JPMorgan Chase & Co.
J P MORGAN CHASE & CO (Form: FWP, Received: 04/25/2007 06:01:01)

Term sheet
To prospectus dated December 1, 2005,
prospectus supplement dated October 12, 2006 and
product supplement no. 75-I dated April 24, 2007

  Term Sheet No. 1 to
Product Supplement No. 75-I
Registration Statement No. 333-130051
Dated April 24, 2007; Rule 433

     

Structured 
Investments 

      JPMorgan Chase & Co.
$
                 7.60% Mandatory Exchangeable Notes due May 8, 2008
Linked to the Common Stock of Alcoa Inc.

General

Key Terms

Reference Stock:

The common stock, par value $1.00 per share, of Alcoa Inc. (New York Stock Exchange symbol “AA”). We refer to Alcoa Inc. as “Alcoa.”

Interest Rate:

7.60% per annum , paid quarterly and calculated on a 30/360 basis.

Principal Amount:

$      , which is equal to the average execution price per share of the Reference Stock, on the pricing date, that our affiliate has paid to hedge our obligations under the notes.

Maturity Date:

May 8, 2008*

Pricing Date:

On or about April 30, 2007

Settlement Date:

On or about May 3, 2007

Observation Date:

May 5, 2008*

CUSIP:

 

Interest Payment Date:

Interest on the notes will be payable quarterly in arrears on August 3, 2007, November 3, 2007, February 3, 2008 and the Maturity Date (each such date, an “Interest Payment Date”), commencing on August 3, 2007, to and including the Interest Payment Date corresponding to the Maturity Date. See “Selected Purchase Considerations — Quarterly Interest Payments” in this term sheet for more information.

Payment at Maturity:

The payment at maturity, in excess of any accrued and unpaid interest, is based on the performance of the Reference Stock. You will receive at maturity for each note, in addition to any accrued and unpaid interest:

(1) if the Final Share Price is greater than the Cap Price, an amount in cash equal to the Cap Price (or, at our election, the Physical Delivery Amount); or
(2) if the Final Share Price is equal to or less than the Cap Price, an amount in cash equal to the Final Share Price (or, at our election, the Physical Delivery Amount).
Excluding any accrued and unpaid interest, the value of your payment per note at maturity will not be more than the Cap Price and may be zero.

Cap Price:

$      , which is equal to 110% of the Principal Amount.

Physical Delivery Amount:

If the Final Share Price is greater than the Cap Price, the number of shares of Reference Stock per note equal to (1) the Cap Price divided by (2) the Final Share Price.
If the Final Share Price is equal to or less than the Cap Price, the number of shares of Reference Stock per note equal to the Exchange Factor.
Fractional shares will be paid in cash. We will notify the trustee five business days before the maturity date if we elect to deliver shares of the Reference Stock equal to the Physical Delivery Amount to you at maturity.

Exchange Factor:

Set initially at 1.0, subject to adjustment upon the occurrence of certain corporate events affecting the Reference Stock. See “General Terms of Notes — Anti-Dilution Adjustments.”

Dividend Protection:

The Exchange Factor is subject to adjustment in the event that Alcoa pays a cash dividend on the Reference Stock for any calendar quarter in an amount either greater or less than the Dividend Threshold. If the calculation agent determines that Alcoa has failed to declare or make a cash dividend payment for any calendar quarter, the Exchange Factor will be subject to adjustment on the relevant Exchange Factor Adjustment Dates, which shall be August 1, 2007, October 31, 2007, January 30, 2008 and April 30, 2008 (or the next following business day if the specified date is not a business day) and the Observation Date, as applicable.

Dividend Threshold:

$0.17 per share of Reference Stock, which is the amount of the dividend per share of common stock most recently paid by Alcoa prior to the date of this term sheet.

Final Share Price:

The product of (1) the closing price of the Reference Stock on the New York Stock Exchange on the Observation Date and (2) the Exchange Factor.

*      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. 75-I.

Investing in the Mandatory Exchangeable Notes involves a number of risks. See “Risk Factors” beginning on page PS-7 of the accompanying product supplement no. 75-I and “Selected Risk Considerations” beginning on page TS-2 of this term sheet.

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, each prospectus supplement, product supplement no. 75-I and any 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 Web site 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. 75-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.

Neither the SEC 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)       In connection with this offering, we will enter into a hedging arrangement with an affiliate of J.P. Morgan Securities Inc., whom we refer to as JPMSI, pursuant to which such affiliate will receive compensation. The amount of this compensation will depend on market conditions on the pricing date, as well as over the term of the notes, but that compensation, which includes our affiliates’ expected cost of providing this hedge, as well as the profits our affiliates expect to realize in consideration for assuming the risks inherent in providing that hedge, is not expected to exceed 1.0% of the price to the public per note. See “Underwriting” beginning on page PS-31 of the accompanying product supplement no. 75-I.

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

April 24, 2007



ADDITIONAL TERMS SPECIFIC TO THE NOTES

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. 75-I dated April 24, 2007. 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. 75-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 web site at www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date on the SEC web site):

Our Central Index Key, or CIK, on the SEC Web site is 19617. As used in this term sheet, the “Company,” “we,” “us,” or “our” refers to JPMorgan Chase & Co.

Selected Purchase Considerations


JPMorgan Structured Investments —
Mandatory Exchangeable Notes Linked to the Common Stock of Alcoa Inc.
 TS-1

Selected Risk Considerations

An investment in the notes involves significant risks. Investing in the notes is not equivalent to investing directly in the Reference Stock. These risks are explained in more detail in the “Risk Factors” section of the accompanying product supplement no. 75-I dated April 24, 2007.


JPMorgan Structured Investments —
Mandatory Exchangeable Notes Linked to the Common Stock of Alcoa Inc.
 TS-2

The Reference Stock

Public Information

       All information contained herein on the Reference Stock and on Alcoa is derived from publicly available sources and is provided for informational purposes only. According to its publicly available filings with the SEC, Alcoa is a leading producer of primary aluminum, fabricated aluminum, and alumina, and is active in all major aspects of the industry: technology, mining, refining, smelting, fabricating and recycling. The common stock of Alcoa, par value $1.00 per share, is registered under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, and listed on the New York Stock Exchange, which we refer to as the Relevant Exchange for purposes of Alcoa in the accompanying product supplement no. 75-I. Information provided to or filed with the SEC by Alcoa, pursuant to the Exchange Act can be located by reference to SEC file number 001-03610, and can be accessed through www.sec.gov. We do not make any representation that these publicly available documents are accurate or complete.

Historical Information of the Reference Stock

       The following graph sets forth the historical performance of the Reference Stock based on the weekly closing price (in U.S. dollars) of the Reference Stock from January 4, 2002 through April 20, 2007. The closing price of the Reference Stock on April 23, 2007 was $ 34.15 . We obtained the closing prices and other information below 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 its inception, the Reference Stock has experienced significant fluctuations. The historical performance of the Reference Stock should not be taken as an indication of future performance, and no assurance can be given as to the closing prices of the Reference Stock during the term of the notes. We cannot give you assurance that the performance of the 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 Alcoa 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 the Reference Stock.



JPMorgan Structured Investments —
Mandatory Exchangeable Notes Linked to the Common Stock of Alcoa Inc.
 TS-3

Examples of Hypothetical Payment at Maturity for Each Note

The following table illustrates hypothetical payments at maturity on an investment in a single note, based on a range of hypothetical Final Share Prices. For the following table and examples, we have assumed that (a) the investment is held from the date on which the notes are first issued until the stated maturity date, (b) the term of the notes is 365 days, (c) Alcoa does not change the amount of the quarterly cash dividend that it pays on the Reference Stock during the term of the notes and (d) there are no other anti-dilution adjustments to the Exchange Factor. We have also assumed the following:

 
  • the Principal Amount:
$34.15
  • the Cap Price:
$37.57
 
  • the Interest Rate:
7.60%
  • the Exchange Factor:
1.0

Hypothetical
Final Share
Price

% Change in
Closing Price of
Reference Stock

Total Return on Note
(Excluding Interest
Payments)

Interest
Payments over
Term of Note

Total Value of
Payments Received
over Term of
Note**


61.47

80.00%

10.00%

$2.60

$40.17

56.35

65.00%

10.00%

$2.60

$40.17

51.23

50.00%

10.00%

$2.60

$40.17

47.81

40.00%

10.00%

$2.60

$40.17

42.69

25.00%

10.00%

$2.60

$40.17

40.98

20.00%

10.00%

$2.60

$40.17

37.57

10.00%

10.00%

$2.60

$40.17

35.86

5.00%

5.00%

$2.60

$38.46

35.00

2.50%

2.50%

$2.60

$37.60

34.49

1.00%

1.00%

$2.60

$37.09

34.15

0.00%

0.00%

$2.60

$36.75

32.44

-5.00%

-5.00%

$2.60

$35.04

30.74

-10.00%

-10.00%

$2.60

$33.34

29.03

-15.00%

-15.00%

$2.60

$31.63

27.32

-20.00%

-20.00%

$2.60

$29.92

23.91

-30.00%

-30.00%

$2.60

$26.51

20.49

-40.00%

-40.00%

$2.60

$23.09

17.08

-50.00%

-50.00%

$2.60

$19.68

13.66

-60.00%

-60.00%

$2.60

$16.26

10.25

-70.00%

-70.00%

$2.60

$12.85

6.83

-80.00%

-80.00%

$2.60

$9.43

3.42

-90.00%

-90.00%

$2.60

$6.02

0

-100.00%

-100.00%

$2.60

$2.60


**       Note that in addition to interest payments over the term of the note, you will receive at maturity an amount in cash equal to either the Cap Price or the Final Share Price (or, in either case and at our election, the Physical Delivery Amount). Also note that if you receive the Physical Delivery Amount, the total value of payment received over the term of the note shown in the table above includes the value of any fractional shares, which will be paid in cash.

The following examples illustrate how the total value of payments received at maturity set forth in the table above are calculated.

Example 1: The Final Share Price is $51.23. Because the Final Share Price of $51.23 is greater than the Cap Price of $37.57, you will receive the Cap Price, or at our election, the Physical Delivery Amount, at maturity. Because the Cap Price is $37.57, the total value of your payments over the term of the note, whether in cash or shares of the Reference Stock, is $40.17.

Example 2: The Final Share Price is $37.57. Because the Final Share Price of $37.57 is equal to the Cap Price, you will receive the Final Share Price, or at our election, the Physical Delivery Amount, at maturity. Because the Final Share Price of the Reference Stock is $37.57, the total value of your payments over the term of the note, whether in cash or shares of the Reference Stock, is $40.17.

Example 3: The Final Share Price is $35.00. Because the Final Share Price of $35.00 is less than the Cap Price, you will receive the Final Share Price, or at our election, the Physical Delivery Amount, at maturity. Because the Final Share Price of the Reference Stock is $35.00, the total value of your payments over the term of the note, whether in cash or shares of the Reference Stock, is $37.60.

Example 4: The Final Share Price is $34.15. Because the Final Share Price of $34.15 is less than the Cap Price, you will receive the Final Share Price, or at our election, the Physical Delivery Amount, at maturity. Because the Final Share Price of the Reference Stock is $34.15, the total value of your payments over the term of the note, whether in cash or shares of the Reference Stock, is $36.75.

Example 5: The Final Share Price is $17.08. Because the Final Share Price of $17.08 is less than the Cap Price, you will receive the Final Share Price, or at our election, the Physical Delivery Amount, at maturity. Because the Final Share Price of the Reference Stock is $17.08, the total value of your payments over the term of the note, whether in cash or shares of the Reference Stock, is $19.68.

The actual payment you receive at maturity may be more or less than the amounts displayed in this hypothetical and will depend in part on the closing price of the Reference Stock on the pricing date.

If we elect to deliver the Physical Delivery Amount at maturity, the market price of the shares of Reference Stock that you receive per note on the stated maturity date may be less than the amount that you would have received had we delivered the applicable cash amount because the number of shares you receive will be calculated based upon the closing price of the Reference Stock on the Observation Date. See “Selected Risk Considerations — If We Elect to Deliver the Physical Delivery Amount, the Value of Reference Stock Delivered At Maturity May Be Less Than If We Had Delivered Cash.”


JPMorgan Structured Investments —
Mandatory Exchangeable Notes Linked to the Common Stock of Alcoa Inc.
 TS-4