Term
sheet
To
prospectus dated December 1, 2005,
prospectus
supplement dated December 1, 2005 and
product
supplement no. 18-I dated March 16, 2006
|
Term
Sheet to
Product
Supplement No. 18-I
Registration
Statement No. 333-130051
Dated
April 8, 2008; Rule 433
|
Structured
Investments |
JPMorgan
Chase & Co.
$
Buffered
Return Enhanced Notes Linked to the S&P 500® Index due
December 6, 2010
|
· |
The
notes are
designed for investors who seek a return of two times the appreciation
of
the S&P 500®
Index up to
a maximum total return on the notes of 38.70%*
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.
|
· |
Senior
unsecured obligations of JPMorgan Chase & Co. maturing December 6,
2010†.
|
· |
Minimum
denominations of $50,000 and integral multiples of $1,000 in excess
thereof.
|
· |
The
notes are
expected to price on or about April 9, 2008 and are expected to settle
on
or about April 14, 2008.
|
Index:
|
The
S&P
500®
Index (the
“Index”)
|
Upside
Leverage Factor:
|
2
|
Payment
at
Maturity:
|
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 38.70%*.
For
example, if the Index Return is more than 19.35%, you will receive
the
Maximum Total Return on the notes of 38.70%*,
which
entitles you to a maximum payment at maturity of $1,387 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:
|
$1,000
+[$1,000 x (Index Return x 2)]
*The
actual
Maximum Total Return on the notes will be set on the pricing date
and will
not be less than 38.70%.
|
|
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:
|
|
$1,000
+
[$1,000 x (Index Return + 10%) x 1.1111]
|
|
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%.
|
|
Buffer
Amount:
|
10%
|
Downside
Leverage Factor:
|
1.1111
|
Index
Return:
|
The
performance of the Index from the Initial Index Level to the Ending
Index
Level, calculated as follows:
|
Ending
Index Level - Initial Index Level
|
|
Initial
Index
Level
|
|
Initial
Index
Level:
|
The
Index
closing level on the pricing date.
|
Ending
Index
Level:
|
The
arithmetic average of the Index closing levels on each of the five
Averaging Dates.
|
Averaging
Dates†:
|
November
24,
2010, November 26, 2010, November 29, 2010, November 30, 2010 and
December
1, 2010
|
Maturity
Date†:
|
December
6,
2010
|
CUSIP:
|
† |
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.
|
Price
to Public
|
Fees
and Commissions (1)
|
Proceeds
to Us
|
|
Per
note
|
$
|
$
|
$
|
Total
|
$
|
$
|
$
|
· |
Product
supplement no. 18-I dated March 16, 2006:
|
· |
Prospectus
supplement dated December 1, 2005:
|
· |
Prospectus
dated December 1, 2005:
|
Ending
Index Level
|
Index
Return
|
Total
Return
|
2475.0000
|
80.00%
|
38.70%
|
2268.7500
|
65.00%
|
38.70%
|
2062.5000
|
50.00%
|
38.70%
|
1925.0000
|
40.00%
|
38.70%
|
1718.7500
|
25.00%
|
38.70%
|
1650.0000
|
20.00%
|
38.70%
|
1641.0625
|
19.35%
|
38.70%
|
1581.2500
|
15.00%
|
30.00%
|
1512.5000
|
10.00%
|
20.00%
|
1443.7500
|
5.00%
|
10.00%
|
1388.7500
|
1.00%
|
2.00%
|
1375.0000
|
0.00%
|
0.00%
|
1306.2500
|
-5.00%
|
0.00%
|
1237.5000
|
-10.00%
|
0.00%
|
1100.0000
|
-20.00%
|
-11.11%
|
962.5000
|
-30.00%
|
-22.22%
|
825.0000
|
-40.00%
|
-33.33%
|
687.5000
|
-50.00%
|
-44.44%
|
550.0000
|
-60.00%
|
-55.56%
|
412.5000
|
-70.00%
|
-66.67%
|
275.0000
|
-80.00%
|
-77.78%
|
137.5000
|
-90.00%
|
-88.89%
|
0.0000
|
-100.00%
|
-100.00%
|
JPMorgan
Structured Investments —
Buffered
Return Enhanced Notes Linked to the S&P 500® Index
|
· |
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 38.70%, or $1,387 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 38.70%. 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.
|
· |
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.
|
· |
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.
|
· |
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. 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, it is reasonable to treat your
purchase and ownership of the notes as an “open transaction” for U.S.
federal income tax purposes. 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
|
JPMorgan
Structured Investments —
Buffered
Return Enhanced Notes Linked to the S&P 500® Index
|
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.
|
· |
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.
|
· |
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
38.70%.
|
· |
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.
|
· |
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.
|
· |
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.
|
· |
WE
ARE CURRENTLY ONE OF THE COMPANIES THAT MAKE UP THE INDEX
—
We
are
currently one of the companies that make up the Index. On March 16,
2008,
and March 24, 2008, we issued press releases (which are included
in our
Current Reports on Form 8-K filed with the Securities and Exchange
Commission on March 18, 2008, and March 24, 2008, respectively) announcing
our potential acquisition of The Bear Stearns Companies, Inc., which
is
also included in the Index. To our knowledge, we are not currently
affiliated with any other issuers the equity securities of which
are
included in 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.
|
· |
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.
|
· |
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:
|
· |
the
expected
volatility of the Index;
|
· |
the
time to
maturity of the notes;
|
· |
the
dividend
rate on the common stocks underlying the
Index;
|
· |
interest
and
yield rates in the market
generally;
|
· |
a
variety of
economic, financial, political, regulatory or judicial events; and
|
· |
our
creditworthiness, including actual or anticipated downgrades in our
credit
ratings.
|
JPMorgan
Structured Investments —
Buffered
Return Enhanced Notes Linked to the S&P 500® Index
|
JPMorgan
Structured Investments —
Buffered
Return Enhanced Notes Linked to the S&P 500® Index
|