JPMORGAN CHASE & CO — Proxy Solicitation & Information Statement 2002

Mar 28, 2002

DEF 14A 1 y56759ddef14a.htm NOTIFICATION OF ANNUAL MEETING J.P. MORGAN CHASE & CO. PAGEBREAK

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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )

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J.P. MORGAN CHASE & CO.

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Notice of 2002 Annual Meeting of Stockholders and Proxy Statement

Meeting Date: May 21, 2002
J.P. Morgan Chase & Co. 270 Park Avenue New York, New York 10017-2070

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| J.P. Morgan Chase & Co. |
| --- |
| 270 Park Avenue |
| New York, New York 10017-2070 |
| March 28, 2002 |
| Dear Fellow Stockholder: |
| We are pleased to invite you to the annual meeting of
stockholders to be held on May 21, 2002, at J.P. Morgan
Treasury Technologies Corp., 10420 Highland Manor Dr.,
Building 2, Tampa, Florida. As we have done in the
past, in addition to considering
the matters described in the proxy statement, we will
review major developments since our last stockholders’
meeting. |
| We hope that you will attend the meeting in person, but
even if you are planning to come, we strongly encourage
you to designate the proxies named on the enclosed
proxy card to vote your shares. This will ensure that
your common stock is represented at the meeting. The
proxy statement explains more about proxy voting.
Please read it carefully. We look forward to your
participation. |
| Sincerely, |
| ● |
| William B. Harrison, Jr. Chairman and Chief Executive Officer |

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Notice of Annual Meeting of Stockholders
Date:	Tuesday, May 21, 2002
Time:	10:00 a.m.
Place:	J.P. Morgan Treasury Technologies Corp. 10420 Highland Manor Dr., Building 2 Tampa, Florida

	Matters to be voted on:
•	Election of directors
•	Ratification of appointment of
PricewaterhouseCoopers LLP as our independent
accountant for 2002
•	Stockholder proposals included
in the attached proxy statement, if they are
introduced at the meeting
•	Any other matters that may properly be brought before the meeting
	By order of the Board of Directors
	Anthony J. Horan Secretary
	March 28, 2002
	Please vote promptly

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TOC

TABLE OF CONTENTS

General information about the meeting
Proposal 1: Election of directors
Information about the nominees
About the Board and its committees
Director compensation
Security ownership of management
Compensation committee report on executive compensation
Executive compensation tables
I. Summary compensation table
II. Stock option grant table
III. Aggregated option exercises in 2001 and year-end option values
IV. Long-term incentive awards
Comparison of five-year cumulative total return
Retirement benefits
Termination arrangements
Additional information about our directors and executive officers
Audit Committee report
Proposal 2: Appointment of independent accountant
Proposals 3-4: Stockholder proposals
Stockholder proposals and nominations for the 2003 annual meeting

/TOC

Table of Contents

Proxy statement table of contents — General information about the meeting		1
Proposal 1:	Election of directors	3
	Information about the nominees	4
	About the Board and its committees	7
	Director compensation	8
	Security ownership of management	9
	Compensation committee report on executive compensation	10
	Executive compensation tables	13
	I. Summary compensation table	13
	II. Stock option grant table	14
	III. Aggregated option exercises in 2001 and
	year-end option values	14
	IV. Long-term incentive awards	15
	Comparison of five-year cumulative total return	16
	Retirement benefits	16
	Termination arrangements	17
	Additional information about our directors and executive officers	18
	Audit Committee report	20
Proposal 2:	Appointment of independent accountant	21
Proposals 3-4:	Stockholder proposals	22
Stockholder proposals and nominations for the 2003 annual meeting		25

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link1 "General information about the meeting"

	Proxy statement
	Your vote is very important. For this reason, the Board
of Directors is requesting that you allow your common
stock to be represented at the annual meeting by the
proxies named on the enclosed proxy card. This proxy
statement is being sent to you in connection with this
request and has been prepared for the Board by our
management. We, our, JPMorgan Chase, and the Firm refer
to J.P. Morgan Chase & Co. The proxy statement is being
sent to our stockholders on or about March 28, 2002.
	General information about the meeting
Who can vote	You are entitled to vote your JPMorgan Chase common stock
if our records showed that you held your shares as of March 22, 2002.
At the close of business on that date, a total of 1,989,679,679
shares of common stock were outstanding and entitled to vote. Each
share of JPMorgan Chase common stock has one vote. The enclosed proxy
card shows the number of shares that you are entitled to vote. Your
vote is confidential and will not be disclosed to persons other than
those recording the vote.
Voting your proxy	If your common stock is held by a broker, bank, or other
nominee, you will receive instructions from them that you must follow
in order to have your shares voted.
	If you hold your shares in your own name as a holder of
record, you may instruct the proxies how to vote your
common stock by using the toll free telephone number or
the Internet voting site listed on the proxy card or by
signing, dating, and mailing the proxy card in the
postage paid envelope that we have provided to you. Of
course, you can always come to the meeting and vote
your shares in person. Specific instructions for using
the telephone and Internet voting systems are on the
proxy card. Whichever of these methods you select to
transmit your instructions, the proxies will vote your
shares in accordance with those instructions. If you
sign and return a proxy card without giving specific
voting instructions, your shares will be voted as
recommended by our Board of Directors.
Matters to be presented	We are not now aware of any matters to be
presented other than those described in this proxy statement. If any
matters not described in the proxy statement are properly presented
at the meeting, the proxies will use their own judgment to determine
how to vote your shares. If the meeting is adjourned, the proxies can
vote your common stock on the new meeting date as well, unless you
have revoked your proxy instructions.
Revoking your proxy	To revoke your proxy instructions if you are a holder
of record, you must advise the Secretary in writing before the
proxies vote your common stock at the meeting, deliver later proxy
instructions, or attend the meeting and vote your shares in person.
Unless you decide to attend the meeting and vote your shares in
person after you have submitted voting instructions to the proxies,
we recommend that you revoke or amend your prior instructions in the
same way you initially gave them – that is, by telephone, Internet,
or in writing. This will help to ensure that your shares are voted
the way you have finally determined you wish them to be voted.

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| How votes are counted | The annual meeting will be held if a majority of
the outstanding common stock entitled to vote is represented at the
meeting. If you have returned valid proxy instructions or attend the
meeting in person, your common stock will be counted for the purpose
of determining whether there is a quorum, even if you wish to abstain
from voting on some or all matters introduced at the meeting. If you
hold your common stock through a nominee, generally the nominee may
vote the common stock that it holds for you only in accordance with
your instructions. Brokers who are members of the National
Association of Securities Dealers, Inc. may not vote shares held by
them in nominee name unless they are permitted to do so under the
rules of any national securities exchange to which they belong. Under
New York Stock Exchange rules, a member broker that has transmitted
proxy soliciting materials to a beneficial owner may vote on matters
that the Exchange has determined to be routine if the beneficial
owner has not provided the broker with voting instructions within 10
days of the meeting. If a nominee cannot vote on a particular matter
because it is not routine, there is a “broker non-vote” on that
matter. Broker non-votes count for quorum purposes, but we do not
count either abstentions or broker non-votes as votes for or against
any proposal. |
| --- | --- |
| Cost of this proxy solicitation | We will pay the cost of this proxy
solicitation. In addition to soliciting proxies by mail, we expect
that a number of our employees will solicit stockholders for the same
type of proxy, personally and by telephone. None of these employees
will receive any additional or special compensation for doing this.
We have retained Mellon Investor Services LLC to assist in the
solicitation of proxies for a fee of $25,000 plus reasonable
out-of-pocket costs and expenses. We will, on request, reimburse
brokers, banks, and other nominees for their expenses in sending
proxy materials to their customers who are beneficial owners and
obtaining their voting instructions. |
| Attending the annual meeting | If you are a holder of record and plan to
attend the annual meeting, please indicate this when you vote. The
lower portion of the proxy card is your admission ticket. If you are
a beneficial owner of common stock held by a broker, bank, or other
nominee, you will need proof of ownership to be admitted to the
meeting. A recent brokerage statement or a letter from a bank or
broker are examples of proof of ownership. If you want to vote your
common stock held in nominee name in person, you must get a written
proxy in your name from the broker, bank, or other nominee that holds
your shares. |

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link1 "Proposal 1: Election of directors"

	Proposal 1: Election of directors
	Our Board of Directors has nominated 13 directors for
election at this annual meeting to hold office until
the next annual meeting and the election of their
successors.
	Dr. Whitman, who has served as a director of the Firm
or a predecessor institution since 1973, will not stand
for election and will retire on the eve of the annual
meeting.
Vote required	Directors must be elected by a plurality of the votes cast
at the meeting. This means that the nominees receiving the greatest
number of votes will be elected. Votes withheld for any nominee will
not be counted.
	Although we know of no reason why any of the nominees
would not be able to serve, if any nominee is
unavailable for election, the proxies would vote your
common stock to approve the election of any substitute
nominee proposed by the Board of Directors. The Board
may also choose to reduce the number of directors to be
elected, as permitted by our By-laws.
General information about the nominees	All of the nominees are currently
directors. Each has agreed to be named in this proxy statement and to
serve if elected. Each of the nominees was a director in 2001 and
attended at least 75% of the meetings of the Board and committees on
which they served in that year.
	Unless stated otherwise, all of the nominees have been
continuously employed by their present employers for
more than five years. All are actively involved in
community and charitable affairs. The age indicated in
each nominee’s biography is as of May 21, 2002, and all
other biographical information is as of the date of
this proxy statement.
	In 1991, Manufacturers Hanover Corporation merged into
Chemical Banking Corporation. In 1996, The Chase
Manhattan Corporation merged into Chemical Banking
Corporation, which changed its name to The Chase
Manhattan Corporation. On December 31, 2000, J.P.
Morgan & Co. Incorporated merged (the Merger) into The Chase Manhattan Corporation, which changed its name
to J.P. Morgan Chase & Co. In the following
biographies, each of these merged companies is referred
to as a predecessor institution of the Firm.

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link2 "Information about the nominees"

	Information about the nominees
●	Hans W. Becherer (Age 67) Retired Chairman and Chief Executive Officer of Deere &
Company (equipment manufacturer) since 2000. Mr.
Becherer is also a director of Honeywell International
Inc. and Schering-Plough Corporation. He has been a
director of the Firm or a predecessor institution since
1998.
●	Riley P. Bechtel (Age 50) Chairman and Chief Executive Officer of Bechtel Group,
Inc. (engineering and construction). Mr. Bechtel is
also a director of Fremont Group, L.L.C., Fremont
Investors, Inc., and Sequoia Ventures Inc. He has been
a director of the Firm or a predecessor institution
since 1995.
●	Frank A. Bennack, Jr. (Age 69) President and Chief Executive Officer of The Hearst
Corporation (publishing, broad-casting, and media). Mr.
Bennack is also a director of Wyeth (formerly American
Home Products Corporation), Hearst-Argyle Television,
Inc., and Polo Ralph Lauren Corporation. He has been a
director of the Firm or a predecessor institution since
1981.
●	Lawrence A. Bossidy (Age 67) Chairman of Honeywell International Inc. (diversified
manufacturing) since July 2001 and from December 1999
to April 2000; Chief Executive Officer from July 2001
to February 2002. Mr. Bossidy was Chairman of Allied
Signal from 1992 to 1999 and Chief Executive Officer
from 1991 to 1999 when he became Chairman of Honeywell
International Inc. following the merger of the two
companies. Mr. Bossidy is also a director of Merck &
Co., Inc. and RightFreight.com. He has been a director
of the Firm or a predecessor institution since 1998.

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| ● | M. Anthony Burns (Age 59) Chairman of Ryder System, Inc. (logistics and
transportation solutions). Mr. Burns was Chief
Executive Officer from January 1983 to November 2000
and President from December 1979 to June 1999. Mr.
Burns is also a director of The Black & Decker
Corporation, J.C. Penney Company, Inc., and Pfizer Inc.
He has been a director of the Firm or a predecessor
institution since 1990. |
| --- | --- |
| ● | H. Laurance Fuller (Age 63) Retired Co-Chairman of BP Amoco p.l.c. (oil, gas, and
chemicals) since 2000. Mr. Fuller is also a director of
Abbott Laboratories, Motorola, Inc., and Security
Capital Group, Inc. He has been a director of the Firm
or a predecessor institution since 1985. |
| ● | Ellen V. Futter (Age 52) President and Trustee of the American Museum of Natural
History. Ms. Futter is also a director of American
International Group, Inc., Bristol-Myers Squibb Company
and Consolidated Edison, Inc. and a Trustee of
Consolidated Edison Company of New York, Inc. She has
been a director of the Firm or a predecessor
institution since 1997. |
| ● | William H. Gray, III (Age 60) President and Chief Executive Officer of The College
Fund/UNCF (educational assistance). Mr. Gray was a
member of the United States House of Representatives
from 1979 to 1991. He is also a director of Dell
Computer Corporation, Electronic Data Systems
Corporation, MBIA Inc., Pfizer Inc., The Prudential
Insurance Company of America, Rockwell International
Corporation, Viacom, and Visteon Corporation. He has
been a director of the Firm or a predecessor
institution since 1992. |

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| ● | William B. Harrison, Jr. (Age 58) Chairman and Chief Executive Officer since November
2001, prior to which he was President and Chief
Executive Officer from December 2000. He was Chairman
and Chief Executive Officer from January through
December 2000 and President and Chief Executive Officer
from June through December 1999, prior to which he had
been Vice Chairman of the Board. He has been a director
of the Firm or a predecessor institution since 1991. Mr
Harrison is also a director of Merck & Co., Inc. |
| --- | --- |
| ● | Helene L. Kaplan (Age 68) Of Counsel to the firm of Skadden, Arps, Slate, Meagher
& Flom LLP (law firm). Mrs. Kaplan is also a director
of Exxon Mobil Corporation, The May Department Stores
Company, Metropolitan Life Inc., and Verizon
Communications, Inc. She has been a director of the
Firm or a predecessor institution since 1987. |
| ● | Lee R. Raymond (Age 63) Chairman of the Board and Chief Executive Officer of
Exxon Mobil Corporation (oil
and gas). Mr. Raymond has been a director of the Firm
or a predecessor institution since 1987. |
| ● | John R. Stafford (Age 64) Chairman of the Board of Wyeth (formerly American Home
Products Corporation) (pharmaceutical); Chief Executive
Officer from 1986 until May 2001. Mr. Stafford is also
a director of Deere & Company, Honeywell International
Inc., and Verizon Communications, Inc. He has been a
director of the Firm or a predecessor institution since
1982. |
| ● | Lloyd D. Ward (Age 53) Chief Executive Officer of the United States Olympic
Committee since October 2001. Mr. Ward was Chairman and
Chief Executive Officer of iMotors from January to July
2001; Chairman and Chief Executive Officer of Maytag
Corporation from 1999 to November 2000 and President
and Chief Operating Officer from 1998 to 1999;
Executive Vice President and President of Maytag
Appliances from 1996 to 1998. Mr. Ward is also a director of Belo Corp. and General
Motors Corporation. He has been a director of the Firm
or a predecessor institution since 1999. |

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link2 "About the Board and its committees"

	About the Board and its committees
The Board	JPMorgan Chase is governed by a Board of Directors and
various committees of the Board that meet throughout the year.
Directors discharge their responsibilities throughout the year at
Board and committee meetings and also through telephone contact and
other communications with the Chairman and Chief Executive Officer
and others regarding matters of concern and interest to the Firm.
During 2001, there were 10 meetings of the Board.
Committees of the Board	The Board has five principal committees. The
following describes for each committee its current membership, the
number of meetings held during 2001, and its function. All members of
these committees are non-employee directors.
Audit Committee	Hans W. Becherer, Frank A. Bennack, Jr., M. Anthony
Burns (Chairman), Lloyd D. Ward
	This committee met seven times in 2001. It reviews and
discusses reports and other communications concerning
management’s responsibilities to:
•	safeguard the assets and income of the Firm
•	provide for reliable and timely financial information and statements
•	maintain compliance with the
Firm’s ethical standards, policies, plans, and
procedures, as well as applicable laws and
regulations
Compensation and Management Development Committee	Riley P. Bechtel, William H. Gray, III, Lee R. Raymond, John R. Stafford (Chairman) This committee met seven times in 2001. The committee:
•	determines compensation and benefit policies and procedures
•	approves senior officer compensation
•	advises the Board on the development of, and succession for, key executives
Governance Committee	Frank A. Bennack, Jr., Lawrence A. Bossidy, Ellen V. Futter, Helene L. Kaplan,
Lee R. Raymond (Chairman), John R. Stafford
	This committee met three times in 2001. The committee:
•	considers nominees for election to the Board, including any written recommendation
by a stockholder that is mailed to the attention of
the Secretary
•	reviews duties and composition of Board committees
•	counsels the Board on other Board governance matters
Public Policy Committee	Hans W. Becherer, Riley P. Bechtel, M. Anthony Burns, H. Laurance Fuller,
William H. Gray, III (Chairman), Lloyd D. Ward, Marina
v.N. Whitman
	This committee met three times in 2001. The committee:
•	reviews our charitable and
community-oriented activities, including strategy
with respect to charitable contributions and
projects undertaken to improve the communities we
serve
•	reviews our community reinvestment activities

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| Risk Policy Committee | Lawrence A. Bossidy, H. Laurance Fuller, Ellen V.
Futter, Helene L. Kaplan (Chairman), Marina v.N. Whitman |
| --- | --- |
| | This committee met six times in 2001. The committee: |
| • | acts in a general advisory
capacity to management in respect of activities
that give rise to credit risk and market risk |
| • | is to be fully apprised of these risks and how they are created and managed |
| • | reviews a general risk management mandate to govern these activities |
| • | re-evaluates regularly our risk exposure, risk tolerance, and the established mandate |
| • | reviews and, as appropriate, approves policies to control risk exposure |
| • | reviews the fiduciary and investment advisory activities of our subsidiaries |

link2 "Director compensation"

	Director compensation
	Directors who are officers of the Firm do not receive
any fees for their services as directors. Each
non-employee director receives an annual retainer of
$75,000, an annual grant of common stock valued at
$85,000 on the date of grant, and an annual grant of
stock options valued at $85,000, based upon 1/3 of the
fair market value per share of our common stock on the
date of grant. Each Chairman of a Board committee
receives an additional fee of $15,000 per year. Stock
options have terms and conditions consistent with
options granted under the Firm’s 1996 Long-Term
Incentive Plan, as amended. The initial stock option
grant to non-employee directors was made in July 2001
for 5,000 options at an exercise price of $51.22 per
share. The options become exercisable in four equal
annual installments beginning on January 19, 2002, and
expire on July 19, 2011.
	Non-employee directors may elect to be included in a
group term life insurance policy and a business travel
accident insurance policy. During 2001, the Firm paid
average premiums for these coverages of approximately
$930 per director. A director may elect to participate
in the Firm’s medical insurance coverage, with the cost
of the coverage paid by the director.
Deferred compensation arrangements for non-employee directors	Each year non-employee directors may elect to defer all or part of their cash
compensation and/or all of their common stock compensation. A
director’s right to receive future payments under any deferred
compensation arrangement is an unsecured claim against JPMorgan
Chase’s general assets. Cash amounts may be deferred into various
investment equivalents, including a common stock equivalent, and will
be paid and distributed in cash after the director retires from the
Board. Stock compensation may be deferred only as common stock and is
distributable only in common stock when the director retires from the
Board. Deferred cash compensation may be relinquished for benefits
under a split-dollar life insurance program.

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link2 "Security ownership of management"

| Security ownership of management |
| --- |
| The following table shows the number of shares of
common stock and common stock equivalents beneficially
owned as of March 1, 2002, by each director, the
executive officers named in the summary compensation
table, and all directors and executive officers as a
group. Unless otherwise indicated, each of the named
individuals and each member of the group has sole
voting power and sole investment power with respect to
the shares shown. The number of shares beneficially
owned, as that term is defined by Rule 13d-3 under the
Securities Exchange Act of 1934, by all directors and
executive officers as a group totals less than 1.0% of
our outstanding common stock as of March 1, 2002. No
director or executive officer beneficially owns any
JPMorgan Chase preferred stock. |
| Security ownership of directors and executive officers |

Name of individual — Hans W. Becherer	16,658	(1)(2)(3)
Riley P. Bechtel	17,847	(1)(2)(3)
Frank A. Bennack, Jr.	33,452	(2)(3)
Geoffrey T. Boisi	1,418,255	(3)(4)
Lawrence A. Bossidy	28,068	(1)(3)
M. Anthony Burns	24,789	(1)(2)(3)
David A. Coulter	484,362	(3)(4)
H. Laurance Fuller	49,805	(1)(2)(3)
Ellen V. Futter	12,358	(1)(3)
William H. Gray, III	23,455	(1)(2)(3)
William B. Harrison, Jr.	3,503,022	(1)(3)(4)(5)
Helene L. Kaplan	36,629	(1)(2)(3)
Donald H. Layton	1,892,022	(1)(3)
Lee R. Raymond	63,318	(1)(2)(3)
Marc J. Shapiro	2,136,417	(1)(3)
John R. Stafford	55,267	(1)(2)(3)(5)
Lloyd D. Ward	11,418	(1)(2)(3)
Marina v.N. Whitman	29,708	(2)(3)(5)
All directors and executive officers as a group (26 persons)	15,641,257

| 1 | The amounts reported include
shares of common stock, receipt of which has been
deferred under deferred compensation plan
arrangements, as follows: Mr. Becherer: 6,551
shares; Mr. Bechtel: 12,850 shares; Mr. Bossidy: 8,318 shares; Mr. Burns: 6,422 shares; Mr. Fuller:
18,212 shares; Ms. Futter: 9,258 shares; Mr. Gray:13,950 shares; Mr. Harrison: 102,062 shares; Mrs.
Kaplan: 8,012 shares; Mr. Layton: 167,219 shares;
Mr. Raymond: 17,580 shares; Mr. Shapiro: 379,695
shares; Mr. Stafford: 11,824 shares; Mr. Ward: 5,116 shares; and all directors and executive
officers as a group: 1,017,124 shares. |
| --- | --- |
| 2 | The amounts reported include
the number of units of common stock equivalents
held by certain directors under deferred
compensation arrangements entitling those
directors, upon termination of service, to receive
a cash payment for each unit equal to the fair
market value at that time of a share of common
stock as follows: Mr. Becherer: 4,297 units; Mr.
Bechtel: 1,896 units; Mr. Bennack: 14,462 units;
Mr. Burns: 7,633 units; Mr. Fuller: 18,493 units;
Mr. Gray: 8,255 units; Mrs. Kaplan: 14,668 units;
Mr. Raymond: 42,638 units; Mr. Stafford: 24,921
units; Mr. Ward: 1,352 units; Dr. Whitman: 12,482
units; and all directors as a group: 151,097 units. |

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| 3 | The amounts reported include
shares of common stock that may be acquired within
60 days of March 1, 2002, through the exercise of
stock options as follows: each non-employee
director: 1,250 shares; Mr. Boisi: 270,890 shares;
Mr. Coulter: 197,676 shares; Mr. Harrison:
2,424,881 shares; Mr. Layton: 1,287,355 shares; Mr.
Shapiro: 1,307,081 shares; and all directors and
executive officers as a group: 9,436,499 shares.
The amounts reported also include shares of common
stock that may be received at the end of a
restricted period and/or when common stock price
targets are met pursuant to
forfeitable awards of restricted stock and/or
restricted stock units as follows: Mr. Boisi: 245,588
shares; Mr. Coulter: 135,686 shares; Mr. Harrison:
588,753 shares; Mr. Layton: 401,387 shares; Mr.
Shapiro: 402,219 shares; and all executive officers as
a group: 3,049,936 shares. |
| --- | --- |
| 4 | The amounts reported include
common stock allocated to accounts under a Section
401(k) plan as follows: Mr. Boisi: 100 shares; Mr.
Coulter: 100 shares; Mr. Harrison: 18,590 shares;
and all executive officers as a group: 28,160
shares. |
| 5 | The amounts reported include
shares for which beneficial ownership is disclaimed
as follows: Mr. Harrison: 27,274 shares; Mr.
Stafford: 900 shares; Dr. Whitman: 1,554 shares;
and all directors and executive officers as a
group: 32,622 shares. |

link2 "Compensation committee report on executive compensation"

	Compensation committee report on executive compensation
Compensation policies	The Compensation and Management Development
Committee, which consists solely of non-employee directors,
administers the compensation and benefit programs of the Firm and its
subsidiaries and determines the compensation of executive officers.
The committee’s recommendations regarding officer directors are
subject to ratification by the Board of Directors.
	JPMorgan Chase’s compensation programs are designed to
attract, retain, and motivate top quality, effective
executives and professionals. Our compensation policy
for executive officers emphasizes performance-based pay
over fixed salary and uses stock-based awards based on
the performance of our stock to further align the
interests of executive officers with our stockholders.
JPMorgan Chase seeks to provide compensation levels
that are competitive with those provided by the
appropriate peer groups of financial institutions in
each of the markets and businesses in which we compete.
During 2001, the committee received reports from
independent consultants to ensure that the program, in
the committee’s judgment, remains competitive and able
to meet its objectives.
	Peer groups will differ for different businesses and,
in general, each peer group will consist of comparable
financial institutions and other competitors that
compete in the same markets and seek to sell similar
groups of financial services and products. Appropriate
peer groups will change over time. These peer groups do
not correspond to the large list of institutions that
make up the indices shown on page 16 of the proxy
statement.
Relationship of corporate performance to compensation	Compensation paid to
the Firm’s executive officers for 2001 consisted primarily of salary,
bonuses, and awards of stock options and restricted stock units
awarded under the Firm’s 2000 Key Executive Performance Plan and the
1996 Long-Term Incentive Plan, as
amended. The payment of bonuses and the awards of stock
options and restricted stock units are directly related
to corporate and individual performance and, where
relevant, business unit performance.

10 PAGEBREAK

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| Cash compensation | An executive officer’s cash compensation is made up of
base salary and an annual performance bonus. For each executive, the
committee reviews salaries paid to similarly situated executives in
the relevant competitor peer group. A particular executive’s actual
salary will be set based on this competitive review and the
executive’s performance and level of experience and the Firm’s
emphasis on performance-based rather than salary-based compensation. |
| --- | --- |
| | Annual performance bonuses are awarded based on the
executive’s success in achieving corporate, business
unit, and individual performance goals. In determining
these awards, the committee takes account of market
data and trends in the appropriate peer groups. |
| | Quantitative performance goals may vary from year to
year and have included such factors as earnings per
share growth, revenue growth, return on common equity,
shareholder value added growth, credit quality, and
management indicators. Qualitative measures include the
committee’s assessment of the executive’s success in: |
| | (1) defining and executing our long-term strategic
vision; (2) achieving market leadership positions in
key businesses; (3) developing leaders who can meet the
growing demands of the marketplace; and (4)
implementing our diversity efforts at all levels of the
organization. For 2001, each executive’s effectiveness
in executing the Merger – refining and implementing
business strategies; building the culture; integrating
the organization; creating new organizations; and
retaining key talent – was also evaluated. |
| Stock-based compensation | JPMorgan Chase believes that the grant of
significant annual stock-based awards further links the interests of
senior management and our stockholders. The committee sets targeted
ranges for stock-based awards for each executive based upon the award
practices of the relevant peer group. Actual awards reflect the
committee’s assessment of the individual’s current and expected
future contribution to the Firm’s success. In January 2002, the
committee granted executive officers stock options that become
exercisable over three years and expire on January 17, 2012, and
restricted stock units which generally vest after three years. These
awards vest in case of job elimination, death, total disability, or
retirement. At management’s recommendation the restricted stock units
granted to certain executive officers will vest only if the Target
Price for JPMorgan Chase common stock is achieved, but not before
January 25, 2005. The Target Price will be achieved when the average
of the closing prices of JPMorgan Chase common stock for 10
consecutive trading days equals or exceeds $52. If the Target Price
is not achieved by January 25, 2007, then the units will be forfeited
on that date. These awards vest in the case of death or total
disability. In the case of job elimination or retirement, the awards
vest only if the Target Price is achieved, unless otherwise
determined by the committee. |
| Deductibility of executive compensation | In May 1999, our stockholders
approved the Key Executive Performance Plan (2000 KEPP), a plan
designed to allow JPMorgan Chase a tax deduction for incentive
compensation payments to the Chief Executive Officer and the other
four most highly paid executive officers. Absent the 2000 KEPP, such
incentive compensation payments would not be deductible to the extent
such amounts for any such officer in any year exceeded $1 million. In
administering this plan, the committee will promote its policy of
maximizing corporate tax deductions, wherever feasible. |
| | Under the 2000 KEPP, each participant is allocated a
percentage of a bonus pool at the beginning of the
performance year (subject to reduction by the committee
and a separate individual participant limit) |

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| Compensation actions for Mr. Harrison |
| --- |
| The reduction in incentive compensation is reflective
of the shortfall in earnings compared to budget and
prior year, somewhat offset by difficult market
conditions. In addition, the Firm achieved increased
market share in key investment banking products,
improved growth in its consumer banking activities, and
improved expense management. The committee also noted
Mr. Harrison’s accomplishment of key initiatives in
leadership development and diversity. |
| The above discussion reflects Mr. Harrison’s awards for
2001 performance. In July 2001, the committee made a
special award of $10,000,000 in cash and 237,164
restricted stock units to Mr. Harrison in recognition
of his role in structuring and implementing the Merger.
This award will vest and be paid out or distributed as
follows, subject to continued employment: 50% of the
cash and 50% of the restricted stock units in January
2002; 50% of the cash in January 2003; and 50% of the
restricted stock units if the price of JPMorgan Chase
common stock achieves the $52 Target Price by January
25, 2007 (but no sooner than January 25, 2003). The
cash awards would be paid out in the event of job
elimination, death, or total disability. The restricted
stock unit awards would vest and be distributed in the
event of death or total disability. In the case of job
elimination or retirement, the restricted stock unit
awards related to the Target Price would vest only if
the Target Price is achieved, unless otherwise
determined by the committee. |
| Dated as of March 19, 2002 |
| Compensation and Management Development Committee |
| John R. Stafford (Chairman) |
| Riley P. Bechtel |
| William H. Gray, III |
| Lee R. Raymond |

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link2 "Executive compensation tables"

link2 "I. Summary compensation table"

Executive compensation tables
I. Summary compensation table

| | | Annual
compensation(1) | | | Long-term compensation awards | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | Awards | | | Payouts | |
| | | | | Merger
related(2) | | | Securities | | |
| | | | | | | Restricted | underlying | LTIP | All other |
| Name and | | | | | Restricted stock | stock award | options | payouts | compensa- |
| principal position | Year | Salary ($) | Bonus ($) | Bonus ($) | award
($)(4) | ($)(3)(4) | granted (#) | ($)(5) | tion
($)(6) |
| William B. Harrison, Jr. | 2001 | $ 1,000,000 | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | $ 0 | 423,340 | $ 1,099,013 | $ 50,000 |
| Chairman and Chief | 2000 | 1,000,000 | 5,281,250 | 0 | 0 | 3,118,766 | 1,897,697 | 0 | 52,500 |
| Executive Officer | 1999 | 930,769 | 5,281,250 | 0 | 0 | 3,101,781 | 1,348,050 | 0 | 46,539 |
| Geoffrey T. Boisi | 2001 | 220,000 | 2,050,000 | 2,500,000 | 2,500,000 | 6,865,000 | 558,889 | 0 | 11,000 |
| Investment Bank | 2000 | 108,167 | 1,280,000 | 0 | 0 | 0 | 1,669,270 | 0 | 4,125 |
| David A. Coulter | 2001 | 220,000 | 4,780,000 | 0 | 0 | 5,000,000 | 407,057 | 0 | 11,000 |
| Retail & Middle Market | 2000 | 108,167 | 1,280,000 | 0 | 0 | 0 | 1,376,415 | 0 | 4,125 |
| Financial Services and
Investment Management
& Private Banking | | | | | | | | | |
| Donald H. Layton | 2001 | 500,000 | 8,000,000 | 2,500,000 | 2,500,000 | 3,750,000 | 305,293 | 792,188 | 25,000 |
| Investment Bank | 2000 | 500,000 | 9,656,250 | 0 | 0 | 3,093,758 | 878,564 | 0 | 26,205 |
| | 1999 | 500,000 | 7,031,250 | 0 | 0 | 2,268,769 | 237,741 | 0 | 25,000 |
| Marc J. Shapiro | 2001 | 675,000 | 3,500,000 | 2,500,000 | 2,500,000 | 2,156,250 | 351,087 | 792,188 | 925,911 |
| Finance, Risk | 2000 | 675,000 | 3,531,250 | 0 | 0 | 2,468,763 | 1,014,741 | 0 | 1,033,406 |
| Management, and | 1999 | 675,000 | 1,781,250 | 0 | 0 | 1,712,128 | 263,649 | 0 | 964,468 |
| Administration | | | | | | | | | |

1	Includes amounts paid or deferred during each year.
2	Merger related awards were
granted on July 18, 2001, as follows: Mr. Harrison: $10,000,000 and 118,582 restricted stock units; Mr.
Boisi, Mr. Layton, and Mr. Shapiro: $5,000,000 and
59,291 restricted stock units each. These awards
are payable as follows: 50% of the cash portion in
January 2002 (this is reflected in the column
Merger related – Bonus) and 50% in January 2003.
The restricted stock units were distributed in
January 2002.
3	Market value of the units
awarded on January 17, 2002, relating to 2001
performance.
4	All awards of restricted stock
units are valued as of the date of grant. Dividend
equivalents are payable on all restricted stock
units. The number and aggregate market value of all
restricted stock units held as of December 31,
2001, (including forfeitable awards and awards of
restricted stock units made on January 17, 2002,
relating to 2001 performance) were as follows: Mr.
Harrison: 719,454 units ($26,152,153); Mr. Boisi: 304,879 units ($11,082,352);
Mr. Coulter: 135,686 units ($4,932,186); Mr. Layton: 475,347 units
($17,278,863); and Mr. Shapiro: 464,189 units
($16,873,270)
5	The 2001 LTIP payout for each
of Mr. Harrison, Mr. Layton, and Mr. Shapiro
represents the aggregate market value of common
stock distributed to them pursuant to the vesting
of long-term incentive plan restricted stock units
granted on January 20, 1998.
6	Includes employer contributions
to 401(k) plans. Amounts for Mr. Shapiro also
include allowances and reimbursements related to
his relocation to New York ($651,172 in 2001,
$707,258 in 2000, and $673,300 in 1999) and tax
reimbursements related to such payments ($232,489
in 2001, $291,191 in 2000, and $257,418 in 1999).
See also Director and officer transactions and other
business relationships on page 18 for co-investment
information. Prior year
amounts have been restated to be consistent with
current year’s presentation.

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link2 "II. Stock option grant table"

II. Stock option grant table

	total options	Percent of — Exercise or		Grant date
Options	granted to	base price	Expiration	present
Name	granted (1)	employees	($/share)	date	value
William B. Harrison, Jr.	423,340	0.54 %	$ 36.85	01/17/2012	$ 4,783,742
Geoffrey T. Boisi	558,889	0.72	36.85	01/17/2012	6,315,446
David A. Coulter	407,057	0.52	36.85	01/17/2012	4,599,744
Donald H. Layton	305,293	0.39	36.85	01/17/2012	3,449,811
Marc J. Shapiro	351,087	0.45	36.85	01/17/2012	3,967,283

| 1 |
| --- |
| For the option grants disclosed in the above table,
present values on the grant date were determined by
using the Black-Scholes option pricing model modified
to take dividends into account. The values set forth in
the table should not be viewed in any way as a forecast
of the performance of our common stock, which will be
influenced by future events and unknown factors. The
model as applied used the applicable grant date and the
exercise price shown in the table and the fair market
value of our common stock on the grant date, which was
the same as the exercise price. The model assumed: (i)
a risk-free rate of return of 5.09%, the implied rate
on 10-year U.S. Treasury zero coupon bonds on the grant
date; (ii) stock price volatility of 33.3%; (iii) a
constant dividend yield of 3.69%, based on the
historical common stock dividend as of the grant date;
and (iv) the exercise of all options on the final day
of their 10-year terms. No discount from the
theoretical value was taken to reflect the waiting
period prior to vesting, the limited transferability of
the options, and the likelihood of the options being
exercised in advance of the final day of their terms. |

link2 "III. Aggregated option exercises in 2001 and year-end option values"

III. Aggregated option exercises in 2001 and year-end option values

	Aggregated — option exercises		Number of securities — underlying unexer-		Value of unexer- — cised in-the-money
			cised options (#)		options ($) (2)
	Shares	Value
	acquired on	realized	Exer-	Unexer-	Exer-	Unexer-
Name	exercise (#)	($) (1)	cisable	cisable	cisable	cisable
William B. Harrison, Jr.	180,000	$ 5,042,250	2,039,512	3,021,235	$ 20,559,206	$ 86,353
Geoffrey T. Boisi	0	0	0	1,669,271	0	0
David A. Coulter	0	0	0	1,376,416	0	0
Donald H. Layton	0	0	1,184,708	1,191,870	18,288,948	47,102
Marc J. Shapiro	180,000	6,151,578	1,043,912	1,347,478	14,206,145	47,102

| 1 | Where applicable, amounts
indicated include values that would have been
realized on exercise but were deferred into common
stock units. |
| --- | --- |
| 2 | Value based on $36.35, the
closing price per share of our common stock on
December 31, 2001. |

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link2 "IV. Long-term incentive awards"

| IV. Long-term incentive awards |
| --- |
| All of the awards reported in the following tables will
be forfeited if the Target Price is not met within the
time specified. The Target Price will be achieved when
the average of the closing prices of JPMorgan Chase
common stock for 10 consecutive trading days equals or
exceeds $52. |
| January 2002 awards |

	Number of	Performance period until	Payout in shares if the
Name	shares (1)	maturation or payout	Target Price is achieved
William B. Harrison, Jr.	141,114	See footnote 2	141,114
Marc J. Shapiro	58,515		58,515

| 1 | These restricted stock units
were granted on January 17, 2002, at a stock price
of $36.85 per share and will be forfeited if the
Target Price is not met by January 25, 2007. |
| --- | --- |
| 2 | The restricted stock units will
vest when the Target Price is reached, but in no
event earlier than January 25, 2005. |
| | July 2001 merger related awards |

	Number of	Performance period until	Payout in shares if the
Name	shares (1)	maturation or payout	Target Price is achieved
William B. Harrison, Jr.	118,582	See footnote 2	118,582
Geoffrey T. Boisi	59,291		59,291
Donald H. Layton	59,291		59,291
Marc J. Shapiro	59,291		59,291

| 1 | These restricted stock units
were granted on July 18, 2001, at a stock price of
$42.165 per share and will be forfeited if the
Target Price is not met by January 25, 2007. |
| --- | --- |
| 2 | The restricted stock units will
vest when the Target Price is reached, but in no
event earlier than January 25, 2003. |

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link2 "Comparison of five-year cumulative total return"

| Comparison of five-year cumulative total return |
| --- |
| Below is a line graph that compares the yearly
percentage change in the cumulative total stockholder
return of our common stock to the cumulative total
return of the S&P Financial Index and the S&P 500 Index
for each of the five years in the period commencing
December 31, 1996, and ending December 31, 2001. The
results are based on an assumed $100 invested on
December 31, 1996, and reinvestment of dividends. |
| ● |

link2 "Retirement benefits"

	Retirement benefits
Retirement plan	Eligible U.S. employees (generally salaried employees) of
those JPMorgan Chase subsidiaries that have elected to participate in
the JPMorgan Chase Retirement Plan (Plan) earn benefits under the
Plan if they have been employed for at least one year. Benefits
generally become vested after five years of service. On a monthly
basis, a bookkeeping account in a participant’s name is credited with
an amount equal to a percentage of the participant’s base salary
ranging from 3% to 10%, depending on years of credited service.
	These accounts also receive interest credits based on
average 30-year U.S. Treasury bond yields for the
previous year. When a participant terminates
employment, the amount credited to the participant’s
account is converted into an annuity or paid to the
participant in a lump sum.
	Certain participants who were earning benefits under
The Chase Manhattan Bank Retirement Plan as of December
31, 2001, have been grandfathered in the former pay
credit schedule of that plan until termination of
employment. Other non-grandfathered employees who were
covered by that retirement plan will remain covered by
such former pay credit schedule until December 31,
2003, when the new schedule takes effect for them.

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Table of Contents

| | In addition, certain participants in the Morgan
Guaranty Trust Company of New York Retirement Plan who
were earning benefits under the prior formula of that
plan as of December 31, 1998, are eligible for a
minimum benefit. This minimum benefit is calculated by
comparing at the date of distribution a participant’s
cash balance to the amount accrued under a prior
traditional final average pay defined benefit formula
using pay and credited service through the earlier of
termination of employment or December 31, 2003.
Compensation recognized for the minimum benefit is
capped at $150,000 per year. After December 31, 2003,
the accrued benefit under the prior formula will be
frozen. |
| --- | --- |
| Supplemental retirement benefits | Supplemental retirement benefits are
provided to certain executive officers and certain other participants
under various nonqualified, unfunded programs. Unfunded benefits are
provided to certain employees, including each executive officer,
whose benefits under the Plan are limited by type of compensation or
amount under applicable federal tax laws and regulations. Designated
employees may also receive an unfunded annual benefit at retirement
equal to a percentage of final average base pay compensation
multiplied by years of service reduced by the amount of all benefits
received under the Plan and other nonqualified, unfunded programs.
One of these programs provides a fixed retirement benefit per year of
service to certain designated persons, including certain executive
officers. |
| Estimate of retirement benefits | The following table shows the estimated
annual retirement benefits, including supplemental retirement
benefits under the plans applicable to the named executive officers,
that would be payable to the officer listed if he were to retire at
age 65 at his 2001 base salary and payments were made in the form of
a 50% joint and surviving spouse annuity, which is the normal form of
payment for married employees. |
| | Estimated age 65 retirement benefits (1) |

Name	Estimated annual retirement benefit
William B. Harrison, Jr.	$ 957,385
Geoffrey T. Boisi	29,345
David A. Coulter	24,579
Donald H. Layton	733,129
Marc J. Shapiro	866,479

1 Amounts include (i) interest credits for cash balances projected to be 5.32% per year on annual salary credits and 6.65% per year on prior service balances, if any, and (ii) accrued benefits as of December 31, 2001, under applicable retirement plans, including nonqualified, unfunded programs, then applicable to the named executive officer. Benefits are not subject to any deduction for social security payments.

link2 "Termination arrangements"

| Termination arrangements |
| --- |
| Certain executive officers of JPMorgan Chase, including
Mr. Harrison, Mr. Layton, and Mr. Shapiro, are parties
to agreements that provide severance benefits if the
officer’s employment is terminated by the employer
without “cause” or by the officer for “good reason”
(each as defined in the officer’s agreement) during the
term of the agreement. The agreements generally expire
on December 22, 2002. “Good reason” includes a
substantial diminution in the overall importance of the
officer’s role, balancing any increase or decrease in
the officer’s responsibilities against any increase or
decrease in the relative sizes of the businesses,
activities, or functions for which the officer has
responsibility |

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link2 "Additional information about our directors and executive officers "

| | Under the agreements, in the event of termination by
the employer without cause or by the officer for good
reason, an officer would be entitled (a) to receive, in
substantially equal payments over the course of 24
months or, at the officer’s election, in a lump sum, an
amount equal to the sum of two times (three times in
the case of Mr. Harrison) (i) such officer’s annual
base salary and (ii) an amount equal to the average
percentage annual bonus paid or payable over the
preceding three years (expressed as a percentage of
annual base salary) applied to such salary and (b)
subject to certain conditions, to continue to
participate in life, accident, and health insurance
plans for a 24 month period following the officer’s
termination. If the officer had been employed by
JPMorgan Chase for five consecutive years prior to
termination of employment, such officer would also be
entitled to coverage under retiree medical and life
insurance programs. In addition, upon such termination,
each officer would be entitled to full vesting of stock
options and restricted stock units, except that
performance-based restrictions on restricted stock or
other stock-based awards would continue. The officer
would continue to be eligible for performance-based
awards, which would become payable at the end of the
applicable performance period, if and to the extent the
relevant performance goals were achieved. |
| --- | --- |
| | Additional information about our directors and executive officers |
| Section 16(a) beneficial ownership reporting compliance | Our directors and
executive officers file reports with the Securities and Exchange
Commission and the New York Stock Exchange indicating the number of
shares of any class of our equity securities they owned when they
became a director or executive officer and, after that, any changes
in their ownership of our equity securities. They must also provide
us with copies of these reports. These reports are required by
Section 16(a) of the Securities Exchange Act of 1934. We have
reviewed the copies of the reports that we have received and written
representations from the individuals required to file the reports.
Based on this review, we believe that each of our directors and
executive officers has complied with applicable reporting
requirements for transactions in our equity securities during 2001. |
| Extensions of credit to directors and officers | In the ordinary course of
business, our subsidiaries have made loans and extended credit, and
expect in the future to make loans and extend credit, to our
directors, officers, and their associates, including corporations of
which these individuals may be a director, officer, or both. None of
these loans is preferential or nonperforming. |
| Director and officer transactions and other business relationships | In the
ordinary course of business, we may use the products or services of a
number of organizations of which our directors are officers or
directors, and in the future we may have similar transactions with
those organizations. Mrs. Kaplan is Of Counsel to a law firm that has
provided and is expected during 2002 to provide certain legal
services to us from time to time. |

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| | Approximately 2,300 employees may invest on an
after-tax basis in a pool of investments that become
available to JPMorgan Chase primarily through the
activities of JPMorgan Partners. Participating
employees purchase an interest in a limited
partnership, the general partner of which is a JPMorgan
Chase subsidiary. JPMorgan Chase makes a preferred
equity capital contribution to the partnership in an
amount equal to three times the amounts invested by the
employee participants and is entitled to receive a
fixed annual return specified under the terms of the
limited partnership agreement. The partnership invests
alongside JPMorgan Chase. Upon distribution of
partnership assets, JPMorgan Chase is entitled to a
priority in the return of its preferred equity
contribution, plus the fixed annual return, before
distribution of any remaining assets to the employee
participants based on their capital contributions.
JPMorgan Chase made preferred equity contributions to
the 2001 partnership in the amount of $1,500,000 for
each of the named executive officers and for prior
partnerships in the following aggregate amounts: Mr.
Harrison: $900,000; Mr. Layton: $1,500,000; and Mr.
Shapiro: $900,000. Mr. Harrison and the other members
of the Firm’s Executive Committee are not eligible to
participate in this program in 2002. |
| --- | --- |
| | In July 2000, JPMorgan Chase acquired The Beacon Group,
LLC, a merger and acquisition advisory and private
investment firm, from The Beacon Group, LP (Old Beacon)
and the other members of The Beacon Group, LLC (the
Beacon Acquisition). Mr. Boisi and Mr. Coulter were
then and remain partners of Old Beacon and they became
executive officers of the Firm following the Beacon
Acquisition. Old Beacon retained responsibility for
investment partnerships (the Beacon Funds) that existed
as of the Beacon Acquisition, including The Beacon
Group Energy Investment Fund II, LP (Beacon II Fund).
Employees of the Firm provide certain services to the
Beacon Funds, for which the Firm receives payments from
Old Beacon in accordance with the terms of the Beacon
Acquisition. In 2001, the Firm, Old Beacon, and the
investors in the Beacon II Fund agreed that the
investment period for the Beacon II Fund would cease
earlier than provided for when the fund was
established, and that the remaining investor
commitments to the fund of approximately $419 million
would be released. Certain investors in the Beacon II
Fund elected to make investments in the Global Fund, a
fund managed by JPMorgan Partners, in lieu of further
investments in the Beacon II Fund. The Firm agreed to
provide Old Beacon with a carried interest in the
Global Fund and other investments managed by JPMorgan
Partners equivalent to the foregone carried interest in
the Beacon II Fund. |
| Compensation and Management Development Committee interlocks and insider participation | No member of the Compensation and Management
Development Committee is or ever was a JPMorgan Chase officer or
employee. No member of the committee is, or was during 2001, an
executive officer of another company whose board of directors has a
comparable committee on which one of JPMorgan Chase’s executive
officers serves. |

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link2 "Audit Committee report"

| Audit Committee report |
| --- |
| The Audit Committee of the JPMorgan Chase Board of
Directors (the Committee) is composed of four
non-employee directors and operates under a written
charter adopted by the Board of Directors, a copy of
which was included in the 2001 proxy statement. The
Board of Directors has determined that each Committee
member is independent in accordance with the listing
standards of the New York Stock Exchange. |
| Management is responsible for the Firm’s internal
controls and the financial reporting process. The
external auditors are responsible for performing an
independent audit of the Firm’s consolidated financial
statements in accordance with generally accepted
auditing standards and to issue a report thereon. The
Committee’s responsibility is to monitor and oversee
these processes. |
| In this context, the Committee has met and held
discussions with management and the external auditors.
Management represented to the Committee that the Firm’s
consolidated financial statements were prepared in
accordance with generally accepted accounting
principles, and the Committee has reviewed and
discussed the consolidated financial statements with
management and the external auditors. The Committee
discussed with the external auditors matters required
to be discussed by Statement on Auditing Standards No.
61 (Communication with Audit Committees) |
| The Firm’s external auditors also provided to the
Committee the written disclosures required by
Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and
the Committee discussed with the external auditors that
firm’s independence. |
| Based on the Committee’s discussion with management,
the internal auditors, and the external auditors and
the Committee’s review of the representations of
management and of the internal auditors, and the report
of the external auditors to the Committee, the
Committee recommended to the Board of Directors, and
the Board has approved, that the audited consolidated
financial statements be included in the Firm’s Annual
Report on Form 10-K for the year ended December 31,
2001, for filing with the Securities and Exchange
Commission. The Committee and the Board also have
approved, subject to stockholder ratification, the
selection of the Firm’s external auditors. |
| Audit Committee |
| M. Anthony Burns (Chairman) |
| Hans W. Becherer |
| Frank A. Bennack, Jr. |
| Lloyd D. Ward |

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link1 " Proposal 2: Appointment of independent accountant"

| Proposal 2: Appointment of independent accountant |
| --- |
| The Board of Directors has appointed
PricewaterhouseCoopers LLP (PwC), 1177 Avenue of the
Americas, New York, New York 10036, as independent
accountant to audit the financial statements of
JPMorgan Chase and its subsidiaries for the year ending
December 31, 2002. A resolution will be presented at
the meeting to ratify their appointment. |
| Audit fees |
| The core fee in respect of the audit of the financial
statements for the year ended December 31, 2001, and
the reviews of the financial information included in
the Firm’s Forms 10-Q for the period, was $18.4
million. |
| Financial information systems design and implementation fees |
| The fees billed by PwC in respect of such services for
2001 were $10.9 million. |
| All other fees |
| The aggregate fees billed by PwC in respect of other
professional services provided to the Firm in 2001 were
$75.0 million. This amount was composed of: |

Audit-related services: Tax services: Other consulting services: $28.8 million $13.0 million $33.2 million

| The audit-related services primarily involved SEC
filings, internal control related reviews, regulatory
and accounting matters, statutory financial statement
audits of consolidated subsidiaries and
non-consolidated affiliates, other attestation work and
SAS 70 reviews. This work is closely aligned with and
in many respects is an integral component of the audit
of our consolidated financial statements. |
| --- |
| The tax services primarily involved assistance with tax
return compliance for both the Firm and third party
entities, as well as advice on areas such as
depreciation and valuation methods. |
| The services provided for financial information systems
design and implementation and substantially all of the
services reflected in the item “other consulting
services” were performed during 2001 by employees of
PwC Consulting (PwCC). The financial information
systems design and implementation services were to
assist the Firm with a multi-year undertaking that has
been performed under the Firm’s direct supervision and
control, and involves implementation of new human
resource systems. The other consulting services related
primarily to assistance with merger-related integration
and securities law compliance activities, all of which
are now substantially complete. |
| All internal auditing is performed under the direct
control of the General Auditor, who is accountable to
the Audit Committee. |

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link1 "Proposals 3-4: Stockholder proposals"

| The Audit Committee has considered whether the
provision of non-core audit services to the Firm by PwC
is compatible with the maintenance of PwC’s
independence. Aggregate fees paid to PwC and individual
large assignments for consulting services have
regularly been reviewed by the committee in advance of
the work. The committee does not believe that such work
has compromised PwC’s independence but has nevertheless
adopted a policy not to commence any new engagements of
PwC other than for tax advice and for audit-related
services. Accordingly, the Firm will not engage its
independent auditor for any new consulting services of
the nature provided by its consulting affiliate, PwCC.
In addition, the committee notes that PwC has announced
its intention to separate PwCC from its attestation
business. |
| --- |
| A member of PwC will be present at the meeting, will
have the opportunity to make a statement, and will be
available to respond to appropriate questions by
stockholders. |
| The affirmative vote of a majority of the total number
of shares of common stock represented at the annual
meeting and entitled to vote is needed to ratify their
appointment. If the stockholders do not ratify the
appointment of PwC, the selection of the independent
accountant will be reconsidered by the Board of
Directors. |
| The Board of Directors recommends that stockholders
vote FOR ratification of the appointment of
PricewaterhouseCoopers LLP |
| Proposals 3-4: Stockholder proposals |
| If a majority of the shares of common stock represented
at the annual meeting and entitled to vote are voted in
favor of any of the following proposals, then the
proposals will be approved. |
| Proposal 3 |
| Mrs. Evelyn Y. Davis, Watergate Office Building, 2600
Virginia Avenue, N.W., Suite 215, Washington, D.C.
20037, the holder of record of 1,044 shares of common
stock, has advised us that she plans to introduce the
following resolution: |
| “RESOLVED: That the shareholders recommend that the
Board take the necessary steps that J.P. Morgan Chase &
Co. specifically identify by name and corporate title
in all future proxy statements those executive
officers, not otherwise so identified, who are
contractually entitled to receive in excess of $250,000
annually as a base salary, together with whatever other
additional compensation bonuses and other cash payments
were due them. |
| “REASONS: In support of such proposed Resolution it is
clear that the shareholders have a right to
comprehensively evaluate the management in the manner
in which the Corporation is being operated and its
resources utilized. At present only a few of the most
senior executive officers are so identified, and not
the many other senior executive officers who should
contribute to the ultimate success of the Corporation.
Through such additional identification the shareholders
will then be provided an opportunity to better evaluate
the soundness and efficacy of the overall
management. Last year the owners of 78,564,128 shares,
representing approximately 6.2% of shares voting voted
FOR this proposal. |
| “If you AGREE, please mark your proxy FOR this
resolution.” |
| The Board of Directors recommends that stockholders
vote AGAINST this proposal for the following reasons: |

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| The Board of Directors believes that the adoption of
this proposal could be extremely harmful to the Firm.
Financial service firms, such as ours, depend on
talented individuals to provide the Firm’s services.
The proposal, if implemented, would provide competitors
with detailed compensation information not otherwise
available that they might use in seeking to attract
talented employees from us. Our competitors do not make
this information available and the risk associated with
this proposal is not counterbalanced by any meaningful
additional information to our stockholders. |
| --- |
| We disclose in our proxy statement detailed information
regarding the compensation of our most highly
compensated executive officers, including the terms and
conditions of any contractual agreements and our
compensation policies. In addition, overall salaries
and the cost of employee benefits are components of
noninterest expense that are disclosed on a line by
line basis in our financial reports. The additional
disclosures proposed are not justified by the
competitive risks they entail. Accordingly, the Board
recommends a vote against this proposal. |
| Proposal 4 |
| Mr. Bartlett Naylor, 1255 N. Buchanan, Arlington, Va.
22205, the beneficial holder of 1,054 shares of common
stock, has advised us that he plans to introduce the
following resolution: |
| “Resolved: The shareholders urge our board of directors
to take the necessary steps to nominate at least two
candidates for each open board position, and that the
names, biographical sketches, SEC-required declarations
and photographs of such candidates shall appear in the
company’s proxy materials (or other required
disclosures) to the same extent that such information
is required by law and is our company’s current
practice with the single candidates it now proposes for
each position. |
| “Supporting statement: Although our company’s board
appreciates the importance of qualified people
overseeing management, I believe that the process for
electing directors can be improved. |
| “Our company currently nominates for election only one
candidate for each board seat, thus leaving
shareholders no practical choice in most director
elections. Shareholders who oppose a candidate have no
easy way to do so unless they are willing to undertake
the considerable expense of running an independent
candidate for the board. The only other way to register
dissent about a given candidate is to withhold support
for that nominee, but that process rarely affects the
outcome of director elections. I believe the current
system thus provides no readily effective way for
shareholders to oppose a candidate who has failed to
attend board meetings; or serves on so many boards as
to be unable to supervise our company management
diligently; or who serves as a consultant to the
company that could compromise independence; or poses
other problems. |
| “As a result, while directors legally serve as the
shareholder agent in overseeing management, the
election of directors at the annual meeting is largely
perfunctory. |
| “Our company should offer a rational choice when
shareholders elect directors. |

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| “Would such a process lead to board discontinuity?
Perhaps, but only with shareholder approval. Presumably
an incumbent would be defeated only because
shareholders considered the alternative a superior
choice. Would such a procedure discourage some
candidates? Surely our board should not be made of
those intolerant of competition. Would such a procedure
be “awkward” for management when it recruits
candidates? Presumably this would add rigor, which I
believe is justified by the responsibility of board
directors. (Management could print a nominee’s name
advanced by an independent shareholder to limit any
embarrassment.) The point is to remove the “final”
decision on who serves as a board director from the
hands of management, and place it firmly in those of
shareholders. |
| --- |
| “I urge you to vote FOR this proposal.” |
| The Board of Directors recommends that stockholders
vote AGAINST this proposal for the following reasons: |
| The Board of Directors believes in the importance of a
sound process for the nomination of directors and
believes that the current process serves stockholders
well. Under current procedures, the Governance
Committee of the Board, which consists solely of
non-employee directors, considers all proposed nominees
for director, including sitting directors and nominees
for which a stockholder has submitted a written
recommendation. Any JPMorgan Chase stockholder may
submit a written recommendation for consideration by
the Governance Committee. In addition, any stockholder
who complies with the advance notice provisions of our
By-laws may nominate a director at the annual meeting
of stockholders. Also, any stockholder may write in the
name of a candidate on the stockholder’s proxy card or
vote for some directors and withhold votes from others.
Finally, any stockholder may propose an alternate slate
of directors as long as the stockholder complies with
the special rules of the Securities and Exchange
Commission relating to election contests. |
| In addition to the current procedures, the proposal
would require the Governance Committee to nominate at
least two candidates for each directorship. The Board
of Directors believes that this proposal would
politicize the director election process and is
inappropriate for a business organization. The current
procedures reflect the Board’s responsibilities for its
own self-evaluation in terms of size, composition, and
performance, and for recommending candidates to
stockholders. The Board weighs renomination of
incumbent directors and candidates for vacancies or new
Board positions against its desired composition, and in
light of the circumstances of the Firm. In the absence
of special circumstances, changes to Board membership
should be incremental so that there is a balance
between renewal and experience. The Board believes that
the nomination of two candidates for each Board vacancy
would be inconsistent with this objective and would
discourage qualified candidates from standing for
election. Accordingly, the Board recommends a vote
against this proposal. |

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link1 "Stockholder proposals and nominations for the 2003 annual meeting"

	Stockholder proposals and nominations for the 2003 annual meeting
Proxy statement proposals	Under the rules of the Securities and Exchange
Commission, proposals that stockholders seek to have included in the
proxy statement for our next annual meeting of stockholders must be
received by the Secretary of JPMorgan Chase not later than November
29, 2002.
Other proposals and nominations	Our By-laws govern the submission of
nominations for director or other business proposals that a
stockholder wishes to have considered at a meeting of stockholders,
but which are not included in JPMorgan Chase’s proxy statement for
that meeting. Under our By-laws, nominations for director or other
business proposals to be addressed at our next annual meeting may be
made by a stockholder entitled to vote who has delivered a notice to
the Secretary of JPMorgan Chase no later than the close of business
on February 18, 2003, and not earlier than January 19, 2003. The
notice must contain the information required by the By-laws.
	These advance notice provisions are in addition to, and
separate from, the requirements that a stockholder must
meet in order to have a proposal included in the proxy
statement under the rules of the Securities and
Exchange Commission.
	A proxy granted by a stockholder will give
discretionary authority to the proxies to vote on any
matters introduced pursuant to the above advance notice
By-law provisions, subject to applicable rules of the
Securities and Exchange Commission.
	Copies of our By-laws may be obtained from the
Secretary.
	Anthony J. Horan
	Secretary

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	Location of Annual Meeting of Stockholders of J.P. Morgan Chase & Co.
	●
	From I-275:
•	Exit at I-4 East (Old Exit #27 – New Exit #45B)
•	Take I-4 East to I-75 South (Old Exit #7 – New Exit #9)
•	Take I-75 South to the first exit labeled “Mango West” (Old Exit #52 – New Exit #260)
•	Merge to your right off the exit ramp onto Dr. Martin Luther King Jr. Blvd.
•	Take the first right turn on
Park Oaks Blvd. (by the bus shelter) into Highland
Oaks, and proceed to the stop sign
•	Turn right onto Highland Manor Dr.
•	Follow Highland Manor Dr. to
the end where you will see the JPMorgan Chase
complex at Highland Oaks
•	Please stop and register at the
Welcome Center prior to entry
	Interstate exits are currently in the process of being
renumbered. We have included both the old and new exit
numbers for your convenience
	Annual Meeting of Stockholders of J.P. Morgan Chase & Co.
	Tuesday, May 21, 2002, at 10:00 a.m.
	J.P. Morgan Treasury Technologies Corp.
	10420 Highland Manor Dr., Building 2
	Tampa, Florida 33610
	Note
	If you are a beneficial owner of common stock held by a
broker, bank, or other nominee (i.e., in “street
name”), you will need proof of ownership to be admitted
to the meeting. A recent brokerage statement or letter
from a bank or broker are examples of proof of
ownership. If you are a holder of record, the lower
portion of the proxy card is your admission ticket.
	© 2002 J.P. Morgan Chase & Co. All rights reserved.
	Printed in U.S.A. on recycled paper.

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PROXY

J.P. MORGAN CHASE & CO.

This proxy is solicited from you by the Board of Directors for use at the Annual Meeting of Stockholders of J.P. Morgan Chase & Co. on May 21, 2002.

You, the undersigned stockholder, appoint each of Dina Dublon, John J. Farrell and Frederick W. Hill your attorney-in-fact and proxy, with full power of substitution, to vote on your behalf shares of JPMorgan Chase common stock that you would be entitled to vote at the 2002 Annual Meeting, and any adjournment of the meeting, with all powers that you would have if you were personally present at the meeting. The shares represented by this proxy will be voted as instructed by you and in the discretion of the proxies on all other matters. If not otherwise specified, shares will be voted in accordance with the recommendations of the Board of Directors.

Participants in 401(k) plan: If you have an interest in JPMorgan Chase common stock through the 401(k) savings plan, your vote will provide voting instructions to the trustee of the plan to vote your proportionate interest as of the record date. If no instructions are given, the trustee will vote the shares pursuant to the terms of the plan.

Voting Methods: If you wish to vote by mail, please sign your name exactly as it appears on this proxy and mark, date and return it in the enclosed envelope. If you wish to vote by Internet or telephone, please follow the instructions below.

FOLD AND DETACH HERE

		YOUR VOTE IS IMPORTANT!
		You can vote in one of three ways:
	1.	Vote by Internet:
●		http://www.eproxy.com/jpm
Admission Ticket J.P. Morgan Chase & Co. 2002 Annual Meeting of Stockholders		If you wish to access future stockholder communications on-line
instead of receiving printed materials by mail, please indicate your
consent when you vote by Internet. or
Tuesday, May 21, 2002 10:00 AM at J.P. Morgan Treasury Technologies Corp. 10420 Highland Manor Dr. Building 2	2.	Call toll free in the U.S., Canada or Puerto Rico 1-800-435-6710 on a touch tone telephone and follow the instructions on the reverse
side. There is NO CHARGE to you for this call. or
Tampa, Florida	3.	Mark, sign and date your proxy card and return it promptly in the
enclosed envelope. If you would like to view future stockholder
communications on-line, please let us know by checking the consent
box when you mark your proxy card
		PLEASE VOTE
		If you wish to view our proxy materials on-line, go to http://www.jpmorganchase.com

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Please mark your votes as indicated in the example

The Board of Directors recommends votes FOR Proposals 1 and 2

Proposal 1 — ELECTION OF DIRECTORS

FOR WITHHOLD FOR ALL

Nominees:
01 Hans W. Becherer	08 William H. Gray, III
02 Riley P. Bechtel	09 William B. Harrison, Jr.
03 Frank A. Bennack, Jr.	10 Helene L. Kaplan
04 Lawrence A. Bossidy	11 Lee R. Raymond
05 M. Anthony Burns	12 John R. Stafford
06 H. Laurance Fuller	13 Lloyd D. Ward
07 Ellen V. Futter

WITHHELD FOR (Write nominees name(s) in the space provided below).

---

Proposal 2 — APPOINTMENT OF INDEPENDENT ACCOUNTANT

FOR AGAINST ABSTAIN

The Board of Directors recommends votes AGAINST stockholder proposals 3 and 4

Proposal 3 — COMPENSATION DISCLOSURE

FOR AGAINST ABSTAIN

Proposal 4 — DIRECTOR NOMINATION

FOR AGAINST ABSTAIN

CONSENT TO ELECTRONIC DELIVERY
By checking the box to the right, I consent to future access of the Annual
Reports, Proxy Statements, prospectuses and other stockholder
communications electronically on-line. I understand that unless I request
otherwise or revoke my consent, JPMorgan Chase will tell me when any
communications are on-line and how to access them. I understand that costs
associated with the use of the Internet will be my responsibility. To revoke
my consent, I can contact JPMorgan Chase’s transfer agent Mellon Investor
Services at 1-800-758-4651.	●

WILL ATTEND MEETING (Please check box if you plan to attend)

Signatures ___________ Date _ NOTE: Please sign your name as it appears above. When signing as attorney, executor, administrator, trustee, guardian or officer of a corporation, please give full title as such.

FOLD AND DETACH HERE

IF YOU WISH TO VOTE BY INTERNET OR TELEPHONE, PLEASE FOLLOW THE INSTRUCTIONS BELOW.

HAVE YOUR PROXY CARD IN HAND. TO VOTE BY INTERNET: Go to http://www.eproxy.com/jpm TO VOTE BY PHONE: • On a touch tone telephone call toll free 1-800-435-6710 — 24 hours a day — 7 days a week. • Enter your eleven-digit personal identification number which is indicated in the box located in the lower right corner of this instruction form.

Option 1: To vote as the Board of Directors recommends on all proposals, press 1.

When you press 1, your vote will be confirmed and cast as you directed. END OF CALL.

Option 2: If you wish to vote on each proposal separately, press 2. You will hear the following instructions:

Proposal 1:	To VOTE FOR ALL nominees, press 1;
	To WITHHOLD FOR ALL nominees, press 2;
	To WITHHOLD FOR AN INDIVIDUAL nominee, press 3 and enter the
two digit number that appears next to the name of the nominee
for whom you DO NOT wish to vote.
	Once you have completed voting for directors, press #.
Proposal 2:	You may make your selection at any time.
	To vote FOR, press 1;
	To vote AGAINST, press 2;
	To ABSTAIN, press 3

The instructions are the same for all remaining proposals.

Your vote will be repeated and you will have an opportunity to confirm it. • You will be asked if you plan to attend the meeting. When prompted, please respond. If you vote by Internet or telephone, there is no need to mail back your proxy card.

THANK YOU FOR VOTING