JPMorgan Chase & Co.
J P MORGAN CHASE & CO (Form: FWP, Received: 04/26/2007 06:01:25)

Term sheet
To prospectus dated December 1, 2005,
prospectus supplement dated December 1, 2005 and
product supplement no. 40-I dated August 29, 2006

  Term Sheet No. 5 to
Product Supplement No. 40-I
Registration Statement No. 333-130051
Dated April 25, 2007; Rule 433

     

Structured 
Investments 

     

JPMorgan Chase & Co.
$
Lesser Index Return Enhanced Notes Linked to the TOPIX ® Index
and the Nikkei 225 Index due June 16, 2008

General

Key Terms

Indices:

The TOPIX ® Index and the Nikkei 225 Index (each an “Index” and, together, the “Indices”)

Upside Leverage Factor:

3

Payment at Maturity:

If the Ending Index Level of the Lesser Performing Index is greater than its Initial Index Level, you will receive a cash payment that provides you a return per $1,000 principal amount note equal to the Lesser Index Return multiplied by three, subject to a Maximum Total Return on the note of 34.50%*. For example, if the Lesser Index Return is more than 11.50%, you will receive the Maximum Total Return on the note of 34.50%*, which entitles you to the maximum payment of $1,345 for every $1,000 principal amount note that you hold. Accordingly, if the Lesser 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 (Lesser Index Return x 3)]

 

*The actual Maximum Total Return on the note will be set on the pricing date and will not be less than 34.50%.

 

Your investment will be fully exposed to any decline in the Lesser Performing Index. If the Ending Index Level of the Lesser Performing Index declines from its Initial Index Level, you will lose 1% of the principal amount of your notes for every 1% that the Lesser Performing Index declines beyond its Initial Index Level. Accordingly, if the Lesser Index Return is negative, your payment per $1,000 principal amount note will be calculated as follows:

 

$1,000 + ($1,000 x Lesser Index Return)

 

You will lose some or all of your investment at maturity if the Ending Index Level of the Lesser Performing Index declines from its Initial Index Level.

Index Return:

For each Index, the Index Return will be calculated as follows:

 

Ending Index Level – Initial Index Level
Initial Index Level

Initial Index Level:

For each Index, the Index closing level on the pricing date, which is expected to be on or about May 11, 2007.

Ending Index Level:

For each Index, the Index closing level on the Observation Date.

Lesser Index Return:

The lower of the Index Return for the TOPIX ® Index and the Index Return for the Nikkei 225 Index.

Lesser Performing Index:

The Index with the Lesser Index Return.

Observation Date:

June 11, 2008

Maturity Date:

June 16, 2008

CUSIP:

48123JWV7

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. 40-I.

Investing in the Lesser Index Return Enhanced Notes involves a number of risks. See “Risk Factors” beginning on page PS-5 of the accompanying product supplement no. 40-I and “Selected Risk Considerations” beginning on page TS-1 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. 40-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. 40-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 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)

If the notes priced today, J.P. Morgan Securities Inc., whom we refer to as JPMSI, acting as agent for JPMorgan Chase & Co., would receive a commission of approximately $21.50 per $1,000 principal amount note and would use a portion of that commission to pay selling concessions to other dealers of approximately $10.00 per $1,000 principal amount note. The actual commission received by JPMSI may be more or less than $21.50 and will depend on market conditions on the pricing date. In no event will the commission received by JPMSI, which includes concessions to be paid to other dealers, exceed $27.50 per $1,000 principal amount note. See “Underwriting” beginning on page PS-25 of the accompanying product supplement no. 40-I.

For a different portion of the notes to be sold in this offering, a non-affiliated bank will receive a fee and an affiliate of ours will receive a structuring and development fee. If the notes priced today, the aggregate amount of these fees would be expected to be $21.50 per $1,000 principal amount note. The actual amount of these fees may be more or less than $21.50 per $1,000 principal amount note and will depend on market conditions on the pricing date. In no event will the total amount of these fees exceed $27.50 per $1,000 principal amount note.

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 25, 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 December 1, 2005 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. 40-I dated August 29, 2006. 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. 40-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

Selected Risk Considerations

An investment in the notes involves significant risks. Investing in the notes is not equivalent to investing directly in the Indices or any of the component stocks of the Indices. These risks are explained in more detail in the “Risk Factors” section of the accompanying product supplement no. 40-I dated August 29, 2006.


JPMorgan Structured Investments —
Lesser Index Return Enhanced Notes Linked to the TOPIX ® Index and the Nikkei 225 Index
 TS-1

What is the Total Return on the Notes at Maturity Assuming a Range of Performance for the Lesser Performing Index?

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 following table assumes that the Lesser Performing Index will be the TOPIX ® Index. We make no representation or warranty as to which of the Indices will be the Lesser Performing Index for purposes of calculating your return on the notes at maturity. The hypothetical total returns set forth below assume an Initial Index Level of 1700 and a Maximum Total Return on the notes of 34.50%. 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.


Lesser Performing
Index Ending Index
Level

Index Return

Total Return


3060.00

80.00%

34.50%

2805.00

65.00%

34.50%

2550.00

50.00%

34.50%

2380.00

40.00%

34.50%

2210.00

30.00%

34.50%

2040.00

20.00%

34.50%

1895.50

11.50%

34.50%

1925.00

10.00%

30.00%

1785.00

5.00%

15.00%

1742.50

2.50%

7.50%

1717.00

1.00%

3.00%

1700.00

0.00%

0.00%

1530.00

-10.00%

-10.00%

1360.00

-20.00%

-20.00%

1190.00

-30.00%

-30.00%

1020.00

-40.00%

-40.00%

850.00

-50.00%

-50.00%

680.00

-60.00%

-60.00%

510.00

-70.00%

-70.00%

340.00

-80.00%

-80.00%

170.00

-90.00%

-90.00%

0

-100.00%

-100.00%


 


JPMorgan Structured Investments —
Lesser Index Return Enhanced Notes Linked to the TOPIX ® Index and the Nikkei 225 Index
 TS-2

Hypothetical Examples of Amounts Payable at Maturity

The following examples illustrate how the total returns set forth in the table on the previous page are calculated.

Example 1: The level of the Lesser Performing Index increases from an Initial Index Level of 1700 to an Ending Index Level of 1785. Because the Ending Index Level of the Lesser Performing Index of 1785 is greater than its Initial Index Level of 1700 and the Lesser Index Return of 5% multiplied by 3 does not exceed the hypothetical Maximum Total Return of 34.50%, 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 Lesser Performing Index decreases from an Initial Index Level of 1700 to an Ending Index Level of 1530. Because the Ending Index Level of the Lesser Performing Index of 1530 is less than its Initial Index Level of 1700, the Lesser Index Return is negative and the investor receives a payment at maturity of $900 per $1,000 principal amount note, calculated as follows:

$1,000 x ($1,000 x -10%) = $900

Example 3: The level of the Lesser Performing Index increases from an Initial Index Level of 1700 to an Ending Index Level of 2040. Because the Index Return of 20% multiplied by 3 exceeds the hypothetical Maximum Total Return of 34.50%, the investor receives a payment at maturity of $1,345 per $1,000 principal amount note, the maximum payment on the notes.

Historical Information

The following graphs set forth the historical performance of the TOPIX ® Index based on the weekly TOPIX ® Index closing level from January 4, 2002 through April 20, 2007, and the historical performance of the Nikkei 225 Index based on the weekly Nikkei 225 Index closing level from January 4, 2002 through April 20, 2007. The Index closing level of the TOPIX ® Index on April 24, 2007 was 1706.16. The Index closing level of the Nikkei 225 Index on April 24, 2007 was 17451.77. We obtained the various Index closing levels below from Bloomberg Financial Markets, and accordingly, make no representation or warranty as to their accuracy or completeness. The historical levels of each Index should not be taken as an indication of future performance, and no assurance can be given as to the Index closing level of either Index on the Observation Date. We cannot give you assurance that the performance of the Indices will result in the return of any of your initial investment.




JPMorgan Structured Investments —
Lesser Index Return Enhanced Notes Linked to the TOPIX ® Index and the Nikkei 225 Index
 TS-3