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September 2009
 

Preliminary Terms No. 14

Registration Statement No. 333-155535

Dated August 26, 2009

Filed pursuant to Rule 433

STRUCTURED INVESTMENTS
Opportunities in Equities
 RevConsSM
Two RevConsSM Each Based on a Different Common Stock Due March 15, 2010
Reverse Convertible Securities

RevCons offer a short-term, enhanced yield strategy that pays a periodic, above-market, fixed rate coupon (per annum) in return for the risk that the RevCons will redeem for shares of the underlying stock of a specific underlying issuer at maturity if the closing price of the underlying stock on the determination date is less than the initial share price and the closing price of the underlying stock trades at or below the trigger price on any trading day up to and including the determination date. The value of these shares as of the determination date will be less than the value of the investor’s initial investment and may be zero, and the investor has no opportunity to participate in any upside. Alternatively, if the closing price of the underlying stock on the determination date is not less than the initial share price or the underlying stock never trades at or below the trigger price, the RevCons will return the stated principal amount at maturity. The coupon is paid regardless of the performance of the underlying stock. RevCons are not principal protected. The RevCons are senior unsecured obligations of JPMorgan Chase & Co., and all payments on the RevCons are subject to the credit risk of JPMorgan Chase & Co. These preliminary terms offer two separate RevCons, each relating to the common stock of a different underlying company.

SUMMARY TERMS FOR ALL REVCONS

Issuer:

JPMorgan Chase & Co.

Stated principal amount:

$1,000 per RevCons

Issue price:

$1,000 per RevCons (see “Commissions and Issue Price” below)

Payment at maturity:

Either (i) the stated principal amount of $1,000 or (ii) if the closing price of the underlying stock on the determination date is less than the initial share price and the closing price of the underlying stock has declined to or below the specified trigger price on any trading day from and including the pricing date to and including the determination date, (x) a number of shares of the underlying stock equal to the exchange ratio or (y) at our option, the cash value of those shares as of the determination date.

Trigger event:

Closing price trigger event

Initial share price:

The initial share price for each RevCons will be the closing price of the underlying stock on the pricing date, subject to adjustments for corporate events.

Determination date:

The determination date for each RevCons is three business days before the maturity date of that RevCons.

Exchange ratio:

For each RevCons, the stated principal amount divided by the initial share price, subject to adjustments for corporate events.

Trigger price:

The trigger price specified for each RevCons is equal to the product of the trigger level times the initial share price, subject to adjustments for corporate events.

Coupon:

Payable monthly at the specified interest rate on the 15th calendar day of each month, beginning October 15, 2009, subject to postponement.

Pricing date:

September 9, 2009

Original issue date:

September 14, 2009

Listing:

The RevCons will not be listed on any securities exchange.

Agent:

J.P. Morgan Securities Inc. (“JPMSI”)

SPECIFIC TERMS FOR EACH REVCONS

Underlying stock:

Chesapeake Energy Corporation (“CHK”)

General Electric Company (“GE”)

Maturity date:

March 15, 2010

March 15, 2010

Interest rate:

16% - 20% per annum

12% - 16% per annum

Trigger level:

75%

75%

Determination date:

March 10, 2010

March 10, 2010

CUSIP:

48123L5B6

48123L5A8

ISIN:

US48123L5B61

US48123L5A88

Initial share price:

$

$

Trigger price:

$

$

Exchange ratio:

 

 

Aggregate principal amount:

$

$

Commissions and Issue Price:

Per CHK RevCons

Total

Per GE RevCons

Total

Price to public(1)(2)

$1,000

$

$1,000

$

Agent’s commissions(1)(2)(3)

$20

$

$20

$

Proceeds to company

$980

$

$980

$
(1) The price to the public includes the estimated cost of hedging our obligations under the RevCons, which includes the expected cost of providing such hedge as well as any profit our affiliates expect to realize in providing such hedge. For additional related information, please see “Use of Proceeds” beginning on PS-16 of the accompanying product supplement no. MS-5-A-I.
(2) The actual price to public and agent’s commissions for a particular investor may be reduced for volume purchase discounts depending on the aggregate amount of RevCons purchased by that investor. The lowest price payable by an investor is $995.00 per RevCons. Please see “Syndicate Information” on page 5 for further details.
(3) JPMSI, acting as agent for JPMorgan Chase & Co., will receive a commission and will use all of that commission to allow selling concessions to Morgan Stanley Smith Barney LLC (“MSSB”) that will depend on market conditions on the pricing date. In no event will the commission received by JPMSI and the selling concessions to be allowed to MSSB, exceed $20 per RevCons. See “Underwriting” beginning on page PS-34 of the accompanying product supplement no. MS-5-A-I.

Investing in the RevCons involves a number of risks. See “Risk Factors” on page PS-7 of the accompanying product supplement no. MS-5-A-I and “Risk Factors” beginning on page 8 of these preliminary terms.

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of the RevCons or passed upon the accuracy or the adequacy of this document or the accompanying prospectus supplement and prospectus. Any representation to the contrary is a criminal offense.

The RevCons are not bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they obligations of, or guaranteed by, a bank. The RevCons are not guaranteed under the Federal Deposit Insurance Corporation’s Temporary Liquidity Guarantee Program.

YOU SHOULD READ THIS DOCUMENT TOGETHER WITH THE RELATED PRODUCT SUPPLEMENT NO. MS-5-A-I, PROSPECTUS SUPPLEMENT AND PROSPECTUS, EACH OF WHICH CAN BE ACCESSED VIA THE HYPERLINKS BELOW, BEFORE YOU DECIDE TO INVEST.

Product supplement no. MS-5-A-I dated August 20, 2009:
http://www.sec.gov/Archives/edgar/data/19617/000089109209003315/e36345_424b2.pdf
 Prospectus supplement dated November 21, 2008:
http://www.sec.gov/Archives/edgar/data/19617/000089109208005661/e33600_424b2.pdf
Prospectus dated November 21, 2008:
http://www.sec.gov/Archives/edgar/data/19617/000089109208005658/e33655_424b2.pdf

The issuer has filed a registration statement (including a prospectus) with the SEC for the offerings to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and these offerings. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in these offerings will arrange to send you the prospectus if you request it by calling toll-free (866) 535-9248.

RevConsSM
Two RevConsSM Each Based on a Different Common Stock Due March 15, 2010

Investment Overview
RevConsSM

Reverse Convertible Securities

RevCons pay a periodic, above-market, fixed rate coupon, on a per annum basis. At maturity, the RevCons will pay either (i) an amount of cash equal to the stated principal amount of the RevCons, or (ii) if the closing price of the underlying stock on the determination date is less than the initial share price and the closing price of the underlying stock has decreased to or below the specified trigger price on any trading day from and including the pricing date to and including the determination date, a number of shares of underlying stock worth (as of the determination date) less than the stated principal amount of the RevCons, or, at our option, the cash value of those shares. RevCons are not principal protected and offer no potential for appreciation. The value of any underlying stock delivered at maturity per RevCons, and accordingly its cash value, will be less (as of the determination date) than the stated principal amount of the RevCons, and may be zero.

Underlying Stock Overview

Chesapeake Energy Corporation

Chesapeake Energy Corporation is a producer of natural gas in the United States, whose strategy is focused on discovering, developing and acquiring conventional and unconventional natural gas reserves onshore in the U.S. Its SEC file number is 001-13726.

Information as of market close on August 25, 2009
      Bloomberg Ticker Symbol: CHK 52 Weeks ago: $48.00
      Current Stock Price: $23.35 52 Week High (on 8/27/08): $50.60
      Current Dividend Yield: 1.25% 52 Week Low (on 12/5/08): $11.32

General Electric Company

General Electric Company is a diversified technology, media and financial services company with products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing and media content. Its SEC file number is 001-00035.

Information as of market close on August 25, 2009
      Bloomberg Ticker Symbol: GE 52 Weeks ago: $28.32
      Current Stock Price: $14.30 52 Week High (on 9/8/08): $29.09
      Current Dividend Yield: 7.25% 52 Week Low (on 3/5/09): $6.66

Each underlying stock is registered under the Securities Exchange Act of 1934, as amended. Information provided to or filed with the Securities and Exchange Commission by the issuer of each underlying stock pursuant to the Securities Exchange Act of 1934, as amended, can be located by reference to the Securities and Exchange Commission file number detailed above through the Securities and Exchange Commission’s website at http://www.sec.gov. In addition, information regarding the issuer of each underlying stock may be obtained from other sources including, but not limited to, press releases, newspaper articles and other publicly disseminated documents. For additional information, please see “Information about the Underlying Stock” in these preliminary terms. Neither the issuer nor the agent makes any representation that such publicly available documents or any other publicly available information regarding any issuer of underlying stock is accurate or complete.

September 2009

Page 2

RevConsSM
Two RevConsSM Each Based on a Different Common Stock Due March 15, 2010

Key Investment Rationale

The RevCons offer a short-term income-oriented strategy linked to the relevant underlying stock.

Key Benefits

The RevCons pay an above-market coupon in exchange for downside exposure to the underlying stock, with only contingent protection against declines in the underlying stock. If the closing price of the underlying stock on the determination date is less than the initial share price and the closing price of the underlying stock declines to, or below, the trigger price on any trading day from, and including, the pricing date to, and including, the determination date, you will then be subject to full downside exposure to the underlying stock.

Enhanced Yield
  • A monthly coupon, the rate per annum of which is higher than the current dividend yield on the underlying stock.

  • The coupon will be paid regardless of the performance of the underlying stock.

Best Case
Scenario
  • If the closing price of the underlying stock on the determination date is not less than the initial share price or never declines to or below the trigger price on any trading day from and including the pricing date to and including the determination date, the RevCons will redeem, at maturity, for the stated principal amount, resulting in a total return on a per annum basis equal to the coupon. You will not participate in any appreciation in the underlying stock, even if the underlying stock is above the initial share price on the determination date.

Worst Case
Scenario
  • If the closing price of the underlying stock declines to or below the trigger price on at least one trading day from and including the pricing date to and including the determination date and, on the determination date, is at a level below its initial share price, the RevCons will redeem for an amount of underlying stock worth substantially less than the stated principal amount based on the closing price of the underlying stock on the determination date and which may be zero. In this worst case scenario, the RevCons will have outperformed the underlying stock on a per annum basis by the coupon.

Summary of Selected Key Risks (see page 8)

September 2009

Page 3

RevConsSM
Two RevConsSM Each Based on a Different Common Stock Due March 15, 2010

Fact Sheet

These preliminary terms offer two separate RevCons, each relating to the common stock of a different underlying company (“underlying stock”). Each RevCons provides exposure to a single underlying stock. You may choose to invest in only one of the RevCons described below or in more than one.

The RevCons offered are senior unsecured obligations of JPMorgan Chase & Co., will pay a coupon at the interest rate per annum specified below and will have the terms described in the accompanying product supplement no. MS-5-A-I, prospectus supplement and prospectus, as supplemented or modified by the preliminary terms for each RevCons set forth below. At maturity the RevCons will pay either (i) an amount of cash equal to the stated principal amount of the RevCons, or (ii) if the closing price of the underlying stock for the particular RevCons on the determination date is less than the initial share price and the closing price of the underlying stock has decreased to or below the specified trigger price on any trading day from and including the pricing date to and including the determination date, a number of shares of underlying stock worth (as of the determination date) less than the stated principal amount of the RevCons, or, at our option, the cash value of those shares. The RevCons do not guarantee any return of principal at maturity. The RevCons are senior unsecured notes issued as part of JPMorgan Chase & Co.’s Series E Global Medium-Term Notes program. All payments on the RevCons are subject to the credit risk of JPMorgan Chase & Co.

“RevConsSM” is a service mark of Morgan Stanley Smith Barney LLC.

Expected Key Dates Applicable to All RevCons

 

Pricing date:

Original issue date (settlement date):

Maturity date:

September 9, 2009

September 14, 2009

March 15, 2010

Key Terms Applicable to All RevCons

Issuer:

JPMorgan Chase & Co.

Issue price:

$1,000 per RevCons (see “Syndicate Information” on page 5)

Stated principal amount:

$1,000 per RevCons

Denominations:

$1,000 and integral multiples thereof

Payment at maturity:

Either (i) the stated principal amount of $1,000 or (ii) if the closing price of the underlying stock on the determination date is less than the initial share price and the closing price of the underlying stock has declined to or below the specified trigger price on any trading day from and including the pricing date to and including the determination date, (x) a number of shares of the underlying stock equal to the exchange ratio or (y) at our option, the cash value of those shares as of the determination date.

Initial share price:

The initial share price for each RevCons will be the closing price of the underlying stock on the pricing date, subject to adjustments for corporate events.

Determination date:

The determination date for each RevCons is three business days before the maturity date of that RevCons, subject to postponement.

Exchange ratio:

For each RevCons, the stated principal amount divided by the initial share price, subject to adjustments for corporate events.

Exchange factor:

Initially equal to 1.0, but will be adjusted to reflect certain corporate events affecting the underlying stock. The initial share price, the trigger price and the exchange ratio will be adjusted by the exchange factor.

Coupon:

Payable monthly at the specified interest rate on the 15th calendar day of each month, beginning October 15, 2009, subject to postponement.

Trigger price:

The trigger price specified for each RevCons is equal to the product of the trigger level times the initial share price, subject to adjustments for corporate events.

Trigger event:

Closing price trigger event

Postponement of maturity date:

If the scheduled maturity date is not a business day, then the maturity date will be the following business day. If the scheduled determination date is not a trading day or if a market disruption event occurs on that day so that the determination date, as postponed, falls less than three business days prior to the scheduled maturity date, the maturity date of the RevCons will be postponed until the third business day following the determination date, as postponed.

Specific Terms for Each RevCons

Underlying stock:

Chesapeake Energy Corporation (“CHK”)

General Electric Company (“GE”)

Maturity date:

March 15, 2010

March 15, 2010

Interest rate:

16% - 20% per annum

12% - 16% per annum

Trigger level:

75%

75%

Determination date:

March 10, 2010

March 10, 2010

CUSIP:

48123L5B6

48123L5A8

ISIN:

US48123L5B61

US48123L5A88

Initial share price:

$

$

Trigger price:

$

$

Exchange ratio:

 

 

Aggregate principal amount:

$

$

Risk factors:

Please see “Risk Factors” beginning on page 8.

September 2009

Page 4

RevConsSM
Two RevConsSM Each Based on a Different Common Stock Due March 15, 2010

 

General Information

Listing:

The RevCons will not be listed on any securities exchange.

Tax considerations:

You should review carefully the section entitled “Certain U.S. Federal Income Tax Consequences” in the accompanying product supplement no MS-5-A-I. We and you agree (in the absence of an administrative determination or judicial ruling to the contrary) to treat the RevCons 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 those allocations in the pricing supplement for the RevCons. If the RevCons based on the common stock of Chesapeake Energy Corporation had priced on August 26, 2009, we would have treated approximately 4.63% of each coupon payment as interest on the Deposit and approximately 95.37% as Put Premium. If the RevCons based on the common stock of General Electric Company had priced on August 26, 2009, we would have treated approximately 6.17% of each coupon payment as interest on the Deposit and approximately 93.83% as Put Premium. The actual allocations that we will determine for the RevCons may differ from these hypothetical allocations, 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 RevCons could be significantly and adversely affected. In addition, in December 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 RevCons 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 RevCons, possibly with retroactive effect. The notice focuses on a number of issues, the most relevant of which for holders of the RevCons 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 RevCons, including possible alternative treatments and the issues presented by this notice. Non-U.S. Holders should also note that they may be withheld upon at a rate of up to 30% unless they have submitted a properly completed IRS Form W-8BEN or otherwise satisfied the applicable documentation requirements. Purchasers who are not initial purchasers of RevCons at the issue price should also consult their tax advisers with respect to the tax consequences of an investment in the RevCons, including possible alternative characterizations, as well as the allocation of the purchase price of the RevCons between the Deposit and the Put Option.

Trustee:

Deutsche Bank Trust Company Americas (formerly Bankers Trust Company)

Calculation agent:

J.P. Morgan Securities Inc. (“JPMSI”)

Use of proceeds and hedging:

The net proceeds we receive from the sale of the RevCons will be used for general corporate purposes and, in part, by us or by one or more of our affiliates in connection with hedging our obligations under the RevCons.

For further information on our use of proceeds and hedging, see “Use of Proceeds” in the accompanying product supplement no. MS-5-A-I.

Benefit plan investor considerations:

See “Benefit Plan Investor Considerations” in the accompanying product supplement no.
MS-5-A-I.

Contact:

Morgan Stanley Smith Barney clients may contact their local Morgan Stanley Smith Barney branch office or Morgan Stanley Smith Barney’s principal executive offices at 2000 Westchester Avenue, Purchase, New York 10577 (telephone number (800) 869-3326).

Syndicate Information

Issue price of the RevCons

Commissions

Principal amount of
RevCons for any single investor

$1,000

$20.00

<$1MM

$997.50

$17.50

≥$1MM and <$3MM

$996.25

$16.25

≥$3MM and <$5MM

$995.00

$15.00

≥$5MM

This offering summary represents a summary of the terms and conditions of the RevCons. We encourage you to read the accompanying product supplement no. MS-5-A-I, prospectus supplement and prospectus for these offerings, which can be accessed via the hyperlinks on the front page of this document.

September 2009

Page 5

RevConsSM
Two RevConsSM Each Based on a Different Common Stock Due March 15, 2010

How RevCons Work

The following payment scenarios illustrate the potential returns on the RevCons at maturity.

Payment Scenario 1

The closing price of the underlying stock on the determination date is not less than the initial share price or never falls to or below the trigger price on any trading day from and including the pricing date to and including the determination date, and you receive the monthly coupon until maturity with a full return of principal at maturity. You will not participate in any appreciation of the underlying stock, even if the underlying stock is above its initial share price on the determination date.

Payment Scenario 2

The closing price of the underlying stock falls to or below the trigger price on at least one trading day from and including the pricing date to and including the determination date and the closing price is at a level below the initial share price on the determination date, in which case, at maturity, RevCons redeem for an amount of underlying stock (or, at our option, the cash value of the underlying stock) worth substantially less than the stated principal amount of the RevCons based on the closing price of the underlying stock on the determination date and which may be zero. You will still receive the monthly coupon until maturity if this occurs.

Hypothetical Payments on the RevCons

The following examples illustrate the payment at maturity on the RevCons (assuming a six-month term) for a range of hypothetical closing prices for a hypothetical underlying stock on a hypothetical determination date, depending on whether the closing price of the underlying stock on the determination date is less than the initial share price and whether, on any trading day from and including the pricing date to and including the determination date, the closing price of the underlying stock has or has not decreased to or below the hypothetical trigger price.

The hypothetical examples are based on the following hypothetical values:

  • Stated principal amount (per RevCons):

$1,000
  • Initial share price:

$100 (the closing price of one share of the hypothetical underlying stock on the pricing date)
  • Exchange ratio:

10 (the $1,000 stated principal amount per RevCons divided by the initial share price)
  • Trigger price:

$75 (75% of the initial share price)
  • Coupon per annum:

14%

TABLE 1: At maturity, unless the closing price of the hypothetical underlying stock on the determination date is less than the initial share price and the closing price of the hypothetical underlying stock has decreased to or below the trigger price on any trading day from and including the pricing date to and including the determination date, your payment at maturity per RevCons will equal the stated principal amount of the RevCons in cash. This table represents the hypothetical payment at maturity and the total payment over the term of the RevCons (assuming a six-month term) on a $1,000 investment in the RevCons on the basis that the closing price of the hypothetical underlying stock has not decreased to or below the hypothetical trigger price of $75 on any trading day from and including the pricing date to and including the determination date.

Hypothetical underlying stock
closing price on
determination date

Value of cash delivery
amount at maturity per
RevCons

Total monthly coupon
payments per RevCons

Value of total
payment per
RevCons
$  76.00

$1,000

$70

 $1,070
$  80.00

$1,000

$70

 $1,070
$  90.00

$1,000

$70

 $1,070
$100.00

$1,000

$70

 $1,070
$120.00

$1,000

$70

 $1,070
$140.00

$1,000

$70

 $1,070

September 2009

Page 6

RevConsSM
Two RevConsSM Each Based on a Different Common Stock Due March 15, 2010

TABLE 2: This table represents the hypothetical payment at maturity and the total payment over the term of the RevCons (assuming a six-month term) on a $1,000 investment in the RevCons if the closing price of the hypothetical underlying stock has decreased to or below the hypothetical trigger price of $75 on any trading day from and including the pricing date to and including the determination date. In each of these examples, where the closing price of the hypothetical underlying stock on the determination date is less than the initial share price, the payment at maturity would be made by delivery of shares of the hypothetical underlying stock, or, at our option, the cash value of the hypothetical underlying stock as of the determination date. In each of these examples, where the closing price on the determination date is at or above the initial share price, the payment at maturity will equal the stated principal amount in cash.

Hypothetical underlying stock
closing price on
determination date

Value of shares of
hypothetical underlying
stock or cash delivered at
maturity per RevCons

Total monthly coupon
payments per RevCons

Value of total
payment per
RevCons
$    0.00 $       0 $70 $     70
$  25.00 $   250 $70 $   320
$  50.00 $   500 $70 $   570
$  75.00 $   750 $70 $   820
$  91.00 $   910 $70 $   980
$100.00 $1,000 $70 $1,070
$125.00 $1,000 $70 $1,070
$150.00 $1,000 $70 $1,070

Because the closing price of the underlying stock may be subject to significant fluctuation over the term of the RevCons, it is not possible to present a chart or table illustrating the complete range of possible payouts at maturity. The examples of the hypothetical payout calculations above are intended to illustrate how the amount payable to you at maturity will depend both on (a) whether the closing price of the underlying stock falls to or below the specified trigger price from and including the pricing date to and including the determination date and (b) the closing price of the underlying stock on the determination date.

September 2009

Page 7

RevConsSM
Two RevConsSM Each Based on a Different Common Stock Due March 15, 2010

Risk Factors

Each of the RevCons offered by these preliminary terms are financial instruments that are suitable only for investors who are capable of understanding the complexities and risks specific to the particular RevCons. Accordingly, investors should consult their own financial and legal advisers as to the risks entailed by an investment in the RevCons and the suitability of such RevCons in light of an investor’s particular circumstances.

The following is a non-exhaustive list of certain key risk factors for investors in the RevCons. For a complete list of risk factors, please see the accompanying prospectus supplement for RevCons and the accompanying prospectus.

Structure Specific Risk Factors

September 2009

Page 8

RevConsSM
Two RevConsSM Each Based on a Different Common Stock Due March 15, 2010

September 2009

Page 9

RevConsSM
Two RevConsSM Each Based on a Different Common Stock Due March 15, 2010

Other Risk Factors

For further discussion of these and other risks you should read the section entitled “Risk Factors” beginning on P-7 of the accompanying product supplement no. MS-5-A-I. We also urge you to consult your investment, legal, tax, accounting and other advisers before you invest in the RevCons.

September 2009

Page 10

RevConsSM
Two RevConsSM Each Based on a Different Common Stock Due March 15, 2010

Information about the Underlying Stocks

Each underlying stock is registered under the Securities Exchange Act of 1934, as amended. Information provided to or filed with the Securities and Exchange Commission by the issuer of each underlying stock pursuant to the Securities Exchange Act of 1934, as amended, can be located by reference to the Securities and Exchange Commission file number detailed below through the Securities and Exchange Commission’s website at http://www.sec.gov. In addition, information regarding the issuer of each underlying stock may be obtained from other sources including, but not limited to, press releases, newspaper articles and other publicly disseminated documents. See the section called “The Underlying Stock” in the accompanying product supplement no. MS-5-A-I

These preliminary terms relate only to the RevCons offered hereby and do not relate to any underlying stock or other securities of any issuer of underlying stock. We have derived all disclosures contained in these preliminary terms regarding each issuer of underlying stock from the publicly available documents described in the preceding paragraph. In connection with each offering of the RevCons, neither we nor the agent has participated in the preparation of such documents or made any due diligence inquiry with respect to any issuer of underlying stock. Neither we nor the agent makes any representation that such publicly available documents or any other publicly available information regarding any issuer of underlying stock is accurate or complete.

Neither we nor any of our affiliates makes any representation to you as to the performance of any underlying stock.

Chesapeake Energy Corporation

Chesapeake Energy Corporation is a producer of natural gas in the United States, whose strategy is focused on discovering, developing and acquiring conventional and unconventional natural gas reserves onshore in the U.S. Its SEC file number is 001-13726.

General Electric Company

General Electric Company is a diversified technology, media and financial services company with products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing and media content. Its SEC file number is 001-00035.

September 2009

Page 11

RevConsSM
Two RevConsSM Each Based on a Different Common Stock Due March 15, 2010

Historical Information

Historical Information. The following tables set forth the published high and low closing prices for each underlying stock for 2006, 2007, 2008 and 2009 through August 25, 2009. The associated graphs show the closing price for the underlying stock for each day in the same period. The issuer obtained the prices and other information below from Bloomberg Financial Markets, without independent verification. The prices and this other information may be adjusted by Bloomberg Financial Markets for corporate actions such as public offerings, mergers and acquisitions, spin-offs, delistings and bankruptcy. We make no representation or warranty as to the accuracy or completeness of the information obtained from Bloomberg Financial Markets. Since its inception, each underlying stock has experienced significant fluctuations. You should not take the historical prices of each underlying stock as an indication of future performance. We cannot assure you as to the closing prices of each underlying stock during the term of the relevant RevCons, or that the performance of the relevant underlying stock will result in the return of any of your initial investment.

Chesapeake Energy Corporation (CUSIP 48123L5B6)

High

Low

Dividends

2006

 

 

 

First Quarter

35.04

28.68

0.64%

Second Quarter

33.46

27.02

0.69%

Third Quarter

33.19

28.54

0.76%

Fourth Quarter

34.09

28.32

0.79%

2007

 

 

 

First Quarter

31.26

27.30

0.78%

Second Quarter

37.59

31.54

0.72%

Third Quarter

36.96

31.70

0.72%

Fourth Quarter

41.06

35.81

0.67%

2008

 

 

 

First Quarter

49.00

35.99

0.59%

Second Quarter

67.79

45.80

0.42%

Third Quarter

69.40

32.60

0.79%

Fourth Quarter

34.30

11.32

1.81%

2009

 

 

 

First Quarter

19.50

13.50

1.76%

Second Quarter

24.52

17.55

1.51%

Third Quarter (through August 25, 2009)

24.49

17.39

1.24%

The closing price of Chesapeake Energy Corporation on August 25, 2009 was $23.35.

We make no representation as to the amount of dividends, if any, that Chesapeake Energy Corporation may pay in the future. In any event, as an investor in the RevCons, you will not be entitled to receive dividends, if any, that may be payable on the stock of Chesapeake Energy Corporation.

Chesapeake Energy Corporation Stock
Closing Prices
January 1, 2006 to August 25, 2009


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General Electric Company (CUSIP 48123L5A8)

High

Low

Dividends

2006

 

 

 

First Quarter

35.48

32.31

2.70%

Second Quarter

35.16

32.88

2.94%

Third Quarter

35.48

32.11

2.83%

Fourth Quarter

38.15

34.71

2.77%

2007

 

 

 

First Quarter

38.11

34.09

3.00%

Second Quarter

39.29

34.76

2.85%

Third Quarter

41.77

36.90

2.71%

Fourth Quarter

42.12

36.25

3.10%

2008

 

 

 

First Quarter

37.49

31.70

3.19%

Second Quarter

38.43

26.26

4.53%

Third Quarter

29.95

23.10

4.86%

Fourth Quarter

24.50

12.84

7.65%

2009

 

 

 

First Quarter

17.07

6.66

12.27%

Second Quarter

14.53

10.17

8.79%

Third Quarter (through August 25, 2009)

14.70

10.71

7.25%

The closing price of General Electric Company on August 25, 2009 was $14.30.

We make no representation as to the amount of dividends, if any, that General Electric Company may pay in the future. In any event, as an investor in the RevCons, you will not be entitled to receive dividends, if any, that may be payable on the stock of General Electric Company

General Electric Company Stock
Closing Prices
January 1, 2006 to August 25, 2009


September 2009

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Supplemental Plan of Distribution

Subject to regulatory constraints, JPMSI intends to use its reasonable efforts to offer to purchase the RevCons in the secondary market, but is not required to do so.

We or our affiliate may enter into swap agreements or related hedge transactions with one of our other affiliates or unaffiliated counterparties in connection with the sale of the RevCons and JPMSI and/or an affiliate may earn additional income as a result of payments pursuant to the swap or related hedge transactions. See “Use of Proceeds” beginning on page PS-16 of the accompanying product supplement no. MS-5-A-I.

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RevConsSM
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Where You Can Find More Information

You may revoke your offer to purchase the RevCons 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 RevCons prior to their issuance. In the event of any changes to the terms of the RevCons, 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.

You should read this document together with the prospectus dated November 21, 2008, as supplemented by the prospectus supplement dated November 21, 2008 relating to our Series E medium-term notes of which these RevCons are a part, and the more detailed information contained in product supplement no. MS-5-A-I dated August 20, 2009.

This document, together with the documents listed below, contains the terms of the RevCons 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, stand-alone 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. MS-5-A-I, as the RevCons 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 RevCons.

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 document, the “Company,” “we,” “us,” or “our” refers to JPMorgan Chase & Co.

“RevConsSM” is a service mark of Morgan Stanley.

September 2009

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