Term sheet |
Term
Sheet to Product Supplement 134-I Registration Statement No. 333-130051 Dated May 6, 2008; Rule 433 |
Structured |
JPMorgan Chase & Co. $ Buffered Dual Directional Return Enhanced Notes Linked to the S&P 500® Index due May 28, 2009 |
General
Key Terms
Index: |
The S&P 500® Index (the Index). |
Upside Leverage Factor: |
2 |
Payment at Maturity: |
If the S&P 500 Closing Level is greater than the S&P 500 Starting Level, you will receive at maturity a cash payment that provides you with a return per $1,000 principal amount note equal to the S&P 500 Return multiplied by two, subject to a Maximum Total Return on the notes of 10.50%*. For example, if the S&P 500 Return is more than 5.25%, you will receive the Maximum Total Return on the notes of 10.50%*, which entitles you to the maximum payment of $1,105 at maturity for every $1,000 principal amount note that you hold. Accordingly, if the S&P 500 Return is positive, your payment at maturity per $1,000 principal amount note will be calculated as follows, subject to the Maximum Total Return: |
$1,000 + [$1,000 x (S&P 500 Return x 2)] | |
*The actual Maximum Total Return on the notes will be set on the pricing date and will not be less than 10.50%. | |
If the S&P 500 Closing Level is equal to the S&P 500 Starting Level, you will receive at maturity a cash payment of $1,000 per $1,000 principal amount note. | |
If the S&P 500 Closing Level declines from the S&P 500 Starting Level by up to 10%, you will receive at maturity a cash payment that provides you with a return per $1,000 principal amount note equal to the Absolute S&P 500 Return and your payment at maturity per $1,000 principal amount note will be calculated as follows: | |
$1,000 + ($1,000 x Absolute S&P 500 Return) | |
If the S&P 500 Closing Level declines from the S&P 500 Starting Level by more than 10%, you will lose 1.1111% of the principal amount of your notes for every 1% that the Index declines beyond 10% and your payment at maturity per $1,000 principal amount note will be calculated as follows: | |
$1,000 + [$1,000 x (S&P 500 Return + 10%) x 1.1111] | |
You will lose some or all of your investment if the S&P 500 Closing Level declines from the S&P 500 Starting Level by more than 10%. | |
Buffer Amount: |
10% |
Downside Leverage Factor: |
1.1111 |
S&P 500 Return: |
The performance of the Index from the S&P 500 Starting Level to the S&P 500 Closing Level, calculated as follows:
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S&P 500 Closing Level S&P 500 Starting
Level |
Absolute S&P 500 Return: |
The absolute value of the S&P 500 Return. For example, an S&P 500 Return of -5% will equal a 5% Absolute S&P 500 Return. |
S&P 500 Starting Level: |
The closing level of the Index on the pricing date. |
S&P 500 Closing Level: |
The closing level of the Index on the Observation Date. |
Observation Date: |
May 22, 2009 |
Maturity Date: |
May 28, 2009 |
CUSIP: |
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| Subject to postponement in the event of a market disruption event and as described under Description of Notes Payment at Maturity in the accompanying product supplement no. 134-I. |
Investing in the Buffered Dual Directional Return Enhanced Notes involves a number of risks. See Risk Factors beginning on page PS-16 of the accompanying product supplement no. 134-I and Selected Risk Considerations beginning on page TS-3 of this term sheet.
JPMorgan Chase & Co. has filed a registration statement (including a prospectus) with the Securities and Exchange Commission, or SEC, for the offering to which this term sheet relates. Before you invest, you should read the prospectus in that registration statement and the other documents relating to this offering that JPMorgan Chase & Co. has filed with the SEC for more complete information about JPMorgan Chase & Co. and this offering. You may get these documents without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, JPMorgan Chase & Co., any agent or any dealer participating in this offering will arrange to send you the prospectus, each prospectus supplement, product supplement no. 134-I and this term sheet if you so request by calling toll-free 866-535-9248.
You may revoke your offer to purchase the notes at any time prior to the time at which we accept such offer by notifying the applicable agent. We reserve the right to change the terms of, or reject any offer to purchase the notes prior to their issuance. In the event of any changes to the terms of the notes, we will notify you and you will be asked to accept such changes in connection with your purchase. You may also choose to reject such changes in which case we may reject your offer to purchase.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the notes or passed upon the accuracy or the adequacy of this term sheet or the accompanying prospectus supplements and prospectus. Any representation to the contrary is a criminal offense.
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Price to Public |
Fees and Commissions (1) |
Proceeds to Us |
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Per note |
$ |
$ |
$ |
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Total |
$ |
$ |
$ |
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(1) | Please see Supplemental Underwriting Information in this term sheet for information about fees and commissions. |
The notes are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they obligations of, or guaranteed by, a bank.
JPMorgan
May 6, 2008
Additional Terms Specific to the Notes
You should read this term sheet together with the prospectus dated December 1, 2005, as supplemented by the prospectus supplement dated October 12, 2006 relating to our Series E medium-term notes of which these notes are a part, and the more detailed information contained in product supplement no. 134-I dated April 29, 2008. This term sheet, together with the documents listed below, contains the terms of the notes and supersedes all other prior or contemporaneous oral statements as well as any other written materials including preliminary or indicative pricing terms, correspondence, trade ideas, structures for implementation, sample structures, fact sheets, brochures or other educational materials of ours. You should carefully consider, among other things, the matters set forth in Risk Factors in the accompanying product supplement no. 134-I, as the notes involve risks not associated with conventional debt securities. We urge you to consult your investment, legal, tax, accounting and other advisers before you invest in the notes.
You may access these documents on the SEC website at www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date on the SEC website):
Our Central Index Key, or CIK, on the SEC website is 19617. As used in this term sheet, the Company, we, us or our refers to JPMorgan Chase & Co.
What Is the Total Return on the Notes at Maturity Assuming a Range of Performance for the Index?
The following table and graph illustrate the hypothetical total return at maturity on the notes. The total return as used in this term sheet is the number, expressed as a percentage, that results from comparing the payment at maturity per $1,000 principal amount note to $1,000. The hypothetical total returns set forth below assume an S&P 500 Starting Level of 1400 and a Maximum Total Return on the notes of 10.50%. The hypothetical total returns set forth below are for illustrative purposes only and may not be the actual total returns applicable to a purchaser of the notes. The numbers appearing in the following table, graph and examples have been rounded for ease of analysis.
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S&P 500 |
S&P 500 Return |
Absolute |
Total Return |
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2520.00 |
80.00% |
80.00% |
10.50% |
2310.00 |
65.00% |
65.00% |
10.50% |
2100.00 |
50.00% |
50.00% |
10.50% |
1960.00 |
40.00% |
40.00% |
10.50% |
1680.00 |
20.00% |
20.00% |
10.50% |
1540.00 |
10.00% |
10.00% |
10.50% |
1473.50 |
5.25% |
5.25% |
10.50% |
1470.00 |
5.00% |
5.00% |
10.00% |
1435.00 |
2.50% |
2.50% |
5.00% |
1414.00 |
1.00% |
1.00% |
2.00% |
1400.00 |
0.00% |
0.00% |
0.00% |
1386.00 |
-1.00% |
1.00% |
1.00% |
1330.00 |
-5.00% |
5.00% |
5.00% |
1260.00 |
-10.00% |
10.00% |
10.00% |
1120.00 |
-20.00% |
20.00% |
-11.11% |
980.00 |
-30.00% |
30.00% |
-22.22% |
840.00 |
-40.00% |
40.00% |
-33.33% |
700.00 |
-50.00% |
50.00% |
-44.44% |
560.00 |
-60.00% |
60.00% |
-55.56% |
420.00 |
-70.00% |
70.00% |
-66.67% |
280.00 |
-80.00% |
80.00% |
-77.78% |
140.00 |
-90.00% |
90.00% |
-88.89% |
0.00 |
-100.00% |
100.00% |
-100.00% |
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JPMorgan
Structured Investments |
TS-1 |
Hypothetical Examples of Amounts Payable at Maturity
The following examples illustrate how the total returns set forth in the table on the previous page and the graph above are calculated.
Example 1: The level of the Index increases from the S&P
500 Starting Level of 1400 to an S&P 500 Closing Level of 1470.
Because the S&P 500 Closing Level of 1470 is
greater than the S&P 500 Starting Level of 1400 and the S&P 500 Return
of 5% multiplied by 2 does not exceed the hypothetical Maximum Total Return of 10.50%,
the investor receives a payment at maturity of $1,100 per $1,000 principal
amount note, calculated as follows:
$1,000 + [$1,000 x (5% x 2)] = $1,100
Example 2: The level of the Index decreases from the S&P
500 Starting Level of 1400 to an S&P 500 Closing Level of 1330.
Although the S&P Return is negative, because the S&P
500 Closing Level of 1330 is less than the S&P 500 Starting Level of 1400
by not more than the Buffer Amount of 10% and the Absolute S&P 500 Return
is 5%, the investor receives a payment at maturity of $1,050 per $1,000
principal amount note, calculated as follows:
$1,000 + ($1,000 x 5%) = $1,050
Example 3: The level of the Index increases from the S&P
500 Starting Level of 1400 to an S&P 500 Closing Level of 1680.
Because the S&P 500 Closing Level of 1680 is
greater than the S&P 500 Starting Level of 1400 and the S&P 500 Return
of 20% multiplied by 2 exceeds the hypothetical Maximum Total Return of 10.50%,
the investor receives a payment at maturity of $1,105 per $1,000 principal
amount note, the maximum payment on the notes.
Example 4: The level of the Index decreases from the S&P
500 Starting Level of 1400 to an S&P 500 Closing Level of 1120.
Because the S&P 500 Return is negative and the S&P
500 Closing Level of 1120 is less than the S&P 500 Starting Level of 1400
by more than the Buffer Amount of 10%, the investor receives a payment at
maturity of $888.89 per $1,000 principal amount note, calculated as follows:
$1,000 + [$1,000 x (-20% + 10%) x 1.1111] = $888.89
Selected Purchase Considerations
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JPMorgan
Structured Investments |
TS-2 |
Selected Risk Considerations
An investment in the notes involves significant risks. Investing in the notes is not equivalent to investing directly in the Index or any of the component stocks of the Index. These risks are explained in more detail in the Risk Factors section of the accompanying product supplement no. 134-I dated April 29, 2008.
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JPMorgan
Structured Investments |
TS-3 |
Historical Information
The following graph sets forth the historical performance of the S&P 500® Index based on the weekly historical closing level of the Index from January 3, 2003 through May 2, 2008. The closing level of the Index on May 5, 2008 was 1,407.49. We obtained the closing levels of the Index below from Bloomberg Financial Markets. We make no representation or warranty as to the accuracy or completeness of the information obtained from Bloomberg Financial Markets.
The historical levels of the Index should not be taken as an indication of future performance, and no assurance can be given as to the closing level of the Index on the Observation Date. We cannot give you assurance that the performance of the Index will result in the return of any of your initial investment.
Supplemental Underwriting Information
JPMSI, acting as agent for JPMorgan Chase & Co., will receive a commission that will depend on market conditions on the pricing date. In no event will that commission, which includes structuring and development fees, exceed $15.00 per $1,000 principal amount note. See Underwriting beginning on page PS-157 of the accompanying product supplement no. 134-I.
For a different portion of the notes to be sold in this offering, an affiliated bank will receive a fee and another affiliate will receive a structuring and development fee. In no event will the total amount of these fees exceed $15.00 per $1,000 principal amount note.
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JPMorgan
Structured Investments |
TS-4 |