Term
Sheet
To prospectus dated December 1, 2005, prospectus supplement dated October 12, 2006 and product supplement no. 34-VI dated February 28, 2008 |
Term
Sheet to
Product
Supplement No. 34-VI
Registration
Statement No. 333-130051
Dated
April 7, 2008; Rule 433
|
Structured
Investments
|
JPMorgan
Chase & Co. $ Reverse Exchangeable Notes due April 30, 2009 Each
Linked to the Common Stock of a Different Single Reference Stock
Issuer
|
·
|
This
term
sheet relates to four (4) separate note offerings. Each issue of
offered
notes is linked to one, and only one, Reference Stock. You may participate
in any of the four (4) note offerings or, at your election, in two
or more
of the offerings. This term sheet does not, however, allow you to
purchase
a note linked to a basket of some or all of the Reference Stocks
described
below.
|
·
|
The
notes are
designed for investors who seek an interest rate that is higher than
the
current dividend yield on the applicable Reference Stock or the yield
on a
conventional debt security with the same maturity issued by us or
an
issuer with a comparable credit rating. Investors should be willing
to
forgo the potential to participate in the appreciation of the applicable
Reference Stock, be willing to accept the risks of owning the common
stock
of the applicable Reference Stock issuer, and be willing to lose
some or
all of their principal at maturity.
|
·
|
Investing
in
the notes is not equivalent to investing in the shares of an issuer
of any
of the Reference Stocks.
|
·
|
Each
issue of
offered notes will pay interest monthly at the fixed rate specified
for
that issue below. However, the
notes do not guarantee any return of principal at
maturity.
Instead,
the payment at maturity will be based on the Final Share Price of
the
applicable Reference Stock and whether the closing price of the applicable
Reference Stock has declined from the applicable Initial Share Price
by
more than the applicable Protection Amount during the Monitoring
Period,
as described below.
|
·
|
Payment
at
maturity for each $1,000 principal amount note will be either a cash
payment of $1,000 or delivery of shares of the applicable Reference
Stock
(or, at our election, the Cash Value thereof), in each case, together
with
any accrued and unpaid interest, as described
below.
|
·
|
Minimum
denominations of $1,000 and integral multiples
thereof.
|
Payment
at
Maturity:
|
The
payment
at maturity, in excess of any accrued and unpaid interest, is based
on the
performance of the applicable Reference Stock. You will receive $1,000
for
each $1,000 principal amount note, plus any accrued and unpaid interest
at
maturity, unless:
(1)
the
applicable Final Share Price is less than the applicable Initial
Share
Price; and
(2)
on
any day
during the Monitoring Period, the closing
price
of the
applicable Reference Stock has declined, as compared to the applicable
Initial Share Price, by more than the applicable Protection Amount.
If
the
conditions described in both (1) and (2) are satisfied, at maturity
you
will receive, in addition to any accrued and unpaid interest, instead
of
the principal amount of your notes, the number of shares of the applicable
Reference Stock equal to the applicable Physical Delivery Amount
(or, at
our election, the Cash Value thereof). Fractional shares will be
paid in
cash. The
market value of the Physical Delivery Amount or the Cash Value thereof
will most likely be substantially less than the principal amount
of your
notes, and may be zero.
|
Maturity
Date:
|
April 30, 2009*
|
Pricing
Date:
|
On
or about
April 25, 2008
|
Settlement
Date:
|
On
or about
April 30, 2008
|
Observation
Date:
|
April
27,
2009*
|
Interest
Payment Dates:
|
Interest
on
the notes will be payable monthly in arrears on the last calendar
day of
each month (each such date, an “Interest Payment Date”), commencing May
31, 2008, to and including the Interest Payment Date corresponding
to the
Maturity Date. See “Selected Purchase Considerations — Monthly Interest
Payments” in this term sheet for more information.
|
Monitoring
Period:
|
The
period
from the Pricing Date to and including the Observation Date.
|
Physical
Delivery Amount:
|
The
number of
shares of the applicable Reference Stock, per $1,000 principal amount
note, equal to $1,000 divided by the applicable Initial Share Price,
subject to adjustments.
|
Cash
Value:
|
For
each
Reference Stock, the amount in cash equal to the product of (1) $1,000
divided by the Initial Share Price of such Reference Stock and (2)
the
Final Share Price of such Reference Stock, subject to
adjustments.
|
Initial
Share
Price:
|
The
closing
price of the applicable Reference Stock on the Pricing Date. The
Initial
Share Price is subject to adjustments in certain circumstances. See
“Description of Notes — Payment at Maturity” and “General Terms of Notes —
Anti-dilution Adjustments” in the accompanying product supplement no.
34-VI for further information about these adjustments.
|
Final
Share
Price:
|
The
closing
price of the applicable Reference Stock on the Observation
Date.
|
Approximate
Tax Allocation of Monthly
Coupon†
|
||||||||||
Page
Number
|
Ticker
Symbol
|
Principal
Amount
|
Interest
Rate
|
Protection
Amount
|
Initial
Share Price
|
CUSIP
|
Approximate
Monthly Coupon
|
Interest
on Deposit
|
Put
Premium
|
|
Apple
Inc.
|
TS-3
|
AAPL
|
11.00%
per
annum
|
40.00%
of the
Initial Share Price
|
48123ML75
|
$9.17
|
23.82%
|
76.18%
|
||
The
Boeing
Company
|
TS-5
|
BA
|
8.50%
per
annum
|
20.00%
of the
Initial Share Price
|
48123ML83
|
$7.08
|
30.82%
|
69.18%
|
||
Bank
of
America Corporation
|
TS-7
|
BAC
|
10.75%
per
annum
|
40.00%
of the
Initial Share Price
|
48123ML91
|
$8.96
|
24.37%
|
75.63%
|
||
Peabody
Energy Corporation
|
TS-9
|
BTU
|
12.00%
per
annum
|
40.00%
of the
Initial Share Price
|
48123MM25
|
$10.00
|
21.83%
|
78.17%
|
*
|
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. 34-VI.
|
†
|
Based
on one
reasonable treatment of the notes, as described herein under “Selected
Purchase Considerations —
Tax
Treatment
as a Unit Comprising a Put Option and a Deposit” and in the accompanying
product supplement no. 34-VI under “Certain U.S. Federal Income Tax
Consequences” on page PS28. The allocations presented herein were
determined as of April 4, 2008; the actual allocations will be determined
as of the Pricing Date and may
differ.
|
Price
to Public
|
Fees
and Commissions (1)
|
Proceeds
to Us
|
|
Per
note
|
$
|
$
|
$
|
Total
|
$
|
$
|
$
|
(1)
|
In
no event
will the fees and commissions received by J.P. Morgan Securities
Inc.,
which we refer to as JPMSI, which include concessions to be allowed
to
other dealers, exceed $60.00 per $1,000 principal amount note for
any of
the four (4) offerings listed above. For more detailed information
about
fees, commissions and concessions, please see “Supplemental Underwriting
Information” on the last page of this term
sheet.
|
·
|
Product
supplement no. 34-VI dated February
28,
2008:
|
·
|
Prospectus
supplement dated October 12, 2006:
|
·
|
Prospectus
dated December 1, 2005:
|
·
|
THE
NOTES OFFER A HIGHER INTEREST RATE THAN THE YIELD ON DEBT SECURITIES
OF
COMPARABLE MATURITY ISSUED BY US OR AN ISSUER WITH A COMPARABLE CREDIT
RATING —
The
notes
will pay interest at an Interest Rate depending upon the applicable
Reference Stock, as indicated on the cover of this term sheet. We
believe
that the applicable Interest Rate is higher than the yield received
on
debt securities of comparable maturity issued by us or an issuer
with a
comparable credit rating. Because the notes are our senior unsecured
obligations, any interest payment or any payment at maturity is subject
to
our ability to pay our obligations as they become
due.
|
·
|
MONTHLY
INTEREST PAYMENTS —
The
notes offer monthly interest payments at the applicable Interest
Rate set
forth on the cover of this term sheet. Interest will be payable monthly
in
arrears on the last
calendar day of each month (each such date, an “Interest Payment Date”),
commencing May 31, 2008, to
and
including the Interest Payment Date corresponding to the Maturity
Date,
to the holders of record at the close of business on the date 15
calendar
days prior to the applicable Interest Payment Date. If an Interest
Payment
Date is not a business day, payment will be made on the next business
day
immediately following such day, but no additional interest will accrue
as
a result of the delayed payment.
|
·
|
THE
NOTES DO NOT GUARANTEE THE RETURN OF YOUR PRINCIPAL —
Your
return
of principal at maturity is protected if the applicable Final Share
Price
does not decline from the applicable Initial Share Price or the closing
price of the applicable Reference Stock does not decline, as compared
to
the applicable Initial Share Price, by more than the applicable Protection
Amount on any day during the Monitoring Period. However,
if the applicable Final Share Price declines from the applicable
Initial
Share Price and the closing price of the applicable Reference Stock
on any
day during the Monitoring Period has declined by more than the applicable
Protection Amount, you could lose the entire principal amount of
your
notes.
|
·
|
TAX TREATMENT AS A UNIT COMPRISING A PUT OPTION AND A DEPOSIT — You should review carefully the section entitled “Certain U.S. Federal Income Tax Consequences” in the accompanying product supplement no. 34-VI. We and you agree (in the absence of an administrative determination or judicial ruling to the contrary) to treat the notes as units comprising a Put Option and a Deposit for U.S. federal income tax purposes. We will determine the portion of each coupon payment that we will allocate to interest on the Deposit and to Put Premium, respectively, and will provide that allocation in the pricing supplement for the notes. If the notes had priced on April 4, 2008, of each coupon payment, we would have treated the percentages specified on the cover of this term sheet as interest on the Deposit and as Put Premium, respectively. The actual allocation that we will determine for the notes may differ from this hypothetical allocation, and will depend upon a variety of factors, including actual market conditions and our borrowing costs for debt instruments of comparable maturities on the Pricing Date. Assuming this characterization is respected, amounts treated as interest on the Deposit will be taxed as ordinary income while the Put Premium will not be taken into account prior to maturity or sale. However, there are other reasonable treatments that the Internal Revenue Service (the “IRS”) or a court may adopt, in which case the timing and character of any income or loss on the notes could be significantly and adversely affected. In addition, on December 7, 2007, Treasury and the IRS released a notice requesting comments on the U.S. federal income tax treatment of “prepaid forward contracts” and similar instruments. While it is not clear whether the notes would be viewed as similar to the typical prepaid forward contract described in the notice, it is possible that any Treasury regulations or other guidance promulgated after consideration of these issues could materially and adversely affect the tax consequences of an investment in the notes, possibly with retroactive effect. The notice focuses on a number of issues, the most relevant of which for holders of the notes are the character of income or loss (including whether the Put Premium might be currently included as ordinary income) and the degree, if any, to which income realized by Non-U.S. Holders should be subject to withholding tax. Both U.S. and Non-U.S. Holders should consult their tax advisers regarding all aspects of the U.S. federal income tax consequences of an investment in the notes, including possible alternative treatments and the issues presented by this notice. Purchasers who are not initial purchasers of notes at the issue price should also consult their tax advisers with respect to the tax consequences of an investment in the notes, including possible alternative characterizations, as well as the allocation of the purchase price of the notes between the Deposit and the Put Option. |
·
|
YOUR
INVESTMENT IN THE NOTES MAY RESULT IN A LOSS —
The notes do not guarantee any return of principal.
The
payment at maturity will be based on the applicable Final Share Price
and
whether the closing price of the applicable Reference Stock has declined
from the applicable Initial Share Price by more than the applicable
Protection Amount on any day during the Monitoring Period. Under
certain
circumstances, you will receive at maturity a predetermined number
of
shares of the applicable Reference Stock (or, at our election, the
Cash
Value thereof). The market value of those shares of the applicable
Reference Stock or the Cash Value thereof will most likely be less
than
the principal amount of each note and may be zero. Accordingly,
you could lose up to the entire principal amount of your
notes.
|
·
|
YOUR
PROTECTION MAY TERMINATE ON ANY DAY DURING THE TERM OF THE NOTES
—
If,
on any
day during the Monitoring Period, the closing price of the applicable
Reference Stock declines below the applicable Initial Share Price
minus
the applicable Protection Amount, you will at maturity be fully exposed
to
any depreciation in the applicable Reference Stock. We refer to this
feature as a contingent buffer. Under these circumstances, and
if the
applicable Final Share Price is less than the applicable Initial
Share
Price, you will receive at maturity a predetermined number of shares
of
the applicable Reference Stock (or, at our election, the Cash Value
thereof) and, consequently, you will lose 1% of the principal amount
of
your investment for every 1% decline in the applicable Final Share
Price
compared to the applicable Initial Share Price. You will be subject
to
this potential loss of principal even if the price of the applicable
Reference Stock subsequently recovers such that the applicable Final
Share
Price is above the applicable Initial Share Price minus the applicable
Protection Amount. If these notes had a non-contingent buffer feature,
under the same scenario, you would have received the full principal
amount
of your notes plus accrued and unpaid interest at maturity. As a
result,
your investment in the notes may not perform as well as an investment
in a
security with a return that includes a non-contingent
buffer.
|
·
|
YOUR
RETURN ON THE NOTES IS LIMITED TO THE PRINCIPAL AMOUNT PLUS ACCRUED
INTEREST REGARDLESS OF ANY APPRECIATION IN THE VALUE OF THE APPLICABLE
REFERENCE STOCK —
Unless (i) the applicable Final Share Price is less
than
the applicable Initial Share Price and (ii) on any day during the
Monitoring Period, the closing price of the applicable Reference
Stock has
declined, as compared to the applicable Initial Share Price, by more
than
the applicable Protection Amount, for each $1,000 principal amount
note,
you will receive $1,000 at maturity plus any accrued and unpaid interest,
regardless of any appreciation in the value of the applicable Reference
Stock, which may be significant. Accordingly, the return on the notes
may
be significantly less than the return on a direct investment in the
applicable Reference Stock during the term of the
notes.
|
·
|
NO
OWNERSHIP RIGHTS IN THE APPLICABLE REFERENCE STOCK —
As
a holder of the notes, you will not have any ownership interest or
rights
in the applicable Reference Stock, such as voting rights or dividend
payments. In addition, the applicable Reference Stock issuer will
not have
any obligation to consider your interests as a holder of the notes
in
taking any corporate action that might affect the value of the applicable
Reference Stock and the notes.
|
·
|
NO
AFFILIATION WITH THE REFERENCE STOCK ISSUERS —
We
are not affiliated with the issuers of the Reference Stocks. We assume
no
responsibility for the adequacy of the information about the Reference
Stock issuers contained in this term sheet or in product supplement
no.
34-VI. You should make your own investigation into the Reference
Stocks
and their issuers. We are not responsible for the Reference Stock
issuers’
public disclosure of information, whether contained in SEC filings
or
otherwise.
|
·
|
CERTAIN
BUILT-IN COSTS ARE LIKELY TO ADVERSELY AFFECT THE VALUE OF THE NOTES
PRIOR
TO
MATURITY
—
While the payment at maturity described in this term
sheet
is based on the full principal amount of your notes, the original
issue
price of the notes includes the agent’s commission and the cost of hedging
our obligations under the notes through one or more of our affiliates.
As
a result, and as a general matter, the price, if any, at which JPMSI
will
be willing to purchase notes from you in secondary market transactions,
if
at all, will likely be lower than the original issue price and any
sale
prior to the maturity date could result in a substantial loss to
you. This
secondary market price will also be affected by a number of factors
aside
from the agent’s commission and hedging costs, including those referred to
under “Many Economic and Market Factors Will Impact the Value of the
Notes” below.
|
·
|
LACK
OF LIQUIDITY —
The
notes
will not be listed on any securities exchange. JPMSI intends to offer
to
purchase the notes in the secondary market but is not required to
do so.
Even if there is a secondary market, it may not provide enough liquidity
to allow you to trade or sell the notes easily. Because other dealers
are
not likely to make a secondary market for the notes, the price at
which
you may be able to trade your notes is likely to depend on the price,
if
any, at which JPMSI is willing to buy the notes.
|
·
|
POTENTIAL
CONFLICT —
We
and our
affiliates play a variety of roles in connection with the issuance
of the
notes, including acting as calculation agent. In performing these
duties,
the economic interests of the calculation agent and other affiliates
of
ours are potentially adverse to your interests as an investor in
the
notes. We and/or our affiliates may also currently or from time to
time
engage in business with the Reference Stock issuers, including extending
loans to, or making equity investments in, such Reference Stock issuer(s)
or providing advisory services to such Reference Stock issuer(s).
In
addition, one or more of our affiliates may publish research reports
or
otherwise express opinions with respect to the Reference Stock issuers
and
these reports may or may not recommend that investors buy or hold
the
Reference Stock(s). As a prospective purchaser of the notes, you
should
undertake an independent investigation of the applicable Reference
Stock
issuer that in your judgment is appropriate to make an informed decision
with respect to an investment in the notes.
|
·
|
HEDGING
AND TRADING IN THE REFERENCE STOCK —
While the notes are outstanding, we or any of our
affiliates may carry out hedging activities related to the notes,
including in the Reference Stocks or instruments related to such
Reference
Stock(s). We or our affiliates may also trade in the Reference Stocks
or
instruments related to Reference Stock(s) from time to time. Any
of these
hedging or trading activities as of the Pricing Date and during the
term
of the notes could adversely affect our payment to you at
maturity.
|
·
|
MANY
ECONOMIC
AND MARKET FACTORS WILL INFLUENCE THE VALUE OF THE NOTES —
In
addition
to the value of the applicable Reference Stock and interest rates
on any
trading day, the value of the notes will be affected by a number
of
economic and market factors that may either offset or magnify each
other
and which are set out in more detail in product supplement no.
34-VI.
|
·
the
Initial
Share Price:
|
$153.00
|
·
the Protection Amount: $61.20
|
·
the
Interest
Rate:
|
11.00%
per
annum
|
Hypothetical
lowest
closing
price during the
Monitoring
Period
|
Hypothetical
Final
Share
Price
|
Payment
at Maturity
|
Total
Value of
Payment
Received
at
Maturity**
|
$153.00
|
$306.00
|
$1,000.00
|
$1,000.00
|
$76.50
|
$160.65
|
$1,000.00
|
$1,000.00
|
$153.00
|
$153.00
|
$1,000.00
|
$1,000.00
|
$91.80
|
$91.80
|
$1,000.00
|
$1,000.00
|
$76.50
|
$145.35
|
6
shares of
the Reference Stock or the Cash Value thereof
|
$950.00
|
$76.50
|
$76.50
|
6
shares of
the Reference Stock or the Cash Value thereof
|
$500.00
|
$38.25
|
$38.25
|
6
shares of
the Reference Stock or the Cash Value thereof
|
$250.00
|
$0.00
|
$0.00
|
6
shares of
the Reference Stock or the Cash Value thereof
|
$0.00
|
**
|
Note
that you
will receive at maturity any accrued and unpaid interest in cash,
in
addition to either shares of the Reference Stock (or, at our election,
the
Cash Value thereof) or the principal amount of your note in cash.
Also
note that if you receive the Physical Delivery Amount, the total
value of
payment received at maturity shown in the table above includes
the value
of any fractional shares, which will be paid in
cash.
|
·
the
Initial
Share Price:
|
$75.60
|
·
the Protection Amount: $15.12
|
·
the
Interest
Rate:
|
8.50%
per
annum
|
Hypothetical
lowest
closing
price during the Monitoring Period
|
Hypothetical
Final
Share
Price
|
Payment
at Maturity
|
Total
Value of
Payment
Received
at
Maturity**
|
$75.60
|
$151.20
|
$1,000.00
|
$1,000.00
|
$37.80
|
$79.38
|
$1,000.00
|
$1,000.00
|
$75.60
|
$75.60
|
$1,000.00
|
$1,000.00
|
$60.48
|
$60.48
|
$1,000.00
|
$1,000.00
|
$37.80
|
$71.82
|
13
shares of
the Reference Stock or the Cash Value thereof
|
$950.00
|
$37.80
|
$37.80
|
13
shares of
the Reference Stock or the Cash Value thereof
|
$500.00
|
$18.90
|
$18.90
|
13
shares of
the Reference Stock or the Cash Value thereof
|
$250.00
|
$0.00
|
$0.00
|
13
shares of
the Reference Stock or the Cash Value thereof
|
$0.00
|
**
|
Note
that you
will receive at maturity any accrued and unpaid interest in cash,
in
addition to either shares of the Reference Stock (or, at our election,
the
Cash Value thereof) or the principal amount of your note in cash.
Also
note that if you receive the Physical Delivery Amount, the total
value of
payment received at maturity shown in the table above includes the
value
of any fractional shares, which will be paid in
cash.
|
·
the
Initial
Share Price:
|
$39.40
|
·
the Protection Amount: $15.76
|
·
the
Interest
Rate:
|
10.75%
per
annum
|
Hypothetical
lowest closing price during the
Monitoring
Period
|
Hypothetical
Final
Share
Price
|
Payment
at Maturity
|
Total
Value of
Payment
Received
at
Maturity**
|
$39.40
|
$78.80
|
$1,000.00
|
$1,000.00
|
$19.70
|
$41.37
|
$1,000.00
|
$1,000.00
|
$39.40
|
$39.40
|
$1,000.00
|
$1,000.00
|
$23.64
|
$23.64
|
$1,000.00
|
$1,000.00
|
$19.70
|
$37.43
|
25
shares of
the Reference Stock or the Cash Value thereof
|
$950.00
|
$19.70
|
$19.70
|
25
shares of
the Reference Stock or the Cash Value thereof
|
$500.00
|
$9.85
|
$9.85
|
25
shares of
the Reference Stock or the Cash Value thereof
|
$250.00
|
$0.00
|
$0.00
|
25
shares of
the Reference Stock or the Cash Value thereof
|
$0.00
|
**
|
Note
that you
will receive at maturity any accrued and unpaid interest in cash,
in
addition to either shares of the Reference Stock (or, at our election,
the
Cash Value thereof) or the principal amount of your note in cash.
Also
note that if you receive the Physical Delivery Amount, the total
value of
payment received at maturity shown in the table above includes the
value
of any fractional shares, which will be paid in
cash.
|
·
the
Initial
Share Price:
|
$57.00
|
·
the Protection Amount: $22.80
|
·
the
Interest
Rate:
|
12.00%
per
annum
|
Hypothetical
lowest
closing
price during the Monitoring Period
|
Hypothetical
Final
Share
Price
|
Payment
at Maturity
|
Total
Value of
Payment
Received
at
Maturity**
|
$57.00
|
$114.00
|
$1,000.00
|
$1,000.00
|
$28.50
|
$59.85
|
$1,000.00
|
$1,000.00
|
$57.00
|
$57.00
|
$1,000.00
|
$1,000.00
|
$34.20
|
$34.20
|
$1,000.00
|
$1,000.00
|
$28.50
|
$54.15
|
17
shares of
the Reference Stock or the Cash Value thereof
|
$950.00
|
$28.50
|
$28.50
|
17
shares of
the Reference Stock or the Cash Value thereof
|
$500.00
|
$14.25
|
$14.25
|
17
shares of
the Reference Stock or the Cash Value thereof
|
$250.00
|
$0.00
|
$0.00
|
17
shares of
the Reference Stock or the Cash Value thereof
|
$0.00
|
**
|
Note
that you
will receive at maturity any accrued and unpaid interest in cash,
in
addition to either shares of the Reference Stock (or, at our election,
the
Cash Value thereof) or the principal amount of your note in cash.
Also
note that if you receive the Physical Delivery Amount, the total
value of
payment received at maturity shown in the table above includes the
value
of any fractional shares, which will be paid in
cash.
|