September 2009 |
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Preliminary Terms No. 13 |
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Registration Statement No. 333-155535 |
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Dated August 25, 2009 |
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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 investors 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 |
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Issuer: |
JPMorgan Chase & Co. |
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Stated principal amount: |
$1,000 per RevCons |
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Issue price: |
$1,000 per RevCons (see Commissions and Issue Price below) |
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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. |
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Trigger event: |
Closing price trigger event |
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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. |
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Determination date: |
The determination date for each RevCons is three business days before the maturity date of that RevCons. |
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Exchange ratio: |
For each RevCons, the stated principal amount divided by the initial share price, subject to adjustments for corporate events. |
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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. |
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Coupon: |
Payable monthly at the specified interest rate on the 15th calendar day of each month, beginning October 15, 2009, subject to postponement. |
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Pricing date: |
September 9, 2009 |
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Original issue date: |
September 14, 2009 |
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Listing: |
The RevCons will not be listed on any securities exchange. |
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Agent: |
J.P. Morgan Securities Inc. (JPMSI) |
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SPECIFIC TERMS FOR EACH REVCONS |
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Underlying stock: |
Chesapeake Energy Corporation (CHK) |
General Electric Company (GE) |
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Maturity date: |
March 15, 2010 |
March 15, 2010 |
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Interest rate: |
18% - 22% per annum |
14% - 18% per annum |
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Trigger level: |
75% |
75% |
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Determination date: |
March 10, 2010 |
March 10, 2010 |
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CUSIP: |
48123L5B6 |
48123L5A8 |
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ISIN: |
US48123L5B61 |
US48123L5A88 |
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Initial share price: |
$ |
$ |
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Trigger price: |
$ |
$ |
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Exchange ratio: |
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|
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Aggregate principal amount: |
$ |
$ |
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Commissions and Issue Price: |
Per CHK RevCons |
Total |
Per GE RevCons |
Total |
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Price to public(1)(2) |
$1,000 |
$ |
$1,000 |
$ |
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Agents 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 agents 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 Corporations 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.
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 |
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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. |
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Information as of market close on August 24, 2009 |
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Bloomberg Ticker Symbol: | CHK | 52 Weeks ago: | $48.00 |
Current Stock Price: | $23.94 | 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 |
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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. |
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Information as of market close on August 24, 2009 |
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Bloomberg Ticker Symbol: | GE | 52 Weeks ago: | $28.32 |
Current Stock Price: | $14.20 | 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 Commissions 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 |
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 |
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Best Case |
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Worst Case |
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Summary of Selected Key Risks (see page 8)
September 2009 |
Page 3 |
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 |
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Pricing date: |
Original issue date (settlement date): |
Maturity date: |
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September 9, 2009 |
September 14, 2009 |
March 15, 2010 |
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Key Terms Applicable to All RevCons |
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Issuer: |
JPMorgan Chase & Co. |
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Issue price: |
$1,000 per RevCons (see Syndicate Information on page 5) |
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Stated principal amount: |
$1,000 per RevCons |
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Denominations: |
$1,000 and integral multiples thereof |
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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. |
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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. |
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Determination date: |
The determination date for each RevCons is three business days before the maturity date of that RevCons, subject to postponement. |
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Exchange ratio: |
For each RevCons, the stated principal amount divided by the initial share price, subject to adjustments for corporate events. |
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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. |
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Coupon: |
Payable monthly at the specified interest rate on the 15th calendar day of each month, beginning October 15, 2009, subject to postponement. |
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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. |
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Trigger event: |
Closing price trigger event |
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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. |
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Specific Terms for Each RevCons |
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Underlying stock: |
Chesapeake Energy Corporation (CHK) |
General Electric Company (GE) |
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Maturity date: |
March 15, 2010 |
March 15, 2010 |
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Interest rate: |
18% - 22% per annum |
14% - 18% per annum |
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Trigger level: |
75% |
75% |
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Determination date: |
March 10, 2010 |
March 10, 2010 |
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CUSIP: |
48123L5B6 |
48123L5A8 |
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ISIN: |
US48123L5B61 |
US48123L5A88 |
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Initial share price: |
$ |
$ |
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Trigger price: |
$ |
$ |
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Exchange ratio: |
|
|
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Aggregate principal amount: |
$ |
$ |
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Risk factors: |
Please see Risk Factors beginning on page 8. |
September 2009 |
Page 4 |
General Information |
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Listing: |
The RevCons will not be listed on any securities exchange. |
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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 24, 2009, we would have treated approximately 3.89% of each coupon payment as interest on the Deposit and approximately 96.11% as Put Premium. If the RevCons based on the common stock of General Electric Company had priced on August 24, 2009, we would have treated 5.00% of each coupon payment as interest on the Deposit and approximately 95.00% 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. |
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Trustee: |
Deutsche Bank Trust Company Americas (formerly Bankers Trust Company) |
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Calculation agent: |
J.P. Morgan Securities Inc. (JPMSI) |
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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. |
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Benefit plan investor considerations: |
See Benefit Plan Investor
Considerations in the accompanying product supplement no. |
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Contact: |
Morgan Stanley Smith Barney clients may contact their local Morgan Stanley Smith Barney branch office or Morgan Stanley Smith Barneys principal executive offices at 2000 Westchester Avenue, Purchase, New York 10577 (telephone number (800) 869-3326). |
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Syndicate Information |
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Issue price of the RevCons |
Commissions |
Principal amount of |
|
$1,000 |
$20.00 |
<$1MM |
|
$997.50 |
$17.50 |
≥$1MM and <$3MM |
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$996.25 |
$16.25 |
≥$3MM and <$5MM |
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$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 |
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:
|
$1,000 |
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$100 (the closing price of one share of the hypothetical underlying stock on the pricing date) |
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10 (the $1,000 stated principal amount per RevCons divided by the initial share price) |
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$75 (75% of the initial share price) |
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16% |
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 |
Value of cash delivery
|
Total monthly coupon
|
Value of total |
$ 76.00 |
$1,000 |
$80 |
$1,080 |
$ 80.00 |
$1,000 |
$80 |
$1,080 |
$ 90.00 |
$1,000 |
$80 |
$1,080 |
$100.00 |
$1,000 |
$80 |
$1,080 |
$120.00 |
$1,000 |
$80 |
$1,080 |
$140.00 |
$1,000 |
$80 |
$1,080 |
September 2009 |
Page 6 |
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 |
Value of shares of
|
Total monthly coupon
|
Value of total |
$ 0.00 | $ 0 | $80 | $ 80 |
$ 25.00 | $ 250 | $80 | $ 330 |
$ 50.00 | $ 500 | $80 | $ 580 |
$ 75.00 | $ 750 | $80 | $ 830 |
$ 91.00 | $ 910 | $80 | $ 990 |
$100.00 | $1,000 | $80 | $1,080 |
$125.00 | $1,000 | $80 | $1,080 |
$150.00 | $1,000 | $80 | $1,080 |
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 |
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 investors 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 |
September 2009 |
Page 9 |
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 |
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 Commissions 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 |
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 24, 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 24, 2009) |
24.49 |
17.39 |
1.24% |
The closing price of Chesapeake Energy Corporation on August 24, 2009 was $23.94.
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 |
|
September 2009 |
Page 12 |
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 24, 2009) |
14.70 |
10.71 |
7.25% |
The closing price of General Electric Company on August 24, 2009 was $14.20.
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 |
|
September 2009 |
Page 13 |
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.
September 2009 |
Page 14 |
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 |
Page 15 |