JPMorgan Chase & Co.
J P MORGAN CHASE & CO (Form: FWP, Received: 06/25/2008 17:05:56)

Term sheet
To prospectus dated December 1, 2005,
prospectus supplement dated October 12, 2006 and
product supplement no. 18-II dated June 2, 2008

 

Term Sheet to
Product Supplement No. 18-II
Registration Statement No. 333-130051
Dated June 25, 2008; Rule 433


     

Structured 
Investments 

      JPMorgan Chase & Co.
$
Buffered Return Enhanced Notes Linked to the S&P 500 ® Index due June 28, 2012

General

Key Terms

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 62.60%*. For example, if the Index Return is more than 31.30%, you will receive the Maximum Total Return on the notes of 62.60%*, which entitles you to a maximum payment at maturity of $1,626 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 62.60%.

 

Your principal is protected against up to a 15% decline of the Index at maturity. If the Ending Index Level declines from the Initial Index Level by up to 15%, 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 15%, you will lose 1.1765% of the principal amount of your notes for every 1% that the Index declines beyond 15% and your final payment per $1,000 principal amount note will be calculated as follows:

$1,000 + [$1,000 x (Index Return + 15%) x 1.1765]

 

Not withstanding the foregoing, in no event will the payment at maturity be less than $0. 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 15%.

Buffer Amount:

15%

Downside Leverage Factor:

1.1765

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 :

June 19, 2012, June 20, 2012, June 21, 2012, June 22, 2012 and June 25, 2012

Maturity Date :

June 28, 2012

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-II.

Investing in the Buffered Return Enhanced Notes involves a number of risks. See “Risk Factors” beginning on page PS-7 of the accompanying product supplement no. 18-II and “Selected Risk Considerations” beginning on page TS-3 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 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. 18-II 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)

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

June 25, 2008

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. 18-II dated June 2, 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. 18-II, 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.

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

The following table and graph illustrate 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 an Initial Index Level of 1300 and a Maximum Total Return on the notes of 62.60%. 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, graph and examples have been rounded for ease of analysis.


Ending Index Level

Index Return

Total Return


2340.00

80.00%

62.6000%

2145.00

65.00%

62.6000%

1950.00

50.00%

62.6000%

1820.00

40.00%

62.6000%

1706.90

31.30%

62.6000%

1690.00

30.00%

60.0000%

1560.00

20.00%

40.0000%

1495.00

15.00%

30.0000%

1430.00

10.00%

20.0000%

1365.00

5.00%

10.0000%

1332.50

2.50%

5.0000%

1313.00

1.00%

2.0000%

1300.00

0.00%

0.0000%

1235.00

-5.00%

0.0000%

1170.00

-10.00%

0.0000%

1105.00

-15.00%

0.0000%

1040.00

-20.00%

-5.8825%

910.00

-30.00%

-17.6475%

780.00

-40.00%

-29.4125%

650.00

-50.00%

-41.1775%

520.00

-60.00%

-52.9425%

390.00

-70.00%

-64.7075%

260.00

-80.00%

-76.4725%

130.00

-90.00%

-88.2375%

0.00

-100.00%

-100.0000%



JPMorgan Structured Investments —
Buffered Return Enhanced Notes Linked to the S&P 500 ® Index

 TS-1

Hypothetical Examples of Amounts Payable at Maturity

The following examples illustrate how the total returns set forth in the table and graph above are calculated.

Example 1: The level of the Index increases from the Initial Index Level of 1300 to an Ending Index Level of 1365. Because the Ending Index Level of 1365 is greater than the Initial Index Level of 1300 and the Index Return of 5% multiplied by 2 does not exceed the hypothetical Maximum Total Return of 62.60%, the investor receives a payment at maturity of $1,100 per $1,000 principal amount note, calculated as follows:

$1,000 + [$1,000 x (5% x 2)] = $1,100

Example 2: The level of the Index decreases from the Initial Index Level of 1300 to an Ending Index Level of 1105. Because the Ending Index Level of 1105 is less than the Initial Index Level of 1300 by not more than the Buffer Amount of 15%, the investor receives a payment at maturity of $1,000 per $1,000 principal amount note.

Example 3: The level of the Index increases from the Initial Index Level of 1300 to an Ending Index Level of 1820 . Because the Ending Index Level of 1820 is greater than the Initial Index Level of 1300 and the Index Return of 40% multiplied by 2 exceeds the hypothetical Maximum Total Return of 62.60%, the investor receives a payment at maturity of $1,626 per $1,000 principal amount note, the maximum payment on the notes.

Example 4: The level of the Index decreases from the Initial Index Level of 1300 to an Ending Index Level of 910. Because the Ending Index Level of 910 is less than the Initial Index Level of 1300 by more than the Buffer Amount of 15%, the Index Return is negative and the investor receives a payment at maturity of $823.53 per $1,000 principal amount note, calculated as follows:

$1,000 + [$1,000 x (-30% + 15%) x 1.1765] = $823.53

Selected Purchase Considerations


JPMorgan Structured Investments —
Buffered Return Enhanced Notes Linked to the S&P 500 ® Index

 TS-2
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.

Selected Risk Considerations

An investment in the notes involves significant risks. Investing in the notes is not equivalent to investing directly in the Index or any of the component stocks of the Index. These risks are explained in more detail in the “Risk Factors” section of the accompanying product supplement no. 18-II dated June 2, 2008.


JPMorgan Structured Investments —
Buffered Return Enhanced Notes Linked to the S&P 500 ® Index

 TS-3

Historical Information

The following graph sets forth the historical performance of the S&P 500 ® Index based on the weekly historical Index closing level from January 3, 2003 through June 20, 2008. The Index closing level on June 24, 2008 was 1314.29. We obtained the Index closing levels below from Bloomberg Financial Markets. We make no representation or warranty as to the accuracy or completeness of the information obtained from Bloomberg Financial Markets.

The historical levels of the Index should not be taken as an indication of future performance, and no assurance can be given as to the Index closing level on any of the Averaging Dates. We cannot give you assurance that the performance of the Index will result in the return of any of your initial investment.

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 $ 37.50 p er $1,000 principal amount note. See “Underwriting” beginning on page PS-28 of the accompanying product supplement no. 18-II.

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 $ 37.50 per $1,000 principal amount note.


JPMorgan Structured Investments —
Buffered Return Enhanced Notes Linked to the S&P 500 ® Index

 TS-4