Term Sheet |
Term Sheet to Product Supplement No. 133-I Registration Statement No. 333-130051 Dated July 14, 2008; Rule 433 |
![]() |
Structured |
JPMorgan Chase & Co. $ Return Enhanced Notes Linked to an Equally Weighted Basket of 10 Basket Stocks due August 5, 2010 |
General
Key Terms
Basket: |
The Basket consists of 10 common stocks (each, a Basket Stock and collectively, the Basket Stocks). The Basket Stocks and the Bloomberg ticker symbol, the relevant exchange on which it is listed, the Stock Weighting and the Initial Share Price of each Basket Stock are set forth under The Basket on page TS-1 of this term sheet. |
Upside Leverage Factor: |
3 |
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 three, subject to the Maximum Total Return on the notes of 41.25%*. For example, if the Basket Return is more than 13.75%, you will receive the Maximum Total Return on the notes of 41.25%*, which entitles you to a maximum payment at maturity of $1,412.50 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 3) * The actual Maximum Total Return on the notes will be set on the pricing date and will not be less than 41.25%. |
|
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 arithmetic average of the Basket Closing Levels on the five Ending Averaging Dates. |
Basket Closing Level: |
For each of the Ending Averaging Dates, the Basket Closing Level will be calculated as follows: 100 x [1 + the sum of the Stock Returns of each Basket Stock on the relevant Ending Averaging Date x (1/10)] |
Stock Return: |
With respect to each Basket Stock, on each of the Ending Averaging Dates: Final Share Price Initial Share PriceInitial Share Price |
Initial Share Price: |
With respect to each Basket Stock, the closing price of one share of such Basket Stock on the pricing date. |
Final Share Price: |
With respect to each Basket Stock, on each of the Ending Averaging Dates, the closing price of one share of such Basket Stock on such day times the Stock Adjustment Factor for such Basket Stock on such day. |
Stock Adjustment Factor: |
With respect to each Basket 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-I for further information. |
Ending Averaging Dates: |
July 27, 2010, July 28, 2010, July 29, 2010, July 30, 2010 and August 2, 2010 |
Maturity Date: |
August 5, 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. 133-I. |
Investing in the Return Enhanced Notes involves a number of risks. See Risk Factors beginning on page PS-8 of the accompanying product supplement no. 133-I 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 supplements and prospectus. Any representation to the contrary is a criminal offense.
|
|||
|
Price to Public |
Fees and Commissions (1) |
Proceeds to Us |
|
|||
Per note |
$ |
$ |
$ |
|
|||
Total |
$ |
$ |
$ |
|
(1) |
Please see Supplemental Underwriting Information in this term sheet for information about fees and commissions. |
The notes are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they obligations of, or guaranteed by, a bank.
JPMorgan
July 14, 2008
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, each prospectus supplement, product supplement no. 133-I 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 December 1, 2005, as supplemented by the prospectus supplement dated October 12, 2006 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-I dated April 25, 2008. 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-I, 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):
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 Basket Stocks and the Bloomberg ticker symbol, the relevant exchange on which it is listed, the Stock Weighting and the Initial Share Price of each Basket Stock are set forth below:
Ticker Symbol |
Basket Stock |
Exchange |
Stock |
Initial Share |
|
||||
MMM |
3M Company |
NYSE |
1/10 |
|
CAT |
Caterpillar Inc. |
NYSE |
1/10 |
|
GLW |
Corning Incorporated |
NYSE |
1/10 |
|
DOV |
Dover Corporation |
NYSE |
1/10 |
|
ETN |
Eaton Corporation |
NYSE |
1/10 |
|
FLEX |
Flextronics International Ltd. |
NASDAQ |
1/10 |
|
COL |
Rockwell Collins, Inc. |
NYSE |
1/10 |
|
TXT |
Textron Inc. |
NYSE |
1/10 |
|
TYC |
Tyco International Ltd. |
NYSE |
1/10 |
|
UTX |
United Technologies Corporation |
NYSE |
1/10 |
|
The Initial Share Price of each Basket 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 Performance for the Basket?
The following table illustrates 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 41.25%. 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% |
41.25% |
165.00 |
65.00% |
41.25% |
150.00 |
50.00% |
41.25% |
140.00 |
40.00% |
41.25% |
130.00 |
30.00% |
41.25% |
120.00 |
20.00% |
41.25% |
113.75 |
13.75% |
41.25% |
110.00 |
10.00% |
30.00% |
105.00 |
5.00% |
15.00% |
102.50 |
2.50% |
7.50% |
101.00 |
1.00% |
3.00% |
100.00 |
0.00% |
0.00% |
95.00 |
-5.00% |
-5.00% |
90.00 |
-10.00% |
-10.00% |
85.00 |
-15.00% |
-15.00% |
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 3 does not exceed the hypothetical Maximum Total Return of 41.25%, the investor receives a payment at maturity of $1,150 per $1,000 principal amount note, calculated as follows:
$1,000 + [$1,000 x (5% x 3)] = $1,150
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 3 exceeds the hypothetical Maximum Total Return of 41.25%, the investor receives a payment at maturity of $1,412.50 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 Ending Basket Level of 80 is less than the Starting Basket Level of 100, the Basket Return is negative and 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
Selected Risk Considerations
An investment in the notes involves significant risks. Investing in the notes is not equivalent to investing directly in the Basket Stocks. These risks are explained in more detail in the Risk Factors section of the accompanying product supplement no. 133-I dated April 25, 2008.
|
|
JPMorgan
Structured Investments |
TS-3 |
|
|
JPMorgan
Structured Investments |
TS-4 |
The Basket Stocks
Public Information
All information contained herein on the Basket Stocks and on the Basket 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 Basket 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 Basket Stocks beginning on page PS-18 of the accompanying product supplement no. 133-I for more information.
Historical Information of the Basket Stocks and the Basket
The graphs contained in this term sheet set forth the historical performance of the Basket Stocks as well as the Basket as a whole based on the weekly closing prices (in U.S. dollars) of the Basket Stocks from January 3, 2003 through July 11, 2008. The graph of the historical Basket performance assumes the Basket Closing Level on January 3, 2003 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 Basket Stock, the price of such Basket Stock has experienced significant fluctuations. The historical performance of each Basket 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 Basket Stock or the levels of the Basket during the term of the notes. We cannot give you assurance that the performance of each Basket 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 Basket 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 Basket Stock.
3M Company (3M)
According to its publicly available filings with the SEC, 3M is a diversified technology oriented company which develops, manufactures and markets products in the following business segments: industrial and transportation; health care; display and graphics; consumer and office; safety, security and protection services; and electro and communications. The common stock of 3M, par value $0.01 per share, is listed on the New York Stock Exchange, which we refer to as the Relevant Exchange for purposes of 3M in the accompanying product supplement no. 133-I. 3Ms SEC file number is 001-03285.
Historical Information of the Common Stock of 3M
The following graph sets forth the historical performance of the common stock of 3M based on the weekly closing price (in U.S. dollars) of the common stock of 3M from January 3, 2003 through July 11, 2008. The closing price of the common stock of 3M on July 11, 2008 was $68.72.
|
|
JPMorgan
Structured Investments |
TS-5 |
Caterpillar Inc. (Caterpillar)
According to its publicly available filings with the SEC, Caterpillar designs, manufactures, markets and sells construction, mining and forestry machinery, offers logistics services for other companies, and designs, manufactures, remanufactures, maintains and services rail-related products. Caterpillar also designs, manufactures, markets and sells engines for Caterpillar machinery; electric power generation systems; on-highway vehicles and locomotives; marine, petroleum, construction, industrial, agricultural and other applications; and related parts. In addition, Caterpillar provides financing and insurance to customers and dealers and invests in independent power projects using Caterpillar power generation equipment and services. The common stock of Caterpillar, par value $1.00 per share, is listed on the New York Stock Exchange, which we refer to as the Relevant Exchange for purposes of Caterpillar in the accompanying product supplement no. 133-I. Caterpillars SEC file number is 001-00768.
Historical Information of the Common Stock of Caterpillar
The following graph sets forth the historical performance of the common stock of Caterpillar based on the weekly closing price (in U.S. dollars) of the common stock of Caterpillar from January 3, 2003 through July 11, 2008. The closing price of the common stock of Caterpillar on July 11, 2008 was $69.81.
Corning Incorporated (Corning)
According to its publicly available filings with the SEC, Corning is a global, technology-based corporation that operates in four business segments: display technologies, telecommunications, environmental technologies and life sciences. The common stock of Corning, 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 Corning in the accompanying product supplement no. 133-I. Cornings SEC file number is 001-03247.
Historical Information of the Common Stock of Corning
The following graph sets forth the historical performance of the common stock of Corning based on the weekly closing price (in U.S. dollars) of the common stock of Corning from January 3, 2003 through July 11, 2008. The closing price of the common stock of Corning on July 11, 2008 was $20.28.
|
|
JPMorgan
Structured Investments |
TS-6 |
Dover Corporation (Dover)
According to its publicly available filings with the SEC, Dover owns and operates a global portfolio of companies which manufacture and provide innovative components and equipment, specialty systems and support services for a variety of applications in the industrial products, engineered systems, fluid management and electronic technologies markets. The common stock of Dover, par value $1.00 per share, is listed on the New York Stock Exchange, which we refer to as the Relevant Exchange for purposes of Dover in the accompanying product supplement no. 133-I. Dovers SEC file number is 001-04018.
Historical Information of the Common Stock of Dover
The following graph sets forth the historical performance of the common stock of Dover based on the weekly closing price (in U.S. dollars) of the common stock of Dover from January 3, 2003 through July 11, 2008. The closing price of the common stock of Dover on July 11, 2008 was $46.25.
Eaton Corporation (Eaton)
According to its publicly available filings with the SEC, Eaton is a diversified industrial manufacturer of electrical systems and components for power quality, distribution and control; fluid power systems and services for industrial, mobile and aircraft equipment; intelligent truck drivetrain systems for safety and fuel economy; and automotive engine air management systems, powertrain solutions and specialty controls for performance, fuel economy and safety. The common shares of Eaton, par value $0.50 per share (which we refer to as the common stock of Eaton), is listed on the New York Stock Exchange, which we refer to as the Relevant Exchange for purposes of Eaton in the accompanying product supplement no. 133-I. Eatons SEC file number is 001-01396.
Historical Information of the Common Stock of Eaton
The following graph sets forth the historical performance of the common stock of Eaton based on the weekly closing price (in U.S. dollars) of the common stock of Eaton from January 3, 2003 through July 11, 2008. The closing price of the common stock of Eaton on July 11, 2008 was $80.93.
|
|
JPMorgan
Structured Investments |
TS-7 |
Flextronics International Ltd. (Flextronics)
According to its publicly available filings with the SEC, Flextronics is a global provider of vertically-integrated advanced design and electronics manufacturing services to original equipment manufacturers in various markets including: infrastructure, mobile communication devices, computing, automotive and medical devices. The common stock of Flextronics, no par value, is listed on The NASDAQ Stock Market LLC, which we refer to as the Relevant Exchange for purposes of Flextronics in the accompanying product supplement no. 133-I. Flextronicss SEC file number is 000-23354.
Historical Information of the Common Stock of Flextronics
The following graph sets forth the historical performance of the common stock of Flextronics based on the weekly closing price (in U.S. dollars) of the common stock of Flextronics from January 3, 2003 through July 11, 2008. The closing price of the common stock of Flextronics on July 11, 2008 was $8.84.
Rockwell Collins, Inc. (Rockwell Collins)
According to its publicly available filings with the SEC, Rockwell Collins, provides design, production and support of communications and aviation electronics for military and commercial customers worldwide. Rockwell Collins also provides equipment repair and overhaul services, parts servicing, training and technical information services. The common stock of Rockwell Collins, par value $0.01 per share, is listed on the New York Stock Exchange, which we refer to as the Relevant Exchange for purposes of Rockwell Collins in the accompanying product supplement no. 133-I. Rockwell Collins SEC file number is 001-16445.
Historical Information of the Common Stock of Rockwell Collins
The following graph sets forth the historical performance of the common stock of Rockwell Collins based on the weekly closing price (in U.S. dollars) of the common stock of Rockwell Collins from January 3, 2003 through July 11, 2008. The closing price of the common stock of Rockwell Collins on July 11, 2008 was $47.16.
|
|
JPMorgan
Structured Investments |
TS-8 |
Textron Inc. (Textron)
According to its publicly available filings with the SEC, Textron is a multi-industry company that leverages its global network of aircraft, industrial and finance businesses to provide innovative solutions and services around the world. The common stock of Textron, par value $0.125 per share, is listed on the New York Stock Exchange, which we refer to as the Relevant Exchange for purposes of Textron in the accompanying product supplement no. 133-I. Textrons SEC file number is 001-05480.
Historical Information of the Common Stock of Textron
The following graph sets forth the historical performance of the common stock of Textron based on the weekly closing price (in U.S. dollars) of the common stock of Textron from January 3, 2003 through July 11, 2008. The closing price of the common stock of Textron on July 11, 2008 was $46.03.
Tyco International Ltd. (Tyco)
According to its publicly available filings with the SEC, Tyco is a leading provider of security products and services, fire protection and detection products and services, valves and controls, and other industrial products. The common shares of Tyco, par value $0.80 per share (which we refer to as the common stock of Tyco), are listed on the New York Stock Exchange, which we refer to as the Relevant Exchange for purposes of Tyco in the accompanying product supplement no. 133-I. Tycos SEC file number is 001-13836.
Historical Information of the Common Stock of Tyco
The following graph sets forth the historical performance of the common stock of Tyco based on the weekly closing price (in U.S. dollars) of the common stock of Tyco from January 3, 2003 through July 11, 2008. The closing price of the common stock of Tyco on July 11, 2008 was $39.71.
|
|
JPMorgan
Structured Investments |
TS-9 |
United Technologies Corporation (United Technologies)
According to its publicly available filings with the SEC, UTC provides high technology products and services to the building systems and aerospace industries worldwide, including the following segments: elevators and escalators, residential, commercial and industrial heating, fire and special hazard detection systems and commercial, general aviation and military aircraft engines. The common stock of UTC, par value $1.00 per share, is listed on the New York Stock Exchange, which we refer to as the Relevant Exchange for purposes of UTC in the accompanying product supplement no. 133-I. United Technologies SEC file number is 001-00812.
Historical Information of the Common Stock of United Technologies
The following graph sets forth the historical performance of the common stock of UTC based on the weekly closing price (in U.S. dollars) of the common stock of UTC from January 3, 2003 through July 11, 2008. The closing price of the common stock of UTC on July 11, 2008 was $60.69.
|
|
JPMorgan
Structured Investments |
TS-10 |
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 3, 2003 through July 11, 2008. The following graph assumes the Basket Closing Level on January 3, 2008 was 100 and the Stock Weightings were as specified under The Basket in this term sheet.
Supplemental Underwriting Information
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, which includes structuring and development fees, exceed $25.00 per $1,000 principal amount note. See Underwriting beginning on page PS-34 of the accompanying product supplement no. 133-I.
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 $25.00 per $1,000 principal amount note.
|
|
JPMorgan
Structured Investments |
TS-11 |