Term Sheet
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Term Sheet No. 7 to
Product Supplement No. 98-I Registration Statement No. 333-130051 Dated December 28, 2007; Rule 433 |
Structured |
JPMorgan
Chase & Co. |
General
Key Terms
Basket: |
The notes are linked to an equally weighted basket consisting of the S&P 500® Index, the Nikkei 225 Index and Dow Jones EURO STOXX 50® Index (each a Basket Index, and together, the Basket Indices). |
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Index Weightings: |
The S&P 500 Weighting, the Nikkei Weighting and the EURO STOXX Weighting (each an Index Weighting, and collectively, the Index Weightings) are each set to equal 1/3 of the value of the Basket, or approximately 33.3333%. |
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Knock-Out Event: |
A Knock-Out Event occurs if, on any trading day during the Monitoring Period, the Index closing level for any Basket Index has decreased, as compared to the Index starting level for such Basket Index, by more than the Knock-Out Buffer Amount. |
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Knock-Out Buffer Amount: |
40% |
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Payment at Maturity: |
If a Knock-Out Event has occurred, you will receive a cash payment at maturity that will reflect the performance of the Basket. Under these circumstances, your final payment at maturity per $1,000 principal amount note will be calculated as follows: |
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$1,000 + ($1,000 x Basket Return) |
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If a Knock-Out Event has occurred, you will lose some or all of your investment at maturity if the Ending Basket Level has declined from the Starting Basket Level. |
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If a Knock-Out Event has not occurred, you will receive a cash payment at maturity that will reflect the performance of the Basket, subject to the Contingent Minimum Return. If a Knock-Out Event has not occurred, your final payment at maturity per $1,000 principal amount note will equal $1,000 plus the product of (a) $1,000 and (b) the greater of (i) the Basket Return and (ii) the Contingent Minimum Return. For additional clarification, please see What is the Total Return on the Notes at Maturity Assuming a Range of Performance for the Basket? |
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Contingent Minimum Return: |
At least 26%. The actual Contingent Minimum Return will be determined on the pricing date and will not be less than 26%. |
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Monitoring Period: |
The period from the pricing date to and including the Observation Date. |
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Basket Return: |
Ending Basket Level
Starting Basket Level |
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Starting Basket Level: |
Set equal to 100 on the pricing date, which is expected to be on or about January 28, 2008. |
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Ending Basket Level: |
The Basket Closing Level on the Observation Date. |
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Basket Closing Level: |
The Basket Closing Level will be calculated as follows: |
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100 x [1 + (S&P 500 Return * S&P 500 Weighting) + (Nikkei Return * Nikkei Weighting) + (EURO STOXX Return * EURO STOXX Weighting)] |
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Each of the S&P 500 Return, the Nikkei Return and the EURO STOXX Return is the performance of the relevant Basket Index, expressed as a percentage, from the relevant Index closing level on the pricing date (each an Index starting level) to the relevant Index closing level on the Observation Date. For additional information, see Description of Notes Payment at Maturity in the accompanying product supplement no. 98-I. |
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Observation Date: |
January 26, 2011 |
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Maturity Date: |
January 31, 2011 |
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CUSIP: |
48123MML3 |
| 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. 98-I. |
Investing in the Index Basket Knock-Out Notes involves a number of risks. See Risk Factors beginning on page PS-7 of the accompanying product supplement no. 98-I and Selected Risk Considerations beginning on page TS-1 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. 98-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) | If the notes priced today, J.P. Morgan Securities Inc., which we refer to as JPMSI, acting as agent for JPMorgan Chase & Co., would receive a commission of approximately $23.50 per $1,000 principal amount note and may use a portion of that commission to allow selling concessions to other dealers of approximately $2.00 per $1,000 principal amount note. The other dealers may forgo some or all of their selling concessions. The actual commission received by JPMSI may be more or less than $23.50 and will depend on market conditions on the pricing date. In no event will the commission received by JPMSI, which includes concessions that may be allowed to other dealers, exceed $30.00 per $1,000 principal amount note. See Underwriting beginning on page PS-35 of the accompanying product supplement no. 98-I. |
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
December 28, 2007
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. 98-I dated October 1, 2007. 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. 98-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.
Selected Purchase Considerations
Selected Risk Considerations
An investment in the notes involves significant risks. Investing in the notes is not equivalent to investing directly in the Basket, the Basket Indices or any of the component stocks of the Basket Indices. These risks are explained in more detail in the Risk Factors section of the accompanying product supplement no. 98-I dated October 1, 2007.
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JPMorgan
Structured Investments
Index Basket Knock-Out Notes Linked to an Equally Weighted Basket Consisting of the S&P 500® Index, the Nikkei 225 Index and the Dow Jones EURO STOXX 50® Index |
TS-1 |
What Is the Total Return on the Notes at Maturity Assuming a Range of Performance for the Basket?
The
following table illustrates 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 a Contingent Minimum Return of 26%. 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 and examples have been rounded for ease of analysis.
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Ending Basket Level |
Basket Return | Total Return | |
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Knock Out Event Has Not Occurred(1) |
Knock Out Event Has Occurred(2) |
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200 | 100.00% | 100.00% | 100.00% |
180 | 80.00% | 80.00% | 80.00% |
150 | 50.00% | 50.00% | 50.00% |
130 | 30.00% | 30.00% | 30.00% |
126 | 26.00% | 26.00% | 26.00% |
120 | 20.00% | 26.00% | 20.00% |
115 | 15.00% | 26.00% | 15.00% |
110 | 10.00% | 26.00% | 10.00% |
105 | 5.00% | 26.00% | 5.00% |
100 | 0.00% | 26.00% | 0.00% |
95 | -5.00% | 26.00% | -5.00% |
90 | -10.00% | 26.00% | -10.00% |
85 | -15.00% | 26.00% | -15.00% |
80 | -20.00% | 26.00% | -20.00% |
60 | -40.00% | 26.00% | -40.00% |
40 | -60.00% | N/A | -60.00% |
20 | -80.00% | N/A | -80.00% |
0 | -100.00% | N/A | -100.00% |
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(1) | The Index closing level of each Basket Index has not declined, as compared to the Index starting level of such Basket Index, by more than 40% on any trading day during the Monitoring Period. |
(2) | The Index closing level of any Basket Index has declined, as compared to the Index starting level of such Basket Index, by more than 40% on at least one trading day during the Monitoring Period. |
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JPMorgan
Structured Investments
Index Basket Knock-Out Notes Linked to an Equally Weighted Basket Consisting of the S&P 500® Index, the Nikkei 225 Index and the Dow Jones EURO STOXX 50® Index |
TS-2 |
Hypothetical Examples
of Amounts Payable at Maturity
The following examples illustrate how the total returns set forth in the table on the previous page are calculated.
Example 1: A Knock-Out Event has not occurred, and the level of the Basket increases from the Starting Basket Level of 100 to an Ending Basket Level of 120. Because a Knock-Out Event has not occurred and the Basket Return of 20% is less than the Contingent Minimum Return of 26%, the investor receives a payment at maturity of $1,260 per $1,000 principal amount note.
Example 2: A Knock-Out Event has not occurred, and the level of the Basket decreases from the Starting Basket Level of 100 to an Ending Basket Level of 80. Because a Knock-Out Event has not occurred and the Basket Return of -20% is less than the Contingent Minimum Return of 26%, the investor receives a payment at maturity of $1,260 per $1,000 principal amount note.
Example 4: A Knock-Out Event has occurred, and
the level of the Basket decreases from the Starting Basket Level of 100 to an
Ending Basket Level of 80. Because a Knock-Out Event has occurred and the
Basket Return is -20%, the investor receives a payment at maturity of $800 per
$1,000 principal amount note, calculated as follows:
$1,000 + ($1,000 x -20%) = $800
Example 5: A Knock-Out Event has occurred, and the level of the Basket increases from the Starting Basket Level of 100 to an Ending Basket Level of 120. Because a Knock-Out Event has occurred and the Basket Return is 20%, the investor receives a payment at maturity of $1,200 per $1,000 principal amount note, calculated as follows:
$1,000 + ($1,000 x 20%) = $1,200
Historical Information
The following graphs show the historical weekly performance of each Basket Index as well as the Basket as a whole from January 4, 2002 through December 21, 2007. The graph of the historical Basket performance assumes the Basket level on January 4, 2002 was 100 and the Index Weightings specified on the cover of this term sheet on that date. The Index closing level of the S&P 500® Index on December 27, 2007 was 1476.37. The Index closing level of the Nikkei 225 Index on December 27, 2007 was 15564.69. The Index closing level of the Dow Jones EURO STOXX 50® Index on December 27, 2007 was 4404.61.
We obtained the various Index closing levels below from Bloomberg Financial Markets. We make no representation or warranty as to the accuracy or completeness of information obtained from Bloomberg Financial Markets. The historical levels of each Basket Index and of the Basket should not be taken as an indication of future performance, and no assurance can be given as to the Index closing level of any Basket Index on the Observation Date. We cannot give you assurance that the performance of the Basket Indices will result in the return of any of your initial investment.
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JPMorgan
Structured Investments
Index Basket Knock-Out Notes Linked to an Equally Weighted Basket Consisting of the S&P 500® Index, the Nikkei 225 Index and the Dow Jones EURO STOXX 50® Index |
TS-3 |