New Issue: JPMorgan prices $3.88 million daily observation knock-out notes linked to Starbucks

By Angela McDaniels

Tacoma, Wash., July 26 - JPMorgan Chase & Co. priced $3.88 million of 0% capped daily observation knock-out notes due Aug. 8, 2012 linked to the common stock of Starbucks Corp., according to a 424B2 filing with the Securities and Exchange Commission.

If the closing price of Starbucks stock falls by more than 27.5% during the life of the notes, the payout at maturity will be par plus the stock return, which could be positive or negative. Otherwise, the payout will be par plus the greater of the stock return and 12%.

In each case, the return will be capped at 15%.

J.P. Morgan Securities LLC is the agent.

Issuer:	JPMorgan Chase & Co.
Issue:	Capped daily observation knock-out notes
Underlying stock:	Starbucks Corp. (Nasdaq: SBUX)
Amount:	$3,882,000
Maturity:	Aug. 8, 2012
Coupon:	0%
Price:	Par
Payout at maturity:	If Starbucks stock falls by more than 27.5% during life of notes, par plus stock return; otherwise, par plus greater of stock return and 12%; in either case, return capped at 15%
Initial share price:	$40.34
Pricing date:	July 22
Settlement date:	July 27
Agent:	J.P. Morgan Securities LLC
Fees:	1%
Cusip:	48125XZA7

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