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Term sheet To prospectus dated November 21, 2008, prospectus supplement dated November 21, 2008 and product supplement no. 20-A-I dated November 21, 2008

Term Sheet to Product Supplement No. 20-A-I Registration Statement No. 333-155535 Dated March 10, 2009; Rule 433

Structured  Investments		JPMorgan Chase & Co. $ Quarterly Review Notes Linked to the S&P 500® Index due March 31, 2010

General

• The notes are designed for investors who seek early exit prior to maturity at a premium if, on any one of the four Review Dates, the S&P 500^® Index is at or above the Call Level applicable to that Review Date. If the notes are not called, investors are protected against up to a 10% decline of the Index on the final Review Date but will lose some or all of their principal if the Index declines by more than 10%. Investors in the notes should be willing to accept this risk of loss, and be willing to forgo interest and dividend payments, in exchange for the opportunity to receive a premium payment if the notes are called.
• The first Review Date, and therefore the earliest date on which a call may be initiated, is June 12, 2009^†.
• Senior unsecured obligations of JPMorgan Chase & Co. maturing March 31, 2010^†.
• Minimum denominations of $20,000 and integral multiples of $1,000 in excess thereof.
• The notes are expected to price on or about March 12, 2009 and are expected to settle on or about March 17, 2009.
• The terms of the notes as set forth in “Key Terms” below, including those set forth under “Key Terms — Payment at Maturity” below, to the extent they differ or conflict with those set forth in the accompanying product supplement no. 20-A-I, supersede the terms set forth in product supplement no. 20-A-I. For example, if the notes have not been called on one of the first three Review Dates and, on the final Review Date, the Index closing level reflects a decline of less than 5% from the Initial Index Level, the notes will be automatically called and you will receive the call price of $1,126* per $1,000 principal amount note instead of the $1,000 per $1,000 principal amount note that would be payable pursuant to the terms described in product supplement no. 20-A-I. Please refer to “Supplemental Terms of the Notes” in this term sheet for more information.

• Product supplement no. 20-A-I dated November 21, 2008:
  http://www.sec.gov/Archives/edgar/data/19617/000089109208005681/e33552_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

• APPRECIATION POTENTIAL — If the Index closing level is greater than or equal to the applicable Call Level on a Review Date, your investment will yield a payment per $1,000 principal amount note of $1,000 plus: (i) at least 3.15%* x $1,000 if called on the first Review Date; (ii) at least 6.30%* x $1,000 if called on the second Review Date; (iii) at least 9.45%* x $1,000 if called on the third Review Date; or (iv) at least 12.60%* x $1,000 if called on the final Review Date. Because the notes are our senior unsecured obligations, payment of any amount if called or at maturity is subject to our ability to pay our obligations as they become due.
  *The actual percentage applicable to the first, second, third and final Review Dates will be determined on the pricing date but will not be less than 3.15%, 6.30%, 9.45% and 12.60%, respectively.
• POTENTIAL EARLY EXIT WITH APPRECIATION AS A RESULT OF AUTOMATIC CALL FEATURE — While the original term of the notes is just over one year, the notes will be called before maturity if the Index closing level is at or above the relevant Call Level on the applicable Review Date and you will be entitled to the applicable payment corresponding to such Review Date set forth on the cover of this term sheet.
• LIMITED PROTECTION AGAINST LOSS — If the notes are not called and the Ending Index Level declines by no more than 10% as compared to the Initial Index Level, you will be entitled to receive the full principal amount of your notes at maturity. 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.
• POTENTIAL FOR EARLY EXIT AND 3.15%** RETURN ON THE FIRST REVIEW DATE, 6.30%** RETURN ON THE SECOND REVIEW DATE, 9.45%** ON THE THIRD REVIEW DATE AND 12.60%** ON THE FINAL REVIEW DATE, EVEN IF THE INDEX RETURN IS NEGATIVE ON THE APPLICABLE REVIEW DATE — The Call Levels for the first, second, third and final Review Dates are set at 80%, 85%, 90% and 95% of the Initial Index Level, respectively. Accordingly, you will receive a payment of $1,031.50** per $1,000 principal amount note after the first Review Date, even if the Index closing level on the first Review Date reflects a decline of up to 20% from the Initial Index Level, or a payment of $1,063** per $1,000 principal amount note after the second Review Date, even if the Index closing level on the second Review Date reflects a decline of up to 15% from the Initial Index Level, a payment of $1,094.50** per $1,000 principal amount note after the third Review Date, even if the Index closing level on the third Review Date reflects a decline of up to 10% from the Initial Index Level or a payment of $1,126** per $1,000 principal amount note after the final Review Date, even if the Index closing level on the final review Date reflects a decline of up to 5% from the Initial Index Level.
  ** The actual percentage and call price applicable to the first Review Date, the second Review Date, the third Review Date and the final Review Date will be determined on the pricing date but will not be less than 3.15% and $1,031.50, respectively (if called on the first Review Date), 6.30% and $1,063, respectively (if called on the second Review Date) 9.45% and $1,094.50 (if called on the third Review Date) and 12.60% and $1,126, respectively (if called on the final Review Date).
• 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. 20-A-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. 20-A-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 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 short-term capital gain or loss unless you hold your notes for more than a year, in which case the gain or loss should be long-term capital gain or loss, 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, which might include 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.

Subject to certain assumptions and representations received from us, 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 regarding the material U.S. federal income tax consequences of owning and disposing of notes.

• YOUR INVESTMENT IN THE NOTES MAY RESULT IN A LOSS — If the notes are not called and the Ending Index Level declines by more than 10% compared to the Initial Index Level, you will lose 1.1111% of your principal amount for every 1% decline in the Ending Index Level compared to the Initial Index Level beyond the 10% buffer.
• 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 or upon an automatic call, 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.
• LIMITED RETURN ON THE NOTES — Your potential gain on the notes will be limited to the call premium applicable for a Review Date, as set forth on the cover of this term sheet, regardless of the appreciation in the Index, which may be significant. Because the Index closing level at various times during the term of the notes could be higher than on the Review Dates and at maturity, you may receive a lower payment if called or at maturity, as the case may be, than you would have if you had invested directly in the Index.
• 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 S&P 500^® Index would have.
• CERTAIN BUILT-IN COSTS ARE LIKELY TO ADVERSELY AFFECT THE VALUE OF THE NOTES PRIOR TO MATURITY — While the payment upon automatic call or 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 estimated 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 the notes to maturity.
• 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.
• 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.
• 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 equity securities 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.