is the  responsibility of us
or of any  paying  agent  of  ours,  disbursement  of such  payments  to  direct
participants will be the  responsibility of the Depositary,  and disbursement of
such payments to the beneficial owners will be the  responsibility of direct and
indirect 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,  the  indenture
permits us at any time and in our sole  discretion  to decide not to have any of
the securities represented by one or more registered global securities.  DTC has
advised us that, under its current  practices,  it would notify its participants
of our request, but will only withdraw beneficial interests from the global note
at the request of each DTC participant.  We would issue definitive  certificates
in  exchange  for  any  such  interests  withdrawn.  Any  securities  issued  in
definitive  form in exchange for 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.

      According to the  Depositary,  the foregoing  information  relating to the
Depositary  has been  provided  to the  financial  community  for  informational
purposes  only and is not  intended  to serve as a  representation,  warranty or
contract modification of any kind.

      The information in this section concerning the Depositary and Depositary's
book-entry system has been obtained from sources we believe to be reliable,  but
we take no responsibility for the accuracy thereof. The Depositary may change or
discontinue the foregoing procedures at any time.


                                      S-30
<PAGE>

                  SERIES E SECURITIES OFFERED ON A GLOBAL BASIS

      If we offer any of the  securities  under our Series E Program on a global
basis, we will so specify in the applicable pricing  supplement.  The additional
information  contained in this section under "-- Book Entry,  Delivery and Form"
and "-- Global Clearance and Settlement Procedures" will apply to every offering
on a global basis.

Book-Entry, Delivery and Form

      The securities will be issued in the form of one or more fully  registered
global  securities which will be deposited with, or on behalf of, the Depositary
and registered in the name of Cede & Co., the Depositary's  nominee.  Beneficial
interests  in the  registered  global  securities  will be  represented  through
book-entry  accounts of financial  institutions  acting on behalf of  beneficial
owners as direct and indirect  participants  in the  Depositary.  Investors  may
elect  to  hold  interests  in the  registered  global  securities  held  by the
Depositary through Clearstream, Luxembourg or the Euroclear operator if they are
participants in those systems,  or indirectly  through  organizations  which are
participants  in  those  systems.  Clearstream,  Luxembourg  and  the  Euroclear
operator will hold interests on behalf of their participants  through customers'
securities  accounts in Clearstream,  Luxembourg's and the Euroclear  operator's
names on the  books of their  respective  depositaries,  which in turn will hold
such  interests in the  registered  global  securities in customers'  securities
accounts in the  depositaries'  names on the books of the Depositary.  Citibank,
N.A. will act as depositary for Clearstream,  Luxembourg and JPMorgan Chase Bank
will act as depositary for the Euroclear operator. We refer to each of Citibank,
N.A. and JPMorgan Chase Bank, acting in this depositary  capacity,  as the "U.S.
depositary" for the relevant  clearing  system.  Except as set forth below,  the
registered global securities may be transferred,  in whole but not in part, only
to the  Depositary,  another  nominee of the Depositary or to a successor of the
Depositary or its nominee.

      Clearstream,  Luxembourg advises that it is incorporated under the laws of
Luxembourg  as  a  bank.  Clearstream,   Luxembourg  holds  securities  for  its
customers,  "Clearstream,  Luxembourg  customers," and facilitates the clearance
and  settlement  of  securities  transactions  between  Clearstream,  Luxembourg
customers  through  electronic  book-entry  transfers  between  their  accounts,
thereby  eliminating the need for physical movement of securities.  Clearstream,
Luxembourg provides to Clearstream,  Luxembourg  customers,  among other things,
services  for   safekeeping,   administration,   clearance  and   settlement  of
internationally   traded  securities  and  securities   lending  and  borrowing.
Clearstream,  Luxembourg  interfaces with domestic securities markets in over 30
countries through established depository and custodial relationships. As a bank,
Clearstream,  Luxembourg is subject to regulation by the  Luxembourg  Commission
for the  Supervision  of the Financial  Sector  (Commission de  Surveillance  du
Secteur Financier).  Clearstream,  Luxembourg customers are world-wide financial
institutions,  including  underwriters,  securities brokers and dealers,  banks,
trust  companies  and  clearing  corporations.  Clearstream,  Luxembourg's  U.S.
customers  are limited to  securities  brokers  and dealers and banks.  Indirect
access to Clearstream,  Luxembourg is also available to other  institutions such
as banks, brokers,  dealers and trust companies that clear through or maintain a
custodial  relationship with a Clearstream,  Luxembourg  customer.  Clearstream,
Luxembourg has established an electronic  bridge with the Euroclear  operator to
facilitate  settlement  of  trades  between  Clearstream,   Luxembourg  and  the
Euroclear operator.

      The Euroclear  operator  advises that the Euroclear  System was created in
1968 to hold securities for its participants,  "Euroclear  participants," and to
clear  and  settle   transactions   between   Euroclear   participants   through
simultaneous electronic book-entry delivery against payment, thereby eliminating
the need for  physical  movement  of  certificates  and any  risk  from  lack of
simultaneous  transfers of securities and cash. The Euroclear System is owned by
Euroclear Clearance System Public Limited Company and operated through a license
agreement by the Euroclear  operator,  a bank incorporated under the laws of the
Kingdom of Belgium.  The  Euroclear  operator is  regulated  and examined by the
Belgian Banking and Finance Commission and the National Bank of Belgium.

      The  Euroclear  operator  holds  securities  and  book-entry  interests in
securities for  participating  organizations  and  facilitates the clearance and
settlement of securities transactions between Euroclear participants and between
Euroclear   participants   and   participants   of  certain   other   securities
intermediaries  through  electronic  book-entry  changes  in  accounts  of  such
participants or other securities intermediaries.


                                      S-31
<PAGE>

      The Euroclear operator provides  Euroclear  participants with, among other
things,  safekeeping,   administration,  clearance  and  settlement,  securities
lending and borrowing and related services.

      Non-participants  of Euroclear may acquire,  hold and transfer  book-entry
interests in securities  through accounts with a direct participant of Euroclear
or any other  securities  intermediary  that holds a book-entry  interest in the
securities through one or more securities  intermediaries  standing between such
other securities intermediary and the Euroclear operator.

      Securities  clearance  accounts  and  cash  accounts  with  the  Euroclear
operator are governed by the Terms and Conditions Governing Use of Euroclear and
the related Operating Procedures of the Euroclear System, and applicable Belgian
law,  collectively,  the "terms and conditions." The terms and conditions govern
transfers of securities  and cash within the Euroclear  System,  withdrawals  of
securities  and cash from the  Euroclear  System,  and receipts of payments with
respect to securities in the Euroclear  System.  All securities in the Euroclear
System are held on a fungible basis without attribution of specific certificates
to specific securities clearance accounts. The Euroclear operator acts under the
terms and conditions only on behalf of Euroclear  participants and has no record
of or relationship with persons holding through Euroclear participants.

      Distributions with respect to the securities held beneficially through the
Euroclear System will be credited to the cash accounts of Euroclear participants
in accordance with the terms and conditions,  to the extent received by the U.S.
depositary for the Euroclear operator.

      Although  the  Euroclear  operator has agreed to the  procedures  provided
below  in  order  to  facilitate   transfers  of  securities   among   Euroclear
participants  and  between  Euroclear  participants  and  participants  of other
intermediaries,  it is under no  obligation to perform or continue to perform in
accordance  with  such  procedures,  and  such  procedures  may be  modified  or
discontinued at any time.

      Investors  electing  to acquire  securities  through  an account  with the
Euroclear  operator  or some  other  securities  intermediary  must  follow  the
settlement  procedures of such an intermediary with respect to the settlement of
new issues of  securities.  Investors  electing  to  acquire,  hold or  transfer
securities  through  an  account  with  the  Euroclear  operator  or some  other
securities  intermediary  must  follow  the  settlement  procedures  of  such an
intermediary with respect to the settlement of secondary market  transactions of
such securities.

      Investors who are  Euroclear  participants  may acquire,  hold or transfer
interests in securities  by book-entry to accounts with the Euroclear  operator.
Investors  who are not  Euroclear  participants  may  acquire,  hold or transfer
interests in securities by book-entry to accounts with a securities intermediary
who holds a  book-entry  interest  in these  securities  through  accounts  with
Euroclear.

      The Euroclear  operator further advises that investors that acquire,  hold
and transfer interests in the securities by book-entry through accounts with the
Euroclear operator or any other securities  intermediary are subject to the laws
and contractual provisions governing their relationship with their intermediary,
as well as the  laws  and  contractual  provisions  governing  the  relationship
between their intermediary and each other intermediary, if any, standing between
themselves and the securities.

      The Euroclear operator advises that, under Belgian law, investors that are
credited  with  securities  on the  records  of the  Euroclear  operator  have a
co-property  right in the fungible  pool of interests in  securities  on deposit
with the  Euroclear  operator in an amount  equal to the amount of  interests in
securities  credited to their  accounts.  In the event of the  insolvency of the
Euroclear operator,  Euroclear participants would have a right under Belgian law
to the return of the amount and type of  interests  in  securities  credited  to
their accounts with the Euroclear  operator.  If the Euroclear operator does not
have a sufficient  amount of interests in  securities on deposit of a particular
type to  cover  the  claims  of all  participants  credited  with  interests  in
securities of that type on the Euroclear  operator's  records,  all participants
having an amount of  interests  in  securities  of that type  credited  to their
accounts  with the  Euroclear  operator will have the right under Belgian law to
the return of their  pro-rata  share of the amount of  interests  in  securities
actually on deposit.

      Under  Belgian  law,  the  Euroclear  operator  is required to pass on the
benefits of ownership in any interests in securities on deposit with it (such as
dividends,  voting rights and other  entitlements)  to any person  credited with
those interests in securities on its records.


                                      S-32
<PAGE>

      Individual certificates in respect of the securities will not be issued in
exchange  for  the  registered  global   securities,   except  in  very  limited
circumstances.  If the Depositary  notifies us that it is unwilling or unable to
continue  as  a  clearing  system  in  connection  with  the  registered  global
securities or ceases to be a clearing agency  registered under the Exchange Act,
and a  successor  clearing  system is not  appointed  by us within 90 days after
receiving  that  notice  from the  Depositary  or upon  becoming  aware that the
Depositary  is no  longer  so  registered,  we will  issue or cause to be issued
individual certificates in registered form on registration of transfer of, or in
exchange  for,  book-entry  interests  in the  securities  represented  by  such
registered global securities upon delivery of those registered global securities
for cancellation.

      Title to book-entry  interests in the  securities  will pass by book-entry
registration of the transfer within the records of Clearstream,  Luxembourg, the
Euroclear  operator or the  Depositary,  as the case may be, in accordance  with
their  respective  procedures.  Book-entry  interests in the  securities  may be
transferred within  Clearstream,  Luxembourg and within the Euroclear System and
between  Clearstream,  Luxembourg  and the Euroclear  System in accordance  with
procedures  established  for these purposes by  Clearstream,  Luxembourg and the
Euroclear  operator.  Book-entry  interests in the securities may be transferred
within the Depositary in accordance with procedures established for this purpose
by the  Depositary.  Transfers of book-entry  interests in the securities  among
Clearstream,  Luxembourg  and the Euroclear  operator and the  Depositary may be
effected  in  accordance  with  procedures   established  for  this  purpose  by
Clearstream, Luxembourg, the Euroclear operator and the Depositary.

      A further  description of the Depositary's  procedures with respect to the
registered  global  securities  is set forth in the  prospectus  under "Forms of
Securities -- Global  Securities."  The  Depositary  has confirmed to us and the
trustee that it intends to follow these procedures.

Global Clearance and Settlement Procedures

      Initial  settlement for the  securities  offered on a global basis will be
made in  immediately  available  funds.  Secondary  market  trading  between the
Depositary's  participants will occur in the ordinary way in accordance with the
Depositary's rules and will be settled in immediately  available funds using the
Depositary's Same-Day Funds Settlement System.  Secondary market trading between
Clearstream,  Luxembourg  customers and/or Euroclear  participants will occur in
the  ordinary  way  in  accordance  with  the  applicable  rules  and  operating
procedures  of  Clearstream,  Luxembourg  and the  Euroclear  System and will be
settled using the procedures applicable to conventional Eurobonds in immediately
available funds.

      Cross-market  transfers  between  persons  holding  directly or indirectly
through the  Depositary  on the one hand,  and  directly or  indirectly  through
Clearstream,  Luxembourg customers or Euroclear participants, on the other, will
be effected through the Depositary in accordance with the Depositary's  rules on
behalf  of the  relevant  European  international  clearing  system  by its U.S.
depositary;  however,  these cross-market  transactions will require delivery of
instructions  to the  relevant  European  international  clearing  system by the
counterparty  in the clearing system in accordance with its rules and procedures
and within its established  deadlines  (European  time).  The relevant  European
international  clearing  system will, if the  transaction  meets its  settlement
requirements,  deliver  instructions  to its U.S.  depositary  to take action to
effect final settlement on its behalf by delivering  interests in the securities
to or receiving  interests in the securities from the Depositary,  and making or
receiving  payment in  accordance  with normal  procedures  for  same-day  funds
settlement applicable to the Depositary.  Clearstream,  Luxembourg customers and
Euroclear participants may not deliver instructions directly to their respective
U.S. depositaries.

      Because of time-zone  differences,  credits of interests in the securities
received in  Clearstream,  Luxembourg or the  Euroclear  System as a result of a
transaction  with a  Depositary  participant  will  be  made  during  subsequent
securities  settlement  processing  and dated the  business  day  following  the
Depositary  settlement date. Credits of interests or any transactions  involving
interests in the securities received in Clearstream, Luxembourg or the Euroclear
System as a result of a transaction  with a Depositary  participant  and settled
during  subsequent  securities  settlement  processing  will be  reported to the
relevant  Clearstream,  Luxembourg  customers or Euroclear  participants  on the
business  day  following  the  Depositary  settlement  date.  Cash  received  in
Clearstream,  Luxembourg  or the  Euroclear  System  as a  result  of  sales  of
interests in the securities by or through a Clearstream,  Luxembourg customer or
a Euroclear participant to a Depositary  participant will be received with value
on the


                                      S-33
<PAGE>

Depositary  settlement  date but will be available in the relevant  Clearstream,
Luxembourg  or Euroclear  cash  account  only as of the  business day  following
settlement in the Depositary.

      Although  the  Depositary,   Clearstream,  Luxembourg  and  the  Euroclear
operator  have  agreed  to the  foregoing  procedures  in  order  to  facilitate
transfers of interests in the securities  among  participants of the Depositary,
Clearstream,  Luxembourg and Euroclear,  they are under no obligation to perform
or continue to perform the  foregoing  procedures  and these  procedures  may be
changed or discontinued at any time.

Notices

      Notices to holders of the securities will be given by mailing such notices
to each holder by first class mail,  postage prepaid,  at the respective address
of each holder as that  address  appears  upon our books.  Notices  given to the
Depositary, as holder of the registered global securities,  will be passed on to
the beneficial  owners of the  securities in accordance  with the standard rules
and  procedures  of the  Depositary  and its direct and  indirect  participants,
including Clearstream, Luxembourg and the Euroclear operator.

      See also  "Plan of  Distribution  --  Series E Notes  Offered  on a Global
Basis."


                                      S-34
<PAGE>

                         UNITED STATES FEDERAL TAXATION

      In the opinion of Davis Polk & Wardwell,  our  special  tax  counsel,  the
following  summary  accurately  describes the principal U.S.  federal income tax
consequences  of ownership  and  disposition  of the notes and units.  Except as
specifically noted below, this discussion applies only to:

      o  notes and units that are purchased on original issuance; and

      o  notes that are held as capital assets.

      This discussion does not describe all of the tax consequences  that may be
relevant in light of a holder's  particular  circumstances or to holders subject
to special rules, such as:

      o  certain financial institutions;

      o  insurance companies;

      o  dealers in securities or foreign currencies;

      o  persons  holding  notes as part of a hedging  transaction,  "straddle,"
         conversion transaction or other integrated transaction;

      o  United States Holders,  as defined below, whose functional  currency is
         not the U.S. dollar; or

      o  partnerships  or other  entities  classified as  partnerships  for U.S.
         federal income tax purposes.

      This summary is based on the Internal  Revenue Code of 1986, as amended to
the date hereof (the "Code"), administrative pronouncements,  judicial decisions
and final, temporary and proposed Treasury Regulations,  changes to any of which
subsequent  to the  date  of  this  prospectus  supplement  may  affect  the tax
consequences  described  below.  Persons  considering  the purchase of the notes
should consult the applicable pricing  supplement for any additional  discussion
regarding U.S. federal income taxation and their tax advisers with regard to the
application of the U.S. federal income tax laws to their  particular  situations
as well as any tax  consequences  arising under the laws of any state,  local or
foreign taxing jurisdiction.

      This  discussion  does  not  apply  to  mandatorily   exchangeable  notes,
warrants,  units,  currency-linked notes or notes linked to commodities,  rates,
single  securities,   baskets  of  securities,  indices  or  other  quantitative
measures.  The tax  treatment  of these  instruments  will be  specified  in the
applicable pricing supplement and prospective purchasers are urged to review the
applicable pricing supplement and consult with their tax advisers.

Tax Consequences to United States Holders

      As used herein,  the term "United States Holder" means a beneficial  owner
of a note that is for U.S. federal income tax purposes:

      o  a citizen or individual resident of the United States;

      o  a  corporation,  or other  entity  taxable  as a  corporation  for U.S.
         federal income tax purposes,  created or organized in or under the laws
         of the United States or of any political subdivision thereof; or

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

      The term "United States Holder" also includes  certain former citizens and
residents of the United States.

      If an entity that is classified as a partnership  for U.S.  federal income
tax purposes  holds notes,  the U.S.  federal  income tax treatment of a partner
will  generally  depend on the status of the partner and upon the  activities of
the  partnership.  Partners of  partnerships  holding notes should  consult with
their tax advisers.

      Payments of Interest

      Interest  paid on a note  will be  taxable  to a United  States  Holder as
ordinary  interest  income at the time it accrues or is received  in  accordance
with the Holder's method of accounting for federal income tax purposes, provided
that the interest is "qualified  stated  interest" (as defined  below).  Special
rules govern the  treatment of interest paid with respect to certain  notes,  as
described under  "Original Issue  Discount,"  "Optionally  Exchangeable  Notes,"
"Mandatorily Exchangeable Notes" and "Foreign Currency Notes" below.


                                      S-35
<PAGE>

      Original Issue Discount

      A note that has an "issue price" that is less than its "stated  redemption
price at  maturity"  will be  considered  to have  been  issued  at an  original
discount  for  federal  income  tax  purposes  (and  will be  referred  to as an
"original issue discount note") unless the note satisfies a de minimis threshold
(as  described  below) or is a short-term  note (as defined  below).  The "issue
price" of a note will be the first  price at which a  substantial  amount of the
notes are sold to the public (not  including  sales to bond  houses,  brokers or
similar  persons  or  organizations  acting  in the  capacity  of  underwriters,
placement agents or wholesalers). The "stated redemption price at maturity" of a
note generally will equal the sum of all payments  required under the note other
than payments of "qualified  stated  interest."  "Qualified  stated interest" is
stated interest  unconditionally  payable (other than in debt instruments of the
issuer) at least  annually  during the entire  term of the note and equal to the
outstanding  principal  balance of the note multiplied by a single fixed rate of
interest. In addition,  qualified stated interest includes,  among other things,
stated  interest on a "variable rate debt  instrument"  that is  unconditionally
payable  (other than in debt  instruments  of the issuer) at least annually at a
single qualified  floating rate of interest or at a rate that is determined at a
single  fixed  formula  that  is  based  on  objective   financial  or  economic
information.  A rate generally is a qualified floating rate if variations in the
rate can reasonably be expected to measure  contemporaneous  fluctuations in the
cost of newly borrowed funds in the currency in which the note is denominated.

      If the difference between a note's stated redemption price at maturity and
its issue price is less than a de minimis amount,  i.e., 1/4 of 1 percent of the
stated  redemption price at maturity  multiplied by the number of complete years
to maturity,  the note will not be considered to have original  issue  discount.
United  States  Holders  of notes  with a de minimis  amount of  original  issue
discount will include this original issue  discount in income,  as capital gain,
on a pro rata basis as principal payments are made on the note.

      A United  States  Holder of  original  discount  notes will be required to
include any qualified stated interest  payments in income in accordance with the
Holder's  method of accounting  for federal  income tax purposes.  United States
Holders of  original  issue  discount  notes that mature more than one year from
their date of issuance will be required to include  original  issue  discount in
income for federal  tax  purposes  as it accrues in  accordance  with a constant
yield method based on a  compounding  of  interest,  regardless  of whether cash
attributable  to this  income is  received.  Under this  method,  United  States
Holders of original issue  discount notes  generally will be required to include
in income increasingly  greater amounts of original issue discount in successive
accrual periods.

      A United States Holder may make an election to include in gross income all
interest  that  accrues  on any note  (including  stated  interest,  acquisition
discount,  original issue discount,  de minimis original issue discount,  market
discount,  de minimis market discount and unstated interest,  as adjusted by any
amortizable  bond premium or acquisition  premium) in accordance with a constant
yield method based on the compounding of interest (a "constant yield election").

      A note  that  matures  one  year or less  from  its  date of  issuance  (a
"short-term note") will be treated as being issued at a discount and none of the
interest  paid on the note will be  treated as  qualified  stated  interest.  In
general, a cash method United States Holder of a short-term note is not required
to accrue the discount for U.S.  federal income tax purposes unless it elects to
do so.  Holders  who so elect and certain  other  Holders,  including  those who
report  income on the  accrual  method of  accounting  for  federal  income  tax
purposes,  are  required  to include  the  discount in income as it accrues on a
straight-line  basis,  unless  another  election is made to accrue the  discount
according to a constant yield method based on daily compounding.  In the case of
a United States Holder who is not required and who does not elect to include the
discount  in income  currently,  any gain  realized  on the sale,  exchange,  or
retirement of the short-term  note will be ordinary  income to the extent of the
discount  that would have  accrued on a  straight-line  basis (or,  if  elected,
according to a constant  yield method  based on daily  compounding)  through the
date of sale, exchange or retirement.  In addition,  those United States Holders
will be required  to defer  deductions  for any  interest  paid on  indebtedness
incurred to purchase or carry  short-term  notes in an amount not  exceeding the
accrued discount until the accrued discount is included in income.

      We may have an  unconditional  option to redeem,  or United States Holders
may have an  unconditional  option to require us to redeem,  a note prior to its
stated maturity date. Under applicable regulations,  if we have an unconditional
option to redeem a note prior to its stated  maturity date,  this option will be
presumed  to be  exercised  if, by  utilizing  any date on which the note may be
redeemed as the maturity date and the amount  payable on that


                                      S-36
<PAGE>

date in accordance with the terms of the note as the stated  redemption price at
maturity,  the yield on the note would be lower than its yield to  maturity.  If
the United States Holders have an unconditional option to require us to redeem a
note prior to its stated  maturity  date,  this  option  will be  presumed to be
exercised  if making  the same  assumptions  as those set forth in the  previous
sentence,  the yield on the note would be higher than its yield to maturity.  If
this  option is not in fact  exercised,  the note  would be  treated  solely for
purposes of calculating  original  issue discount as if it were redeemed,  and a
new note were issued,  on the presumed  exercise date for an amount equal to the
note's  adjusted  issue  price on that  date.  The  adjusted  issue  price of an
original  issue  discount  note is defined as the sum of the issue  price of the
note and the aggregate  amount of previously  accrued  original issue  discount,
less any prior payments other than payments of qualified stated interest.

      Market Discount

      If a United States Holder  purchases a note (other than a short-term note)
for an amount that is less than its stated  redemption  price at maturity or, in
the case of an original  issue  discount  note,  its adjusted  issue price,  the
amount of the difference  will be treated as market  discount for federal income
tax purposes, unless this difference is less than a specified de minimis amount.

      A United  States  Holder will be required to treat any  principal  payment
(or, in the case of an original  issue  discount note, any payment that does not
constitute  qualified  stated  interest) on, or any gain on the sale,  exchange,
retirement or other  disposition  of a note,  including  disposition  in certain
nonrecognition  transactions,  as  ordinary  income to the  extent of the market
discount  accrued on the note at the time of the payment or  disposition  unless
this market discount has been previously included in income by the United States
Holder  pursuant  to an  election  by the Holder to include  market  discount in
income as it accrues,  or pursuant to a constant yield election by the Holder as
described under  "Original Issue Discount"  above. If the note is disposed of in
certain nontaxable  transactions,  accrued market discount will be includible as
ordinary  income to the Holder as if such  Holder had sold the note in a taxable
transaction at its then fair market value. In addition, the United States Holder
may be  required  to  defer,  until  the  maturity  of the  note or its  earlier
disposition (including certain nontaxable transactions), the deduction of all or
a portion of the interest expense on any indebtedness  incurred or maintained to
purchase or carry such note.

      If a United States Holder makes a constant  yield election for a note with
market  discount,  such election will result in a deemed election for all market
discount  bonds  acquired  by the  Holder on or after the first day of the first
taxable year to which such election applies.

      Acquisition Premium and Amortizable Bond Premium

      A United  States Holder who purchases a note for an amount that is greater
than the note's  adjusted  issue  price but less than or equal to the sum of all
amounts  payable on the note after the  purchase  date  other than  payments  of
qualified  stated  interest will be considered to have  purchased the note at an
acquisition premium. Under the acquisition premium rules, the amount of original
issue  discount  that the United  States Holder must include in its gross income
with  respect to the note for any taxable year will be reduced by the portion of
acquisition premium properly allocable to that year.

      If a United States  Holder  purchases a note for an amount that is greater
than the amount payable at maturity, or on the earlier call date, in the case of
a note that is redeemable  at our option,  the Holder will be considered to have
purchased the note with  amortizable  bond premium equal in amount to the excess
of the purchase price over the amount payable at maturity.  The Holder may elect
to amortize this premium, using a constant yield method, over the remaining term
of the note (where the note is not optionally  redeemable  prior to its maturity
date). If the note may be optionally redeemed prior to maturity after the Holder
has  acquired  it, the amount of  amortizable  bond  premium  is  determined  by
substituting  the call  date for the  maturity  date and the call  price for the
amount payable at maturity only if the substitution  results in a smaller amount
of premium  attributable to the period before the redemption  date. A Holder who
elects to  amortize  bond  premium  must reduce his tax basis in the note by the
amount of the premium  amortized  in any year.  An  election  to  amortize  bond
premium  applies to all  taxable  debt  obligations  then  owned and  thereafter
acquired by the Holder and may be revoked  only with the consent of the Internal
Revenue Service.


                                      S-37
<PAGE>

      If a United  States Holder makes a constant  yield  election (as described
under "Original Issue Discount" above) for a note with amortizable bond premium,
such election will result in a deemed  election to amortize bond premium for all
of the  Holder's  debt  instruments  with  amortizable  bond  premium and may be
revoked only with the permission of the Internal Revenue Service with respect to
debt instruments acquired after revocation.

      Sale, Exchange or Retirement of the Notes

      Upon the sale,  exchange or  retirement  of a note, a United States Holder
will recognize  taxable gain or loss equal to the difference  between the amount
realized on the sale, exchange or retirement and the Holder's adjusted tax basis
in the note. For these purposes, the amount realized does not include any amount
attributable to accrued  interest on the note.  Amounts  attributable to accrued
interest  are treated as interest as  described  under  "Payments  of  Interest"
above.

      Except as described below, gain or loss realized on the sale,  exchange or
retirement  of a note  will  generally  be  capital  gain  or loss  and  will be
long-term  capital gain or loss if at the time of sale,  exchange or  retirement
the note has been held for more than one year.  Exceptions  to this general rule
apply  to the  extent  of any  accrued  market  discount  or,  in the  case of a
short-term note, to the extent of any accrued  discount not previously  included
in the  Holder's  taxable  income.  See  "Original  Issue  Discount"  above.  In
addition,  other  exceptions  to this  general rule apply in the case of foreign
currency notes and optionally  exchangeable  notes. See "Foreign Currency Notes"
and "Optionally Exchangeable Notes" below.

      Optionally Exchangeable Notes

      Unless otherwise noted in the applicable  pricing  supplement,  optionally
exchangeable notes will be treated as "contingent  payment debt instruments" for
U.S.  federal income tax purposes.  Under the rules that govern the treatment of
contingent  payment debt instruments,  no payment on an optionally  exchangeable
note qualifies as qualified stated interest. Rather, a United States Holder must
account for interest for U.S. federal income tax purposes based on a "comparable
yield" and the  differences  between actual  payments on the note and the note's
"projected  payment  schedule"  as  described  below.  The  comparable  yield is
determined by us at the time of issuance of the notes and takes into account the
yield at which we could issue a fixed rate debt  instrument  with no  contingent
payments,  but with  terms  and  conditions  otherwise  similar  to those of the
optionally  exchangeable notes. The comparable yield may be greater than or less
than the stated interest, if any, with respect to the notes.

      Solely for the purpose of determining the amount of interest income that a
United States will be required to accrue on an optionally  exchangeable note, we
will be required to construct a "projected  payment  schedule" that represents a
series of  payments  the  amount and  timing of which  would  produce a yield to
maturity on the optionally  exchangeable note equal to the comparable yield that
is used.

      Neither  the  comparable   yield  nor  the  projected   payment   schedule
constitutes a representation by us regarding the actual amount, if any, that the
optionally exchangeable note will pay.

      For U.S.  federal  income tax  purposes,  a United  States  Holder will be
required  to use  the  comparable  yield  and  the  projected  payment  schedule
established by us in determining interest accruals and adjustments in respect of
an  optionally  exchangeable  note,  unless  the  Holder  timely  discloses  and
justifies the use of a different comparable yield and projected payment schedule
to the Internal Revenue Service.

      A United States  Holder,  regardless of the Holder's  method of accounting
for U.S. federal income tax purposes, will be required to accrue interest income
on an optionally  exchangeable note at the comparable yield,  adjusted upward or
downward to reflect the difference, if any, between the actual and the projected
amount of any contingent  payments on the optionally  exchangeable  note (as set
forth below).

      A United States Holder will be required to recognize interest income equal
to the  amount  of any net  positive  adjustment,  i.e.,  the  excess  of actual
payments over projected payments, in respect of an optionally  exchangeable note
for a taxable  year. A net negative  adjustment,  i.e.,  the excess of projected
payments over actual payments, in respect of an optionally exchangeable note for
a taxable year:

      o  will first  reduce the amount of interest in respect of the  optionally
         exchangeable  note that a Holder would otherwise be required to include
         in income in the taxable year; and


                                      S-38
<PAGE>

      o  to the extent of any excess,  will give rise to an ordinary  loss equal
         to so much of this excess as does not exceed the excess of:

         o  the amount of all previous interest  inclusions under the optionally
            exchangeable note over

         o  the  total  amount  of  the  United  States  Holder's  net  negative
            adjustments treated as ordinary loss on the optionally  exchangeable
            note in prior taxable years.

      A net  negative  adjustment  is not  subject  to  the  two  percent  floor
limitation imposed on miscellaneous  deductions.  Any net negative adjustment in
excess of the amounts  described  above will be carried forward to offset future
interest income in respect of the optionally  exchangeable note or to reduce the
amount realized on a sale, exchange or retirement of the optionally exchangeable
note. Where a United States Holder purchases an optionally exchangeable note for
a price other than its adjusted issue price, the difference between the purchase
price and the  adjusted  issue price must be  reasonably  allocated to the daily
portions  of interest  or  projected  payments  with  respect to the  optionally
exchangeable  note over its remaining term and treated as a positive or negative
adjustment,  as the case may be,  with  respect  to each  period  to which it is
allocated.

      Upon a sale,  exchange or retirement of an  optionally  exchangeable  note
(including  a delivery  of shares  pursuant to the terms of the  obligation),  a
United States Holder will generally  recognize taxable gain or loss equal to the
difference  between the amount realized on the sale,  exchange or retirement and
the Holder's  adjusted  basis in the  optionally  exchangeable  note. A Holder's
adjusted  basis in the note will  equal the cost of the note,  increased  by the
amount of  interest  income  previously  accrued by the Holder in respect of the
note  (disregarding  any positive or negative  adjustments  described above) and
decreased by the amount of all prior projected  payments in respect of the note.
If we deliver property, other than cash, to a United States Holder in retirement
of an  optionally  exchangeable  note,  the amount  realized will equal the fair
market value of the  property,  determined at the time of  retirement,  plus the
amount of cash,  if any,  received in lieu of property.  A United  States Holder
generally will treat any gain as interest income,  and any loss as ordinary loss
to the extent of the excess of  previous  interest  inclusions  in excess of the
total net negative adjustments previously taken into account as ordinary losses,
and the balance as capital loss. The  deductibility of capital losses is subject
to limitations. Additionally, a United States Holder who recognizes a loss above
certain  thresholds  could be required to file a disclosure  statement  with the
Internal Revenue Service.

      A United States  Holder will have a tax basis in any property,  other than
cash, received upon the retirement of an optionally  exchangeable note including
in satisfaction  of a conversion  right or a call right equal to the fair market
value of the  property,  determined  at the  time of  retirement.  The  Holder's
holding period for the property will commence on the day  immediately  following
its receipt.

      Foreign Currency Notes

      The following  discussion  summarizes the principal  United States federal
income  tax  consequences  to a  United  States  Holder  of  the  ownership  and
disposition of notes that are denominated in a specified currency other than the
U.S. dollar, which we refer to as "foreign currency notes." The tax treatment of
currency-linked  notes and notes the payment of interest or  principal  on which
are  payable in more than one  currency  or  currency  units other than the U.S.
dollar will be specified in the relevant pricing supplement.

      The rules  applicable to foreign  currency notes could require some or all
gain or loss on the sale,  exchange or other  disposition of a foreign  currency
note to be  recharacterized  as ordinary income or loss. The rules applicable to
foreign  currency  notes are complex and may depend on the  holder's  particular
U.S. federal income tax situation.  For example, various elections are available
under these rules,  and whether a United  States Holder should make any of these
elections may depend on the holder's  particular  federal  income tax situation.
United States Holders are urged to consult their own tax advisers  regarding the
U.S. federal income tax consequences of the ownership and disposition of foreign
currency notes.

      A United  States  Holder who uses the cash  method of  accounting  and who
receives a payment of  qualified  stated  interest  in a foreign  currency  with
respect to a foreign  currency  note will be  required  to include in income the
U.S. dollar value of the foreign  currency  payment  (determined on the date the
payment is received)  regardless of whether the payment is in fact  converted to
U.S.  dollars at the time, and this U.S.  dollar value will be the United States
Holder's tax basis in the foreign currency.  A cash method Holder who receives a
payment of  qualified  stated


                                      S-39
<PAGE>

interest in U.S. dollars pursuant to an option available under such note will be
required to include the amount of this payment in income upon receipt.

      An accrual  method  United  States  Holder  will be required to include in
income  the U.S.  dollar  value of the  amount  of  interest  income  (including
original issue discount or market discount,  but reduced by acquisition  premium
and amortizable bond premium,  to the extent applicable) that has accrued and is
otherwise  required to be taken into account with respect to a foreign  currency
note during an accrual period.  The U.S. dollar value of the accrued income will
be determined by translating  the income at the average rate of exchange for the
accrual  period or,  with  respect to an accrual  period  that spans two taxable
years,  at the average rate for the partial  period within the taxable year. The
United  States  Holder will  recognize  ordinary  income or loss with respect to
accrued interest income on the date the income is actually received.  The amount
of ordinary income or loss recognized will equal the difference between the U.S.
dollar value of the foreign currency  payment  received  (determined on the date
the payment is  received) in respect of the accrual  period (or,  where a Holder
receives  U.S.  dollars,  the amount of the  payment  in respect of the  accrual
period) and the U.S. dollar value of interest income that has accrued during the
accrual period (as determined above).  Rules similar to these rules apply in the
case of a cash method  taxpayer  required to  currently  accrue  original  issue
discount or market discount.

      An accrual  method United  States  Holder may elect to translate  interest
income (including original issue discount) into U.S. dollars at the spot rate on
the  last day of the  interest  accrual  period  (or,  in the case of a  partial
accrual  period,  the spot rate on the last day of the taxable  year) or, if the
date of receipt is within  five  business  days of the last day of the  interest
accrual  period,  the spot rate on the date of receipt.  A United  States Holder
that makes this election must apply it consistently to all debt instruments from
year to year and cannot change the election  without the consent of the Internal
Revenue Service.

      Original  issue  discount,   market  discount,   acquisition  premium  and
amortizable  bond premium on a foreign currency note are to be determined in the
relevant foreign currency.  Where the taxpayer elects to include market discount
in income  currently,  the amount of market  discount will be determined for any
accrual period in the relevant  foreign  currency and then  translated into U.S.
dollars on the basis of the average  rate in effect  during the accrual  period.
Exchange  gain or loss  realized  with respect to such accrued  market  discount
shall be determined in accordance  with the rules  relating to accrued  interest
described above.

      If an election to amortize bond premium is made,  amortizable bond premium
taken into account on a current basis shall reduce  interest  income in units of
the relevant  foreign  currency.  Exchange gain or loss is realized on amortized
bond premium  with respect to any period by treating the bond premium  amortized
in the period in the same manner as on the sale,  exchange or  retirement of the
foreign currency note. Any exchange gain or loss will be ordinary income or loss
as described  below. If the election is not made, any loss realized on the sale,
exchange or retirement  of a foreign  currency note (other than to the extent of
exchange loss) with  amortizable  bond premium by a United States Holder who has
not elected to amortize  the premium will be a capital loss to the extent of the
bond premium.

      A United States  Holder's tax basis in a foreign  currency  note,  and the
amount of any subsequent  adjustment to the holder's tax basis, will be the U.S.
dollar  value  amount  of the  foreign  currency  amount  paid for such  foreign
currency note, or of the foreign  currency amount of the adjustment,  determined
on the date of the purchase or adjustment.  A United States Holder who purchases
a foreign  currency note with previously  owned foreign  currency will recognize
ordinary  income or loss in an amount equal to the difference,  if any,  between
such  United  States  Holder's  tax basis in the foreign  currency  and the U.S.
dollar fair market value of the foreign currency note on the date of purchase.

      Gain or loss realized  upon the sale,  exchange or retirement of a foreign
currency note that is  attributable  to fluctuation  in currency  exchange rates
will be ordinary  income or loss which will not be treated as interest income or
expense.  Gain or loss attributable to fluctuations in exchange rates will equal
the  difference  between  (i) the  U.S.  dollar  value of the  foreign  currency
principal amount of the note,  determined on the date the payment is received or
the note is disposed of, and (ii) the U.S. dollar value of the foreign  currency
principal  amount of the note,  determined  on the date the United States Holder
acquired the note.  Payments  received that are attributable to accrued interest
will be treated in accordance with the rules  applicable to payments of interest
on foreign  currency notes described  above.  The foreign  currency gain or loss
will be recognized  only to the extent of the total gain or


                                      S-40
<PAGE>

loss realized by the United States Holder on the sale, exchange or retirement of
the foreign  currency note. The source of the foreign currency gain or loss will
be  determined  by reference to the residence of the United States Holder or the
"qualified  business  unit" of the  holder on whose  books the note is  properly
reflected. Any gain or loss realized by these United States Holders in excess of
the  foreign  currency  gain or loss will be capital  gain or loss except to the
extent of any accrued market discount or, in the case of short-term note, to the
extent of any discount not previously included in the holder's income.

      A United  States  Holder  will  have a tax basis in any  foreign  currency
received on the sale, exchange or retirement of a foreign currency note equal to
the U.S. dollar value of the foreign  currency,  determined at the time of sale,
exchange  or  retirement.  A cash  method  taxpayer  who buys or sells a foreign
currency  note is  required  to  translate  units of  foreign  currency  paid or
received  into  U.S.  dollars  at the spot  rate on the  settlement  date of the
purchase  or sale.  Accordingly,  no  exchange  gain or loss  will  result  from
currency  fluctuations  between  the trade date and the  settlement  date of the
purchase or sale. An accrual  method  taxpayer may elect the same  treatment for
all purchases and sales of foreign currency  obligations provided that the notes
are traded on an established  securities market. This election cannot be changed
without the consent of the Internal Revenue  Service.  Any gain or loss realized
by a United States  Holder on a sale or other  disposition  of foreign  currency
(including its exchange for U.S. dollars or its use to purchase foreign currency
notes) will be ordinary income or loss.

      Backup Withholding and Information Reporting

      Information  returns  will be filed with the Internal  Revenue  Service in
connection  with  payments  on the notes and the  proceeds  from a sale or other
disposition of the notes.  A United States Holder may be subject to U.S.  backup
withholding  on these  payments  if it fails to provide  its tax  identification
number to the paying agent and comply with certain  certification  procedures or
otherwise  establish an  exemption  from backup  withholding.  The amount of any
backup withholding from a payment to a United States Holder will be allowed as a
credit  against the Holder's U.S.  federal  income tax liability and may entitle
them to a refund,  provided  that the required  information  is furnished to the
Internal Revenue Service.

Tax Consequences to Non-United States Holders

      As used herein,  the term  "Non-United  States  Holder" means a beneficial
owner of a note that is, for United States federal income tax purposes:

      o  an  individual  who is classified  as a  nonresident  for U.S.  federal
         income tax purposes;

      o  a foreign corporation; or

      o  a foreign estate or trust.

      "Non-United  States Holder" does not include a holder who is an individual
present  in the  United  States  for 183  days or  more in the  taxable  year of
disposition  and who is not  otherwise a resident of the United  States for U.S.
federal  income tax  purposes.  Such a holder is urged to consult his or her own
tax advisor  regarding the U.S.  federal  income tax  consequences  of the sale,
exchange or other disposition of a note.

      Subject to the discussion below concerning backup withholding, payments of
principal,  interest (including original issue discount,  if any) and premium on
the notes by us or any paying agent to any Non-United  States Holder will not be
subject to United States federal  withholding tax, provided that, in the case of
interest,   (i)  the  Non-United   States  Holder  does  not  own,  actually  or
constructively,  10 percent or more of the total  combined  voting  power of all
classes  of  our  stock  entitled  to  vote  and  is  not a  controlled  foreign
corporation related,  directly or indirectly,  to us through stock ownership and
(ii) if the note is a registered note, the certification  requirement  described
below has been  fulfilled  with respect to the  beneficial  owner,  as discussed
below.   Additionally,   subject  to  the  discussion  below  concerning  backup
withholding,  a Non-United States Holder of a note will not be subject to United
States  federal  income  tax on gain  realized  on the sale,  exchange  or other
disposition  of such note,  unless the gain is  effectively  connected  with the
conduct by the holder of a trade or business in the United States.

      Certification Requirement

      Interest and original issue  discount will not be exempt from  withholding
tax unless the  beneficial  owner of that note  certifies  on  Internal  Revenue
Service Form W-8BEN, under penalties of perjury,  that it is not a United


                                      S-41
<PAGE>

States person. The exemption will not apply to contingent interest if the amount
of the interest is determined with reference to our financial performance or the
financial  performance  of a related  person or with reference to changes in the
value of our or a related  person's  assets.  Unless  otherwise  provided in the
applicable pricing supplement, we do not expect to pay this type of interest.

      If a Non-United  States Holder of a note is engaged in a trade or business
in the United States, and if interest (including original issue discount) on the
note is effectively  connected  with the conduct of this trade or business,  the
Non-United States Holder,  although exempt from the withholding tax discussed in
the preceding paragraph,  will generally be taxed in the same manner as a United
States Holder (see "Tax  Consequences to United States Holders"  above),  except
that the Holder will be  required to provide to the Company a properly  executed
Internal  Revenue  Service  Form  W-8ECI  in order to  claim an  exemption  from
withholding  tax. These  Non-United  States Holders should consult their own tax
advisors  with  respect to other U.S.  tax  consequences  of the  ownership  and
disposition of notes,  including the possible imposition of a 30% branch profits
tax.

      Subject to benefits provided by an applicable estate tax treaty, a note or
coupon held by an individual who is a Non-United States Holder may be subject to
United States federal estate tax upon the  individual's  death if, at such time,
interest payments on the note would have been:

      o  subject to United States  federal  withholding  tax (even if the W-8BEN
         certification requirement described above were satisfied); or

      o  effectively  connected  to the  conduct  by the  holder  of a trade  or
         business in the United States.

      Backup Withholding and Information Reporting

      Information  returns will be filed with the United States Internal Revenue
Service in connection with payments on the notes.  Unless the Non-United  States
Holder  complies with  certification  procedures  to establish  that it is not a
United States  person,  information  returns may be filed with the United States
Internal  Revenue  Service in connection  with the proceeds from a sale or other
disposition  and the  Non-United  States  Holder may be subject to United States
backup  withholding  tax on payments on the notes or on the proceeds from a sale
or other  disposition of the notes.  The  certification  procedures  required to
claim the exemption from withholding tax on interest and original issue discount
described above will satisfy the certification  requirements  necessary to avoid
the backup  withholding tax as well. The amount of any backup withholding from a
payment to a Non-United  States  Holder will be allowed as a credit  against the
Non-United  States  Holder's  United States federal income tax liability and may
entitle the  Non-United  States  Holder to a refund,  provided that the required
information is furnished to the Internal Revenue Service.

      The federal  income tax discussion set forth above is included for general
information only and may not be applicable  depending upon a holder's particular
situation. Holders should consult their own tax advisors with respect to the tax
consequences  to them of the ownership and  disposition of the notes,  including
the tax  consequences  under  state,  local,  foreign and other tax laws and the
possible effects of changes in federal or other tax laws.


                                      S-42
<PAGE>

                              PLAN OF DISTRIBUTION

      We are offering the Series E securities on a continuing basis through J.P.
Morgan Securities Inc. ("JPMSI"), which we refer to as the "agent" to the extent
it is named in the applicable pricing supplement.  In addition, we may offer the
Series E notes  through  certain  other  agents  to be  named in the  applicable
pricing supplement. The agent has agreed and any additional agents will agree to
use reasonable  efforts to solicit offers to purchase these securities.  We will
have the sole right to accept offers to purchase these securities and may reject
any offer in whole or in part.  Each agent may reject,  in whole or in part, any
offer it solicited to purchase  securities.  We will pay an agent, in connection
with sales of these securities  resulting from a solicitation that agent made or
an offer to  purchase  the  agent  received,  a  commission  as set forth in the
applicable pricing supplement.

      We may also sell these  securities  to an agent as  principal  for its own
account at  discounts  to be agreed upon at the time of sale as disclosed in the
applicable  pricing  supplement.  That  agent may  resell  these  securities  to
investors and other purchasers at a fixed offering price or at prevailing market
prices,  or prices related  thereto at the time of resale or otherwise,  as that
agent determines and as we will specify in the applicable pricing supplement. An
agent may offer the  securities it has purchased as principal to other  dealers.
That  agent may sell the  securities  to any dealer at a  discount  and,  unless
otherwise specified in the applicable pricing  supplement,  the discount allowed
to any dealer will not be in excess of the discount that agent will receive from
us. After the initial public  offering of securities that the agent is to resell
on a fixed public offering price basis, the agent may change the public offering
price, concession and discount.

      The agent may be deemed to be an  "underwriter"  within the meaning of the
Securities  Act of 1933,  as amended.  We and the agent have agreed to indemnify
each  other  against  certain  liabilities,   including  liabilities  under  the
Securities  Act,  or  to  contribute  to  payments  made  in  respect  of  those
liabilities. We have also agreed to reimburse the agent for specified expenses.

      We estimate that we will spend approximately $300,000 for printing, rating
agency, trustee and legal fees and other expenses allocable to the offering.

      Unless otherwise provided in the applicable pricing supplement,  we do not
intend to apply for the  listing of these  securities  on a national  securities
exchange, but we have been advised by the agent that it intends to make a market
in these securities or, if separable, any other securities included in units, as
applicable  laws and  regulations  permit.  The agent is not obligated to do so,
however,  and the agent  may  discontinue  making a market  at any time  without
notice.  No assurance can be given as to the liquidity of any trading market for
these securities or, if separable, any other securities included in units.

      JPMSI is our wholly owned indirect  subsidiary.  To the extent it is named
in the applicable pricing supplement,  each offering of these securities will be
conducted in compliance with the requirements of Rule 2720 of the NASD regarding
an NASD member firm's distributing the securities of an affiliate. Following the
initial  distribution of these  securities,  each agent may offer and sell those
securities in the course of its business as a broker-dealer. An agent may act as
principal  or agent in those  transactions  and will make any  sales at  varying
prices related to prevailing market prices at the time of sale or otherwise. The
agent  may use  this  prospectus  supplement  in  connection  with  any of those
transactions.  The  agents  are not  obligated  to make a market in any of these
securities or any other  securities  included in units and may  discontinue  any
market-making activities at any time without notice.

      Neither  the agents nor any dealer  utilized  in the  initial  offering of
these  securities  will  confirm  sales to  accounts  over  which  it  exercises
discretionary  authority  without  the prior  specific  written  approval of its
customer.

      In order to facilitate  the offering of these  securities,  the agents may
engage in transactions that stabilize, maintain or otherwise affect the price of
these  securities or of any other  securities the prices of which may be used to
determine payments on these securities.  Specifically,  the agents may sell more
securities  than they are obligated to purchase in connection with the offering,
creating a short  position in these  securities  for their own account.  A short
sale is covered if the short position is no greater than the number or amount of
securities available for purchase by the agents under any overallotment  option.
The agents can close out a covered short sale by exercising  the  over-allotment
option or purchasing  these  securities in the open market.  In determining  the
source  of  securities  to close out a  covered  short  sale,  the  agents  will
consider, among other things, the open market price of these


                                      S-43
<PAGE>

securities  compared to the price available under the overallotment  option. The
agents may also sell these  securities or any other  securities in excess of the
overallotment option, creating a naked short position. The agents 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 agents 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 agents 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 agents are not required to engage in these activities,  and may
end any of these activities at any time.

Series E Notes, Series E Warrants and Series E Units Offered on a Global Basis

      If the applicable  pricing  supplement  indicates that any of our Series E
medium-term  notes,  Series E  warrants  or Series E units  will be offered on a
global basis,  those  registered  global  securities will be offered for sale in
those  jurisdictions  outside  of the  United  States  where it is legal to make
offers for sale of those securities.

      The agent has represented and agreed, and any other agent through which we
may offer any Series E medium-term notes, Series E warrants or Series E units on
a global basis will represent and agree, that it will comply with all applicable
laws and regulations in force in any jurisdiction in which it purchases, offers,
sells or delivers the  securities  or possesses or  distributes  the  applicable
pricing supplement,  this prospectus  supplement or the accompanying  prospectus
and will  obtain any  consent,  approval  or  permission  required by it for the
purchase,  offer or sale by it of the securities  under the laws and regulations
in  force  in any  jurisdiction  to  which  it is  subject  or in which it makes
purchases,   offers  or  sales  of  the  securities,   and  we  shall  not  have
responsibility   for  the  agent's  compliance  with  the  applicable  laws  and
regulations or obtaining any required consent, approval or permission.

      With respect to sales in any jurisdictions outside of the United States of
such securities offered on a global basis, purchasers of any such securities may
be required to pay stamp taxes and other charges in accordance with the laws and
practices of the country of purchase in addition to the issue price set forth on
the cover page hereof.

                                  LEGAL MATTERS

      The  validity  of the notes,  warrants  and units will be passed  upon for
JPMorgan  Chase & Co. by Simpson  Thacher & Bartlett LLP.  Davis Polk & Wardwell
will pass upon certain legal matters  relating to the notes,  warrants and units
for the agents. Davis Polk & Wardwell has in the past represented JPMorgan Chase
& Co. and its  affiliates,  and continues to represent  JPMorgan Chase & Co. and
its affiliates on a regular basis and in a variety of matters.


                                      S-44
<PAGE>

Prospectus

                             [LOGO] JPMorgan Chase

                              JPMorgan Chase & Co.

                                 $4,738,098,000

                                 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 September 23, 2004

<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  $4,738,098,000  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 1 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 JPMorgan  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.


                                       i

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

Where You Can Find More Information .......................................    1
JPMorgan Chase & Co. ......................................................    2
Consolidated Ratios Of Earnings To Fixed Charges ..........................    4
Use Of Proceeds ...........................................................    4
Description Of Debt Securities ............................................    5
Description Of Warrants ...................................................   11
Description Of Units ......................................................   15
Forms Of Securities .......................................................   17
Plan Of Distribution ......................................................   20
Experts ...................................................................   22
Legal Opinions ............................................................   22
ERISA Matters For Pension Plans And Insurance Companies ...................   22

                                   ----------

      In this prospectus,  the "Company," "we," "us" and "our" refer to JPMorgan
Chase & Co. and its subsidiaries, except where the context otherwise requires or
as otherwise indicated.


                                       ii

<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, 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  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 Sections 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,
                2003 (filed on February 18, 2004 and amended on June 28, 2004);

           (b)  our Quarterly  Reports on Form 10-Q for the quarters ended March
                31,  2004  (filed on May 10,  2004) and June 30,  2004 (filed on
                August 9, 2004); and

           (c)  our  Current  Reports  on Form 8-K filed on  January  21,  2004,
                January  28,  2004,  February 3, 2004,  March 1, 2004,  March 4,
                2004,  April 21, 2004,  May 3, 2004, May 11, 2004, May 14, 2004,
                May 27, 2004, June 3, 2004, June 8, 2004, June 15, 2004, July 1,
                2004 (as amended on July 30, 2004 and August 13, 2004),  July 8,
                2004,  July 21, 2004 (two reports  filed) and  September 8, 2004
                (other than, in each case,  the portions of those  documents not
                deemed to be filed).

      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,  JPMorgan Chase & Co., 270 Park Avenue, New York, New York 10017 2070
(Telephone: (212) 270-4040).


                                       1
<PAGE>

                              JPMORGAN CHASE & CO.

      On July 1, 2004,  JPMorgan  Chase & Co.  ("JPMorgan  Chase")  and Bank One
Corporation  consummated  the  merger  of Bank  One  Corporation  with  and into
JPMorgan Chase.

      JPMorgan Chase is a financial holding company  incorporated under Delaware
law in 1968.  JPMorgan Chase is one of the largest  banking  institutions in the
United States,  with more than $1 trillion in assets and operations in more than
50 countries.  Its principal  bank  subsidiaries  are JPMorgan Chase Bank, a New
York banking corporation,  Chase Manhattan Bank USA, National Association,  Bank
One Ohio,  N.A., Bank One Illinois,  N.A. and Bank One Delaware,  N.A.  JPMorgan
Chase's  principal  nonbank  subsidiary is its  investment  banking  subsidiary,
JPMorgan Securities. The bank and nonbank subsidiaries of JPMorgan Chase operate
nationally as well as through overseas branches and subsidiaries, representative
offices and affiliated banks.

      JPMorgan  Chase's  activities  are  internally  organized,  for management
reporting purposes, into six major business segments:  Investment Bank; Treasury
& Securities  Services;  Asset & Wealth  Management;  Card Services;  Commercial
Banking; and Retail Financial Services.  The following is a brief description of
those businesses.

Investment Bank

      The Investment  Bank is one of the world's leading  investment  banks with
broad client relationships and product capabilities.  JPMorgan Chase's customers
are  corporations,   financial   institutions,   governments  and  institutional
investors  worldwide.  The Investment Bank provides a complete  platform for its
clients, including advising on corporate strategy and structure, equity and debt
capital raising,  sophisticated  risk management,  research and market-making in
cash securities and derivative instruments around the world. The Investment Bank
also participates in proprietary investing and trading.

Treasury & Securities Services

      Treasury  &   Securities   Services  is  a  global   leader  in  providing
transaction, investment and information services to support the needs of issuers
and  investors  worldwide.  JPMorgan  Chase is one of the world's  largest  cash
management providers and one of the world's largest custodians.

Asset & Wealth Management

      Asset &  Wealth  Management  provides  investment  and  wealth  management
services  to  institutional,  high net  worth  and  retail  investors  and their
advisors.   For  wealthy   individuals  and  families,   JPMorgan  Chase  offers
personalized financial solutions that integrate investment  management,  capital
markets,  trust and banking  products.  JPMorgan Chase provides  retirement plan
services and brokerage for retail clients.

Card Services

      JPMorgan  Chase is the second largest issuer of credit cards in the United
States and the largest merchant  acquirer.  JPMorgan Chase offers a wide variety
of cards to satisfy  the needs of its  cardmembers,  including  cards  issued on
behalf of major airlines, hotels,  universities,  top retailers, other financial
institutions and other well-known brands.

Commercial Banking

      Commercial Banking includes three client segments:  Middle Market Banking,
which  serves  companies  with  revenues  between $10 million and $500  million;
Mid-Corporate Banking, which focuses on clients with more significant Investment
Banking  needs;  and  Commercial  Real Estate.  Commercial  Banking also has two
product segments: Asset Based Lending and Commercial Leasing.


                                       2
<PAGE>

Retail Financial Services

      Retail  Financial  Services  provides  consumer  banking,  small  business
banking,  auto and  education  finance,  insurance  and home  finance.  JPMorgan
Chase's  extensive  branch network of 2,400 retail banking  centers in 17 states
makes it the fourth-largest retail bank in the United States.  JPMorgan Chase is
one of the industry's  leading  providers of mortgages and home equity loans and
is the largest U.S. bank originator of auto loans and leases.

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


                                       3
<PAGE>

                CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>

                                           Six Months                   Year Ended December 31,
                                         Ended June 30,   ----------------------------------------------------
                                              2004        2003        2002       2001        2000        1999
                                          -------------   -----       -----      -----       -----       -----
<S>                                           <C>         <C>         <C>        <C>         <C>         <C>
Excluding Interest on Deposits ........       1.46        2.27        1.28       1.18        1.52        1.93
Including Interest on Deposits ........       1.32        1.87        1.17       1.11        1.31        1.54
</TABLE>

      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.

                                 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.


                                       4
<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 dated May 25, 2001,
between us and Deutsche  Bank Trust  Company  Americas  (formerly  Bankers Trust
Company),  as trustee.  We refer to the Indenture,  as may be supplemented  from
time to time, as the "Indenture."

      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  JPMorgan  Chase  Bank,  Chase
         Manhattan Bank USA, National Association, Bank One Ohio, N.A., Bank One
         Illinois,  N.A.,  Bank  One  Delaware,  N.A and  other  of our  banking
         subsidiaries.

      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


                                       5
<PAGE>

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 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

      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.


                                       6
<PAGE>

      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)


                                       7
<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".


                                       8
<PAGE>

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

      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  we are a party or by which we are
         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)


                                       9
<PAGE>

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

      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 JPMorgan 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 JPMorgan
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,  Deutsche  Bank Trust  Company  Americas.  Deutsche  Bank Trust Company
Americas  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.


                                       10
<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;


                                       11
<PAGE>

      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;

      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;


                                       12
<PAGE>

      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;

      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.


                                       13
<PAGE>

      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.

      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  by us 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.


                                       14
<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."


                                       15
<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.


                                       16
<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 any action that
a holder is entitled


                                       17
<PAGE>

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
us,  the  trustees,  the  warrant  agents,  the unit  agents or any of our other
agents, 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,  the  indenture
permits us at any time and in our sole  discretion  to decide not to have any of
the securities represented by one or more registered global securities. However,
The Depository Trust Company,  New York, New York has advised us that, under its
current  practices,  it would notify its  participants of our request,  but will
only withdraw beneficial  interests from the global securities at the request of
each DTC  participant.  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


                                       18
<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 we have  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 we 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.


                                       19
<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.


                                       20
<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., which is commonly  referred to as the
NASD,  regarding the  distribution of securities of an affiliate.  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.

      As required  by the NASD,  (a)  post-effective  amendments  or  prospectus
supplements  disclosing  the actual price and selling terms will be submitted to
the NASD's  Corporate  Financing  Department  (the Department ) at the same time
they are filed with the SEC, (b) the Department  will be advised if,  subsequent
to the  filing of the  offering,  any 5% or  greater  shareholder  of ours is or
becomes an affiliate or associated person of an NASD member participating in the
distribution,  and (c) all  NASD  members  participating  in the  offering  will
confirm  their  understanding  of  the  requirements  that  have  to be  met  in
connection  with  SEC  Rule  415  and  Notice-to-Members  88-101.   Underwriting
discounts and  commissions on securities sold in the initial  distribution  will
not exceed 8% of the offering proceeds.

      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.


                                       21
<PAGE>

                                     EXPERTS

      The audited financial  statements of JPMorgan Chase & Co. contained in our
Annual  Report  on  Form  10-K  for  the  year  ended  December  31,  2003,  are
incorporated  by  reference  in this  prospectus  in  reliance on the reports of
PricewaterhouseCoopers  LLP, an independent  registered  public accounting firm,
given on the authority of that firm as experts in auditing and  accounting.  The
audited  financial  statements of Bank One Corporation  contained in our Current
Report on Form 8-K dated March 1, 2004 are  incorporated  by  reference  in this
prospectus  in reliance on the  reports of KPMG LLP, an  independent  registered
public  accounting  firm,  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 JPMorgan  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 JPMorgan Chase & Co. and its affiliates,  and continues to represent
JPMorgan  Chase & Co. and its  affiliates 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.


                                       22
<PAGE>

                                TABLE OF CONTENTS

Pricing Supplement                                                          Page
------------------                                                          ----

Summary ............................................................        PS-1
Risk Factors .......................................................        PS-8
Use of
Proceeds ...........................................................       PS-13
Description of Notes ...............................................       PS-14
The S&P 500(R) Index ...............................................       PS-20
The Nikkei 225 Index ...............................................       PS-25
The Dow Jones EURO STOXX 50(SM) Index ..............................       PS-29
Historical Basket Values ...........................................       PS-34
Certain U.S. Federal Income Tax Consequences........................       PS-35
Underwriting .......................................................       PS-38
ERISA Matters for Pension Plans and Insurance Companies ............       PS-39

Prospectus Supplement                                                       Page
---------------------                                                       ----

About this Prospectus Supplement ...................................         S-1
Where You Can Find Out More About Us ...............................         S-2
JPMorgan Chase & Co. ...............................................         S-3
Consolidated Ratios of Earnings to Fixed Charges ...................         S-5
Foreign Currency Risks .............................................         S-6
Description of Notes ...............................................         S-8
Descriptions of Warrants ...........................................        S-26
Description of Units ...............................................        S-27
The Depositary .....................................................        S-29
Series E Securities Offered on a Global Basis ......................        S-31
United States Federal Taxation .....................................        S-35
Plan of Distribution ...............................................        S-43
Legal Matters ......................................................        S-44

Prospectus                                                                  Page
----------                                                                  ----

Where You Can Find More Information About Us .......................           1
JPMorgan Chase & Co. ...............................................           2
Consolidated Ratios of Earnings to Fixed Charges ...................           4
Use of Proceeds ....................................................           4
Description of Debt Securities .....................................           5
Description of Warrants ............................................          11
Description of Units ...............................................          15
Forms of Securities ................................................          17
Plan of Distribution ...............................................          20
Experts ............................................................          22
Legal Opinions .....................................................          22
ERISA Matters for Pension Plans and Insurance Companies ............          22

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

      The notes described in this pricing 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  pricing
supplement nor the accompanying prospectus supplement and 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 pricing supplement and the accompanying  prospectus supplement and
prospectus,  "we,"  "us" and "our"  refer to  JPMorgan  Chase & Co.,  unless the
context requires otherwise.
</TEXT>
</DOCUMENT>
