Term
sheet
To
prospectus dated December 1, 2005,
prospectus
supplement dated December 1, 2005 and
product
supplement no. 18-I dated March 16, 2006
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Term
Sheet No. 83 to
Product
Supplement No. 18-I
Registration
Statement No. 333-130051
Dated
February 12, 2008; Rule
433
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Structured
Investments
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JPMorgan
Chase & Co.
$
Buffered
Return Enhanced Notes Linked to the S&P 500® Index due
March 6, 2009
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·
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The
notes are
designed for investors who seek a return of twice the appreciation
of the
S&P 500® Index
up to a
maximum total return on the notes of 15.70%* at maturity. Investors
should
be willing to forgo interest and dividend payments and, if the
Index
declines by more than 10%, be willing to lose some or all of their
principal.
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·
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Senior
unsecured obligations of JPMorgan Chase & Co. maturing March 6,
2009†.
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·
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Minimum
denominations of $50,000 and integral multiples of $1,000 in excess
thereof.
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·
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The
notes are
expected to price on or about February 15, 2008††
and are
expected to settle on or about February 21,
2008.
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Index:
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The
S&P 500® Index
(the “Index”)
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Upside
Leverage Factor:
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2
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Payment
at
Maturity:
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If
the Ending
Index Level is greater than the Initial Index Level, you will receive
a
cash payment that provides you with a return per $1,000 principal
amount
note equal to the Index Return multiplied by two, subject to a Maximum
Total Return on the notes of 15.70%*. For example, if the Index Return
is
more than 7.85%, you will receive the Maximum Total Return on the
notes of
15.70%*, which entitles you to a maximum payment at maturity of $1,157
for
every $1,000 principal amount note that you hold. Accordingly, if
the
Index Return is positive, your payment per $1,000 principal amount
note
will be calculated as follows, subject to the Maximum Total
Return:
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$1,000
+[$1,000 x (Index Return x 2)]
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*The
actual
Maximum Total Return on the notes will be set on the pricing date
and will
not be less than 15.70%.
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Your
principal is protected against up to a 10% decline of the Index at
maturity. If the Ending Index Level declines from the Initial Index
Level
by up to 10%, you will receive the principal amount of your notes
at
maturity.
If
the Ending
Index Level declines from the Initial Index 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 final payment per $1,000 principal
amount note will be calculated as follows:
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$1,000
+
[$1,000 x (Index Return + 10%) x 1.1111]
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You
will
lose some or all of your investment at maturity if the Ending Index
Level
declines from the Initial Index Level by more than
10%.
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Buffer
Amount:
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10%
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Downside
Leverage Factor:
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1.1111
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Index
Return:
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The
performance of the Index from the Initial Index Level to the Ending
Index
Level, calculated as follows:
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Ending
Index Level - Initial Index Level
Initial
Index
Level
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Initial
Index
Level:
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The
Index
closing level on the pricing date.
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Ending
Index
Level:
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The
arithmetic average of the Index closing levels on each of the five
Averaging Dates.
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Averaging
Dates†:
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February
25,
2009, February 26, 2009, February 27, 2009, March 2, 2009 and March
3,
2009
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Maturity
Date†:
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March
6,
2009
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CUSIP:
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†
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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. 18-I.
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††
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The
pricing
of the notes is subject to our special tax counsel delivering
to us their
opinion as described under “Selected Purchase Considerations — Capital
Gains Tax Treatment.”
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Price
to
Public
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Fees
and
Commissions (1)
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Proceeds
to
Us
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Per
note
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$
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$
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$
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Total
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$
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$
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$
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·
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Product
supplement no. 18-I dated March 16, 2006:
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·
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Prospectus
supplement dated December 1, 2005:
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·
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Prospectus
dated December 1, 2005:
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Ending
Index Level
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Index
Return
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Total
Return
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2430.000
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80.00%
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15.70%
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2227.500
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65.00%
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15.70%
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2025.000
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50.00%
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15.70%
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1890.000
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40.00%
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15.70%
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1755.000
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30.00%
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15.70%
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1620.000
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20.00%
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15.70%
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1552.500
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15.00%
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15.70%
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1485.000
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10.00%
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15.70%
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1455.975
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7.85%
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15.70%
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1417.500
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5.00%
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10.00%
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1383.750
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2.50%
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5.00%
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1363.500
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1.00%
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2.00%
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1350.000
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0.00%
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0.00%
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1282.500
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-5.00%
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0.00%
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1215.000
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-10.00%
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0.00%
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1080.000
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-20.00%
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-11.11%
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945.000
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-30.00%
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-22.22%
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810.000
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-40.00%
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-33.33%
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675.000
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-50.00%
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-44.44%
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540.000
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-60.00%
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-55.56%
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405.000
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-70.00%
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-66.67%
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270.000
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-80.00%
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-77.78%
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135.000
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-90.00%
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-88.89%
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0.000
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-100.00%
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-100.00%
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·
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APPRECIATION
POTENTIAL —
The
notes
provide the opportunity to enhance equity returns by multiplying
a
positive Index Return by two, up to the Maximum Total Return on the
notes
of 15.70%, or $1,157 for every $1,000 principal amount note. The
actual
Maximum Total Return on the notes will be set on the pricing date
and will
not be less than 15.70%. Because the notes are our senior unsecured
obligations, payment of any amount at maturity is subject to our
ability
to pay our obligations as they become due.
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·
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LIMITED
PROTECTION AGAINST LOSS —
Payment
at
maturity of the principal amount of the notes is protected against
a
decline in the Ending Index Level, as compared to the Initial Index
Level,
of up to 10%. If the Ending Index Level declines by more than 10%,
for
every 1% decline of the Index beyond 10%, you will lose an amount
equal to
1.1111% of the principal amount of your notes.
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·
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DIVERSIFICATION
OF THE S&P 500®
INDEX —
The return on the notes is linked to the S&P 500®
Index. The S&P 500®
Index consists of 500 component stocks selected to provide a performance
benchmark for the U.S. equity markets. For additional information
about
the Index, see the information set forth under “The S&P
500®
Index” in the accompanying product supplement no. 18-I.
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·
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CAPITAL
GAINS TAX TREATMENT — You
should review carefully the section entitled “Certain U.S. Federal Income
Tax Consequences” in the accompanying product supplement no. 18-I. The
pricing of the notes is subject to delivery of an opinion of our
special
tax counsel, Davis Polk & Wardwell, that it is reasonable to treat
your purchase and ownership of the notes as an “open transaction” for U.S.
federal income tax purposes. The opinion will be subject to the
limitations described in the section entitled “Certain U.S. Federal Income
Tax Consequences” in the accompanying product supplement no. 18-I and will
be based on certain factual representations to be received from us
on or
prior to the pricing date. Assuming this characterization is respected,
your gain or loss on the notes should be treated as long-term capital
gain
or loss if you hold the notes for more than a year, whether or not
you are
an initial purchaser of notes at the issue price. However, the Internal
Revenue Service (the “IRS”) or a court may not respect this
characterization or treatment of the notes, 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,
such as the notes. The notice focuses in particular on whether to
require
holders of these instruments to accrue income over the term of their
investment. It also asks for comments on a number of related topics,
including the character of income or loss with respect to these
instruments; the relevance of factors such as the nature of the underlying
property to which the instruments are linked; the degree, if any,
to which
income (including any mandated accruals) realized by Non-U.S. Holders
should be subject to withholding tax; and whether these instruments
are or
should be subject to the “constructive ownership” regime, which very
generally can operate to recharacterize certain long-term capital
gain as
ordinary income that is subject to an interest charge. While the
notice
requests comments on appropriate transition rules and effective dates,
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. Both
U.S. and Non-U.S. Holders
should consult their
tax advisers
regarding the U.S.
federal income tax consequences of an investment in
the notes, including possible alternative treatments
and the issues
presented by
this notice.
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·
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YOUR
INVESTMENT IN THE NOTES MAY RESULT IN A LOSS —
The
notes
do not guarantee any return of principal. The return on the notes
at
maturity is linked to the performance of the Index and will depend
on
whether, and the extent to which, the Index Return is positive or
negative. Your investment will be exposed on a leveraged basis to
any
decline in the Ending Index Level beyond the 10% buffer as compared
to the
Initial Index Level.
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·
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YOUR
MAXIMUM GAIN ON THE NOTES IS LIMITED TO THE MAXIMUM TOTAL
RETURN —
If
the
Ending Index Level is greater than the Initial Index Level, for each
$1,000 principal amount note, you will receive at maturity $1,000
plus an
additional amount that will not exceed a predetermined percentage
of the
principal amount, regardless of the appreciation in the Index, which
may
be significant. We refer to this percentage as the Maximum Total
Return,
which will be set on the pricing date and will not be less than
15.70%.
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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,
the
price, if any, at which J.P. Morgan Securities Inc., which we refer
to as
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. The notes are not designed to be short-term
trading instruments. Accordingly, you should be able and willing
to hold
your notes to maturity.
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NO
INTEREST OR DIVIDEND PAYMENTS OR VOTING RIGHTS —
As
a holder
of the notes, you will not receive interest payments, and you will
not
have voting rights or rights to receive cash dividends or other
distributions or other rights that holders of securities composing
the
Index would have.
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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.
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·
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POTENTIAL
CONFLICTS —
We
and our
affiliates play a variety of roles in connection with the issuance
of the
notes, including acting as calculation agent and hedging our obligations
under the notes. 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.
In addition,
we are currently one of the companies that make up the Index. We
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 Index
and
the notes.
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·
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MANY
ECONOMIC AND MARKET FACTORS WILL IMPACT THE VALUE OF THE
NOTES —
In
addition
to the level of the Index on any 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, including:
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·
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the
expected
volatility of the Index;
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the
time to
maturity of the notes;
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·
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the
dividend
rate on the common stocks underlying the
Index;
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interest
and
yield rates in the market
generally;
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a
variety of
economic, financial, political, regulatory or judicial events; and
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our
creditworthiness, including actual or anticipated downgrades in our
credit
ratings.
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THE
OFFERING OF THE NOTES MAY BE TERMINATED BEFORE PRICING
—
This
term
sheet has not been reviewed by our special tax counsel, Davis Polk
&
Wardwell, and the pricing of the offering of the notes is subject
to
delivery by them of an opinion regarding the tax treatment of the
notes as
described under “Selected Purchase Considerations — Capital Gains Tax
Treatment” above. If our special tax counsel does not deliver this opinion
prior to pricing, the offering of the notes will be terminated.
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