|
Term sheet |
Term Sheet to |
|
Structured |
$ Return Enhanced Notes Linked to an Equally Weighted Basket of 3 Reference Stocks due May 19, 2011 |
||
General
- The notes are designed for investors who seek a return of two times the appreciation of an equally weighted basket of 3 common stocks up to a maximum total return on the notes of at least 23.60%* at maturity. Investors should be willing to forgo interest and dividend payments and, if the Basket declines, be willing to lose some or all of their principal. Any payment on the notes is subject to the credit risk of JPMorgan Chase & Co.
- Senior unsecured obligations of JPMorgan Chase & Co. maturing May 19, 2011†
- Minimum denominations of $10,000 and integral multiples of $1,000 in excess thereof
- The notes are expected to price on or about April 30, 2010 and are expected to settle on or about May 5, 2010.
Key Terms
|
Basket: |
The Basket consists of 3 common stocks (each, a “Reference Stock” and collectively, the “Reference Stocks”). The issuers of the Reference Stocks and the Bloomberg ticker symbol, the relevant exchange on which it is listed, the Stock Weighting and the Initial Share Price of each Reference Stock are set forth under “The Basket” on page TS-1 of this term sheet. |
|
Upside Leverage Factor: |
2 |
|
Payment at Maturity: |
If the Ending Basket Level is greater than the Starting Basket Level, you will receive a cash payment that provides you with a return per $1,000 principal amount note equal to the Basket Return multiplied by two, subject to the Maximum Total Return on the notes of at least 23.60%*. For example, assuming the Maximum Total Return is 23.60%*, if the Basket Return is more than 11.80%, you will receive the Maximum Total Return on the notes of 23.60%*, which entitles you to a maximum payment at maturity of $1,236 for every $1,000 principal amount note that you hold. Accordingly, if the Basket Return is positive, your payment at maturity per $1,000 principal amount note will be calculated as follows, subject to the Maximum Total Return: $1,000 + ($1,000 x Basket Return x 2) *The actual Maximum Total Return on the notes and the actual maximum payment at maturity will be set on the pricing date and will not be less than 23.60% and $1,236 per $1,000 principal amount note, respectively. |
|
|
Your investment will be fully exposed to any decline in the Basket. If the Ending Basket Level declines from the Starting Basket Level, you will lose 1% of the principal amount of your notes for every 1% that the Basket declines beyond the Starting Basket Level. Accordingly, if the Basket Return is negative, your payment at maturity per $1,000 principal amount note will be calculated as follows: |
|
|
$1,000 + ($1,000 x Basket Return) |
|
|
You will lose some or all of your investment at maturity if the Ending Basket Level declines from the Starting Basket Level. |
|
Basket Return: |
Ending Basket Level – Starting
Basket Level |
|
Starting Basket Level: |
Set equal to 100 on the pricing date |
|
Ending Basket Level: |
The Basket Closing Level on the Observation Date |
|
Basket Closing Level: |
The Basket Closing Level on the Observation Date will be calculated as follows: 100 x [1 + the sum of the Stock Returns of each Reference Stock on the Observation Date x (1/3)] |
|
Stock Return: |
Final
Share Price – Initial Share Price |
|
Initial Share Price: |
With respect to each Reference Stock, the closing price of one share of such Reference Stock on the pricing date |
|
Final Share Price: |
With respect to each Reference Stock, the closing price of one share of such Reference Stock on the Observation Date times the Stock Adjustment Factor for such Reference Stock on the Observation Date |
|
Stock Adjustment Factor: |
With respect to each Reference Stock, 1.0 on the pricing date and subject to adjustment under certain circumstances. See “Description of Notes — Payment at Maturity” and “General Terms of Notes — Anti-Dilution Adjustments” in the accompanying product supplement no. 133-A-II for further information. |
|
Observation Date†: |
May 16, 2011 |
|
Maturity Date†: |
May 19, 2011 |
|
CUSIP: |
48124ANR4 |
|
† |
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. 133-A-II |
Investing in the Return Enhanced Notes involves a number of risks. See “Risk Factors” beginning on page PS-9 of the accompanying product supplement no. 133-A-II and “Selected Risk Considerations” beginning on page TS-3 of this term sheet.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the notes or passed upon the accuracy or the adequacy of this term sheet or the accompanying prospectus supplement and prospectus. Any representation to the contrary is a criminal offense.
|
|
|||
|
|
Price to Public (1) |
Fees and Commissions (2) |
Proceeds to Us |
|
|
|||
|
Per note |
$ |
$ |
$ |
|
|
|||
|
Total |
$ |
$ |
$ |
|
|
|||
| (1) |
The price to the public includes the cost of hedging our obligations under the notes through one or more of our affiliates, which includes our affiliates’ expected cost of providing such hedge as well as the profit our affiliates expect to realize in consideration for assuming the risks inherent in providing such hedge. For additional related information, please see “Use of Proceeds” beginning on page PS-20 of the accompanying product supplement no. 133-A-II. |
| (2) |
Please see “Supplemental Plan of Distribution (Conflicts of Interest)” in this term sheet for information about fees and commissions. |
The agent for this offering, J.P. Morgan Securities Inc., which we refer to as JPMSI, is an affiliate or ours. See “Supplement Plan of Distribution (Conflicts of Interest)” in this term sheet.
The notes 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.
April 28, 2010
Additional Terms Specific to the Notes
JPMorgan Chase & Co. has filed a registration statement (including a prospectus) with the Securities and Exchange Commission, or SEC, for the offering to which this term sheet relates. Before you invest, you should read the prospectus in that registration statement and the other documents relating to this offering that JPMorgan Chase & Co. has filed with the SEC for more complete information about JPMorgan Chase & Co. and this offering. You may get these documents without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, JPMorgan Chase & Co., any agent or any dealer participating in this offering will arrange to send you the prospectus, the prospectus supplement, product supplement no. 133-A-II and this term sheet if you so request by calling toll-free 866-535-9248.
You may revoke your offer to purchase the notes at any time prior to the time at which we accept such offer by notifying the applicable agent. We reserve the right to change the terms of, or reject any offer to purchase, the notes prior to their issuance. In the event of any changes to the terms of the notes, we will notify you and you will be asked to accept such changes in connection with your purchase. You may also choose to reject such changes in which case we may reject your offer to purchase.
You should read this term sheet 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 notes are a part, and the more detailed information contained in product supplement no. 133-A-II dated May 4, 2009. This term sheet, together with the documents listed below, contains the terms of the notes and supersedes all other prior or contemporaneous oral statements as well as any other written materials including preliminary or indicative pricing terms, correspondence, trade ideas, structures for implementation, sample structures, fact sheets, brochures or other educational materials of ours. You should carefully consider, among other things, the matters set forth in “Risk Factors” in the accompanying product supplement no. 133-A-II, as the notes involve risks not associated with conventional debt securities. We urge you to consult your investment, legal, tax, accounting and other advisers before you invest in the notes.
You may access these documents on the SEC website at www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date on the SEC website):
-
Product supplement no. 133-A-II dated May 4, 2009:
http://www.sec.gov/Archives/edgar/data/19617/000089109209001800/e35260_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
Our Central Index Key, or CIK, on the SEC website is 19617. As used in this term sheet, the “Company, ” “we,” “us” or “our” refers to JPMorgan Chase & Co.
The Basket
The issuers of the Reference Stocks and the Bloomberg ticker symbol, the relevant exchange on which it is listed and the Stock Weighting of each Reference Stock are set forth below:
|
Ticker Symbol |
Reference Stock Issuer |
Exchange |
Stock |
Initial |
|
|
||||
|
BYI |
Bally Technologies, Inc. |
NYSE |
1/3 |
|
|
IGT |
International Game Technology |
NYSE |
1/3 |
|
|
WMS |
WMS Industries Inc. |
NYSE |
1/3 |
|
**The Initial Share Price of each Reference Stock will be determined on the pricing date.
|
|
|
|
JPMorgan
Structured Investments — |
TS-1 |
What Is the Total Return on the Notes at Maturity Assuming a Range of Performances for the Basket?
The following table and examples illustrate the hypothetical total return at maturity on the notes. The “total return” as used in this term sheet is the number, expressed as a percentage, that results from comparing the payment at maturity per $1,000 principal amount note to $1,000. The hypothetical total returns set forth below assume a Maximum Total Return on the notes of 23.60%. The hypothetical total returns set forth below are for illustrative purposes only and may not be the actual total returns applicable to a purchaser of the notes. The numbers appearing in the following table and examples have been rounded for ease of analysis.
|
|
||
|
Ending Basket |
Basket Return |
Total Return |
|
|
||
|
180.00 |
80.00% |
23.60% |
|
165.00 |
65.00% |
23.60% |
|
150.00 |
50.00% |
23.60% |
|
140.00 |
40.00% |
23.60% |
|
130.00 |
30.00% |
23.60% |
|
120.00 |
20.00% |
23.60% |
|
111.80 |
11.80% |
23.60% |
|
110.00 |
10.00% |
20.00% |
|
105.00 |
5.00% |
10.00% |
|
102.50 |
2.50% |
5.00% |
|
100.00 |
0.00% |
0.00% |
|
95.00 |
-5.00% |
-5.00% |
|
90.00 |
-10.00% |
-10.00% |
|
80.00 |
-20.00% |
-20.00% |
|
70.00 |
-30.00% |
-30.00% |
|
60.00 |
-40.00% |
-40.00% |
|
50.00 |
-50.00% |
-50.00% |
|
40.00 |
-60.00% |
-60.00% |
|
30.00 |
-70.00% |
-70.00% |
|
20.00 |
-80.00% |
-80.00% |
|
10.00 |
-90.00% |
-90.00% |
|
0.00 |
-100.00% |
-100.00% |
|
|
||
Hypothetical Examples of Amounts Payable at Maturity
The following examples illustrate how the total returns set forth in the table above are calculated.
Example 1: The level of the Basket increases from the Starting Basket Level of 100 to an Ending Basket Level of 105. Because the Ending Basket Level of 105 is greater than the Starting Basket Level of 100 and the Basket Return of 5% multiplied by 2 does not exceed the hypothetical Maximum Total Return of 23.60%, the investor receives a payment at maturity of $1,100 per $1,000 principal amount note, calculated as follows:
$1,000 + ($1,000 x 5% x 2) = $1,100
Example 2: The level of the Basket increases from the Starting Basket Level of 100 to an Ending Basket Level of 120. Because the Ending Basket Level of 120 is greater than the Starting Basket Level of 100 and the Basket Return of 20% multiplied by 2 exceeds the hypothetical Maximum Total Return of 23.60%, the investor receives a payment at maturity of $1,236 per $1,000 principal amount note, the maximum payment on the notes.
Example 3: The level of the Basket decreases from the Starting Basket Level of 100 to an Ending Basket Level of 80. Because the Basket Return is negative and the Ending Basket Level of 80 is less than the Starting Basket Level of 100, the investor receives a payment at maturity of $800 per $1,000 principal amount note, calculated as follows:
$1,000 + ($1,000 x -20%) = $800
|
|
|
|
JPMorgan
Structured Investments — |
TS-2 |
Selected Purchase Considerations
- APPRECIATION POTENTIAL — The notes provide the opportunity to enhance equity returns by multiplying a positive Basket Return by two, up to the Maximum Total Return on the notes. The actual Maximum Total Return on the notes will be set on the pricing date and will not be less than 23.60%, and accordingly, the actual maximum payment at maturity will not be less than $1,236 per $1,000 principal amount note. 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.
- RETURN LINKED TO AN EQUALLY WEIGHTED BASKET OF 3 REFERENCE STOCKS — The return on the notes is linked to the performance of an equally weighted Basket, which consists of 3 Reference Stocks. These Reference Stocks are the common stocks of Bally Technologies, Inc., International Game Technology and WMS Industries Inc.
- CAPITAL GAINS TAX TREATMENT — You should review carefully the
section entitled “Certain U.S. Federal Income Tax Consequences” in the
accompanying product supplement no. 133-A-II. Subject to the limitations
described therein, and based on certain factual representations received from
us, in the opinion of our special tax counsel, Davis Polk & Wardwell LLP, it
is reasonable to treat the notes as “open transactions” for U.S. federal income tax purposes. Assuming this characterization is respected, the gain or
loss on your notes should be treated as long-term capital gain or loss if you
hold your 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, in 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 and impose 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. 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.
The discussion in the preceding paragraph, when read in combination with the section entitled “Certain U.S. Federal Income Tax Consequences” in the accompanying product supplement, constitutes the full opinion of Davis Polk & Wardwell LLP regarding the material U.S. federal income tax consequences of owning and disposing of notes.
Selected Risk Considerations
An investment in the notes involves significant risks. Investing in the notes is not equivalent to investing directly in the Reference Stocks. These risks are explained in more detail in the “Risk Factors” section of the accompanying product supplement no. 133-A-II dated May 4, 2009.
- 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 Basket and will depend on whether, and the extent to which, the Basket Return is positive or negative. Your investment will be fully exposed to any decline in the Ending Basket Level, as compared to the Starting Basket Level.
- YOUR MAXIMUM GAIN ON THE NOTES IS LIMITED TO THE MAXIMUM TOTAL RETURN — If the Ending Basket Level is greater than the Starting Basket 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 Basket, 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 23.60%.
- CREDIT RISK OF JPMORGAN CHASE & CO. — The notes are subject to the credit risk of JPMorgan Chase & Co. and our credit ratings and credit spreads may adversely affect the market value of the notes. Investors are dependent on JPMorgan Chase & Co.’s ability to pay all amounts due on the notes at maturity, and therefore investors are subject to our credit risk and to changes in the market’s view of our creditworthiness. Any decline in our credit ratings or increase in the credit spreads charged by the market for taking our credit risk is likely to adversely affect the value of the notes.
|
|
|
|
JPMorgan
Structured Investments — |
TS-3 |
- CERTAIN BUILT-IN COSTS ARE LIKELY TO AFFECT ADVERSELY THE VALUE OF THE NOTES PRIOR TO MATURITY — While the payment at maturity, if any, 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 estimated cost of hedging our obligations under the notes. As a result, the price, if any, at which JPMSI will be willing to purchase notes from you in secondary market transactions, if at all, will likely be lower than the original issue price, and any sale prior to the maturity date could result in a substantial loss to you. The notes are not designed to be short-term trading instruments. Accordingly, you should be able and willing to hold your notes to maturity.
- CORRELATION (OR LACK OF CORRELATION) OF THE REFERENCE STOCKS — The notes are linked to a weighted Basket consisting of 3 Reference Stocks. Price movements and performances in the Reference Stocks may or may not be correlated with each other. At a time when the value of one or more of the Reference Stocks increases, the value of the other Reference Stocks may not increase as much or may even decline. Therefore, in calculating the Ending Basket Level, increases in the value of one or more of the Reference Stocks may be moderated, or more than offset, by the lesser increases or declines in the level of the other Reference Stocks. There can be no assurance that the Ending Basket Level will be higher than the Starting Basket Level. You may lose some or all of your investment in the notes if the Ending Basket Level is less than the Starting Basket Level.
- THE REFERENCE STOCKS ARE CONCENTRATED IN THE GAMING INDUSTRY
— Each Reference Stock has been
issued by a company whose primary line of business is directly associated with
the gaming industry. Because the value of the notes is determined by the
performance of each of the Reference Stocks, an investment in these notes will
be concentrated in this industry. As a result, the value of the notes may be
subject to greater volatility and be more adversely affected by a single
positive or negative economic, political or regulatory occurrence affecting
this industry than a different investment linked to securities of a more
broadly diversified group of issuers.
In addition, the gaming industry is significantly affected by a number of factors that may either offset or magnify each other, including:- changing economic conditions domestically and worldwide;
- consumer discretionary spending;
- industry competition;
- industry consolidation;
- product innovation;
- political environment and market opinion on gaming;
- intellectual property protection;
- domestic and foreign governmental regulations; and
- risks of international operations.
These or other factors or the absence of such factors
could cause a downturn in the gaming industry generally or regionally and could
cause the value of some or all of the Reference Stocks to decline during the
term of the notes.
- NO OWNERSHIP RIGHTS IN THE REFERENCE STOCKS — As a holder of the notes, you will not have any ownership interest or rights in any of the Reference Stocks, such as voting rights or dividend payments. In addition, the issuers of the Reference Stocks 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 relevant Reference Stocks and the notes.
- NO AFFILIATION WITH THE REFERENCE STOCK ISSUERS — We are not affiliated with the issuers of the Reference Stocks. We assume no responsibility for the adequacy of the information about the Reference Stock issuers contained in this term sheet. You should make your own investigation into the Reference Stocks and their issuers. We are not responsible for the Reference Stock issuers’ public disclosure of information, whether contained in SEC filings or otherwise.
- 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.
|
|
|
|
JPMorgan
Structured Investments — |
TS-4 |
- POTENTIAL CONFLICTS — We and our affiliates play a variety of roles in connection with the issuance of the notes, including acting as calculation agent. In performing these duties, the economic interests of the calculation agent and other affiliates of ours are potentially adverse to your interests as an investor in the notes. We and/or our affiliates may also currently or from time to time engage in business with the Reference Stock issuers, including extending loans to, or making equity investments in, such Reference Stock issuers or providing advisory services to such Reference Stock issuers. In addition, one or more of our affiliates may publish research reports or otherwise express opinions with respect to the Reference Stock issuers and these reports may or may not recommend that investors buy or hold the Reference Stocks. As a prospective purchaser of the notes, you should undertake an independent investigation of the applicable Reference Stock issuer that in your judgment is appropriate to make an informed decision with respect to an investment in the notes.
- HEDGING AND TRADING IN THE REFERENCE STOCKS — While the notes are outstanding, we or any of our affiliates may carry out hedging activities related to the notes, including in the Reference Stocks or instruments related to one or more of the Reference Stocks. We or our affiliates may also trade in the Reference Stocks or instruments related to either or both of the Reference Stocks from time to time. Any of these hedging or trading activities as of the pricing date and during the term of the notes could adversely affect our payment to you at maturity.
- ANTI-DILUTION PROTECTION IS LIMITED — The calculation agent will make adjustments to the Stock Adjustment Factor for each Reference Stock to reflect certain events affecting such Reference Stock. However, the calculation agent will not make an adjustment in response to all events that could affect the Reference Stocks. If an event occurs that does not require the calculation agent to make an adjustment, the value of the notes may be materially and adversely affected. See “General Terms of Notes — Anti-Dilution Adjustments” in the accompanying product supplement no. 133-A-II for further information.
- MANY ECONOMIC AND MARKET
FACTORS WILL INFLUENCE THE VALUE OF THE NOTES — In addition to the closing
prices of the Reference Stocks 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:
- the expected volatility in the Reference Stocks;
- the time to maturity of the notes;
- the correlation (or lack of correlation) in price movements among the Reference Stocks;
- the dividend rates paid on the Reference Stocks;
- interest and yield rates in the market generally;
- a variety of economic, financial, political, regulatory or judicial events;
- the occurrence of certain events affecting the issuer(s) of the Reference Stock(s) that may or may not require an adjustment to the applicable Stock Adjustment Factor, including a merger or acquisition; and
- our creditworthiness, including actual or anticipated downgrades in our credit ratings.
|
|
|
|
JPMorgan
Structured Investments — |
TS-5 |
The Reference Stocks
Public Information
All information contained herein on the Reference Stocks and on the Reference Stock issuers is derived from publicly available sources and is provided for informational purposes only. Companies with securities registered under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, are required to periodically file certain financial and other information specified by the SEC. Information provided to or filed with the SEC by a Reference Stock issuer pursuant to the Exchange Act can be located by reference to the SEC file number provided below and can be accessed through www.sec.gov. We do not make any representation that these publicly available documents are accurate or complete. See “The Reference Stocks” beginning on page PS-21 of the accompanying product supplement no. 133-A-II for more information.
Historical Information of the Reference Stocks and the Basket
The graphs contained in this term sheet set forth the historical performance of the Reference Stocks as well as the Basket as a whole based on the weekly closing prices (in U.S. dollars) of the Reference Stocks from January 7, 2005 through April 23, 2010. The graph of the historical Basket performance assumes the Basket Closing Level on January 7, 2005 was 100 and the Stock Weightings were as specified under “The Basket” in this term sheet. We obtained the closing prices and other market information in this term sheet from Bloomberg Financial Markets, without independent verification. The closing 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 the commencement of trading of each Reference Stock, the price of such Reference Stock has experienced significant fluctuations. The historical performance of each Reference Stock and the historical performance of the Basket should not be taken as an indication of future performance, and no assurance can be given as to the closing prices of each Reference Stock or the levels of the Basket during the term of the notes. We cannot give you assurance that the performance of each Reference Stock will result in the return of any of your initial investment. We make no representation as to the amount of dividends, if any, that each Reference Stock issuer will pay in the future. In any event, as an investor in the notes, you will not be entitled to receive dividends, if any, that may be payable on each Reference Stock.
Bally Technologies, Inc. (“Bally”)
According to its publicly available filings with the SEC, Bally is a diversified, worldwide gaming company that designs, manufactures, distributes and operates gaming devices and computerized monitoring, accounting and player-tracking systems for gaming devices. The common stock of Bally, par value $0.10 per share, is listed on the New York Stock Exchange, which we refer to as the Relevant Exchange for purposes of Bally in the accompanying product supplement no. 133-A-II. Bally’s SEC file number 001-31558.
Historical Information of the Common Stock of Bally
The following graph sets forth the historical performance of the common stock of Bally based on the weekly closing price (in U.S. dollars) of the common stock of Bally from January 7, 2005 through April 23, 2010. The closing price of the common stock of Bally on April 27, 2010 was $44.19.
|
|
|
|
JPMorgan
Structured Investments — |
TS-6 |
International Game Technology (“IGT”)
According to its publicly available filings with the SEC, IGT is a global gaming company specializing in the design, manufacture and marketing of electronic gaming equipment and systems products. The common stock of IGT, par value $0.00015625 per share, is listed on the New York Stock Exchange, which we refer to as the Relevant Exchange for purposes of IGT in the accompanying product supplement no. 133-A-II. IGT’s SEC file number 001-10684.
Historical Information of the Common Stock of IGT
The following graph sets forth the historical performance of the common stock of IGT based on the weekly closing price (in U.S. dollars) of the common stock of IGT from January 7, 2005 through April 23, 2010. The closing price of the common stock of IGT on April 27, 2010 was $20.56.
WMS Industries Inc. (“WMS”)
According to its publicly available filings with the SEC, WMS is engaged in serving the legalized gaming industry worldwide by designing, manufacturing and distributing video and reel-spinning gaming machines, video lottery terminals and in gaming operations. The common stock of WMS, par value $0.50 per share, is listed on the New York Stock Exchange, which we refer to as the Relevant Exchange for purposes of WMS in the accompanying product supplement no. 133-A-II. WMS’s SEC file number 001-08300.
Historical Information of the Common Stock ofWMS
The following graph sets forth the historical performance of the common stock of WMS based on the weekly closing price (in U.S. dollars) of the common stock of WMS from January 7, 2005 through April 23, 2010. The closing price of the common stock of WMS on April 27, 2010 was $47.89.
|
|
|
|
JPMorgan
Structured Investments — |
TS-7 |
Historical Information of the Basket
The following graph sets forth the historical performance of the Basket based on the weekly Basket Closing Level from January 7, 2005 through April 23, 2010. The following graph assumes the Basket Closing Level on January 7, 2005 was 100 and the Stock Weightings were as specified under “The Basket” in this term sheet.
Supplemental Plan of Distribution (Conflicts of Interest)
We own, directly or indirectly, all of the outstanding equity securities of JPMSI, the agent for this offering. The net proceeds received from the sale of the notes will be used, in part, by JPMSI or one of its affiliates in connection with hedging our obligation under the notes. In accordance with NASD Rule 2720, JMPSI may not make sales in this offering to any of its discretionary accounts without the prior written approval of the customer.
JPMSI, acting as agent for JPMorgan Chase & Co., will receive a commission that will depend on market conditions on the pricing date. In no event will that commission exceed $10.00 per $1,000 principal amount note. See “Plan of Distribution” beginning on page PS-38 of the accompanying product supplement no. 133-A-II.
For a different portion of the notes to be sold in this offering, an affiliated bank will receive a fee and another affiliate of ours will receive a structuring and development fee. In no event will the total amount of these fees exceed $10.00 per $1,000 principal amount note.
|
|
|
|
JPMorgan
Structured Investments — |
TS-8 |