JPMORGAN CHASE & CO - Proxy Solicitation & Information Statement 2003

DEF 14A 1 y82711def14a.htm J.P. MORGAN CHASE & CO. def14a 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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Check the appropriate box:

[ ]	Preliminary Proxy Statement
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[ ]	Soliciting Material Pursuant to
Section 240.14a-11(c) or Section 240.14a-2.

J.P. Morgan Chase & Co.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than Registrant)

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

(1) Amount Previously Paid:

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| J.P. Morgan Chase & Co. 270 Park Avenue New York, New York 10017-2070 |
| --- |
| March 31, 2003 |
| Dear fellow stockholder: |
| We are pleased to invite you to the annual meeting of stockholders
to be held on May 20, 2003, at our offices at One Chase Manhattan
Plaza in New York City, New York. 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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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 2002 and year-end option values
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 external auditor
Proposals 3-8: Stockholder proposals
Stockholder proposals and nominations for the 2004 annual meeting
Appendix A: Charter of the Audit Committee
Appendix B: Corporate Governance Practices of the Board

/TOC

Table of Contents

Notice of 2003 Annual Meeting of Stockholders and Proxy Statement

Date: Time: Place: Tuesday, May 20, 2003 10:00 a.m. Auditorium One Chase Manhattan Plaza New York, New York

	Matters to be voted on:
	Election of directors
	Ratification of appointment of PricewaterhouseCoopers LLP as our external
auditor for 2003
	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 31, 2003
	Please vote promptly
	Please note that if you are attending the meeting, you will be asked to
present photo identification, such as a drivers license. See Attending the
annual meeting on page 2.

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Contents link1 "General information about the meeting "

General information about the meeting		1
Proposal 1:	Election of directors	3
	Information about the nominees	4
	About the Board and its committees	6
	Director compensation	7
	Security ownership of management	7
	Compensation committee report on executive compensation	9
	Executive compensation tables	12
	I. Summary compensation table	12
	II. Stock option grant table	13
	III. Aggregated option exercises in 2002 and
year-end option values	14
	Comparison of five-year cumulative total return	14
	Retirement benefits	15
	Termination arrangements	16
	Additional information about our directors and
executive officers	16
	Audit Committee report	17
Proposal 2:	Appointment of external auditor	18
Proposals 3-8:	Stockholder proposals	20
Stockholder proposals and nominations for the 2004 annual meeting		28
Appendix A:	Charter of the Audit Committee	29
Appendix B:	Corporate Governance Practices of the Board	34

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	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, the Corporation and
the Firm refer to J.P. Morgan Chase & Co.The proxy
statement is being sent to our stockholders on or about
March 31, 2003.
	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 21, 2003. At the close of
business on that date, a total of 2,029,846,623 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, except as may
be required in accordance with appropriate legal process or
as authorized by you.
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 for 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 unless the matters are routine. 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 not vote on matters that are not
routine if the beneficial owner has not provided the broker with voting
instructions. If a nominee cannot vote on a particular matter because it is not
routine and the beneficial owner has not given instructions, there is a broker
non-vote on that matter. Broker non-votes count for quorum purposes, but we do
not count broker non-votes as votes for or against any proposal. Abstentions
have the effect of a vote against a proposal except for purposes of the rules
of the Securities and Exchange Commission regarding resubmission of stockholder
proposals, in which case they have no effect. |
| --- | --- |
| 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. When you arrive at the annual meeting, you will be asked
to present photo identification, such as a drivers
license. 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. |
| | You may listen to the annual meeting over the Internet.
Please go to our Web site, www.jpmorganchase.com, early
to download any necessary audio software. |

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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.
	Lloyd D. Ward, who has served as a director of the Firm
or a predecessor institution since 1999, resigned from
the Board effective March 18, 2003, and will not stand
for election.
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. John H. Biggs became a director on March 18, 2003; each other nominee
was a director in 2002 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. The age indicated in each
nominees biography is as of May 20, 2003, 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.
Director independence	The Board of Directors determined that each of the non-management directors is independent in accordance
with the director independence definition specified in the Corporate
Governance Practices of the Board, which are set forth in Appendix B. In
making its independence determinations, the Board noted that Mr.
Bossidys son is employed by the Firm as a Vice
President, Ms. Futters brother-in-law is employed by
the Firm as a Managing Director and that each such
employee received more than $100,000 in compensation in
2002. The Board determined that these relationships were
not material. Each of such employment relationships is
maintained on an arms length basis; neither family
member is an executive officer of the Firm or a member
of the household of the related director; and neither
director has any material interest in the employment
relationship.

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link2 "Information about the nominees"

Information about the nominees

Hans W. Becherer (age 68) Mr. Becherer has been Retired Chairman and Chief Executive Officer of Deere & Company (equipment manufacturer) since August 2000, having served as Chairman since 1990 and as Chief Executive Officer since 1989. 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 51) Mr. Bechtel has been Chairman and Chief Executive Officer of Bechtel Group, Inc. (engineering and construction) since January 1996. Previously he was President and Chief Executive Officer beginning in 1990. 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 70) Mr. Bennack has been Chairman of the Executive Committee and Vice Chairman of the Board of The Hearst Corporation (publishing, broadcasting, and media) since June 2002. He is the immediate past President and Chief Executive Officer, positions he held beginning in 1979. Mr. Bennack is a director of Hearst-Argyle Television, Inc., Polo Ralph Lauren Corporation and Wyeth. He has been a director of the Firm or a predecessor institution since 1981.

John H. Biggs (age 66) Mr. Biggs has been Former Chairman and Chief Executive Officer of Teachers Insurance and Annuity Association College Retirement Equities Fund (TIAA-CREF) (national teachers pension fund) since November 2002, having served as Chairman and Chief Executive Officer from 1993 until 2002. Mr. Biggs is also a director of The Boeing Company and a trustee of the International Accounting Standards Foundation. He has been a director of the Firm since March 2003.

Lawrence A. Bossidy (age 68) Mr. Bossidy has been Retired Chairman of Honeywell International Inc. (technology and manufacturing) since June 2002, having served as Chairman from July 2001 and from December 1999 to April 2000. He was Chief Executive Officer from July 2001 to February 2002. He was Chairman of AlliedSignal Inc. from 1992 to 1999 and Chief Executive Officer from 1991 to 1999 when he was named Chairman of Honeywell following the merger of the two companies. Mr. Bossidy is also a director of Berkshire Hills Bancorp, Inc. and Merck & Co., Inc. He has been a director of the Firm or a predecessor institution since 1998.

M. Anthony Burns (age 60) Mr. Burns has been Chairman Emeritus of Ryder System, Inc. (logistics and transportation solutions) since May 2002. He was Chairman from May 1985 through May 2002, Chief Executive Officer from January 1983 through November 2000 and President from December 1979 through 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.

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Information about the nominees

H. Laurance Fuller (age 64) Mr. Fuller has been Retired Co-Chairman of BP Amoco p.l.c. (oil, gas, and chemical) since April 2000. He was named Co-Chairman of BP Amoco following the merger of British Petroleum, p.l.c. and Amoco Corporation in December 1998. He was Chairman and Chief Executive Officer of Amoco from 1991 and President from 1983. Mr. Fuller is also a director of Abbott Laboratories, Cabot Microelectronics Corporation and Motorola, Inc. He has been a director of the Firm or a predecessor institution since 1985.

Ellen V. Futter (age 53) Ms. Futter has been President and Trustee of the American Museum of Natural History since 1993. She previously served as President of Barnard College beginning in 1980. 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 61) Mr. Gray has been President and Chief Executive Officer of The College Fund/UNCF (educational assistance) since 1991. He was a member of the United States House of Representatives from 1979 to 1991. Mr.Gray is also a director of Dell Computer Corporation, Electronic Data Systems Corporation, Pfizer Inc., The Prudential Insurance Company of America, Rockwell International Corporation, Viacom Inc., and Visteon Corporation. He has been a director of the Firm or a predecessor institution since 1992.

William B. Harrison, Jr. (age 59) Mr. Harrison has been 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 of The Chase Manhattan Corporation from January through its merger with J.P. Morgan & Co. Incorporated in 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. and the New York Stock Exchange, Inc.

Helene L. Kaplan (age 69) Mrs. Kaplan has been Of Counsel to the firm of Skadden, Arps, Slate, Meagher & Flom LLP (law firm) since 1990. Mrs. Kaplan is also a director of Exxon Mobil Corporation, The May Department Stores Company, MetLife Inc., and Verizon Communications Inc. She has been a director of the Firm or a predecessor institution since 1987.

Lee R. Raymond (age 64) Mr. Raymond has been Chairman of the Board and Chief Executive Officer of Exxon Mobil Corporation (oil and gas) since December 1999. He was Chairman of the Board and Chief Executive Officer of Exxon Corporation from 1993 until its merger with Mobil Oil Corporation in 1999. He has been a director of the Firm or a predecessor institution since 1987.

John R. Stafford (age 65) Mr. Stafford has been Consultant and Retired Chairman of the Board of Wyeth (pharmaceuticals) since January 2003. He was Chairman of the Board from 1986 and Chief Executive Officer from 1986 until May 2001. Mr. Stafford is also a director of Honeywell International Inc. and Verizon Communications Inc. He has been a director of the Firm or a predecessor institution since 1982.

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link2 "About the Board and its committees"

| The Board | About the Board and its committees — 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 2002, there were 11 meetings of the Board. The Board of
Directors has regularly scheduled meetings of non-management directors at least
twice each year. | |
| --- | --- | --- |
| | The Boards corporate governance practices and charters
of the committees described below, which are the Boards
principal committees, are available on the Firms Web
site at www.jpmorganchase.com. The charter of the Audit
Committee and the Boards corporate governance practices
are also attached as appendices to this proxy statement. | |
| 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 2002, and its mission. All members of these committees are
non-management directors. | |
| Audit Committee | Hans W. Becherer, Frank A. Bennack, Jr., John H. Biggs, M.
Anthony Burns (Chairman) | |
| | This committee met 11 times in 2002. The Audit Committee
is responsible for oversight of: | |
| | | the external auditors qualifications and independence |
| | | the performance of the Firms internal audit function and
external auditor |
| | | the Chief Executive Officers and
senior managements responsibilities to assure that
there is in place an effective system of controls
reasonably designed to safeguard the assets and income
of the Firm; assure the integrity of the Firms
financial statements; and maintain compliance with the
Firms ethical standards, policies, plans and
procedures, and with laws and regulations. |
| | The Audit Committee is also responsible for preparing
the Audit Committee report required by the rules of the
Securities and Exchange Commission which is included in
this proxy statement on page 17. | |
| | The Board of Directors has determined that each
committee member is independent in accordance with the
listing standards of the New York Stock Exchange and
each member is an audit committee financial expert as
defined by the Securities and Exchange Commission. | |
| Compensation & Management Development Committee | Riley P. Bechtel, William H. Gray, III, Lee R. Raymond, John R.
Stafford (Chairman) This committee met six times in 2002. The Compensation &
Management
Development Committee reviews and approves the Firms
compensation and benefit
programs; ensures the competitiveness of these programs; and 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 four times in 2002. The Governance
Committee of the Firm exercises general oversight with
respect to the governance of the Board of Directors. | |
| Public Policy Committee | Hans W. Becherer, Riley P. Bechtel, John H. Biggs, M.
Anthony Burns, H. Laurance Fuller, William H. Gray, III (Chairman) | |
| | This committee met two times in 2002. The Public Policy
Committee reviews the charitable and community oriented
activities of JPMorgan Chase and its subsidiaries. | |

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| Risk Policy Committee |
| --- |
| This committee met seven times in 2002. The Risk Policy
Committee is responsible for oversight of the Chief
Executive Officers and senior managements
responsibilities to assess and manage the Firms credit
risk and market risk and is also responsible for review
of the Firms fiduciary and asset management activities. |

link2 "Director compensation"

	Director compensation
	Directors who are officers of the Firm do not receive
any fees for their services as directors. Each
non-management director receives an annual retainer of
$75,000 and an annual grant of common stock equivalents
valued at $170,000 on the date of grant. Each chairman
of a Board committee receives an additional fee of
$15,000 per year.
	The annual grant of common stock equivalents will earn
dividend equivalents and must remain indexed to the
Firms common stock until a directors termination of
service, at which time it will be paid in cash or may be
reallocated in accordance with elections permitted for
deferred cash compensation.
	Non-management directors may elect to be included in a
group term life insurance policy and a business travel
accident insurance policy. During 2002, the Firm paid
average premiums for these coverages of approximately
$896 per director. A director may elect to participate
in the Firms medical insurance coverage, with the cost
of the coverage paid by the director.
Deferred compensation arrangements for non- management directors	Each year non-management directors may elect to defer all
or part of their cash compensation. A directors right to
receive future payments under any deferred compensation
arrangement is an unsecured claim against JPMorgan Chases 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. Compensation that was paid in common stock in prior
years which may have been deferred is distributable only in common stock when
the director retires from the Board.

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, 2003, by each director who is a nominee, 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 0.9% of our
outstanding common stock as of March 1, 2003. No
director or executive officer beneficially owns any
JPMorgan Chase preferred stock. |
| JPMorgan Chase has been notified by Capital Research and
Management Company (Capital Research), 333 South Hope
Street,
Los Angeles, California 90071, that as of December 31,
2002, they were the beneficial owners of 150,634,330
shares of our common stock, representing 7.5% of our
outstanding common stock. According to the Schedule 13G
dated February 10, 2003, filed by Capital Research with
the Securities and Exchange Commission, the shares were
acquired in Capital Researchs capacity as a registered
investment advisor to various investment companies.
Capital Research has sole dispositive power over these
shares; they disclaim beneficial ownership of the
shares. |

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Security ownership of directors and executive officers

Name of individual — Hans W. Becherer	31,941	(1)(2)(3)
Riley P. Bechtel	29,926	(1)(2)(3)
Frank A. Bennack, Jr.	45,517	(2)(3)
John H. Biggs	3,050
Lawrence A. Bossidy	49,820	(1)(2)(3)
M. Anthony Burns	36,833	(1)(2)(3)
David A. Coulter	943,576	(3)(4)
Dina Dublon	828,381	(1)(3)(4)
H. Laurance Fuller	63,002	(1)(2)(3)
Ellen V. Futter	24,158	(1)(2)(3)
William H. Gray, III	36,427	(1)(2)(3)
William B. Harrison, Jr.	4,082,764	(1)(3)(4)(5)
Helene L. Kaplan	53,467	(1)(2)(3)
Donald H. Layton	2,198,620	(1)(3)
Lee R. Raymond	81,229	(1)(2)(3)
Marc J. Shapiro	2,457,541	(1)(3)
John R. Stafford	70,225	(1)(2)(3)(5)
All directors and executive officers as a group (25 persons)	18,455,123

| 1 | The amounts reported include
shares of common stock, receipt of which has been
deferred under deferred compensation plan
arrangements, as follows: Mr. Becherer: 6,884 shares;
Mr. Bechtel: 13,504 shares; Mr. Bossidy: 8,741
shares; Mr. Burns: 6,749 shares; Ms. Dublon: 35,666
shares; Mr. Fuller: 19,139 shares; Ms. Futter: 9,729
shares; Mr. Gray: 14,660 shares; Mr. Harrison: 107,534 shares; Mrs. Kaplan: 8,419 shares; Mr.
Layton: 206,185 shares; Mr. Raymond: 18,475 shares;
Mr. Shapiro: 439,925 shares; Mr. Stafford: 12,426
shares; and all directors and executive officers as a
group: 1,203,355 shares. |
| --- | --- |
| 2 | The amounts reported include
the number of units of common stock equivalents held
by 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: 15,691 units; Mr. Bechtel: 9,766 units; Mr. Bennack:
22,971 units; Mr. Bossidy: 7,773 units; Mr. Burns: 15,794 units; Mr. Fuller: 27,207 units; Ms. Futter:
7,773 units; Mr. Gray: 16,961 units; Mrs. Kaplan: 24,542 units; Mr. Raymond: 56,098 units; Mr.
Stafford: 35,721 units; and all directors as a group: 240,297 units. |
| 3 | The amounts reported include
shares of common stock that may be acquired within 60
days of March 1, 2003, through the exercise of stock
options as follows: each non-management director:
4,806 shares; Mr. Coulter: 531,038 shares; Ms.
Dublon: 491,320 shares; Mr. Harrison: 2,823,862
shares; Mr. Layton: 1,445,146 shares; Mr. Shapiro:
1,506,881 shares; and all directors and executive
officers as a group: 11,799,617 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. Coulter: 240,397 shares; Ms. Dublon:
249,450 shares; Mr. Harrison: 634,772 shares; Mr.
Layton: 455,213 shares; Mr. Shapiro: 429,616 shares; and
all executive officers as a group: 3,725,451 shares. |
| 4 | The amounts reported include
common stock allocated to accounts under a Section
401(k) plan as follows: Mr. Coulter: 107 shares; Ms.
Dublon: 2,700 shares; Mr. Harrison: 18,852 shares;
and all executive officers as a group: 28,948 shares. |
| 5 | The amounts reported include
shares for which beneficial ownership is disclaimed
as follows: Mr. Harrison: 30,249 shares; Mr.
Stafford: 900 shares; and all directors and executive
officers as a group: 34,043 shares. |

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link2 "Compensation committee report on executive compensation"

	Compensation committee report on executive compensation
Compensation policies	The Compensation & Management Development Committee, which consists solely of non-management directors,
administers the compensation and benefit programs of the Firm and its subsidiaries and determines the
compensation of executive officers.
The committees determinations regarding officer
directors are subject to ratification by the Board of
Directors.
	JPMorgan Chases 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 to 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 2002,
the committee received reports from independent
consultants to ensure that the program, in the
committees judgment, remains competitive and able to
meet its objectives.
	In general, each peer group will consist of comparable
financial institutions that compete in the same markets
and seek to sell similar 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 14
of the proxy statement.
	The committee reviewed its charter in 2002 and approved
minor revisions in January 2003 to ensure that its
charter and the committees practices are fully
compliant with the proposed New York Stock Exchange
listing requirements.
Firm
performance and
compensation	The committees fundamental principle in determining
appropriate compensation levels for individual executive officers
and for overall business units is to align compensation award levels with
annual performance and progress towards and achievement of long-term strategic
goals. Because of the Firms diversified businesses, compensation award amounts
vary significantly across businesses in line with the compensation practices in
our different competitive markets. 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.
	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, income before income tax
expense, credit quality, and management indicators.
Qualitative measures include the committees assessment
of the executives success in (1) establishing, refining
and executing our long-term strategic plan; (2)
achieving market leadership positions in key businesses;
(3) developing leaders who can meet the demands of the
marketplace; and (4) implementing our diversity efforts
at all levels of the organization.

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| | For 2002, the committee approved compensation funding
levels for the Firm and awards to executive officers
based on its assessment of a difficult performance year.
The Firms financial performance reflected losses from
the Firms private equity portfolio, higher credit costs
and a reserve taken to address potential litigation
losses. The Firms stock price was down 34%
year-over-year. On the other hand, the committee
recognized that the Firm maintained its leadership
position in key products and markets, while continuing
its expense management discipline. The Firms consumer
banking businesses produced record results, while the
transaction services businesses continued to produce
solid operating earnings. Overall, incentive
compensation award pools were down 25% from last year,
and the average incentive award for Executive Committee
members decreased by more than 40%. |
| --- | --- |
| Compensation program design | Compensation paid to the Firms executive officers for
2002 consisted primarily of salary, cash bonuses, and awards of stock
options and restricted stock units awarded under the Firms 2000 Key Executive
Performance Plan (2000 KEPP) and the 1996 Long-Term Incentive Plan, as amended.
Both these plans were approved by stockholders. In addition, executive officers
are eligible to participate in the Firms general benefit plans, including
retirement, health and savings plans. |
| | Salaries For each executive, the committee reviews
salaries paid to similarly situated executives in the
relevant competitor peer group. A particular executives
actual salary will be set based on this competitive
review; the executives performance and potential; and
the Firms emphasis on performance-based rather than
salary-based compensation. |
| | Incentives Throughout the year, the committee reviews
financial and operational results and strategic
achievements, both for the Firm overall and by line of
business, as well as market data and trends for the
appropriate peer groups, to determine overall business
incentive funding levels and individual awards for
executive officers. Individual annual performance
incentives are awarded based on the executives success
in achieving corporate, business unit and individual
performance goals and the committees assessment of the
individuals current and potential contribution to the
Firms success. |
| | Incentive mix Incentives are awarded in cash and in
the form of JPMorgan Chase equity. Because JPMorgan
Chase believes that the grant of significant annual
equity-based awards further links the interests of
senior management and our stockholders, more than 50% of
the incentives awarded to executive officers for 2002
were in the form of JPMorgan Chase equity. In January
2003, the committee approved awards of restricted stock
units which will vest 50% in January 2005 and 50% in
January 2006. The committee also approved stock option
grants which will become exercisable 50% in January 2005
and 50% in January 2006. These options will expire on
February 12, 2013. All awards vest in case of death,
disability, or retirement. These terms and conditions
applied to awards for all employees across the Firm. |
| | Executive Committee members own significant amounts of
our stock. Effective August 2002, the committee approved
stock ownership guidelines for Executive Committee
members that require each executive to retain 75% of the
net shares of stock received
from stock grants and options (after deductions for
taxes and option exercise costs). |
| | Final compensation data for JPMorgan Chases competitive
peer groups for calendar year 2002 is not yet available.
The committee estimates that total compensation amounts
for the Firms executive officers (base salary, annual
bonus, and stock-based awards) will on average be below
the 75th percentile of compensation levels of applicable
peer groups. |

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| Deductibility of
executive
compensation | In May 1999 our stockholders approved the 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). |
| Compensation
actions
for Mr. Harrison | In January 2003, the committee, as ratified by the Board of
Directors, awarded Mr. Harrison total incentives for 2002 performance of $7,700,000, a 50% decrease from
his 2001 awards, detailed in the table below: |

	Cash	Restricted		Total annual — incentive	Percent — change versus
Year	bonus	stock(1)	Options(2)	compensation(3)	prior year
2002	$ 3,080,000	$ 2,310,000	$ 2,310,000	$ 7,700,000	-50.0 %
2001	$ 5,000,000	$ 5,200,000	$ 5,200,000	$ 15,400,000	-15.4 %

| 1 | 105,625 restricted stock units grant for 2002. The 2001
restricted stock unit grant was reported in Table IV of the 2002
proxy statement and is paid out only if the stock price achieves
the $52 target by January 2007. |
| --- | --- |
| 2 | 316,873 nonqualified stock options granted for 2002; options
valued at one-third the grant price. |
| 3 | Does not include merger related award in July 2001. |

| The restricted stock units will vest 50% in January 2005 and 50% in January
2006 and the nonqualified stock options become exercisable 50% in January
2005 and 50% in January 2006. These awards reflect the Firms performance in
2002 described above. In addition to Mr. Harrisons overall leadership, the
committee also noted among others, Mr. Harrisons contribution to the
following significant achievements: (1) maintaining key market leadership
positions in leveraged and syndicated lending, high grade bonds, derivatives,
foreign exchange, mergers and acquisitions, asset management, private
banking, and global custody; (2) disciplined expense management; (3) the
continued profitability of a diverse portfolio of strong U.S. consumer
businesses; and (4) continuing efforts in leadership development and
diversity. |
| --- |
| Dated as of March 18, 2003 |
| Compensation & 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"

Executive compensation tables

link3 "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)	($) (3)(4)	granted (#)		($) (6)	tion ($) (7)
William B. Harrison, Jr.	2002	$ 1,000,000	$ 3,080,000	$ 5,000,000	$ 0	$ 2,310,000		316,873	$ 0	$ 65,414
Chairman and Chief	2001	1,000,000	5,000,000	5,000,000	5,000,000	Note (5)		423,340	1,099,013	78,477
Executive Officer	2000	1,000,000	5,281,250	0	0	3,118,766		1,897,697	0	72,275
David A. Coulter	2002	220,000	3,200,000	0	0	2,290,000		314,129	0	0
Investment Bank	2001	220,000	4,780,000	0	0	5,000,000		407,057	0	11,000
Investment Management	2000	108,167	1,280,000	0	0	0		1,376,415	0	4,125
& Private Banking
Dina Dublon	2002	500,000	2,100,000	625,000	625,000	1,575,000		216,050	0	25,000
Chief Financial Officer	2001	491,667	2,500,000	625,000	625,000	1,875,000		152,647	396,094	24,583
	2000	400,000	1,781,250	0	0	1,368,767		339,712	0	20,000
Donald H. Layton	2002	500,000	3,000,000	2,500,000	0	2,250,000		308,642	0	10,416
Chase Financial Services	2001	500,000	8,000,000	2,500,000	2,500,000	3,750,000		305,293	792,188	25,000
Treasury & Securities	2000	500,000	9,656,250	0	0	3,093,758		878,564	0	26,205
Services
Marc J. Shapiro	2002	675,000	1,800,000	2,500,000	0	1,352,000		185,529	0	694,540
Finance, Risk	2001	675,000	3,500,000	2,500,000	2,500,000	2,156,250	(5)	351,087	792,188	940,751
Management and	2000	675,000	3,531,250	0	0	2,468,763		1,014,741	0	1,033,460
Administration

| 1 | Includes amounts paid or
deferred during each year. |
| --- | --- |
| 2 | Amounts shown are special
merger related awards granted in 2001 as follows: Mr.
Harrison: $10,000,000 and 118,582 restricted stock
units; Ms. Dublon: $1,250,000 and 29,646 restricted
stock units; Mr. Layton and Mr. Shapiro: $5,000,000
and 59,291 restricted stock units each. These awards
were payable as follows: 50% of the cash portion in
January 2002 and 50% in January 2003 (this is
reflected in the column Merger related Bonus). The
restricted stock units were distributed in January
2002 for Mr. Harrison, Mr. Layton and Mr. Shapiro.
Restricted stock units awarded to Ms. Dublon were
distributed 50% in January 2002 and 50% in January
2003. |
| 3 | Market value of the restricted
stock units awarded on February 12, 2003, relating to
2002 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, 2002
(including forfeitable awards and awards of
restricted stock units made on February 12, 2003,
relating to 2002 performance) were as follows: Mr.
Harrison: 694,378 units ($16,665,072); Mr. Coulter: 240,397 units ($5,769,528); Ms. Dublon: 281,178 units
($6,748,272); Mr. Layton: 504,269 units
($12,102,456); and Mr. Shapiro: 464,062 units
($11,137,488). |
| 5 | Amounts shown in this table for
Mr. Harrison and Mr. Shapiro for 2001 do not include
awards for 2001 performance reported as January 2002
long-term incentive awards in Table IV of the 2002
proxy statement, which the Compensation & Management
Development Committee valued at $5,200,000 and
$2,156,250 respectively, based upon a grant date
stock price of $36.85 per share. These awards will be
forfeited if the target price is not met by January
25, 2007. The target price will be achieved when the
average of the closing prices of JPMorgan Chase
common stock for 10 consecutive |

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| | trading days equals or exceeds $52. Amounts shown in this table as
merger related awards for Messrs. Harrison, Layton and Shapiro for
2001 also do not include awards reported as July 2001 merger related
awards in Table IV of the 2002 proxy statement. Such merger related
awards were subject to the same target price and forfeiture
provisions as the January 2002 long-term incentive awards for 2001
performance for Messrs. Harrison and Shapiro. |
| --- | --- |
| 6 | The 2001 LTIP payout for each of Mr. Harrison, Ms. Dublon, 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. |
| 7 | Includes employer contributions to 401(k) plans. Mr. Coulter was
not eligible to receive the employer contributions to the 401(k)
plan in 2002; Mr. Layton was not eligible for a portion of 2002.
Amounts for Mr. Shapiro also include allowances and
reimbursements related to his relocation to New York ($535,582 in
2002, $651,172 in 2001 and $707,258 in 2000) and tax
reimbursements related to such payments ($123,426 in 2002,
$232,489 in 2001 and $291,191 in 2000). Also includes tax
reimbursements in connection with non-business use of corporate
aircraft where the imputed value of such use exceeded amounts
paid to the Firm by an officer, as follows: Mr. Harrison: $15,414
in 2002, $28,477 in 2001 and $19,775 in 2000; and Mr. Shapiro: $1,782 in 2002, $14,840 in 2001 and $54 in 2000. |

link3 "II. Stock option grant table"

II. Stock option grant table

		Percent of — total options	Exercise or		Grant date
	Options	granted to	base price	Expiration	present
Name	granted(1)	employees	($/share)	date	value
William B. Harrison, Jr.	316,873	0.74 %	$ 21.87	2/12/2013	$ 1,752,308
David A. Coulter	314,129	0.73	21.87	2/12/2013	1,737,133
Dina Dublon	216,050	0.50	21.87	2/12/2013	1,194,757
Donald H. Layton	308,642	0.72	21.87	2/12/2013	1,706,790
Marc J. Shapiro	185,529	0.43	21.87	2/12/2013	1,025,975

| 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 3.46%, the implied rate on 10-year U.S.
Treasury zero coupon bonds on the grant date; (ii) stock price
volatility of 43.81%; (iii) a constant dividend yield of 6.03%,
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. |

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link3 "III. Aggregated option exercises in 2002 and year-end option values"

III. Aggregated option exercises in 2002 and year-end option values

	Aggregated		Number of securities — underlying unexer-		Value of unexer- — cised in-the-money
	option exercises		cised options (#)		options ($) (2)
	Shares	Value
	acquired on	realized	Exer-	Unexer-	Exer-	Unexer-
Name	exercise (#)	($)(1)	cisable	cisable	cisable	cisable
William B. Harrison, Jr.	0	$ 0	2,604,881	2,879,206	$ 7,762,478	$ 0
David A. Coulter	0	0	197,676	1,585,797	0	0
Dina Dublon	0	0	346,458	534,820	412,624	0
Donald H. Layton	241,623	4,261,395	1,165,732	1,274,516	4,645,900	0
Marc J. Shapiro	78,479	594,282	1,187,081	1,435,396	4,186,862	0

| 1 | Where applicable, amounts indicated include values that would
have been realized on exercise but were deferred into common
stock units. Option exercises were in connection with options
expiring during 2002. |
| --- | --- |
| 2 | Value based on $24.00, the closing price per share of
our common stock on December 31, 2002. |

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, 1997, and ending December 31, 2002. The results are based on an
assumed $100 invested on December 31, 1997, and reinvestment of
dividends. |
| --- |
| Comparisons of five-year total stockholder return In dollars |
| ● |

JPMorgan Chase — 100.00	132.57	147.93	133.11	109.76	76.09
S&P Financial
100.00	111.43	115.85	146.06	133.00	113.53
S&P 500
100.00	128.58	155.63	141.47	124.65	97.10

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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 participants name is credited
with an amount equal to a percentage of the participants
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 participants 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.
	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 participants 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.

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| Estimate of
retirement
benefits |
| --- |
| Estimated age 65 retirement benefits (1) |

Name	Estimated annual retirement benefit
William B. Harrison, Jr.	$ 889,159
David A. Coulter	22,759
Dina Dublon	395,983
Donald H. Layton	707,377
Marc J. Shapiro	1,072,673

1 Amounts include (i) interest credits for cash balances projected to be 4.93% per year on annual salary credits and 6.16% per year on prior service balances, if any, and (ii) accrued benefits as of December 31, 2002, 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 |
| --- |
| The Firm maintains a discretionary severance plan that
provides for severance in case of involuntary
termination, except for cause, under which severance may
be paid to a named executive officer in an amount up to
two times current base salary, plus up to two times such
officers three-year average cash bonus. Under the terms
and conditions of restricted stock unit awards and
option grants, upon a job elimination officers would be
entitled to: (1) full vesting of restricted stock units,
except that performance-based restrictions on restricted
stock or other stock-based awards would continue; and
(2) stock options (other than the Growth Performance
Incentive Program stock options) would become
exercisable immediately and remain exercisable for their
term for persons who are retirement eligible and for up
to two years for persons not retirement eligible. |

link2 "Additional information about our directors and executive officers"

| | 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 during 2002 each of our directors and executive officers has complied with
applicable reporting requirements for transactions in our equity securities,
except for Jeffrey C. Walker who filed a late Form 4 reporting deferral of
gains on expiring options and Dina Dublon who filed an amended Form 5 for 2001
reporting two charitable gifts. |
| 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, and we believe that all are in conformity with
the Sarbanes-Oxley Act. |

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| Director and
officer
transactions and
other business
relationships | In the ordinary course of business, we may use the
products or services of organizations of which our
directors are officers or directors. Mrs. Kaplan is Of
Counsel to a law firm that has provided and is expected during 2003 to provide
certain legal services to us from time to time. |
| --- | --- |
| | Approximately 2,500 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. The outstanding balance as of December
31, 2002, of the aggregate preferred equity
contributions made by JPMorgan Chase for the named
executive officers, from the year such person became an
executive officer through 2001, were as follows: Mr.
Harrison: $2,032,196; Mr. Coulter: $1,390,354; Ms.
Dublon: $705,966; Mr. Layton: $2,316,886; and Mr.
Shapiro: $2,032,196. The named executive officers and
the other members of the Firms Executive Committee were
not eligible to participate in this program commencing
in 2002. |
| Compensation
committee
interlocks and
insider
participation | No member of the Compensation & Management Development
Committee is or ever was a JPMorgan Chase officer or employee.
No member of the committee is, or was during 2002, an
executive officer of another company whose board of directors has a
comparable committee on which one of JPMorgan Chases executive officers
serves. |

link2 "Audit Committee report"

| Audit Committee report |
| --- |
| The Audit Committee of the JPMorgan Chase Board of
Directors is composed of non-management directors and
operates under a written charter adopted by the Board of
Directors, a copy of which is attached as Appendix A to
this proxy statement. |
| Management is responsible for the Firms internal
controls and the financial reporting process. The
external auditor is responsible for performing an
independent audit of the Firms consolidated financial
statements in accordance with generally accepted
auditing standards and to issue a report thereon. The
committees responsibility is to monitor and oversee
these processes. |
| In this context, the committee has met and held
discussions with management and the external auditor.
Management represented to the committee that the Firms
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 auditor. The committee discussed with
the external auditor matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication
with Audit Committees). |
| The Firms external auditor 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 auditor that
firms independence. |

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| Based on the committees discussion with management, the
internal auditors, and the external auditor and the
committees review of the representations of management
and of the internal auditors, and the report of the
external auditor 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 Firms Annual Report on
Form 10-K for the year ended December 31, 2002, for
filing with the Securities and Exchange Commission. The
committee also approved, subject to stockholder
ratification, the selection of the Firms external
auditor. |
| --- |
| The committee reviewed its charter and practices in 2002
and adopted a revised charter in January 2003. The
committee determined that its charter and practices are
consistent with proposed listing standards of the New
York Stock Exchange. |
| Dated as of March 18, 2003 |
| Audit Committee |
| M. Anthony Burns (Chairman) |
| Hans W. Becherer |
| Frank A. Bennack, Jr. |

link1 "Proposal 2: Appointment of external auditor"

| Proposal 2: Appointment of external auditor |
| --- |
| The Audit Committee of the Board of Directors has
appointed PricewaterhouseCoopers LLP (PwC), 1177 Avenue
of the Americas, New York, NY 10036, as external auditor
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. |
| JPMorgan Chase has elected to early adopt the Securities
and Exchange Commissions (SEC) new proxy disclosure
requirements pertaining to fee categories, pursuant to
the implementation of the Sarbanes-Oxley Act of 2002.
Under the new requirements, the fee categories have been
expanded to four: Audit, Audit-related, Tax and All
other. Under previous requirements, financial
information systems design and implementation fees were
reported in a separate category, with tax,
audit-related, and consulting services combined into the
All other category. Under the new requirements, Audit
has been expanded to include audit and attest services
provided in connection with statutory and regulatory
filings and SEC consent letters. |
| In adopting these new disclosures in 2002, the SEC
requires that comparative information for 2001 be
presented. Accordingly, fee information presented in the
2002 proxy statement has been restated here for
comparative purposes. |
| All services provided by PwC have been reviewed with
senior management of the Firm to confirm that the
performance of such services is consistent with the
regulatory requirements for auditor independence. |

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Aggregate fees for professional services rendered for the Firm by PwC for the years ended December 31, 2002 and 2001, were:

($ in millions)	2002	2001
Audit	$ 22.8	$ 23.1
Audit-related	16.8	24.1
Tax	15.1	13.0
All other	14.5	44.1
Total	$ 69.2	$ 104.3

| Audit fees Audit fees for the years ended December 31, 2002 and
2001, were $19.0 million and $18.4 million, respectively, for the
annual audit and quarterly reviews of the consolidated financials
statements and $3.8 million and $4.7 million, respectively, for
services related to statutory/subsidiary audits, attestation reports
required by statute or regulation, and comfort letters and SEC
consents. |
| --- |
| Audit-related fees Audit-related fees are comprised of assurance
and related services that are traditionally performed by the
external auditor. These services include audits of non-consolidated
entities, and other attest and agreed-upon procedures not required
by statute or regulation, which address accounting, reporting and
control matters. These are normally provided by PwC in connection
with the recurring audit engagement. Under previous proxy reporting
rules, many of these services were required to be included in the
All other fees category. |
| Tax fees Tax fees relate primarily to assistance with tax return
compliance, as well as monitoring of legislative and regulatory tax
updates, and assistance with tax examinations. |
| All other fees As stated in the 2002 proxy statement, the Firms
current policy restricts the use of PwC to audit, audit-related and
tax services only. During 2002, All other fees represent multi-year
projects in process of completion prior to adoption of this policy.
The majority of these services were completed by the former
consulting arm of PwC and involved implementation of new human
resource systems and assistance with merger-related integration. |
| All internal auditing is performed under the direct control of the
General Auditor, who is accountable to the Audit Committee. |
| 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 external auditor
will be reconsidered by the Audit Committee of the Board of
Directors. |
| The Board of Directors recommends that stockholders vote FOR
ratification of the appointment of PricewaterhouseCoopers LLP. |

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link1 "Proposals 3-8: Stockholder proposals"

| Proposals 3-8: 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 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 104,176,310 shares, representing
approximately 7.83% of shares voting, voted FOR this proposal. |
| If you AGREE, please mark your proxy FOR this proposal. |
| The Board of Directors recommends that stockholders vote AGAINST this proposal
for the following reasons: |
| 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 Firms 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. Richard A. Dee, 115 East 89th Street, New York, NY 10128, the holder of 813
shares of common stock, has advised us that he intends to introduce the
following resolution: |
| Stockholders of publicly-owned corporations do not elect directors.
Directors are selected by incumbent directors and managements stockholders
merely ratify or approve director selections much as they ratify selections
of auditors. |

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| The term Election of Directors is misused in corporate proxy
materials to refer to the process by which directors are empowered.
The term is inappropriate and it is misleading. With no choice of
candidates, there is no election. |
| --- |
| Approval of this Corporate
Governance proposal will provide J.P. Morgan Chase & Co.
stockholders with a choice of director candidates an opportunity
to vote for those whose qualifications and views they favor. And
approval will provide stockholders with duly elected
representatives. |
| In a democracy, those who govern are duly elected
by those whom they represent and they are accountable to those who
elect them. Continuing in public office requires satisfying
constituents, not just nominators. Corporate directors, who often
must divide their time between many boards, take office unopposed. |
| It is hereby requested that the Board of Directors adopt promptly a
resolution requiring the Governance Committee to nominate two
candidates for each directorship to be filled by voting of
stockholders at annual meetings. In addition to customary personal
background information, Proxy Statements shall include a statement
by each candidate as to why he or she believes they should be
elected. |
| As long as incumbents are permitted to select and to
propose only the number of so-called candidates as there are
directorships to be filled and as long as it is impossible,
realistically, for stockholders to utilize successfully what is
supposed to be their right to nominate and elect directors there
will be no practical means for stockholders to bring about director
turnover until this or a similar proposal is adopted.
Turnover reduces the possibility of inbreeding and provides sources
of new ideas, viewpoints, and approaches. |
| The pool from which
corporate directors are selected must be expanded from the current
preponderance of chairmen and CEOs to include younger executives,
including many more women, whose backgrounds qualify them well to
oversee a company business and to represent shareholder interests
properly. |
| Although Delaware law provides for director nominees to
be selected by incumbents, approval of this proposal will enable
J.P. Morgan Chase & Co. stockholders to replace any or all directors
if they become dissatisfied with them or with the results of
corporate policies and/or performance. Not a happy prospect even for
those able to nominate their possible successors! |
| The benefits that
will accrue to J.P. Morgan Chase & Co. stockholders by having
Directors that have been democratically-elected, and who are willing
to have their respective qualifications reviewed and considered
carefully by stockholders, far outweigh any arguments raised by
those accustomed to being selected. |
| Please 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
independent non-management 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 to
the Secretary for consideration by the Governance Committee. In
addition, any stockholder who complies with the advance notice
provisions of our By-laws described on page 28 of this proxy
statement may nominate a director at the annual meeting of
stockholders. Also, any stockholder may write in the name of a
candidate on the stockholders proxy card or vote for some directors
and withhold votes from others. |

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| 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 two candidates for each directorship and to
include a statement by each as to why he or she should be elected. The Board of
Directors believes that these proposed procedures would politicize the director
election process and are inappropriate for a business organization. The current
procedures reflect the Boards 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. |
| Proposal 5 |
| Mr. Chris Rossi, P.O. Box 249, Boonville, CA 95415, the holder of record of
1,368 shares of common stock, has advised us that he intends to introduce the
following resolution: |
| 5 Shareholder Vote regarding Poison Pills This topic won an average 60%-yes vote at 50 companies in 2002 |
| This is to recommend that our Board of Directors redeem any poison pill
previously issued (if applicable) and not adopt or extend any poison pill
unless such adoption or extension has been submitted to a shareholder vote. |
| This topic won an average 60%-yes vote at 50 companies in 2002 according to
the Investor Responsibility Research Center Tabulation on Average Voting
Results, December 2002. |
| Harvard Report: A 2001 Harvard Business School
report found that good corporate governance (which took into account
whether a company had a poison pill) was positively and significantly
related to company value. This report, conducted with the University of
Pennsylvanias Wharton School, reviewed the relationship between the
corporate governance index for 1,500 companies and company performance
from 1990 to 1999. The Harvard Business School report is titled,
Corporate Governance and Equity Prices, July 2001. |
| Some investors
believe that a company with good governance will perform better over time,
leading to a higher stock price. Other investors see good governance as a
means of reducing risk, as they believe it decreases the likelihood of bad
things happening to a company. Source: Investors Will Pay for Good
Governance, Directors & Boards , Fall 2001. |
| Since the 1980s Fidelity, a
mutual fund giant with $800 billion invested, has withheld votes for
directors at companies that have approved poison pills, Wall Street
Journal , June 12, 2002. |

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| Council of Institutional Investors Recommendation: The Council
of Institutional Investors www.cii.org, an organization of 120
pension funds which invests $1.5 trillion, called for shareholder
approval of poison pills. The Council of Institutional Investors
recommendation is validated in Council Policies, Corporate
Governance Policies, General Principles, Shareholder Voting Rights,
Item 5.b., approved March 25, 2002. In recent years, companies have
been willing to redeem existing poison pills or seek shareholder
approval for their poison pill. This includes Columbia/HCA and
McDermott International. I believe that our company should follow
suit and allow shareholder input. |
| --- |
| Allow Shareholder Vote regarding Poison Pills Yes on 5 |
| The Board of Directors recommends that stockholders vote AGAINST
this proposal for the following reasons: |
| The Firm has not had a stockholder rights plan (commonly referred
to as a rights plan or poison pill) for a number of years, and the
Board of Directors does not have any current plan to adopt one. |
| A rights plan is a commonly used defensive mechanism which is
designed to assist a board of directors in protecting stockholders
from coercive or unfair takeover tactics, such as those that might
be employed at a time when a companys share price was temporarily
depressed. |
| In the Boards opinion, a rights plan neither prevents nor
discourages takeover attempts. Rather, it can be a very effective
tool to provide a target companys board with time to properly
evaluate an acquisition offer and to develop and explore other
alternatives. It can also strengthen the Boards bargaining position
in negotiating better terms with the potential acquiror. |
| Rights plans have proved effective in combating inadequate offers
and abusive tactics, and in maximizing stockholder value, in the
context of takeover offers. A 2001 study by J.P. Morgan Securities
Inc., covering about 400 acquisitions of U.S. public companies since
January 1, 1997, in which the purchase price exceeded $1 billion,
concluded that stockholders of companies with poison pills received
higher takeover premiums than those without pill provisions. This
result was consistent with a 1997 report by Georgeson & Co., which
also concluded that the presence of a rights plan at a target
company did not increase the likelihood of defeat of a hostile
takeover bid or decrease the likelihood of a companys becoming a
takeover target. |
| If in the future, under circumstances we do not presently
anticipate, the Board of Directors considered the adoption of a
rights plan, the Board would be required by law to do so only after
carefully determining that the plan was in the best interest of
stockholders. It is important to note that only one member of the
Board is an employee of the Firm, that all the rest are independent,
and that the entire Board is reelected each year rather than being
classified into staggered terms of office. |
| The Board recognizes that this resolution is not binding on the
Board but is a recommendation only. If circumstances arose in which
the Board considered adopting a rights plan, the Board would also
consider submitting the plan for stockholder approval. However, in
some situations that may not be feasible due to time constraints or
other factors, and in those situations we believe the Board needs
the flexibility to act promptly to protect the rights of all
stockholders. Accordingly, the Board recommends a vote against this
proposal. |

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| Proposal 6 |
| --- |
| Mr. Raymond B. Ruddy, 26 Rolling Land, Dover, MA 02030, the holder
of 1,429 shares of common stock, has advised us that he intends to
introduce the following resolution: |
| Whereas, charitable contributions should serve to enhance
shareholder value. |
| Whereas, the company has given money to groups
involved in abortion and other activities. |
| Whereas, our company is
dependent on people to buy our products and services. |
| Whereas, our
company respects diverse religious and cultural beliefs. It should
try not to offend these beliefs wherever possible. |
| Whereas, our
company is being boycotted by Life Decisions International and
mutual funds like the Timothy Plan and the Ave Maria Catholic Values
Fund because of our contributions to certain groups. |
| Resolved: The
shareholders request the company to refrain from making charitable
contributions. If the company wishes, it could send a note to
shareholders with each dividend check suggesting the shareholder
contribute to their favorite charity. The shareholder could be
encouraged to inform the charity that a portion of the contribution
is the result to the hard work of the men and women of J.P. Morgan
Chase and Company. |
| Supporting statement: Shareholder money is
entrusted to the Board of Directors to be invested in a prudent
manner for the benefit of the shareholders. Members of the Board
have a fiduciary responsibility to maximize shareholder value.
People did not invest in this company so it could be given to
someone elses favorite charity. In fact, some of the money has gone
to Planned Parenthood, a group that was responsible for almost two
hundred thousand abortions in the United States last year. How such
contributions contribute to shareholder value would surely be
difficult to quantify. In contrast, the subsequent boycotts caused
by these contributions could hardly be considered beneficial. |
| The Board of Directors recommends that stockholders vote AGAINST
this proposal for the following reasons: |
| JPMorgan Chase is proud of its long history of charitable giving. |
| Recognizing that even a generous program is more effective if it
targets a limited number of specific needs, The J.P. Morgan Chase
Foundation, which is funded by the Firm, concentrates its
contributions in three areas Community Development & Human
Services; Pre-collegiate Public Education; and Arts & Culture. This
emphasis reflects the Firms conviction that, by enhancing the lives
of our customers and employees and improving the communities in
which they live, we are strengthening our business franchise and
thereby adding stockholder value. The Firm has a vital business
interest in ensuring and improving the vitality of the markets we
serve, because if they thrive, we thrive. |
| The following are just a few of the many efforts funded by the Foundation in
recent years: |
| Through grants to non-profit organizations providing mortgage
counseling, we have assisted low and moderate income families to
become first-time home buyers. |
| In the immediate aftermath of September 11, we made grants to
organizations providing emergency food assistance to those who had
lost their jobs or their homes in the tragedy. |
| At a middle school, we supplied every student, faculty member, and
administrator with a computer and provided training in the use of
this technology, not only to the students and teachers, but also to
the families of the students, helping to bridge the digital divide
that too often separates low-income communities from others in our
society. |

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| The Board is confident that, far from damaging the Firms reputation
with any of its constituencies, our corporate giving strengthens the
Firms image as a good citizen and a good neighbor. Our customers
benefit greatly from the Foundations activities. Our employees also
enjoy the fruits of our corporate investment in their home
communities. We believe that the good will, and the economic
prosperity, generated by these activities are important to the
Firms success. Accordingly, the Board recommends a vote against
this proposal. |
| --- |
| Proposal 7 |
| Mr. Daniel F. Case, 6716 Tildenwood Lane, Rockville, MD 20852, the
holder of record of 2,563 shares of common stock, has advised us
that he intends to introduce the following resolution: |
| RESOLVED: That the shareholders recommend that the Board: |
| limit the compensation of non-employee directors, for their
service as directors, to an annual amount not exceeding
approximately $200,000; |
| adopt a policy of presenting for
stockholder approval, in proxy statements for stockholder meetings,
any Board proposals to increase non-employee director compensation;
and |
| Specify (or continue specifying, as the case may be)
stock-based compensation of non-employee directors in terms of
dollar values, rather than numbers of shares, and exclude (or
continuing excluding, as the case may be) stock options from their
compensation package. |
| REASONS: Between March 2001 and March 2002,
non-employee directors annual compensation changed from about
$135,000 (varying according to the directors committee assignments
and attendance record) to about $250,000. No proposed change in
directors compensation had been presented for stockholder approval
in the March 2001 proxy statement. |
| The By-laws currently provide
that the directors compensation be determined by the Board itself.
That provision creates an obvious conflict of interest. In an effort
to remedy the situation, at least partially, this proposal would
give the stockholders the final say. |
| Proposals to change the
directors compensation can appropriately come from the Board, of
course, but under this proposal, any increase in the compensation
would be subject to stockholder approval. Any proposed increase
would have to be described in the proxy statement, so that
stockholders voting by proxy would have an effective voice in the
determination. This proposal seeks to give all the stockholders the
opportunity to vote on directors compensation in a way that they
were not invited to do in 2002. |
| Under this proposal, non-employee
directors could be paid about $200,000 per year. That would be about
45% or 50% more than they were being paid as of March 2001. $200,000
is no small sum. The wording of this proposal is intended to
preclude the granting of additional compensation outside the annual
amounts. |
| There are advantages in specifying stock-based
compensation in terms of dollar value, rather than number of shares,
at time of grant. If numbers of shares are specified, the value of
the compensation at time of grant can fluctuate widely. In
particular, the value of the compensation could increase
significantly without the Boards and stockholders having taken
action to change the terms of the compensation package. |
| This
proposal also calls for excluding (or continuing to exclude, as the
case may be) stock options from the non-employee directors
compensation. Stock options may tend to align directors interests
more closely with those of other stock-option holders than with
those of the stockholders. |
| I urge you to vote FOR this proposal. |

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| The Board of Directors recommends that stockholders vote AGAINST
this proposal for the following reasons: |
| --- |
| The Boards current compensation is set forth on page 7. As stated
in the Firms Corporate Governance Practices of the Board, which is
included as Appendix B in this proxy statement, the Boards
Governance Committee makes periodic recommendations to the Board
regarding director compensation; these recommendations are based on
a comparison with relevant peer groups. The Board last examined its
compensation in 2001, following the Merger, with advice from an
independent consultant. |
| Because the Board believes it is desirable that a significant
portion of overall director compensation be linked to J.P. Morgan
Chase & Co. common stock, the Boards total compensation includes
approximately one-third cash and two-thirds stock-based
compensation. In 2001, such stock-based compensation included
approximately equal values of stock options and common stock. In
2002, the Board determined to eliminate stock options as an element
of director compensation. |
| All stock-based compensation is currently in the form of common
stock equivalents, which must remain indexed to the Firms common
stock until a directors termination of service. |
| Recent legislative and regulatory initiatives have imposed increased
obligations and potential liability on corporate directors. It is
today even more important to maintain our competitive position in
terms of director compensation in order to attract and retain highly
qualified Board members to serve the Firm. The Board believes that,
in seeking to establish director compensation levels commensurate
with those of its peers and competitors, it is acting to protect the
interests of its stockholders. Accordingly, the Board recommends a
vote against this proposal. |
| Proposal 8 |
| Academy of Our Lady of Lourdes, 1001 14th Street NW Suite 100
Assisi Heights, Rochester, MN 55901-2511, the holders of 1,509
shares of common stock, has advised us that they intend to introduce
the following resolution which is co-sponsored by Sisters of The
Holy Names of Jesus and Mary, Washington Province; Sisters of St.
Francis of Dubuque Iowa, Mount Saint Francis; Congregation of the
Sisters of Charity of the Incarnate Word; Dominican Sisters of
Mission San Jose; Needmor Fund; Providence Trust; New York Yearly
Meeting of the Religious Society of Friends; and CHRISTUS Health,
each of whom is the beneficial owner of at least 100 shares of
common stock: |
| WHEREAS, the average chief executive officers pay has increased
from 42 times in 1982 to 411 times that of the average production
worker in 2001 ( Business Week Online 05/06/02). |
| Responding to that
statistic, New York Fed President, William J. McDonough
acknowledged that a market economy requires that some people will
be rewarded more than others, but asked: should there not be both
economic and moral limitations on the gap created by the
market-driven reward system? He stated: I can find nothing in
economic theory that justifies this development. He called such a
jump in executive compensation terribly bad social policy and
perhaps even bad morals. According to The Wall Street Journal, McDonough cited the biblical admonition to love thy neighbor as
thyself as justification for voluntary CEO pay cuts beginning
with the strongest companies. He said: CEOs and their boards
should simply reach the conclusion that executive pay is excessive
and adjust it to more reasonable and justifiable levels
(09/12/02). |

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| Affirming McDonoughs comments, the Milwaukee Journal-Sentinel editorialized that regulating executive compensation is the
business of corporate boards, or should be. Unfortunately, too many
corporate directors on company compensation committees simply
rubber-stamp decisions made by top managers. That should stop
(09/13/02). |
| --- |
| In CEOs: Why Theyre So Unloved, Business Week editorialized: CEO pay is so huge that people dont believe
executives deserve it... In 1980, CEO compensation was 42 times
that of the average worker. In 2000, it was 531 times. This is a
winner-take-all philosophy that is unacceptable in American society...
The size of CEO compensation is simply out of hand (04/22/02). |
| The Conference Board issued a report acknowledging that executive
compensation has become excessive in many instances and bears no
relationship to a companys long-term performance and that changes
must be made (09/17/02). Commenting on this The New York Times called for Atonement in the Boardroom (09/21/02), while Warren
Buffet said: The ratcheting up of compensation has been obscene. |
| United For a Fair Economy has shown an inverse correlation between
very high CEO pay and long-term stock performance
(http://www.ufenet.org/press/2001/ Bigger_They_Come.pdf). |
| RESOLVED: shareholders request the Boards Compensation Committee to prepare
and make available by January 1, 2004 a report (omitting
confidential information and prepared at reasonable cost) to
requesting shareholders comparing the total compensation of the
companys top executives and its lowest paid workers both in this
country and abroad on January 1, 1982, 1992 and 2002. We request the
report include: statistics related to any changes in the relative
percentage size of the gap between the two groups; the rationale
justifying any such percentage change; whether our top executives
compensation packages (including options, benefits, perks, loans and
retirement agreements) are excessive and should be changed; as
well as any recommendations to adjust the pay to more reasonable
and justifiable levels. |
| Supporting Statement: Our Company fits
William J. McDonoughs strong company category. Our pay scales
should model justice and equity for all our workers. Supporting this
resolution would be one step in this direction. |
| The Board of Directors recommends that stockholders vote AGAINST
this proposal for the following reasons: |
| We believe that the requested report, assuming it were possible to
compile it, would not be informative to stockholders in evaluating
the Firms current compensation policies. Most importantly,
compensation levels are dictated by the market from which we must
attract employees we must offer competitive compensation to
maintain the high quality of our work force, at all levels. |
| The implementation of this proposal would present significant
logistical problems in that records are not likely to be maintained
for periods 10 and 20 years in the past. Assuming that these
problems could be overcome, we do not believe that past practices
are relevant to any consideration of the appropriateness of our
present compensation policies. Our constituent companies varied in
size and business emphasis; competed in different markets; had
presences in different locations around the world; and had different
compensation and benefits policies. |

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| Insofar as our current compensation practices are
concerned, the report of the Compensation & Management
Development Committee on page 9 addresses the Firms
compensation policy for its executive officers. More
broadly, JPMorgan Chase strives to be the employer of
choice for all its employees. At our various locations
around the world, we seek to be competitive with other
top companies in the market, in salary and benefit
packages, for workers at all compensation levels. This
emphasis on competitive pay is essential to attracting
and retaining qualified and enthusiastic personnel,
which in turn is essential to the success of all our
business endeavors, and to maximizing stockholder value. |
| --- |
| We are proud of our record of fairness and concern for
the welfare of all who work at the Firm. In addition to
competitive wages, the Firm makes a wide array of
benefits generally available to employees a choice of
health and dental insurance plans, life, accident,
disability, long-term care, and other insurance
programs, and retirement savings plans. The cost of
these plans is partially funded by the Firm. |
| In short, JPMorgan Chase prides itself on being a great
place to work, for employees at all levels, both in
terms of competitive wages and salaries, and in terms of
other benefits. Accordingly, the Board recommends a vote
against this proposal. |

link1 "Stockholder proposals and nominations for the 2004 annual meeting"

| | Stockholder proposals and nominations for the 2004
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 December 2, 2003. |
| 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 Chases 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 20, 2004, and not earlier than January 21, 2004. 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 are available on our Web site,
www.jpmorganchase.com, or may be obtained from the
Secretary. |
| | Anthony J. Horan Secretary |

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link1 "Appendix A: Charter of the Audit Committee"

	Appendix A: Charter of the Audit Committee
Mission	The
Audit Committee is responsible for oversight of:

the external auditors qualifications and
independence
	the performance of the Corporations internal audit
function and external auditor
	the Chief Executive
Officers and senior managements responsibilities to
assure that there is in place an effective system of
controls reasonably designed to:

safeguard the assets and income of the Corporation
	assure the integrity of
the Corporations financial statements
	maintain
compliance with the Corporations ethical standards,
policies, plans and procedures, and with laws and
regulations
	The Audit Committee shall also be responsible for
preparing the Audit Committee report required by the
rules of the Securities and Exchange Commission to be
included in the Corporations annual proxy statement.

| Membership | 1 | The Audit Committee shall be composed of not fewer than three
directors, each of whom shall be independent. |
| --- | --- | --- |
| | 2 | Each member of the Audit
Committee shall be financially literate, or become
financially literate within a reasonable period of
time after appointment to the Audit Committee. At
least one member of the Audit Committee shall have
accounting or related financial management expertise
and at least one member shall have banking or related
financial management expertise. The Board of
Directors shall determine whether any members of the
Audit Committee are audit committee financial experts
as defined by the Securities and Exchange Commission. |
| | 3 | Determinations of independence,
audit committee financial expertise, financial
literacy and accounting, banking or related financial
management expertise shall be made by the Board of
Directors as the Board interprets such qualifications
in its business judgment and in accordance with
applicable law and New York Stock Exchange listing
standards. |
| | 4 | No director may serve as a
member of the Audit Committee if such director serves
on the audit committees of more than two other public
companies, unless the Board of Directors determines
that such simultaneous service would not impair the
ability of such director to effectively serve on the
Audit Committee and discloses such determination in
the proxy statement. |
| | 5 | No member of the Audit
Committee may be a large customer of the Corporation,
as determined by the Board in accordance with the
Federal Deposit Insurance Corporation Improvement Act
of 1991 (FDICIA) and applicable rules and
regulations. |
| Authorities and
responsibilities | 1 | The Audit Committee shall meet as often as it determines, but not
less frequently than quarterly. The Audit Committee shall
meet, at least quarterly, with the General Auditor, the external auditor, and
management in separate private sessions to discuss any matters that the Audit
Committee or these groups believe should be discussed. The Audit Committee may
also meet periodically in separate executive sessions. The Audit Committee may
request any officer or employee of the Corporation or the Corporations outside
counsel or external auditor to attend a meeting of the Audit Committee or to
meet with any members of, or consultants to, the Audit Committee. |

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| 2 | The Audit Committee has authority to retain outside legal
counsel, or accounting or other advisors, when deemed
necessary, without the prior permission from the Corporations
Board of Directors or management and shall be provided the
necessary resources for such purposes. |
| --- | --- |
| 3 | The Audit Committee shall maintain minutes and other relevant
documentation of all meetings held. |
| 4 | The Audit Committee shall review, at least annually, the
committees charter and recommend any proposed changes to the
Board for approval. The Audit Committee shall prepare and review
with the Board an annual performance evaluation of the Audit
Committee, which evaluation shall compare the performance of the
Audit Committee with the requirements of this charter, and set
forth the goals and objectives of the Audit Committee for the
upcoming year. |
| 5 | The Audit Committee shall establish procedures for the receipt,
retention and treatment of complaints received by the Corporation
regarding accounting, internal accounting controls or auditing
matters, and for the confidential, anonymous submission by
Corporation employees of concerns regarding questionable
accounting or auditing matters. |
| | In carrying out its
responsibilities, the Audit Committee believes its policies and
procedures should remain flexible in order to best react to
changing circumstances. Subject to this, in carrying out its
mission, the Audit Committee shall have the following authorities
and responsibilities: |

| A. Oversight of the Corporations relationship to internal and external
auditors | |
| --- | --- |
| 1 | The external auditor for the Corporation is accountable
to the Board of Directors and Audit Committee of the
Corporation, as representatives of the stockholders, and
shall report directly to the Audit Committee. The Audit
Committee shall have the authority and responsibility to
select, evaluate and, where appropriate, replace the external
auditor, subject to stockholder ratification of the selection
if such ratification is required or sought by the Board of
Directors. |
| 2 | The Audit Committee shall advise the Board of Directors
of the engagement of the external auditor, based on review
and discussion by the Audit Committee as to the overall plan
of audit; adequacy of scope; coordination with the General
Auditor; reasonableness of fees; quality of prior
performance; composition of the audit team, including a
review and evaluation of the external auditors lead partner
and the experience and qualifications of the senior members
of the audit team; results of the audit firms last internal
quality-control or peer review; and any other issues raised
by the annual auditors report, status of significant
regulatory or litigation problems that may affect the
external auditor, and the amount of non-audit services
provided by the audit firm. The Audit Committee shall advise
the Board of Directors when any change in the audit firm
engaged as the principal external auditor, or other action
with respect to the external auditor, seems necessary or
desirable, provided that the Audit Committee shall be
directly responsible for any action to retain or terminate
the external auditor. |

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| 3 | The external auditor shall submit, at least annually, a
report to the Audit Committee regarding (a) the auditors
internal quality-control procedures and (b) any material
issues raised by the most recent internal quality-control or
peer review or by any inquiry or investigations by
governmental or professional authorities within the
preceding five years respecting one or more independent
audits carried out by the audit firm, and any steps taken to
deal with such issues. The external auditor shall also
submit such a report to the Audit Committee promptly after
any review, inquiry or investigation referred to in the
preceding sentence. The Audit Committee is responsible for
reviewing and discussing with the external auditor whether
the auditors quality controls are adequate. |
| --- | --- |
| 4 | The external auditor shall also submit on a periodic basis,
but at least annually, to the Audit Committee a formal
written statement delineating all relationships between the
audit firm and the Corporation, including each non-audit
service provided to the Corporation and at least the matters
set forth in Independence Standards Board No. 1. The Audit
Committee is responsible for actively engaging in a dialogue
with the external auditor as to whether any disclosed
relationships or services may impact the objectivity and
independence of the external auditor. |
| 5 | The Audit Committee shall have sole authority to approve
all audit engagement fees and terms as well as all non-audit
engagements with the external auditor. The Audit Committee
shall review and approve managements conclusion that any
proposed performance of non-audit services by the principal
external auditor would not affect the independence of such
auditor in the performance of its audit services. |
| 6 | The Audit Committee shall consider whether, in order to
assure continuing auditor independence, there should be a
regular rotation of the lead audit partner or the audit firm
itself, and recommend to the Board policies for the
Corporations hiring of employees or former employees of the
audit firm. These policies shall provide that no former
employee of the external auditor may become the chief
executive officer, controller, chief financial officer or
chief accounting officer (or serve in a similar capacity) if
such person participated in any capacity in the
Corporations audit within the one-year period preceding the
date of initiation of the audit. |
| 7 | The Audit Committee shall review and concur in the
appointment, replacement, reassignment, or dismissal of the
General Auditor. The Audit Committee shall review and
approve the General Auditors proposed annual audit plan and
financial budget and staffing. The Audit Committee shall
receive periodic communications from the General Auditor on
the completion status of the annual audit plan, as well as a
summary of significant changes made to such plan. |

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B. Compliance and regulatory oversight responsibilities The Audit Committee shall:
1	Receive periodic communications and presentations from the
General Auditor on the adequacy of managements systems of
control, including computerized information system controls
and security, in the Corporation and its subsidiaries;
significant audit findings identified and managements
responses thereto, including any special audit steps adopted
in light of material control deficiencies; and initiation and
status of significant special investigations.
2	Receive, when needed, presentations from management and
the external auditor on the identification and resolution
status of material weaknesses and reportable conditions in
the internal control environment, including computerized
information system controls and security, if any, and on any
fraud, whether or not material, that involves management or
other employees who have a significant role in the
Corporations internal controls.
3	Receive periodic presentations from the General Auditor on
the review, and related results, of each corporate Executive
Committee members expense account and perquisites, including
their use of corporate assets.
4	Review with management the program established that
provides for compliance with laws and regulations and review
the record of such compliance; review significant legal
cases outstanding against the Corporation or its
subsidiaries or other regulatory or legal matters that may
have a material impact on the Corporations financial
statements.
5	Review the program established by management that
monitors compliance with the Worldwide Rules of Conduct and
review the record of such compliance.
6	Review regulatory authorities significant examination
reports pertaining to the Corporation, its subsidiaries
and associated companies.
7	Fulfill the requirements of Sections 122 and 123 of the
New York State Banking Law with respect to conducting an
annual directors examination. Report thereon to the Board of
Directors and the Superintendent of Banks of the State of New
York. Utilize assistance, as deemed necessary by the
committee, to discharge these statutory duties.
8	Review summaries of significant issues in reports of
directors examinations, or other similar examinations, of
the subsidiaries of the Corporation.
9	Receive communications and presentations from management
summarizing the suspicious activity reports filed by
subsidiaries with the appropriate regulatory and law
enforcement agencies.
10	Review management reports issued by the Corporation in
accordance with FDICIA and the corresponding external
auditors attestation and agreed-upon procedures reports.
11	Receive from management, periodically, and from the General
Auditor, as appropriate, presentations on significant
operating and control issues in internal audit reports,
management letters, and regulatory authorities examination
reports, and initiate such other inquiries into the affairs of
the Corporation as it deems necessary or appropriate.

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C. Financial statement and disclosure matters The Audit Committee shall:
1	Review and discuss with management, the external auditor
and the General Auditor the scope of the audit, including
obtaining assurances from the external auditor that the audit
was conducted in a manner consistent with Section 10A of the
Securities Exchange Act of 1934.
2	Review and discuss, at least quarterly, with management,
the external auditor and, as appropriate, the General Auditor
the annual audited financial statements, quarterly financial
statements and significant current reports, including
disclosures made in Managements Discussion and Analysis of
Financial Condition and Results of Operation, and review the
process for required quarterly CEO and CFO certifications.
3	Review and discuss with management, the external auditor
and, as appropriate, the General Auditor any significant
accounting, income tax, financial, reporting policies, issues
or judgments made in connection with the preparation, or
audit, of the Corporations financial statements and other
financial or informational reports, including any major
issues regarding or significant changes in the Corporations
selection or application of accounting principles, the
development, selection and disclosure of critical accounting
estimates or judgments (including tax reserves), an analysis
of the effect of any alternative assumptions, estimates or
GAAP methods on the financial statements, and the effect of
regulatory examinations or any regulatory and accounting
initiatives, as well as off-balance sheet structures, on the
financial statements.
4	Review internal accounting control reports (management
letters) submitted by the external auditor which related to
the Corporation. Review summaries of significant issues in
management letters addressed to subsidiaries of the
Corporation.
5	Discuss with management the Corporations earnings press
releases, including the use of pro-forma financial
information, as well as financial information and earnings
guidance provided to analysts and rating agencies.
6	Taking into consideration the Boards allocation of
responsibility for review of credit risk, market risk and
fiduciary risk to the Boards Risk Policy Committee, review
with management guidelines and policies for assessing and
managing the Corporations exposure to risks, the
Corporations major financial risk exposures and the steps
management has taken to monitor and control such exposures.
7	Discuss with the external auditor the matters required to
be described by SAS 61, including without limitation, any
difficulties encountered in the course of the work, any
restriction on the scope of the external auditors activities
or on access to requested information and any significant
disagreements with management.

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link1 "Appendix B: Corporate Governance Practices of the Board"

| Appendix B: Corporate Governance Practices of the Board |
| --- |
| Functions of the Board |
| Criteria for composition of the Board, selection of new directors |
| Setting the criteria for composition of the Board and the selection
of new directors are Board functions. In fulfilling its
responsibilities, the Governance Committee, in consultation with the
Chairman, periodically reviews the criteria for composition of the
Board and evaluates potential new candidates for Board membership.
The committee then makes recommendations to the Board. |
| In general, the Board wishes to balance the needs for professional
knowledge, business expertise, varied industry knowledge, financial
expertise, and CEO-level business management experience, while
maintaining within these criteria an appropriate gender and minority
representation. |
| Assessing the Boards performance |
| The Governance Committee annually reviews and reports to the Board
on the performance of the Board as a whole with a view to increasing
the effectiveness of the Board. |
| Formal evaluation of the Chief Executive Officer |
| The Board (non-management directors only) makes an evaluation of the Chief
Executive Officer at least annually. This will normally be in
January in connection with a review of the Chief Executive Officers
annual compensation. |
| Succession planning and management development |
| Succession planning is considered periodically by the non-management
directors with the Chief Executive Officer. Generally, the
Compensation & Management Development Committee considers management
development in preparation for discussion by the full Board. |
| Board and management compensation review |
| The Governance Committee makes periodic recommendations to the
Board regarding director compensation based on comparisons with
relevant peer groups. The Board believes it is desirable that a
significant portion of overall director compensation be linked to
J.P. Morgan Chase & Co. stock, and the Boards total compensation
includes approximately one-third cash and two-thirds stock-based
compensation. |
| Non-management directors receive no compensation from the Firm
other than their Board compensation. Officer directors receive no
separate compensation for their Board service. |
| Compensation of officer directors is approved by the Compensation
& Management Development Committee and then submitted to the
Board for its ratification. Compensation of senior management,
other than officer directors, is determined by the Compensation &
Management Development Committee, which reviews its decisions
with the Board. |

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| Board composition |
| --- |
| Size and composition of the Board |
| While the Boards size in recent years has been as high as 20
members, the preference is to maintain a smaller Board for the sake
of efficiency. A substantial majority of directors will be
independent directors under the New York Stock Exchanges proposed
independence standards. |
| Definition of independence |
| Independence determinations. The Board may determine a director to
be independent if the Board has affirmatively determined that the
director has no material relationship with the Firm, either directly
or as a partner, stockholder or officer of an organization that has
a relationship with the Firm. Independence determinations will be
made on an annual basis at the time the Board approves director
nominees for inclusion in the proxy statement and, if a director
joins the Board between annual meetings, at such time. For these
purposes, a director will not be deemed independent if: |
| (a) within the preceding five years, the director or an immediate
family member of the director received more than $100,000 per year
in direct compensation from the Firm, other than director and
committee fees and pension or other deferred compensation for prior
service (provided that the Board may determine that such
relationship is not material and explain its determination in the
proxy statement); the director was affiliated with or employed by
the Firms present or former external auditor (or had an immediate
family member who was affiliated with or employed in a professional
capacity by such firm); or the director was an executive officer of
a company in which an executive officer of the Firm served on the
compensation committee of the board of directors (or had an
immediate family member who was an executive officer of such
company). |
| (b) within the preceding five years, the director accepted any
consulting, advisory or other compensation from the Firm, other
than compensation in the directors capacity as a member of the
Board or a committee of the Board. |
| Relationship to an entity. The relationship between the Firm and an
entity will be considered in determining director independence where
a director serves as an officer of the entity or, in the case of a
for-profit entity, where the director is a general partner of or
owns more than 5% of the entity. Such relationships will not be
deemed relevant to the independence of a director who is a
non-management director or a retired officer of an entity unless the
Board determines otherwise. |
| For-profit entities. Where a director is an officer of a for-profit
entity that is a client of the Firm, whether as borrower, trading
counterparty or otherwise, the financial relationship between the
Firm and the entity will not be deemed material to a directors
independence if (i) the relationship was entered into on terms
substantially similar to those that would be offered to comparable
counterparties in similar circumstances and (ii) termination of the
relationship in the normal course of business would not reasonably
be expected to have a material and adverse effect on the financial
condition, results of operations or business of the borrower or
other counterparty. |
| A director who is an employee, or whose immediate family member is
an executive officer, of another company (i) that accounts for more
than 2% or $1 million, whichever is greater, of the Firms
consolidated gross revenues or (ii) for which the Firm accounts for
more than 2% or $1 million, whichever is greater, of such other
companys consolidated gross revenues in any of the past five years
will not be deemed independent. |

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| For these purposes, payments exclude payments arising from
investments by the entity in the Firms securities and payments
from trading and other financial relationships. |
| --- |
| Where a director is associated as a partner or associate of, or Of
Counsel to, a law firm that provides services to the Firm, the
relationship will not be deemed material if neither the director nor
an immediate family member of the director provides such services to
the Firm and the payments from the Firm do not exceed 2% or $1
million, whichever is greater, of the law firms revenues in each of
the past five years. |
| Not-for-profit entities. The Firm encourages contributions by
directors and employees to not-for-profit entities and matches such
contributions to eligible institutions within certain limits by
grants made by the Firm (directly or through The J.P. Morgan Chase
Foundation). The Firm also supports not-for-profit entities through
grants and other support unrelated to the Matching Gift Program.
Where a director is an officer of a not-for-profit entity,
contributions by the Firm will not be deemed material if, excluding
matching funds from the Firm, they do not exceed 2% of a
not-for-profit entitys total revenues. |
| Personal banking and other financial services. The Firm provides
personal banking and other financial services to individuals in the
ordinary course of its business. The Sarbanes-Oxley Act prohibits
loans to directors, as well as executive officers, except certain
loans in the ordinary course of business and loans by an insured
depository institution subject to Regulation O of the Board of
Governors of the Federal Reserve System. Any loans to directors are
made pursuant to the Sarbanes-Oxley Act and Regulation O. All such
relationships that are in the ordinary course of business will not
be deemed material for director independence determinations unless
a director has an extension of credit that is on a non-accrual
basis. Where a subsidiary of the Firm is an underwriter in an
initial public offering, the Firm will not allocate any of such
shares to directors. |
| Former officer directors |
| As a general rule, an officer director may not serve on the Board
beyond the date he or she retires or resigns as a full-time
officer. |
| Change of job responsibility |
| A director will offer his or her resignation following the loss
of principal occupation other than through normal retirement. |
| Director tenure |
| The Board does not believe it appropriate to institute fixed limits
on the tenure of directors because the Firm and the Board would
thereby be deprived of experience and knowledge. |
| Retirement age |
| Non-management directors retire from the Board on the eve of the
annual meeting in the calendar year following the year in which the
director will be age 72. |
| Limits on board and audit committee memberships |
| Each person serving as a director must devote the time and
attention necessary to fulfill the obligations of a director. Key
obligations include appropriate attendance at Board and committee
meetings and appropriate review of preparatory material. Directors
will review proposed service on the Board of any additional public
company or any governmental position with the Governance Committee.
It is expected that an officer director will serve on the board of
no more than two other public companies. |

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| If a member of the Audit Committee wishes to serve on more than a
total of three audit committees, the Board must approve such
additional service before the director accepts the additional
position. |
| --- |
| Stock ownership requirements |
| It is generally desirable for directors to own a significant number
of shares or share equivalents of J.P. Morgan Chase & Co. stock,
and for new directors to work toward that goal. The current
holdings of Board members meet this objective, and it is
unnecessary to set a specific target. |
| Board committees |
| Number of committees, reporting by committees and assignment and
rotation of committee membership |
| The Board as a whole is responsible for the oversight of management
on behalf of the corporations stockholders. The Board is assisted
in its oversight function by Board committees. |
| The Board has the following committees: Audit, Compensation &
Management Development, Governance, Public Policy, and Risk
Policy, as well as two Stock
Committees and a Board-level Executive Committee. The Board has
allocated oversight of risk matters to the Audit Committee and to
the Risk Policy Committee, with the Audit Committee responsible for
discussion of guidelines and policies to govern the process by
which risk assessment and management is undertaken. The number and
responsibilities of committees are reviewed periodically. |
| Committees will generally report to the Board at the next
regularly scheduled Board meeting following a committee meeting. |
| Membership on the committees is reviewed each year by the
Governance Committee and approved by the full Board. There is no
strict committee rotation policy. Changes in committee assignments
are made based on committee needs, director experience, interest
and availability, and evolving legal and regulatory
considerations. |
| In general, there should be no overlap in membership of the Audit,
Compensation & Management Development, and Risk Policy Committees
as these committees meet most often and generally meet at the same
hour. |
| Each of the members of the Audit Committee, the Compensation &
Management Development Committee, and the Governance Committee will
be directors for whom the Board has made an independence
determination. Officer directors do not serve on any committee
other than the Stock Committees and the Board-level Executive
Committee. The Board-level Executive Committee is established with
the expectation that it would not take material actions absent
special circumstances. Officer directors may attend committee
meetings at the invitation of the committee chairman. |
| In reviewing the composition of Board committees, the Board will
also consider any listing and/or regulatory qualifications as may
be applicable to specific committees. |

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| Board operations |
| --- |
| Non-executive chairman |
| The Board currently does not have a non-executive chairman but has
no set policy on whether or not to have one. |
| Lead director |
| There is no lead director. Committee chairmen provide leadership for
matters under the jurisdiction of their respective committees. In
case of need, it is the responsibility of the chairmen of the
committees to recommend whether non-executive leadership is
required, and if so, in what form. |
| Executive sessions for non-management directors |
| The non-management directors will meet regularly in executive
session at least twice each year. One meeting is for review of the
Chief Executive Officer, generally in January, and is led by the
chairman of the Compensation & Management Development Committee, and
one meeting is for a review of the Board and its corporate
governance practices, generally in July, and is led by the chairman
of the Governance Committee. These meetings, or others that may be
scheduled, will also provide the opportunity for discussion of such
other topics as the non-management directors may find appropriate,
with discussion to be led by the chairman of the committee most
relevant to the topic, including the Audit Committee, the Risk
Policy Committee and the Public Policy Committee. |
| Committee and Board agendas |
| Committee agendas are prepared based on expressions of interest by
committee members and recommendations of management. Committee
chairs give substantive input to and approve final agendas prior to
committee meetings. The Chairman of the Board prepares Board agendas
based on discussions with all directors and issues that arise. |
| Board and committee materials and presentations |
| To the extent feasible, information regarding items requiring
Board and/or committee approval is distributed sufficiently in
advance to permit adequate preparation. |
| Information regarding press and analyst reports is provided monthly. |
| Detailed financial information is provided monthly and quarterly. |
| Regular attendance of non-directors at Board meetings |
| Board meetings generally commence in executive session, with the
General Counsel and the Secretary present during most executive
sessions. During the remainder of the meeting, the Vice Chairman of
Finance, Risk Management & Administration, the Chief Financial
Officer, the General Counsel and the Secretary are present. Other
members of management may be present at the invitation of the
Chairman. |
| Board access to management |
| Board members have complete access to management. A director will
not discuss with management investment research involving a company
with which the director is affiliated. |
| Board interaction with institutional investors and press |
| JPMorgan Chase management is the contact with outside parties. From
time to time, directors may be asked by the Board or management to
speak with others, as appropriate. |

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| Board access to outside resources |
| --- |
| The main responsibility for providing assistance to the Board rests
on the internal organization. The Board and Board committees can, if
they wish to do so, seek legal or other expert advice from a source
independent of management and shall be provided the resources for
such purposes. Generally this would be with the knowledge of the
Chief Executive Officer, but this is not a condition to retaining
such advisors. |
| Director orientation and continuing education |
| At such time as a director joins the Board, the Board and the Chief
Executive Officer will provide appropriate orientation for the
director, including arrangement of meetings with management. The
Board considers it desirable that directors participate in
continuing education opportunities and considers such participation
an appropriate expense to be reimbursed by the Firm. |
| Code of business conduct and ethics |
| JPMorgan Chase has a comprehensive code of business conduct and
ethics referred to as the Worldwide Rules of Conduct. The Worldwide
Rules are applicable to all employees and, as modified by applicable
addenda, to directors. The Worldwide Rules address compliance with
law; reporting of violations of the Worldwide Rules or of laws or
regulations; employment and diversity; confidentiality of
information; protection and proper use of the Firms assets;
conflicts of interest; and personal securities and other financial
transactions. Each director is expected to be familiar with and to
follow the Worldwide Rules to the extent applicable to them. |
| Communications with Board |
| Procedures for interested parties to communicate directly with the
non-management directors will be posted on the Firms Web site. |

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The Board of Directors recommends votes FOR Proposals 1 and 2

	FOR	WITHHOLD FOR ALL
Proposal 1
ELECTION OF DIRECTORS	o	o
Nominees:
01 Hans W. Becherer	08 Ellen V. Futter
02 Riley P. Bechtel	09 William H. Gray, III
03 Frank A. Bennack, Jr.	10 William B. Harrison, Jr.
04 John H. Biggs	11 Helene L. Kaplan
05 Lawrence A. Bossidy	12 Lee R. Raymond
06 M. Anthony Burns	13 John R. Stafford
07 H. Laurance Fuller

WITHHELD FOR (Strike a line through the nominees name above).

	FOR	AGAINST	ABSTAIN
Proposal 2 APPOINTMENT OF EXTERNAL AUDITOR	o	o	o

The Board of Directors recommends votes AGAINST stockholder proposals 3 through 8

	FOR	AGAINST	ABSTAIN
Proposal 3 COMPENSATION DISCLOSURE	o	o	o
Proposal 4 DIRECTOR NOMINATION	o	o	o
Proposal 5 POISON PILL	o	o	o
Proposal 6 CHARITABLE CONTRIBUTIONS	o	o	o
Proposal 7 DIRECTOR COMPENSATION	o	o	o
Proposal 8 PAY DISPARITY	o	o	o

WILL ATTEND MEETING (Please check box if you plan to attend)	o
By checking the box to the right, I consent to future
delivery of annual reports, proxy statements,
prospectuses and other materials and shareholder
communications electronically via the Internet at a
webpage which will be disclosed to me. Companys
transfer agent understand that the Company may no
longer distribute printed materials to me from any
future shareholder meeting until such consent is
revoked. I understand that I may revoke my consent at
any time by contacting the Mellon Investor Services
LLC, Ridgefield Park, NJ and that costs normally
associated with electronic delivery, such as usage
and telephone charges as well as any costs I may
incur in printing documents, will be my
responsibility. Please disregard if you have
previously provided your consent decision.	o

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.

5 FOLD AND DETACH HERE 5

IF YOU WISH TO VOTE BY INTERNET OR TELEPHONE, PLEASE FOLLOW THE INSTRUCTIONS BELOW. INTERNET AND TELEPHONE VOTING ARE AVAILABLE THROUGH 11PM EASTERN TIME THE DAY PRIOR TO THE ANNUAL MEETING.

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 day7 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 PAGEBREAK

Table of Contents

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 20, 2003.

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 2003 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) Savings 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 unvoted shares in the same proportion as voted shares.

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.

Your voting instructions are confidential.

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YOUR VOTE IS IMPORTANT!

You can vote in one of three ways:

Admission Ticket J.P. Morgan Chase & Co. 2003 Annual Meeting of Stockholders

Tuesday, May 20, 2003 10:00 AM Auditorium One Chase Manhattan Plaza New York, New York

| 1. |
| --- |
| 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. |

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.

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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JPMORGAN CHASE & CO Proxy Solicitation & Information Statement 2003

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JPMORGAN CHASE & CO — Proxy Solicitation & Information Statement 2003

10833_psi_2003-03-28_27c8436b-a289-4954-84e4-114df8dec3af.zip

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JPMORGAN CHASE & CO Proxy Solicitation & Information Statement 2003