The 401(k) Savings Plan

Transcription

1 The 401(k) Savings Plan Your Wealth Accumulation Program JPMorgan Chase offers a number of wealth accumulation plans that help you build income for your future. These plans include: The Retirement Plan The 401(k) Savings Plan The Employee Stock Purchase Plan Working together, the components of these plans along with your personal savings and Social Security benefits allow you to design a personal strategy to help you meet your long-term financial needs. This section will provide you with a better understanding of how the 401(k) Savings Plan works, including how and when benefits are paid. Questions? Contact the 401(k) Savings Plan Call Center: JPMC401k ( ) TDD: Service Representatives are available from 8 a.m. to 8 p.m. Eastern Time, Monday through Friday, except New York Stock Exchange holidays. To Access the 401(k) Savings Plan Web Center: From Work: Go to Company Home > My Work > 401(k) Savings Plan Web Center From Home: Go to via the Internet, and follow the path above JPMorgan Chase understands the importance of planning for the future; that s why we offer the 401(k) Savings Plan. Joining the JPMorgan Chase 401(k) Savings Plan is optional. If you participate, you decide how much to contribute to your account and how your savings should be invested. You can contribute on a before-tax basis that is, before federal and, in most cases, state and local taxes have been withheld. With before-tax contributions, you reduce your current taxable income and defer taxes on both your savings and any earnings on those savings until you withdraw them from the plan. You can also make Roth 401(k) contributions on an after-tax basis that is, after federal, state and local income taxes have already been withheld. In this case, you do not lower your taxable income, but when you take a qualified distribution, your contributions, including any investment earnings, are tax-free when withdrawn. Update: Your Guide to Benefits at JPMorgan Chase This document is your summary plan description of the JPMorgan Chase 401(k) Savings Plan. The U.S. Department of Labor requires JPMorgan Chase to routinely provide benefits plan summaries to plan participants. Please retain this information for your records. This document does not include all of the details contained in the applicable insurance contracts, plan documents, and trust agreements. If there is a discrepancy between the official plan documents and this summary, the official plan documents will govern. Be sure to read the About This Guide section and the Plan Administration section for more important details about the plan and this description, and for reference to the official plan documents. Effective 1/1/08 The 401(k) Savings Plan 1

2 In addition, if you are eligible and have completed one year of total service, JPMorgan Chase will generally match the first 5% of benefits pay you contribute to the plan. Taxes on your matching contributions and their investment earnings are deferred until you take a withdrawal or a distribution from the plan. Whatever you re working toward, the 401(k) Savings Plan can help you get that much closer to your long-term financial goals. This section will provide you with a better understanding of how the 401(k) Savings Plan works, including how and when benefits are paid. Securities Act This summary plan description is incorporated by reference into the 401(k) Savings Plan Prospectus on page 54 covering securities that have been registered under the Securities Act. The enclosed prospectus is prepared and circulated in connection with JPMorgan Chase s obligations under United States securities laws to its shareholders, not pursuant to any obligations set forth in the Employee Retirement Income Security Act (ERISA). Accordingly, participants should be aware that the prospectus is a separate document unrelated to this summary plan description, and the financial statements referred to by it, and incorporated by reference therein, have not been prepared pursuant to the fiduciary duties imposed by ERISA. Effective 1/1/08 The 401(k) Savings Plan 2

3 Table of Contents Page Important Terms... 5 Some Quick Facts... 8 Participating in the 401(k) Savings Plan... 9 Eligibility... 9 When Participation Begins... 9 How to Enroll Fiduciary Responsibilities Beneficiaries When Contributions End When Participation Ends Contributions to Your Account Your Contributions Catch-Up Contributions (If Eligible) JPMorgan Chase Matching Contributions JPMorgan Chase Non-Matching Contributions Rollover Contributions When Contributions Are Vested Legal Limits on Benefits Pay and Contributions How Will My Taxable Income be Affected? Making a Decision about Your Contributions Maximizing Your Total Savings Investment Funds Investment Funds Lifestyle Portfolios Investment Fund Performance Investment Management Fees, Recordkeeping, and Other Plan Expenses Temporary Investments Accounting Method Investing Your Contributions Investing Future Contributions Reallocations and Transfers of Your Existing Vested Account Balance Daily Plan Processing Limits on Reallocations/Transfers Affecting the International Funds and Mutual Funds Equity Wash Rules Limitations on Certain Reallocations or Transfers from the Stable Value Fund Potential Adjustments to JPMorgan Chase Common Stock Fund Transactions Borrowing or Withdrawing from Your Account Loans Withdrawals While Employed When and How a Withdrawal Is Paid JPMorgan Chase Common Stock Fund Dividend Election Payment Options How Your 401(k) Savings Plan Account Is Paid Receiving Account Payments After You Retire or Terminate from JPMorgan Chase Mandatory Distributions The JPMorgan Chase U.S. Benefits Program is available to most full-time and part-time U.S. dollar-paid salaried employees who are regularly scheduled to work 20 hours or more a week and who are employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the JPMorgan Chase U.S. Benefits Program. This information does not include all of the details contained in the applicable insurance contracts, plan documents, and trust agreements. If there is any discrepancy between this information and the governing documents, the governing documents will control. JPMorgan Chase & Co. expressly reserves the right to amend, modify, reduce, change, or terminate its benefits and plans at any time. The JPMorgan Chase U.S. Benefits Program does not create a contract or guarantee of employment between JPMorgan Chase and any individual. JPMorgan Chase or you may terminate the employment relationship at any time. Effective 1/1/08 The 401(k) Savings Plan 3

4 Payments to a Beneficiary Tax Consequences Additional Income Tax Rollovers Direct Rollovers Traditional Rollover Additional Plan Information Right to Amend If You Become Divorced or Legally Separated Voting of JPMorgan Chase Common Stock Approved Quarterly Window Periods Top-Heavy Rules Pension Benefit Guaranty Corporation Appeals Process Additional Information on Investment Funds If Your Situation Changes Appendix A Heritage Morgan and Heritage Bank One Plan Participants Former Participants in The Deferred Profit Sharing Plan of Morgan Guaranty Trust Company of New York and Affiliated Companies for United States Employees Former Participants in the Bank One Savings and Investment Plan Appendix B Bank One Supplemental Savings and Investment Plan Contributions Investing Your SSIP Account Vesting Distributions Accessing Your Account (k) Savings Plan Prospectus Effective 1/1/08 The 401(k) Savings Plan 4

5 Important Terms As you read this summary of the JPMorgan Chase 401(k) Savings Plan, you ll come across some important terms related to the plan. Many of those important terms are defined here to help you better understand the plan. Term After-Tax Contributions Before-Tax Contributions Benefits Pay for the 401(k) Savings Plan Break in Service Catch-Up Contributions Common Stock Direct Fund Dividend Income Employee Stock Ownership Plan (ESOP) Definition Contributions you may have previously made to a heritage 401(k) plan after federal, state, and local income taxes were withheld. These contributions should not be confused with Roth 401(k) contributions. Contributions you make to the plan that are taken from your pay before federal (and, in most cases, state and local) taxes are withheld. This lowers your taxable income and your current income tax liability. The Internal Revenue Code limits the amount you may contribute annually to the 401(k) Savings Plan on a combined before-tax and Roth 401(k) basis. For 2008, the combined legal limit is $15,500. This amount is subject to change periodically. For purposes of making employee contributions, benefits pay is your annual base pay plus applicable job differential pay (e.g., shift pay). It does not include any annual bonuses, overtime, special recognition, or other incentive awards you might receive. In certain situations, your benefits pay may include other cash earnings (e.g., commissions, draws, and overrides) paid under certain non-annual incentive plans that provide compensation in lieu of base salary. For 2008, the legal limit on benefits pay is $230,000. Generally, the period beginning on the date your employment with JPMorgan Chase, or an affiliate that is a member of the controlled group, ends for any reason and ending on the date you re rehired. A break in service may affect your total service, and therefore, your right to receive matching contributions under the 401(k) Savings Plan. Please see If Your Situation Changes on page 47 for a more detailed explanation. Before-tax and/or Roth 401(k) contributions that may be made annually to the 401(k) Savings Plan by eligible participants who are age 50 or older as of December 31 of any calendar year. The Internal Revenue Code limits the amount you can contribute annually on a catch-up basis. For 2008, the legal limit is $5,000. This amount is subject to change periodically. Please see Catch-Up Contributions (If Eligible) on page 12 for more information. Common stock represents an ownership interest in a corporation. If the company has also issued preferred stock, both common and preferred stockholders have ownership rights. Common stockholders assume a greater risk of loss than preferred stockholders, but generally exercise greater control and may gain a greater reward in the form of dividends and capital appreciation. One of the investment funds in the JPMorgan Chase 401(k) Savings Plan that represents a single investment fund under the plan. A payment of cash or stock from a company s retained earnings to each stockholder as declared by the company s board of directors. Dividends are not guaranteed. The JPMorgan Chase Common Stock Fund, one of the plan s investment funds, is also an Employee Stock Ownership Plan (ESOP). You can elect to have any dividend income reinvested in the JPMorgan Chase Common Stock Fund, or you can have it distributed to you in cash. Please Note: This type of dividend does not qualify for the lower tax rate normally applicable to dividends paid directly by a corporation. Please see JPMorgan Chase Common Stock Fund Dividend Election on page 34 for more information. Effective 1/1/08 The 401(k) Savings Plan 5

6 Term Full-Time Employee Hardship Withdrawals Heritage Plans JPMorgan Chase Common Stock Fund JPMorgan Chase Matching Contributions JPMorgan Chase Non-Matching Contributions Lifestyle Portfolio Market Value or Fair Value Net Asset Value per Unit (NAV) Definition An employee who is regularly scheduled to work 40 hours a week. Withdrawals of certain types of vested money are allowed only if you have a serious and immediate financial hardship that cannot be met by other resources and is limited to very specific circumstances. Please see Withdrawals While Employed on page 30 for more information. The predecessor savings plans that heritage Bank One and heritage JPMorgan Chase employees participated in prior to January 1, The predecessor plans are the Bank One Corporation Savings and Investment Plan and the JPMorgan Chase 401(k) Savings Plan. An investment fund that invests substantially all its assets in shares of JPMorgan Chase common stock except for a certain amount of uninvested cash to use in settling daily transactions. Contributions made by JPMorgan Chase to the 401(k) Savings Plan on behalf of certain eligible employees after they complete one year of total service. These contributions match, dollar for dollar, the first 5% of benefits pay that you contribute to the 401(k) Savings Plan on a per pay period basis (up to the legal limit). Please see JPMorgan Chase Matching Contributions on page 13 for more information. Please Note: If your total annual cash compensation is $250,000 or more, you are not eligible to receive matching contributions under the 401(k) Savings Plan. This determination is made as of each August 1 and applies for the next succeeding calendar year. Discretionary contributions made by JPMorgan Chase, from time to time, for certain non-highly compensated designated employees. Please see JPMorgan Chase Non-Matching Contributions on page 13 for more information. In the JPMorgan Chase 401(k) Savings Plan, an investment portfolio that is made up of a predetermined combination of some of the plan s direct funds. In no case does it include the JPMorgan Chase Common Stock Fund. The investment mix of a lifestyle fund reflects its particular investment objectives and a defined degree of risk and return. The value of each plan investment fund normally determined as of the close of business of the New York Stock Exchange. It is generally based on market quotations. If market quotations are not available for particular securities or are not deemed to be representative of their value, the plan uses various methods to determine the value of such securities that reflect their fair value. The fair market value of the assets of each investment fund s total assets less liabilities, divided by the number of units allocated to the fund. The value of a single unit is called net asset value per unit, or NAV. Part-Time Employee A salaried employee who is regularly scheduled to work between 20 and 39 hours per week. Qualified Distribution For purposes of determining whether any investment earnings associated with Roth 401(k) contributions can be withdrawn tax-free, a qualified distribution is one in which: Your Roth 401(k) account has been in existence for at least five years. The five-year holding period begins with the first tax year for which you made a Roth 401(k) contribution to the plan, and continues to run even if you stop making Roth 401(k) contributions; and Contributions and earnings are not withdrawn until you reach age , die, or become disabled. Effective 1/1/08 The 401(k) Savings Plan 6

7 Term Rollover Contribution Roth 401(k) Contributions Total Annual Cash Compensation Total Service Unit Vesting Definition A contribution you make to the JPMorgan Chase 401(k) Savings Plan from a previous employer s tax-qualified plan (like another 401(k) plan), from a conduit or contributory Individual Retirement Account (IRA), from another qualified plan including a governmental plan, or from the JPMorgan Chase Retirement Plan (after you terminate employment with the company). Please see Rollovers on page 42 for more information. Contributions you make to the plan that are taken from your pay after federal, state and local taxes are withheld. This does not lower your taxable income or your current income tax liability. The Internal Revenue Code limits the amount you may contribute annually to the 401(k) Savings Plan on a combined before-tax and Roth 401(k) basis. For 2008, the combined legal limit is $15,500. This amount is subject to change periodically. For purposes of determining your eligibility to receive JPMorgan Chase matching contributions and non-matching contributions, total annual cash compensation is your base salary plus applicable job differential pay (e.g., shift pay) as of each August 1, plus any cash earnings from any incentive plans (e.g., annual bonus, commissions, draws, overrides, and special recognition payments or incentives) that are paid to or deferred by you for the previous 12-month period. (Overtime is not included.) Your total annual cash compensation is calculated as of each August 1 to take effect the following January 1 and will remain unchanged throughout the year. Generally, the period beginning on your first business day actively-at-work as an employee of JPMorgan Chase or an affiliate and ending when your employment ends. This generally includes all periods of employment with JPMorgan Chase or any of the merged companies that have become part of JPMorgan Chase. If you had service with heritage Bank One, your total service will not include such prior Bank One service to the extent it would not have been recognized by the heritage Bank One Savings and Investment Plan. A portion of ownership in an investment fund (or portfolio). Your right or your designated beneficiary s right to receive your entire plan account balance. You re always 100% vested in (meaning you have a non-forfeitable right to) the value of your contributions whether before-tax, Roth 401(k), or rollover and any investment experience associated with these contributions, as well as the value of any associated matching contributions (adjusted for investment experience). JPMorgan Chase non-matching contributions, if any, will generally vest after you complete three years of service. Effective 1/1/08 The 401(k) Savings Plan 7

8 Some Quick Facts Reasons for Joining Participation How Much You Can Contribute How JPMorgan Chase Makes Matching Contributions How Contributions Are Invested When You re Vested Accessing Funds from Your Account How Often Your Account Is Valued The 401(k) Savings Plan is a key component of the JPMorgan Chase Wealth Accumulation Plans. The plan offers a tax-effective way for you to save for your future, offering both before-tax contribution and Roth 401(k) contribution features. Additionally, saving is easy through convenient payroll deductions. Finally, most participants who complete one year of service are eligible to receive JPMorgan Chase matching contributions. Full-time employees are eligible to enroll in the 401(k) Savings Plan as of your first day of employment with JPMorgan Chase. Part-time employees are eligible to participate the first of the month after completing 90 days of service. Eligible participants receive JPMorgan Chase matching contributions the first of the month following completion of one year of total service. Please see Important Terms beginning on page 5 for the definition of Total Service. You can contribute up to 50% of your benefits pay per pay period on a before-tax and/or Roth 401(k) basis (up to certain legal limits). Please see Important Terms beginning on page 5 for a definition of Benefits Pay. The combined legal limit for before-tax and Roth 401(k) contributions in 2008 is $15,500. In addition, participants who are age 50 or older as of December 31 of any calendar year may be eligible to make catch-up contributions to the plan. The legal limit for 2008 is $5,000. For certain eligible participants, after you complete one year of total service, JPMorgan Chase matches your contributions, dollar for dollar, up to the first 5% of benefits pay on a per pay period basis. Please Note: If your total annual cash compensation is $250,000 or more, you are not eligible to receive matching contributions under the 401(k) Savings Plan. Please see Important Terms beginning on page 5 for the definition of Total Annual Cash Compensation. This determination is made as of each August 1 and applies for the next succeeding calendar year. You decide how your contributions are invested among the investment funds (in 1% increments to a total of 100%) offered by the plan. You can also decide if you want any future JPMorgan Chase matching contributions, if eligible, invested in the plan s JPMorgan Chase Common Stock Fund or invested in the same manner as your employee contributions. You are always 100% vested in (meaning you have a non-forfeitable right to) the value of any contributions you make to the plan (adjusted for investment experience) as well as the value of any associated JPMorgan Chase matching contributions (adjusted for investment experience), if eligible. JPMorgan Chase non-matching contributions, if any, will generally vest after you complete three years of service. While you re an active employee, you can access your account through loans and/or withdrawals. Please see Borrowing or Withdrawing from Your Account on page 28 for more information. The value of your account is calculated each day that the New York Stock Exchange is open for trading. With certain exceptions, transactions are processed the same business day if you request the transaction by 4 p.m. Eastern Time or the close of the New York Stock Exchange, whichever is earlier. The transaction is generally based on the closing market value/fair value on the day you request it and is reflected in your account through the 401(k) Savings Plan Web Center and Call Center the next business day. Please see Daily Plan Processing on page 26 for information about what happens if there is a market disruption. Effective 1/1/08 The 401(k) Savings Plan 8

9 Participating in the 401(k) Savings Plan The JPMorgan Chase 401(k) Savings Plan is a defined contribution plan. This means the value of your account depends on the amount of contributions made, as well as gains and losses based on your investment choices. The general guidelines for participating in the JPMorgan Chase 401(k) Savings Plan are described in this section. Eligibility Your participation in the JPMorgan Chase 401(k) Savings Plan is optional. In general, you are eligible to participate if you are: A U.S. dollar-paid employee who receives salary or earns draw, commissions, or production overrides ( salaried employee ); Regularly scheduled to work 20 or more hours per week; and Employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the plan. Please Note: An individual classified or employed in a work status other than as a common law salaried employee by his/her employer, such as an: Independent contractor/agent (or its employee), Hourly-paid employee, Intern, and/or Occasional/seasonal, leased, or temporary employee, is not eligible to participate in the plan regardless of whether an administrative or judicial proceeding subsequently determines this individual to have instead been a common law salaried employee. When Participation Begins If you re an eligible full-time employee, you are immediately eligible to enroll in the 401(k) Savings Plan as of your first day of employment with JPMorgan Chase there s no waiting period. If you are an eligible part-time employee, you are eligible to enroll in the plan the first of the month after completing 90 days of total service. However, in either case, it s your responsibility to enroll in the plan. Your enrollment will become effective in accordance with administrative practices. In general, as an eligible participant, you may receive JPMorgan Chase matching contributions the first of the month following completion of one year of total service. Please see JPMorgan Chase Matching Contributions on page 13 for more information. Confirmation Statements You ll receive a confirmation statement following most requested 401(k) Savings Plan transactions. For instance, you ll receive a statement after you first enroll in the plan. In addition, if you change your future contributions or reallocate or transfer your existing account balance, you ll receive a statement confirming your elections. Effective 1/1/08 The 401(k) Savings Plan 9

10 How to Enroll When you become eligible to enroll in the plan, you will receive a 401(k) Savings Plan enrollment kit containing information regarding the plan and the enrollment process. Before enrolling, it s important to review the materials carefully to ensure you understand all the details of the plan, including the risks of investing. You can access your 401(k) Savings Plan enrollment materials online via Company Home > HR & Personal > Pay & Benefits > Enrollment Materials. (A copy of these materials will also be sent to you via interoffice mail. However, you do not need to wait for these materials to arrive to make your enrollment elections online.) Fiduciary Responsibilities The 401(k) Savings Plan is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974 (ERISA) relating to defined contribution plans. The plan is intended to constitute a plan described in Section 404(c) of ERISA and Title 29 of the Code of Federal Regulations Section C-1. Under these regulations, fiduciaries of the plan may be released of liability for any losses that are the direct and necessary result of investment instructions given by a participant or beneficiary. Beneficiaries A beneficiary is the person(s) you name to receive your vested plan benefit in the event of your death. You can name any individual to be your beneficiary but only on a form approved and accepted by the plan. However, if you re legally married, your spouse will automatically be your sole primary beneficiary under current law. If you want to designate someone other than your spouse as your primary beneficiary, your spouse must give written, notarized consent (this consent is irrevocable). Please Note: If you name someone as a beneficiary and you subsequently marry, your prior designation becomes invalid and your new spouse will be your beneficiary. Your most recent beneficiary designation will remain in effect until you make a change. If you re not married and don t name a beneficiary, or if your beneficiary predeceases you, vested benefits are paid to your estate upon your death. Changing Your Beneficiary You can change your 401(k) Savings Plan beneficiary at any time (subject to the rules for naming a beneficiary) by completing the Beneficiary Designation Form for JPMorgan Chase s Benefit Plans that is accepted by the plan administrator. To request this form, please call accesshr at JPMChase ( ). (The TDD number for participants with a hearing impairment is ) Service Representatives are generally available from 8 a.m. to 7 p.m. Eastern Time, Monday through Friday, except certain U.S. holidays. This form is also available online through Company Home > HR & Personal > Pay & Benefits. Effective 1/1/08 The 401(k) Savings Plan 10

11 When Contributions End Your contributions to the 401(k) Savings Plan and any associated JPMorgan Chase matching contributions, if eligible, will end when: You stop contributing to the plan; You reach any plan or legal limits; Your benefits pay ends; Your employment with JPMorgan Chase or a participating affiliate ends for any reason; You transfer to an affiliate/unit that doesn t participate in the plan; or You die. When Participation Ends Your participation in the plan ends when you or your beneficiary receives payment of your vested account balance. Effective 1/1/08 The 401(k) Savings Plan 11

12 Contributions to Your Account This section provides important details about the types of contributions you can make to the plan and, for certain eligible employees (as described under JPMorgan Chase Matching Contributions on page 13), the dollar-for-dollar matching contributions that JPMorgan Chase will automatically make to the plan on your behalf on the first 5% of benefits pay you contribute per pay period. Please see Important Terms beginning on page 5 for the definition of Benefits Pay. Your Contributions You can contribute up to 50% (in increments of 1%) of your benefits pay each pay period on a combined before-tax and/or Roth 401(k) basis (subject to legal limits): Before-tax Contributions Contributions made before federal income taxes, and in most cases, state, and local income taxes are withheld. With before-tax contributions, you lower your current taxable income during the year the contributions are made, and your take-home pay is, in most cases, higher than it would be if you contributed the same amount on a Roth 401(k) basis. Roth 401(k) Contributions Contributions made on an after-tax basis, which means federal, state, and local income taxes have already been withheld. With Roth 401(k) contributions, you do not lower your current taxable income during the year contributions are made, and your take-home pay is, in most cases, lower than it would be if you contributed the same amount on a before-tax basis. The combined annual legal limit for contributions in 2008 is $15,500. Your contributions will automatically be capped once they reach the annual legal limit. If this happens, your contributions will automatically resume at the beginning of the following calendar year at your last elected contribution rate. Any existing after-tax contributions from heritage plans will remain invested in the plan according to your elections and continue to be subject to investment experience. The investment earnings on these contributions do not receive the favorable tax treatment afforded to investment earnings on Roth 401(k) contributions. You can change the amount of your 401(k) Savings Plan contributions at any time through the 401(k) Savings Plan Web Center or Call Center. Any changes you make generally become effective according to administrative practices. Catch-Up Contributions (If Eligible) If you are at least age 50, or will reach age 50 at any time during the calendar year, you may be eligible to make additional before-tax and/or Roth 401(k) contributions known as catch-up contributions (subject to legal limits). For 2008, the combined annual catch-up contribution limit is $5,000. You are eligible to make catch-up contributions if the following applies to you: You will be at least age 50 by December 31 of the current year; and You will reach the annual legal limit on contributions ($15,500 in 2008); or You contribute to the plan at the maximum annual rate of 50% but will not reach the annual legal limit on contributions. JPMorgan Chase Matching Contributions Because matching contributions are made each pay period, you should carefully consider the effect your contribution elections have on matching contributions (if eligible). Please see Maximizing Your Total Savings on page 16 for more information. Potential Additional Limits There also may be additional limits imposed on contributions made by highly compensated employees. These limits are based on the ratio of contribution amounts to highly compensated and non-highly compensated employees. In 2008, you re generally considered a highly compensated employee if your total compensation is $105,000 or more for the year. (This definition is subject to change annually.) These limits may require reductions in the rate of contributions made during the year as well as refunds of contributions and earnings following the end of the year. Effective 1/1/08 The 401(k) Savings Plan 12

13 If you meet the requirements for catch-up contributions described on page 12, you may want to consider making an election to contribute up to an additional $5,000 to the plan. The annual legal limit for catch-up contributions in 2008 is $5,000. Your catch-up contributions will automatically be capped once they reach the annual legal limit. If this happens, your catch-up contributions will automatically resume at the beginning of the following calendar year at your last elected catch-up contribution rate. However, the amount is not adjusted for any increase in the catch-up contribution limit. Keep in mind that any catch-up contributions you make will be in addition to your regular before-tax and/or Roth 401(k) contributions and will be invested in the same manner as your regular employee contributions. When making your election, you will specify a dollar amount to be taken each pay period. You can change the amount of your catch-up contributions at any time through the 401(k) Savings Plan Web Center or Call Center. Any changes you make generally become effective according to administrative practices. JPMorgan Chase Matching Contributions If eligible, beginning the first of the month coincident with or next following the completion of one year of total service, JPMorgan Chase will match, dollar for dollar, the first 5% of benefits pay you contribute to the plan per pay period on a combined before-tax, Roth 401(k), and catch-up basis (subject to legal limits). Please see Important Terms beginning on page 5 for the definition of Total Service. Please refer to Maximizing Your Total Savings on page 16 for information about how these matching contributions may affect your contribution elections. Please Note: If your total annual cash compensation is $250,000 or more, you are not eligible to receive matching contributions under the 401(k) Savings Plan. This determination is made as of each August 1 and applies for the next succeeding calendar year. JPMorgan Chase Non-Matching Contributions JPMorgan Chase may, from time to time, make discretionary contributions for certain designated non-highly compensated employees. If JPMorgan Chase determines to make a non-matching contribution, the employees designated to receive the contribution will be notified. Please see When Contributions Are Vested on page 14 for more information on when non-matching contributions are vested. Rollover Contributions You are eligible to make a rollover contribution to the 401(k) Savings Plan at any time after your employment begins or if you have a 401(k) Savings Plan account balance after you leave the company. Your rollover contribution can be made after you receive a distribution from: Your previous employer s qualified defined contribution or defined benefit plan; A conduit or contributory Individual Retirement Account (IRA); A governmental 457 plan; or A 403(b) annuity plan. Saver s Credit Certain individuals may be eligible to receive an income tax credit of up to $1,000 (or $2,000 if filing jointly) for contributing to qualified tax-deferred retirement plans, such as the 401(k) Savings Plan. These credits are limited to individuals whose adjusted gross income (AGI) is less than or equal to the following amounts for 2008: $53,000 for couples filing income taxes jointly; $39,750 for individuals who file as heads of households; and $26,500 for single taxpayers. For more information, please contact your personal financial planner or tax advisor. Effective 1/1/08 The 401(k) Savings Plan 13

14 By rolling over your distribution to the plan, you ll continue to defer taxes on it. You ll also avoid a 10% penalty tax that may apply to your distribution. After your employment with the company terminates, you will have the same rollover choices that are available to active employees, assuming you continue to maintain an account balance in the 401(k) Savings Plan. In addition, you will have the ability to roll over your vested lump-sum distribution from the JPMorgan Chase Retirement Plan to the 401(k) Savings Plan; in this instance, a 401(k) account balance is not required. A Rollover Application is available via the 401(k) Savings Plan Web Center or Call Center. When Contributions Are Vested You are always 100% vested in (meaning you have a non-forfeitable right to) the value of any before-tax and/or Roth 401(k) contributions, as well as rollover contributions, you make to the 401(k) Savings Plan (adjusted for investment experience). You are always 100% vested in the value of any associated JPMorgan Chase matching contributions, if eligible, adjusted for investment experience. JPMorgan Chase non-matching contributions, if any, will generally vest after you complete three years of service. Legal Limits on Benefits Pay and Contributions The Internal Revenue Code limits the amount of benefits pay that can be considered for purposes of making employee contributions to a qualified 401(k) plan. For 2008, this amount is $230,000. This amount is subject to change over time. In addition, the Internal Revenue Code limits the amount you may contribute annually to a qualified 401(k) plan on a regular before-tax and/or Roth 401(k) basis, as well as on a combined catch-up basis. The combined annual legal limit for regular contributions in 2008 is $15,500, and $20,500 if you are age 50 or over in 2008 and eligible to make catch-up contributions. These contributions limits apply across all 401(k) plans in which you participate during a calendar year. JPMorgan Chase will monitor your benefit pay and before-tax, Roth 401(k), and catch-up contributions to the 401(k) Savings Plan to ensure that you don t exceed the legal limits. However, if you contributed to the plan of any other employer during the year, it is your responsibility to monitor compliance with legal limits on contributions. If you elect a contribution percentage that results in your total before-tax and/or Roth 401(k) contributions exceeding the legal limit for the year, you may request a refund of the excess amount. All refunds for the excess amounts contributed during the year must be requested no later than April 1 of the following year. If these contributions are not distributed to you before April 15 following the year in which they were contributed, you will be taxed twice on these contributions once in the year of contribution and again in the year of distribution. To request a refund, please contact the 401(k) Savings Plan Call Center. Effective 1/1/08 The 401(k) Savings Plan 14

15 How Will My Taxable Income be Affected? The following examples show how making before-tax or Roth 401(k) contributions to the 401(k) Savings Plan can affect your pay. Please Note: The numbers shown below are for illustrative purposes only. For example, state and local taxes or certain other payroll deductions are not reflected. In addition, the actual rate of your Federal taxes may vary depending on your individual situation. Example 1: Description Before-Tax Saving Roth 401(k) Saving Annual Benefits Pay $40,000 $40,000 Less Before-Tax Contributions -2,000-0 Taxable Income $38,000 $40,000 Less Federal Income Taxes (assumed 18% tax rate) Less Roth 401(k) Contributions -6,840-7, ,000 Take-Home Pay $31,160 $30,800 In the above example, contributing $2,000 on a Roth 401(k) basis instead of on a before-tax basis reduces the individual s take-home pay by $360. Example 2: Description Before-Tax Saving Roth 401(k) Saving Annual Benefits Pay $100,000 $100,000 Less Before-Tax Contributions -10,000-0 Taxable Income $90,000 $100,000 Less Federal Income Taxes (assumed 28% tax rate) -25,200-28,000 Less Roth 401(k) Contributions -0-10,000 Take-Home Pay $64,800 $62,000 In the above example, contributing $10,000 on a Roth 401(k) basis instead of on a before-tax basis reduces the individual s take-home pay by $2,800. To better understand how Roth 401(k) contributions and before-tax contributions may affect your personal situation, you can access a modeling tool available on the 401(k) Savings Plan Web Center. The Roth 401(k) Planner shows the likely impact on your take-home pay and allows you to model the retirement income provided when contributing on a before-tax basis versus a Roth 401(k) basis. Roth 401(k) Planner To access the Roth 401(k) Planner, go to Company Home > My Work > 401(k) Savings Plan Web Center > My Accounts > Plan Highlights > Roth 401(k) Planner. Effective 1/1/08 The 401(k) Savings Plan 15

16 Making a Decision about Your Contributions A decision about whether to make Roth 401(k) contributions or before-tax contributions depends on many factors, such as your age, financial needs, tolerance for risk, and what you believe your income tax rate will be during retirement. While everyone s individual situation differs, below are some general guidelines that you may find useful when making your decision. Generally, you may prefer making Roth 401(k) contributions if: You believe you will be in the same or higher income tax bracket during retirement than you are now. You cannot contribute to a Roth IRA outside of the plan because you exceed the income limitations. (Generally, you cannot contribute to a Roth IRA if your adjusted gross income is greater than $114,000 for single filers or $166,000 for married filing jointly.) You can afford to pay taxes on your contributions now and could benefit from potentially many years of accumulated tax-free investment earnings. Conversely, you may prefer making before-tax contributions if: You believe you will be in a lower income tax bracket during retirement than you are now. You want to take advantage of the tax break you receive in your current taxable income. You qualify for any earned income credits or dependent care credits. (Contributing on a Roth 401(k) basis will not decrease your taxable income and thus may affect your ability to qualify for these credits.) The above information is not intended to be, nor should it be construed as, tax advice. Because the tax rules can be quite complicated, you are encouraged to consult with a qualified tax or financial advisor before deciding which type of contribution is right for you. The tax considerations of the type of contribution you make to the plan, beforetax and/or Roth 401(k), are important. Please see Tax Considerations of Contributions Made to the Plan on page 39 for more information. You should also review the Roth 401(k) Qualified Distribution section on page 40. Maximizing Your Total Savings Important Information About Your Contribution Rate and JPMorgan Chase Matching Contributions Participants in the 401(k) Savings Plan can have many investment objectives and strategies. For example, some participants want to maximize the contributions they make to the plan. Others want to maximize the amount of matching contributions they receive from the company. And some participants want to do both and maximize their total savings in the plan. After completing one year of total service, JPMorgan Chase provides most employees with dollar-for-dollar matching contributions on the first 5% of benefits pay contributed each pay period. As a result, if you expect to participate in the plan for the full calendar year, you may wish to contribute a consistent rate of at least 5% each pay period, but less than the percentage that would cause you to exceed the before-tax and Roth 401(k) contribution legal limit ($15,500 in 2008) before year-end. If you exceed the limit prior to year-end, your matching contributions will end, as well as your employee contributions. Effective 1/1/08 The 401(k) Savings Plan 16

17 By decreasing your Roth and/or before-tax contribution rate and ensuring that you receive matching contributions throughout the year you may actually have more total annual dollars invested in the plan. The following examples illustrate this approach: Contributing at 25% will give you annual contributions of And annual matching contributions of For a total annual savings under the plan of However, by limiting your contribution rate to You will still contribute annual contributions of But, you will receive matching contributions of Thus increasing your total annual savings under the plan to This chart assumes 24 equal semi-monthly pay periods. Doing the Math Annual Benefits Pay of $78,000 Annual Benefits Pay of $120,000 $15,500 $15,500 $3,150 $3,250 $18,650 $18,750 20% 13% $15,500 $15,500 $3,900 $6,000 $19,400 $21,500 To find the highest contribution rate that will allow you to receive JPMorgan Chase matching contributions for the longest period of time during the year, just do the math. JPMorgan Chase 401(k) Contributions Calculator To model the effects of contribution rates and related JPMorgan Chase matching contributions based on your personal situation, you can access the JPMorgan Chase 401(k) Contributions Calculator. It s available online at the 401(k) Savings Plan Web Center via My Work. Based on the information you input, the calculator provides a personalized analysis of what contribution rates can give you the highest matching contributions from JPMorgan Chase or the highest savings amount based on your current benefits pay. Divide the annual legal contribution limit ($15,500 in 2008) by your annual benefits pay*, multiply the result by 100, and round down to the lowest whole number: $15,500 = 100 = Your annual benefits pay Round down to the lowest whole number You are responsible for electing a deferral rate that makes the most sense for your personal financial situation. *For 2008, the amount that can be recognized as benefits pay under the plan is $230,000. If You Contribute for Less Than a Full Year If you re contributing for less than a full year, you ll need to divide $15,500 (the combined Roth 401(k) and before-tax legal limit) by the amount of benefits pay you ll have for the remainder of the year when you start contributing. The resulting amount up to a maximum of 50% is the maximum rate you may contribute for the remainder of the year. Effective 1/1/08 The 401(k) Savings Plan 17

18 Investment Funds To help you create an investment strategy that s right for your financial objectives, the 401(k) Savings Plan lets you invest your savings among a number of investment funds with different risk and return characteristics. As a participant in the 401(k) Savings Plan, it s your responsibility to determine which investment choices and what balance of risk are right for you. You alone are responsible for your investment choices. By diversifying your investments spreading them out among several funds you may be able to provide more long-term stability. Know the Facts About Your Investment Funds Although some information about the plan s investment funds have been summarized in this section, it s important that you fully understand all the facts about the investment funds (including objectives, historical performance, and risk) before investing. You should read the 401(k) Savings Plan Investment Fund Profiles brochure and applicable mutual fund prospectuses, including the risks associated with each fund, before making any investment fund elections. If you need a copy of these materials, please access the 401(k) Savings Plan Web Center or Call Center. Please Note: JPMorgan Chase may change or eliminate any investment fund under the 401(k) Savings Plan at any time. The investment funds are not deposits or obligations of nor guaranteed by JPMorgan Chase (or any of its respective affiliates). Nor are they insured by the Federal Deposit Insurance Corporation (FDIC) or any other governmental agency. Investment in these funds involves risks, including the possible loss of principal. Therefore, it s important that you make informed investment decisions only after carefully reading all the plan information (including the mutual fund prospectuses and the 401(k) Savings Plan Investment Fund Profiles brochure) available through the 401(k) Savings Plan Web Center or Call Center. If you need a copy of these materials, please access the 401(k) Savings Plan Web Center or Call Center. Invest Carefully The Department of Labor s Web site has more information about individual investing and diversification. Please go to for more information. To help achieve long-term retirement security, you should give careful consideration to the benefits of a well-balanced and diversified investment portfolio. Spreading your assets among different types of investments may help you achieve a favorable rate of return, while it may minimize your overall risk of losing money. This is because market or other economic conditions that cause one category of assets, or one particular security, to perform very well often cause another asset category, or another particular security to perform poorly. If you invest more than 20% of your retirement savings in any one company or industry, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it may be an effective strategy to help you manage investment risk. Investor Education Is Available Online Go to the 401(k) Savings Plan Web Center for a wide range of investor education topics, including information about retirement planning, understanding investments, and making investment decisions. The Web Center includes a number of interactive tools. You can access the Web Center from work or from home via the home page of My Work. With the exception of the JPMorgan Chase Common Stock Fund, the investment funds described in this section contain a number of securities issued by different corporations. In contrast, the JPMorgan Chase Common Stock Fund consists of a single security plus a small amount of cash. Thus, the JPMorgan Chase Common Stock Fund is not a diversified fund, and the value of an individual security can be more volatile than the market as a whole. Such volatility can be due to developments particular to the industry or the company, as well as to economic, political, regularity, and market developments. Effective 1/1/08 The 401(k) Savings Plan 18

19 In deciding how to invest your retirement savings, you should take into account all of your assets, including any retirement savings outside of the Plan. No single approach is right for everyone because, among other factors, individuals have different financial goals, different time horizons for meeting their goals, and different tolerances for risk. It is also important to periodically review your investment portfolio, your investment objectives, and the investment options under the Plan to help ensure that your retirement savings will meet your retirement goals. Investment Funds Most of the investment funds generally can be categorized as either a fixed income or an equity investment. The following chart provides a brief description of these investment funds. It is not intended to provide you with a complete overview of each fund. Therefore, before you make any investment decisions, please refer to the 401(k) Savings Plan Investment Fund Profiles brochure and the applicable mutual fund prospectuses available through the 401(k) Savings Plan Web Center or Call Center. Please Note: In general, all or any part of the assets of the plan s investment funds may be invested in short-term securities or other short-term investments. This allows the funds to meet liquidity needs or achieve investment objectives. 401(k) Savings Plan Investment Fund Characteristics Investment Fund The Objective/ Goal of This Fund Is to This Investment Fund Is Primarily Invested in The Value of Your Investment in This Fund Can Change Due to This Investment Fund Offers the Following Risk/Return Potential For the funds marked with an asterisk, please see Limits on Reallocations/Transfers Affecting the International Funds and Mutual Funds on page 27 and Equity Wash Rules Limitations on Certain Reallocations or Transfers from the Stable Value Fund on page 27 for more information. Short-Term Fixed Income* Stable Value* Preserve capital and generate current income Provide stability of principal with a steady return of interest income High-quality, short-term fixed income securities and cash instruments with an average maturity of less than 90 days Fixed-rate investment contracts issued by insurance companies and banks and bond commingled funds with book-value wrapper contracts Increase/decrease in securities value over purchase price, interest income, and reinvested income Increase/decrease in the interest rate earned by the fund over time Low Low to moderate Effective 1/1/08 The 401(k) Savings Plan 19

20 Investment Fund The Objective/ Goal of This Fund Is to This Investment Fund Is Primarily Invested in The Value of Your Investment in This Fund Can Change Due to This Investment Fund Offers the Following Risk/Return Potential For the funds marked with an asterisk, please see Limits on Reallocations/Transfers Affecting the International Funds and Mutual Funds on page 27 and Equity Wash Rules Limitations on Certain Reallocations or Transfers from the Stable Value Fund on page 27 for more information. Government Inflation- Protected Bond Core Bond * (mutual fund) Intermediate Bond High Yield Bond Large Cap Value Index Large Cap Value Generate a rate of return that exceeds inflation while seeking to preserve capital Maximize total return Generate current income while seeking to preserve capital Maximize long- term yield and capital appreciation Approximate overall performance of stocks that make up the Russell 1000 Value Index Provide long-term capital appreciation and dividend income Inflation-protected securities ( IPS ) Intermediate-term bonds with average maturities of 4 to 12 years through purchase of shares in JPMorgan Core Bond Fund Intermediate-term bonds with average maturities of 5 to15 years Below investment grade (speculative) high-yield bonds Common stocks of companies that make up the Russell 1000 Value Index Common stocks of large companies that the investment manager believes exhibit value characteristics Increase/decrease in securities value over purchase price, interest income, reinvested income, and inflation adjustments Increase/decrease in securities value over purchase price, interest income, and reinvested income Increase/decrease in securities value over purchase price, interest income, and reinvested income Increase/decrease in securities value over purchase price, interest income, and reinvested income Increase/decrease in securities value over purchase price and reinvested income Increase/decrease in securities value over purchase price and reinvested income Moderate Moderate Moderate Moderate to high Moderate to high Moderate to high Effective 1/1/08 The 401(k) Savings Plan 20

21 Investment Fund The Objective/ Goal of This Fund Is to This Investment Fund Is Primarily Invested in The Value of Your Investment in This Fund Can Change Due to This Investment Fund Offers the Following Risk/Return Potential For the funds marked with an asterisk, please see Limits on Reallocations/Transfers Affecting the International Funds and Mutual Funds on page 27 and Equity Wash Rules Limitations on Certain Reallocations or Transfers from the Stable Value Fund on page 27 for more information. Growth and Income* (mutual fund) S&P 500 Index Large Cap Growth Index Large Cap Growth Mid Cap Value Mid Cap Growth* (mutual fund) Small Cap Index Provide long-term capital appreciation Approximate overall performance of stocks that make up the S&P 500 Index Approximate overall performance of stocks that make up the Russell 1000 Growth Index Maximize long-term total return Provide long-term total return Seek long-term growth Approximate overall performance of stocks that make up the Russell 2000 Index Stocks of mid- and large-cap companies through purchase of shares in JPMorgan Value Opportunities Fund Common stocks of companies that make up the S&P 500 Index Common stocks of companies that make up the Russell 1000 Growth Index Common stocks of large companies that the investment manager believes exhibit growth characteristics Common stocks of mid-cap companies that the investment manager believes exhibit value characteristics Common stocks of mid-cap companies through purchase of shares in JPMorgan Capital Growth Fund Common stocks of companies that make up the Russell 2000 Index Increase/decrease in securities value over purchase price and reinvested income Increase/decrease in securities value over purchase price and reinvested income Increase/decrease in securities value over purchase price and reinvested income Increase/decrease in securities value over purchase price and reinvested income Increase/decrease in securities value over purchase price and reinvested income Increase/decrease in securities value over purchase price and reinvested income Increase/decrease in securities value over purchase price and reinvested income Moderate to high Moderate to high Moderate to high Moderate to high Moderate to high Moderate to high High Effective 1/1/08 The 401(k) Savings Plan 21

22 Investment Fund The Objective/ Goal of This Fund Is to This Investment Fund Is Primarily Invested in The Value of Your Investment in This Fund Can Change Due to This Investment Fund Offers the Following Risk/Return Potential For the funds marked with an asterisk, please see Limits on Reallocations/Transfers Affecting the International Funds and Mutual Funds on page 27 and Equity Wash Rules Limitations on Certain Reallocations or Transfers from the Stable Value Fund on page 27 for more information. Small Cap Core* (mutual fund) Small Cap Blend International Large Cap Value* International Large Cap Index* International Large Cap Core* International Small Cap* JPMorgan Chase Common Stock Seek capital growth over long term Provide capital appreciation over the long term Seek long-term growth of capital and income Approximate overall performance of stocks that make up the Morgan Stanley Capital International (MSCI) Europe, Australasia, and Far East (EAFE) Index Provide long-term capital appreciation Seek capital growth over time Reflect, as closely as practicable, the rate of return on the shares of common stock of JPMorgan Chase & Co. (subject to maintaining a portion of the fund invested in cash equivalents) Common stocks of small-cap companies through purchase of shares in JPMorgan Small Cap Core Fund Common stocks of small-cap companies Common stocks of companies in developed countries located outside the U.S. Common stocks of companies that make up the Morgan Stanley Capital International (MSCI) Europe, Australasia, and Far East (EAFE) Index Common stocks of companies incorporated in, or doing business primarily in, Europe, Australasia, and Asia Common stocks of small capitalization non-u.s. companies. Common stock of JPMorgan Chase & Co. Increase/decrease in securities value over purchase price and reinvested income Increase/decrease in securities value over purchase price and reinvested income Increase/decrease in securities value over purchase price and reinvested income Increase/decrease in securities value over purchase price and reinvested income Increase/decrease in securities value over purchase price and reinvested income Increase/decrease in securities value over purchase price and reinvested income Increase/decrease in securities value over purchase price and reinvested income 1 1 Dividend income will be reinvested to the extent you do not elect to have the dividend income distributed to you in cash. High High High High High High High Effective 1/1/08 The 401(k) Savings Plan 22

23 Investors should carefully read each fund profile and/or the mutual fund prospectuses available through the 401(k) Savings Plan Web Center or Call Center, which includes information on the funds investment objectives, risk, as well as charges and expenses along with other information, before investing. Lifestyle Portfolios The remaining three investment choices under the plan are called lifestyle portfolios. These lifestyle portfolios are designed to simplify the investment process because they re already diversified and automatically rebalanced. Lifestyle portfolios include both fixed income and equity core investment funds to match a particular investment style. They re rebalanced each calendar quarter so that each portfolio s investment mix continues to meet its particular investment objective and risk and return profile. The following chart provides a brief description of the plan s three lifestyle portfolios. For more complete profiles of all of the plan s investment funds, and before you make any investment decisions, see the 401(k) Savings Plan Investment Fund Profiles brochure and the mutual fund prospectuses available by accessing the 401(k) Savings Plan Web Center or Call Center. 401(k) Savings Plan Lifestyle Portfolio Characteristics Investment Portfolio Moderately Conservative Moderately Aggressive Aggressive The Objective/ Goal of This Portfolio Is to Provide returns through a mix of fixed income securities and exposure to equities Provide potentially higher risk and return than the Moderately Conservative Fund through greater exposure to equities Provide potentially higher risk and return than the other lifestyle portfolios in the plan through greater exposure to equities This Investment Portfolio Is Primarily Invested in Direct investment funds in the plan and seeks to maintain an asset class mix of 60% fixed income funds and 40% equity funds Direct investment funds in the plan and seeks to maintain an asset class mix of 40% fixed income funds and 60% equity funds Direct investment funds in the plan and seeks to maintain an asset class mix of 20% fixed income funds and 80% equity funds The Value of Your Investment in This Portfolio Can Change Due to Increase/decrease in securities value over purchase price, interest income, and reinvested income Increase/decrease in securities value over purchase price, interest income, and reinvested income Increase/decrease in securities value over purchase price, interest income, and reinvested income This Investment Portfolio Offers the Following Risk/Return Potential Moderate Moderate to High Moderate to High Effective 1/1/08 The 401(k) Savings Plan 23

24 Investment Fund Performance The performance of each investment fund is affected not only by investment performance but also by cash flows during each month, including transfers in and out and distributions. Performance is also affected by transactional and investment management fees and expenses. Past performance is not a guarantee of future results. Investment returns will fluctuate so that an investment, when sold, may be worth more or less than original cost. Investment Management Fees, Recordkeeping, and Other Plan Expenses Investment management fees for most investment funds are charged against the performance of such funds, and the amount of fees differ by fund. Additionally, the performance of each fund is affected by transactional costs, such as brokerage fees. An investment fund that is managed as an index fund will likely have lower investment management fees and transactional costs as compared to an actively managed fund. No recordkeeping fees are charged directly to the accounts of the participants. However, certain investment funds share their revenue with the plan s recordkeeper. They are the Core Bond Fund, Growth and Income Fund, Mid Cap Growth Fund, and Small Cap Core Fund. Fees and transactional costs may have a significant impact on your rate of return. You should carefully review them before making your investment decision. For more information on fees, please refer to the 401(k) Savings Plan Investment Fund Profiles brochure available by accessing the 401(k) Savings Plan Web Center or Call Center. Temporary Investments In general, all or any part of the plan s investment funds may be invested temporarily in mutual funds or collective trust funds (investing in short-term securities or other short-term investments) pending investment. This allows the plan to meet liquidity needs or achieve investment objectives. Accounting Method The investment funds in the 401(k) Savings Plan, including the JPMorgan Chase Common Stock Fund, are valued based on a unit accounting method. This type of accounting means that the JPMorgan Chase Common Stock Fund, as well as various other funds, hold a certain level of uninvested cash to use in settling daily transactions such as transfers, loans, and withdrawals. In particular, the JPMorgan Chase Common Stock Fund maintains a cash reserve of approximately 2 3% of its value to meet such liquidity needs. Unit accounting allows participants transactions involving the JPMorgan Chase Common Stock Fund to be fully executed in a single business day. Therefore, a portion of your JPMorgan Chase Common Stock Fund assets are invested in cash rather than in JPMorgan Chase common stock. Effective 1/1/08 The 401(k) Savings Plan 24

25 Investing Your Contributions As a participant in the 401(k) Savings Plan, there are generally three instances when you may be making investment decisions. These include: Investing future contributions; Reallocating your existing account balance; and Transferring your existing account balance. Investing Future Contributions You elect how your contributions are invested among the plan s investment funds. In general, contributions purchase units in the investment funds available under the plan at their net asset value (NAV) per unit. This investment normally occurs using the NAV for each investment fund determined as of 4 p.m. Eastern Time or the close of the New York Stock Exchange, whichever is earlier. No participant-initiated transaction of any kind will be processed on a day that the New York Stock Exchange is closed. If you are eligible for JPMorgan Chase matching contributions, you will have full investment discretion over how your matching contributions are invested in the plan. You may choose to invest JPMorgan Chase s matching contributions in the same manner as your own contributions or in the JPMorgan Chase Common Stock Fund. However, future matching contributions will be invested in the plan s JPMorgan Chase Common Stock Fund unless you elect otherwise. To change the way your future contributions are invested, you can use the 401(k) Savings Plan Web Center or Call Center. Just follow the instructions online or on the automated telephone system. Your elections will become effective in accordance with administrative practices. Reallocations and Transfers of Your Existing Vested Account Balance Reallocating Your Existing Vested Account Balance An investment fund reallocation affects your entire existing vested plan balance (subject to the restrictions noted in this section). It allows you to direct how you would like your entire vested balance to be invested among the plan s investment funds in whole percentages that must equal 100%. You can request an investment fund reallocation through the 401(k) Savings Plan Web Center or Call Center. Transferring Your Existing Vested Account Balance An investment fund transfer allows you to transfer all or part of your vested balance from one investment fund to another investment fund or funds in either whole percentages or whole dollar amounts (subject to the restrictions noted in this section). You can request an investment fund transfer through the 401(k) Savings Plan Web Center or Call Center at any time. Effective 1/1/08 The 401(k) Savings Plan 25

26 When Reallocations/Transfers Take Effect Unless the plan administrator provides for the contrary, or due to events outside of JPMorgan Chase s control, investment changes associated with reallocating and/or transferring your existing vested account balance are generally processed the same business day that the New York Stock Exchange is open if your request for a change is made before 4 p.m. Eastern Time or by the close of the New York Stock Exchange, whichever is earlier. Transactions will be reflected in your account through the 401(k) Savings Plan Call Center and Web Center the following business day. Please see Daily Plan Processing on page 26 for more information. JPMorgan Chase Non-Matching Contributions You will be able to transfer and/or reallocate the portion of your account balance attributable to JPMorgan Chase non-matching contributions any time following the date that such contributions vest. Until the contributions are vested, the contribution will be invested in such investment funds as JPMorgan Chase designates. Reallocations/Transfers to and from the JPMorgan Chase Common Stock Fund If you transfer and/or reallocate balances to and from the JPMorgan Chase Common Stock Fund, you should be aware of the impact on the net unrealized appreciation (i.e., its increase in value while held by the plan) should you decide at a later date to take a distribution in the form of JPMorgan Chase common stock. You also may wish to consult a professional tax advisor. Please see JPMorgan Chase Common Stock on page 40 for more information on net unrealized appreciation. Daily Plan Processing For your convenience, most 401(k) Savings Plan transactions including investment fund reallocations, transfers, and distribution requests are processed on a daily basis using the net asset value (NAV) per unit for the various investment funds. However, under certain circumstances your ability to engage in daily reallocations, transfers, and distribution requests among the investment funds at those prices may be affected. In the case of all investment funds, daily transactions may be suspended in the event of market disruptions. This could occur if the New York Stock Exchange is closed or trading is restricted. Certain other events, such as system failure or acts of nature, may preclude daily processing. Additionally, in the event that appropriate pricing for the securities in one or more investment funds cannot be determined, the plan may use the most recent NAVs to effectuate transactions, but may make subsequent adjustments to account balances to reflect the proper NAV, or the plan may suspend all transactions for that day and use NAVs for the investment funds on the next day that appropriate valuations exist. Approved Quarterly Window Periods To ensure compliance with certain federal securities law requirements, certain plan participants cannot make elections that affect participation in the JPMorgan Chase Common Stock Fund, except during specified quarterly window periods. Please see Approved Quarterly Window Periods on page 45 for more information. Excessive Trading While the plan permits daily transactions, it s not designed or intended to be a brokerage account or trading account. Trading in and out of funds on a daily basis can disrupt appropriate management of the various funds and causes increased transactional costs and losses to participants who do not engage in such activity. In the event that a participant engages in excessive transfers or reallocations, the plan may restrict the number of transactions that such a participant may engage in with respect to all funds or to a particular fund. Alternatively, the plan or the mutual fund in which the participant elects to purchase may impose a fee for such transfers or reallocations, or restrict daily transfers or reallocations. Effective 1/1/08 The 401(k) Savings Plan 26

27 Limits on Reallocations/Transfers Affecting the International Funds and Mutual Funds If you transfer and/or reallocate balances out of any of the investment funds that hold shares of a mutual fund or any of the international funds (see chart below), you will be restricted from transferring any assets back into that same fund for 30 calendar days from the initial transfer/reallocation transaction. Investment Funds with Underlying Mutual Funds Core Bond Fund Growth and Income Fund Mid Cap Growth Fund Small Cap Growth Fund International Investment Funds International Large Cap Value Fund International Large Cap Index Fund International Large Cap Core Fund International Small Cap Fund Please Note: Other transactions, such as contributions and loan repayments, will not subject you to the 30-day restriction period. The plan reserves the right to impose similar restrictions on other funds. Equity Wash Rules Limitations on Certain Reallocations or Transfers from the Stable Value Fund Reallocating or transferring investments from the Stable Value Fund to the Short-Term Fixed Income Fund may be limited under certain circumstances. A reallocation or transfer is allowed only when the one-month rate of return (annualized) of the Stable Value Fund is at least one-half of 1% (i.e., 50 basis points) more than the one-month rate of return (annualized) of the Short-Term Fixed Income Fund as of the applicable valuation date. If the difference is less than 50 basis points, you can reallocate or transfer amounts from the Stable Value Fund to one of the plan s other investment funds but not to the Short-Term Fixed Income Fund. After a 30-day waiting period, you can then reallocate or transfer money from one of those other investment funds to the Short-Term Fixed Income Fund. Potential Adjustments to JPMorgan Chase Common Stock Fund Transactions Because the JPMorgan Chase Common Stock Fund consists of a single security, the 401(k) Savings Plan will adjust the account balances of certain participants who engage in a transaction such as a reallocation, transfer, contribution, loan, withdrawal, or distribution request on days of excessive activity in the fund. On any day that the net of all transactions exceeds a specified percentage (currently 3%) of the value of the fund, provided that the net transactions result in a purchase of stock by the fund, the account balances of only those participants who increased their interest in the investment fund by a transaction will be subject to an adjustment. Similarly, if the net transactions result in a sale of stock from the fund, then the account balances of only those participants who decreased their interest in the investment fund by a transaction will be subject to an adjustment. The adjustment will be based on the difference between the average sale or purchase price with respect to the net transactions and the price used to compute the initial net asset value (NAV) per unit for the transaction. Adjustments will only be made if the differences in these prices are deemed to be material to the fund. Such upward or downward adjustment(s), including related recordkeeping expenses, would generally be reflected in account balances within one or two days following the transaction. Effective 1/1/08 The 401(k) Savings Plan 27

28 Borrowing or Withdrawing from Your Account Because the 401(k) Savings Plan is intended to help provide income for your future, you should think carefully before accessing your account balance while you re still actively employed. However, if you need your money before retirement, you do have access to your account in two ways loans and withdrawals. The advantage of taking a loan from the plan is that you use payroll deductions to pay yourself back with interest. If you withdraw money from the plan, it won t be available to you when you retire. In addition, certain taxes and penalties may apply to withdrawals. With this in mind, for most people, taking a loan from their 401(k) Savings Plan account is more advantageous than a withdrawal. Loans The plan lets most participants who are actively employed borrow against their vested account balance without paying taxes or incurring income tax penalties, subject to plan provisions. Plan loans are not available once you terminate employment, even if you have an account balance in the plan. When you take a loan, the plan funds in which you ve invested are reduced by the loan amount. Money for a loan generally will be taken on a pro rata basis across all investment funds holding a balance. You ll continue to receive investment experience, but only on the balance of the remaining investments. Loans are available for any reason. However, plan participants subject to a window period may request a loan only during a window period if the loan reduces their interest in the JPMorgan Chase Common Stock Fund. Please see Approved Quarterly Window Periods on page 45 for more information. Also, in certain cases spousal consent may be required. You will be notified if this applies to you. The exact terms and conditions of your loan will be incorporated into a promissory note. Summary of 401(k) Savings Plan Loan Features Loan Features Loan Amount Multiple Loans Loan Repayment Period How It Works You decide how much you want to borrow as a loan. The minimum loan amount is $1,000. The legal maximum is the lesser of 50% of your vested account balance, or $50,000 minus your highest outstanding loan balance in the last 12 months. You re allowed a maximum of six outstanding loans at any time, as long as your take-home pay is sufficient to make the required loan repayments. When you request a loan, you set the repayment period. The repayment period can be up to five years. However, if your loan is for the purchase of your principal residence, your repayment period may be up to 15 years (documentation is required). You may prepay your outstanding loan balance in full without penalty. Partial prepayments and overpayments are not permitted. Effective 1/1/08 The 401(k) Savings Plan 28

29 Loan Features Interest Rate Repayments Applying for a Loan When Loans Are Disbursed How It Works When you take your loan, an interest rate (based on the prime rate, as published in the Wall Street Journal, in effect on the first business day of the month) is set for the duration of the loan. Your repayments (made with after-tax dollars) both principal and interest are deducted from your pay and are invested in the plan s investment funds in the same way that your contributions are invested. If you change to a different payroll schedule, your repayment amount will be updated to reflect the new schedule. Your loan cannot be extended beyond its original term. If you take an approved unpaid leave of absence, you may prepay your outstanding loan balance in full by cashier s check, certified check or money order, or authorize semi-monthly automatic withdrawals from your bank account. Your loan will be considered in default if you fail to make a repayment within 90 days of your last repayment. The taxable portion of an outstanding loan balance will be considered a taxable distribution and may also be subject to an additional 10% early distribution tax penalty. Please see Tax Consequences on page 39 for more information. If you default on a loan, you won t be able to request or receive any new loans until you ve repaid the defaulted loan in full. You can apply for a loan through the 401(k) Savings Plan Web Center or Call Center. A request for a loan generally will be processed on the same business day if the request is made by 4 p.m. Eastern Time or the close of the New York Stock Exchange, whichever is earlier. Your loan check will be mailed to your work address on file, and generally will be sent the business day after your loan request is processed. What Happens to Your Loan If You Terminate Employment with JPMorgan Chase When your employment with JPMorgan Chase terminates for any reason, you must repay all outstanding loans. However, if your employment terminates and your balance (including the amount of any outstanding loans) is $1,000 or more, your loan(s) may remain outstanding until the maturity date of your loan, as long as you defer receipt of your account balance. To take advantage of this feature, you must authorize semi-monthly automatic electronic withdrawals from your bank account. If after two consecutive attempts the direct debit fails (i.e., there are no available funds in your account), the outstanding amount must be paid in full within 90 days of your last repayment or the taxable portion of your loan will be treated as a taxable distribution and may also be subject to an additional 10% early distribution tax penalty. Lump-sum payment of outstanding loans may also be made by cashier s check, certified check, or money order. If your employment terminates and your vested balance (including the amount of your outstanding loans) is less than $1,000, your loan(s) may not remain outstanding as described above. You must repay your loan(s) in full or you will incur a taxable distribution to the extent that your outstanding loan balance includes taxable monies. You may also be subject to an additional 10% early distribution tax penalty. Effective 1/1/08 The 401(k) Savings Plan 29

30 Withdrawals While Employed The Internal Revenue Code restricts the circumstances under which you can take a withdrawal and, in most instances, penalizes you for early withdrawal of your plan money while employed by JPMorgan Chase. Accordingly, before making this request, you should carefully consider the limited circumstances under which a withdrawal can occur, as well as the possible tax consequences of such a withdrawal. Subject to the plan provisions described below, active employees may request withdrawals. However, plan participants subject to a window period may request a withdrawal only during a window period if the withdrawal reduces their interest in the JPMorgan Chase Common Stock Fund. Please see Approved Quarterly Window Periods on page 45 for more information. If you take a withdrawal, you must withdraw a minimum amount of $500 unless the amount available is less than $500. Money for a withdrawal will be distributed on a pro rata basis from across all investment funds holding a balance as of the withdrawal date. If your withdrawal includes funds from the JPMorgan Chase Common Stock Fund, you can request payment in shares from that fund. Please see Stock Distribution from the JPMorgan Chase Common Stock Fund in the section Receiving Account Payments After You Retire or Terminate from JPMorgan Chase on page 37 for more information. The following paragraphs describe withdrawal options for participants still employed by JPMorgan Chase. In certain cases, spousal consent may be required. You will be notified if this applies to you. Non-Hardship Withdrawals If you ve made after-tax contributions or a rollover contribution to the plan, or you re at least age , you may be eligible to request a non-hardship withdrawal. (Please Note: The after-tax contributions referenced here are contributions permitted by certain heritage plans. They are not to be confused with Roth 401(k) contributions.) The table in this section describes the types of money available for withdrawal in non-hardship situations and the related tax consequences. Hardship Withdrawals If you are not age or older and you experience a financial hardship as defined by the plan, under certain conditions you can apply for a special hardship withdrawal from certain types of money in your account, such as before-tax contributions, Roth 401(k) contributions, and JPMorgan Chase matching contributions made prior to January 1, The Internal Revenue Code imposes strict limitations on hardship withdrawals. Before you can apply for a hardship withdrawal, you must: Withdraw all of your after-tax contributions, rollover contributions, and any other available contributions from the plan, as well as any funds from certain other plans maintained by JPMorgan Chase (such as the JPMorgan Chase Employee Stock Purchase Plan) or an affiliated company; Request all loans available from the 401(k) Savings Plan; and Elect to receive cash dividends from the JPMorgan Chase Common Stock Fund. Then you can apply for a hardship withdrawal. Documentation of the financial hardship is required (examples are included below). Please Note The rules governing withdrawals can be quite complicated because of legal restrictions and tax implications. For specific tax advice, you may want to consult with a qualified tax advisor. JPMorgan Chase non-matching contributions, if any, are not available for withdrawal while you are employed by JPMorgan Chase. Effective 1/1/08 The 401(k) Savings Plan 30

31 In general, financial hardships are defined as: Medical expenses for you, your spouse, your children, your dependents, or your primary beneficiary that are not paid by insurance. An example of documentation needed for this financial hardship is an explanation of noncoverage by a benefit plan for unreimbursed medical expenses; Tuition and related expenses including room and board for the next 12 months of post-secondary education for you, your spouse, your children, your dependents, or your primary beneficiary. An example of documentation needed for this financial hardship is an invoice for expenses such as tuition, room and board, and related expenses; The purchase or construction of your principal residence (excluding mortgage payments). An example of documentation needed for this financial hardship is the purchase contract and mortgage commitment for purchase of your principal residence; The amount needed to prevent eviction from your principal residence or foreclosure on the mortgage of your principal residence. Examples of documentation needed for this financial hardship are court papers and notices of foreclosure; or Funeral expenses for an immediate family member (i.e. spouse, parent, or child), your dependent, or your primary beneficiary. Examples of documentation needed for this financial hardship are the unpaid bill(s) from the funeral home and a birth certificate (or other documentation) verifying the relationship. Please see Summary of 401(k) Savings Plan Withdrawal Features on page 31 for a summary of the plan s withdrawal features and their associated tax consequences. However, you should consult with a tax advisor about the application of these and other exceptions to the penalty tax on your distribution. Summary of 401(k) Savings Plan Withdrawal Features Type of Withdrawal How It Works Tax Consequences Prior to Age Withdrawals Non-Hardship Withdrawals After-Tax Contributions (as permitted by certain heritage plans; not to be confused with Roth 401(k) contributions) If you have after-tax dollars in the plan, you can request a withdrawal of these contributions. This type of withdrawal will be made in the following order: From after-tax (non-roth) contributions made before January 1, 1987 to heritage plans, but not including earnings on these amounts. From after-tax (non-roth) contributions to any heritage plan made after December 31, 1986, including all earnings on after-tax amounts. See Beneficiaries on page 10 for information about designating a primary beneficiary. After-tax contributions are not subject to tax. However, investment earnings on these contributions are considered taxable income and are subject to a mandatory 20% federal income tax withholding requirement. State income tax may also be withheld. Your withdrawal of investment earnings may also be subject to an additional 10% penalty tax. You can roll these amounts over. Please see Rollovers on page 42 for more information. Effective 1/1/08 The 401(k) Savings Plan 31

32 Type of Withdrawal How It Works Tax Consequences Rollover Contributions Other Contributions You can withdraw rollover contributions. There may be certain additional money types available to you for withdrawal prior to age (Please Note: These money types do not include before-tax, Roth 401(k), or JPMorgan Chase matching and non-matching contributions.) Please contact the 401(k) Savings Plan Web Center or Call Center. Prior to Age Withdrawals Hardship Withdrawal Hardship Withdrawal If you qualify for a hardship withdrawal, you can access your before-tax contributions, Roth 401(k) contributions and vested matching contributions made to the plan prior to January 1, Further, you cannot withdraw income earned on before-tax contributions made after December 31, There may be additional money types available to you for hardship withdrawal. Your withdrawal is considered taxable income to you and will be subject to a mandatory 20% federal income tax withholding requirement. State income tax may also be withheld. Your withdrawal may be subject to a 10% penalty tax. You can roll these amounts over. Please see Rollovers on page 42 for more information. Your withdrawal is considered taxable income to you and will be subject to a mandatory 20% federal income tax withholding requirement. State income tax may also be withheld. Your withdrawal may be subject to a 10% penalty tax. You can roll these amounts over. Please see Rollovers on page 42 for more information. Your withdrawal of your non-roth contributions is considered taxable income to you. Your withdrawal of Roth 401(k) contributions is tax-free. However, any withdrawal of Roth 401(k) investment earnings is considered taxable income to you unless it meets the criteria for a qualified distribution. The taxable portion of your withdrawal may be subject to an optional 10% federal income tax withholding requirement. State tax withholding may also apply. The taxable portion of your withdrawal may be subject to a 10% penalty tax unless certain exceptions are applicable. Hardship withdrawals may not be rolled over. Effective 1/1/08 The 401(k) Savings Plan 32

33 Type of Withdrawal How It Works Tax Consequences After Age Withdrawals Age Withdrawals Once you re age , you can generally apply for a withdrawal of up to your entire vested account balance for any reason. Certain heritage money types may not be available for an age withdrawal. You can elect to withdraw your Roth account or non-roth account. When and How a Withdrawal Is Paid A request for a withdrawal generally will be processed on the same business day if you make your request prior to 4 p.m. Eastern Time or the close of the New York Stock Exchange, whichever is earlier. If you have direct deposit for your paycheck, your withdrawal will be credited to the same bank account. If you don t have direct deposit, a check for your withdrawal will be mailed to your work address on file. The payment (whether credited to your account or sent via check) generally will be sent the business day after your withdrawal request is processed. Keep in mind that you may also be responsible for state and local income taxes as well as federal income tax. Your withdrawal of your non-roth account is considered taxable income to you and will be subject to a mandatory 20% federal income tax withholding requirement. State income tax may also be withheld. Your withdrawal of Roth 401(k) contributions is tax-free. Any withdrawal of Roth 401(k) investment earnings is considered taxable income unless it meets the criteria for a qualified distribution. Your withdrawal won t be subject to a 10% penalty tax. You can roll these amounts over. Please see Rollovers on page 42 for more information. Effective 1/1/08 The 401(k) Savings Plan 33

34 JPMorgan Chase Common Stock Fund Dividend Election If you wish, you may elect to have any dividend income attributable to your vested account balance under the JPMorgan Chase Common Stock Fund distributed to you in cash. If you don t make an election, your dividend income will be reinvested automatically. Please Note: Making an election to receive dividends in cash will decrease your ability to save on a tax-deferred basis (or tax-free basis as it relates to investment earnings on Roth 401(k) contributions) and will reduce the value of your account balance at final distribution. However, reinvesting dividends adds to the cost basis of your JPMorgan Chase Common Stock Fund within the plan. (Please see Tax Consequences on page 39 for more information.) You can make or revoke your dividend election at any time through the 401(k) Savings Plan Web Center or Call Center. In accordance with plan procedures, the election on file prior to the dividend record date will govern. Your election to take your dividends in the form of a cash distribution will remain in effect until you revoke it. Cash payments of dividends, to the extent declared, are generally paid quarterly. Payments for employees who have direct deposit for their paychecks will be credited to the same bank account. Otherwise, payment will be made by check. Once your employment with JPMorgan Chase has ended, your quarterly dividends will still be paid in the same manner as when you were actively employed. However, you can provide alternative bank account information for the electronic transfer of your quarterly dividend by contacting the 401(k) Savings Plan Call Center. Note on Taxes You will pay federal, state, and local income taxes on cash dividend payments from the 401(k) Savings Plan, but there is no income tax withholding on these payments. Additionally, cash dividend payments are not subject to the 10% early distribution penalty tax. They do not qualify for the lower federal income tax rate normally applicable to dividends paid directly by a corporation, and are not a qualified distribution for purposes of receiving tax-free investment earnings with respect to Roth 401(k) contributions. You ll receive a Form 1099-DIV after the close of the calendar year that reports the payment as ordinary income taxable as a dividend. You may not roll over these dividends to an IRA or back into the 401(k) Savings Plan. You may want to consult with your personal financial or tax advisor for more information on how this would impact your individual situation. Approved Quarterly Window Periods To ensure compliance with certain federal securities law requirements, certain plan participants cannot make elections that affect participation in the JPMorgan Chase Common Stock Fund, except during specified quarterly window periods. Please see Approved Quarterly Window Periods on page 45 for more information. Effective 1/1/08 The 401(k) Savings Plan 34

35 Payment Options The vested value of your 401(k) Savings Plan account is payable if any of the following events occur: Your employment with JPMorgan Chase terminates; You re totally disabled and have received benefits under the JPMorgan Chase Long-Term Disability (LTD) Plan for more than 18 months; or You die. As long as you have an account balance in the plan, you may access the 401(k) Savings Plan Web Center or Call Center to obtain rates of return, account balance information, and reallocate or transfer your vested account balance among the investment funds, subject to plan provisions. If you maintain an account balance in the plan after your employment terminates, your account balance will reflect the investment experience of the fund(s) in which you choose to invest. This section describes the different ways your account can be paid to you under the 401(k) Savings Plan. In certain cases, spousal consent may be required. You will be notified if this applies to you. How Your 401(k) Savings Plan Account Is Paid When your employment with JPMorgan Chase ends and you request a distribution, you ll receive the full value of your contributions (adjusted for investment experience), as well as the vested value of JPMorgan Chase company contributions (adjusted for investment experience). If Your Vested Account Balance Is $1,000 or Less If the vested value of your account (including loans) is $1,000 or less, your account balance will be distributed to you in a single lump sum payment approximately 90 days after the end of the month following the date of your termination. Prior to that automatic payment date, you can elect to have your vested account balance made payable to an Individual Retirement Account (traditional or Roth) or to another employer s qualified plan. You can elect to receive all or a portion of any amounts invested in the JPMorgan Chase Common Stock Fund in the form of JPMorgan Chase common stock. Please see Stock Distribution from the JPMorgan Chase Common Stock Fund in the section Receiving Account Payments After You Retire or Terminate from JPMorgan Chase on page 37 for more information. If you do not make an election within 90 days after the end of the month in which your employment ended, your vested account balance will be paid to you in a lump sum with 20% federal income tax withheld. State income taxes may also be withheld, if applicable. The 10% early distribution penalty tax may also apply. Please see Tax Consequences on page 39 for important information on the associated tax consequences of your election. Important Note About Tax Advice It is strongly recommended that you seek the advice of a qualified tax expert before requesting a withdrawal or payment from the plan. Please see Tax Consequences on page 39 for an overview of applicable tax consequences. Effective 1/1/08 The 401(k) Savings Plan 35

36 If Your Vested Account Balance Is Greater Than $1,000 If the vested value of your account (including loans) is greater than $1,000 following your termination of employment, you can either elect to defer receipt of your account balance or elect a payment in the plan in one of the methods detailed below: Single Lump Sum Payment Made payable to yourself; or Made payable to an Individual Retirement Account (traditional or Roth) or to another employer s qualified plan. Quarterly, Monthly, or Annual Installments Installments are paid on the 15 th of the month, unless that day falls on a weekend or holiday. In which case, the payment will be made on the preceding business day. Please Note: Once your installment payments begin, you cannot change the amount, timing, or frequency of these payments. You can, however, elect to cancel your installment election by taking a lump-sum distribution of your remaining account balance. You also may elect a partial distribution at any time, which does not cancel your installment payment election. Partial Distribution of Your Account (minimum withdrawal of $1,000) Made payable to yourself; or Made payable to an Individual Retirement Account (traditional or Roth) or to another employer s qualified plan. You may also elect to defer receipt of your distribution up to the month following your 65 th birthday. You can elect to further defer receipt of your distribution until April 1 of the year following the year in which you attain age You can continue to defer federal income tax on the taxable portion of your retirement savings, including avoiding a potential 10% penalty tax, by deciding not to take all or a portion of your account balance. If your distribution is deferred, your plan balance will continue to reflect the investment experience (gain or loss) of the fund(s) in which you choose to invest. Please see If You Don t Request a Distribution on page 38 for more information. You can elect to receive all or a portion of any amounts invested in the JPMorgan Chase Common Stock Fund in the form of JPMorgan Chase common stock. Please see Stock Distribution from the JPMorgan Chase Common Stock Fund in the section Receiving Account Payments After You Retire or Terminate from JPMorgan Chase beginning on page 37 for more information. Please Note: Taking a distribution from the plan could result in a tax consequence. You are encouraged to read Tax Consequences on page 39 for important information on the associated tax consequences of your election. By taking a distribution from the plan, you may be affecting your ability to accumulate additional retirement benefits. Further, if you elect a lump sum, no additional payments will be paid to you or your beneficiaries. Please Note The plan reserves the right at its discretion to transfer balances of $5,000 or less to an IRA, as provided by law. You will be notified if this applies to you. Deferring Your Account Balance If you elect to defer your account balance, you may continue to obtain rates of return, account balance information, and reallocate or transfer your vested account balance among the investment funds. Your account balance will continue to reflect the investment experience of the fund(s) in which you choose to invest. Further, the fees described in Investment Management Fees, Recordkeeping, and Other Plan Expenses on page 24 will continue to apply to your account. Please Note: Loans are not available to participants who have terminated employment. You may request partial withdrawals from the plan from time to time (the minimum amount for partial withdrawals is $1,000). However, if you request a partial withdrawal while you have an outstanding loan, the loan will be defaulted and reported as a taxable event. Effective 1/1/08 The 401(k) Savings Plan 36

37 Receiving Account Payments After You Retire or Terminate from JPMorgan Chase There are certain steps you need to follow to receive a payment of your 401(k) Savings Plan account following retirement or termination of employment. The following information describes this process. How to Request Plan Payments To receive plan payments, you should contact the 401(k) Savings Plan Web Center or Call Center. If you die, your beneficiary or your estate, as appropriate, should contact the 401(k) Savings Plan Call Center for assistance in filing for plan payments. Please see Payments to a Beneficiary on page 38 for more information. It may take approximately 10 business days after your employment with JPMorgan Chase ends for your 401(k) Savings Plan records to be updated to reflect your termination. Until these records are updated, you ll be unable to initiate a request for a final distribution. However, during this interim period, you may take advantage of other available plan options and transactions such as investment fund reallocations and transfers. In general, your account balance will be valued on the day that your distribution request is recorded and approved, provided it is received by 4 p.m. Eastern Time or the close of the New York Stock Exchange, whichever is earlier. All approved requests for a distribution will usually be disbursed via check and mailed within two business days from the date your account is valued. Stock Distributions from the JPMorgan Chase Common Stock Fund If you elect to receive a portion of your vested account balance invested in the JPMorgan Chase Common Stock Fund in the form of common stock, you ll be credited with the appropriate number of shares of JPMorgan Chase stock based on the closing price of the JPMorgan Chase stock on your valuation date. Such shares will be held in a book-entry account with JPMorgan Chase s transfer agent, Bank of New York Mellon Shareowner Services (BNY Mellon). Shortly after your distribution is processed, you will receive an account statement from BNY Mellon, along with an explanation of the Direct Registration System (DRS), or book-entry stock ownership. Direct Registration allows for the electronic recordkeeping of share holdings, relieving shareholders of the responsibility of keeping track of actual stock certificates. If you have questions about DRS, you may contact BNY Mellon directly at ( for the hearing impaired). Please see JPMorgan Chase Common Stock in the section Tax Consequences on page 39 for more information. Important Note To avoid delays caused by misdirected plan payments, please ensure that JPMorgan Chase has your current home address (and your beneficiary s current home address) on file. While employed, you can update your home and mailing address online at HR & Personal > Pay and Personal. If it has been less than two years since your employment has ended, please report address changes to the accesshr Contact Center. If it has been longer than two years since your employment has ended, address changes should be reported directly to the 401(k) Savings Plan Call Center. Effective 1/1/08 The 401(k) Savings Plan 37

38 If You Don t Request a Distribution If you don t request a distribution of your account and the vested value of your account balance, including loans, is greater than $1,000, then your account distribution will automatically be deferred until the month following your 65 th birthday. However, you can elect to receive either a full or partial distribution at any time prior to that time. If you do not make such an election, you ll be contacted regarding your payment options shortly before you reach age 65. You may further elect to defer distribution of your account balance until April 1 of the year following the year in which you attain age If you fail to respond to our request for a payment election or to further defer, your entire vested account balance will be distributed to you in a single lump-sum payment. Please see Tax Consequences on page 39 for more information on the tax consequences of a lump-sum payment made to you. Mandatory Distributions Under current law, if you re no longer employed by JPMorgan Chase, you must begin to receive payment of your account balance no later than April 1 of the year following the year in which you attain age or retire, whichever is later. If this mandatory distribution provision applies to you, you ll be notified. You can take your mandatory distribution in the form of a lump-sum payment or in installments. If you do not elect to receive an amount at least equal to your mandatory distribution amount for any year, you will be subject to a 50% excise tax on the amount of the shortfall. You cannot roll over a mandatory distribution. Payments to a Beneficiary In the event of your death prior to complete distribution of your account balance, your beneficiary will receive the vested balance in your account. If you are married, your vested account balance will be paid to your spouse or to your designated beneficiary (assuming your spouse has provided the necessary consent on Beneficiary Forms approved and accepted by the Plan). If you are not married, your designated beneficiary is entitled to your vested account balance. If you have not designated a beneficiary, plan payments are made to your estate. Please see Beneficiaries on page 10 for more information. Generally, beneficiaries have the same distribution options available to active participants. However, a non-spousal beneficiary must complete receipt of your vested account balance within five years of your death. If you die, your beneficiary should contact the 401(k) Savings Plan Call Center for assistance in filing for plan payments. Effective 1/1/08 The 401(k) Savings Plan 38

39 Tax Consequences Taxation of 401(k) Savings Plan benefits is complex and subject to frequent change. However, understanding taxation rules is very important because your decisions concerning payment of your account will affect your tax liability. Neither JPMorgan Chase nor its representatives can provide you with tax advice. Accordingly, it is strongly recommended that you seek the advice of a qualified tax expert and financial advisor before requesting a withdrawal or payment from the plan. This will help ensure that you receive the most updated information that applies to your own personal tax situation. Tax Considerations of Contributions Made to the Plan Before-tax Contributions. You pay no federal income taxes or, in most cases, state and local income taxes on the before-tax contributions you make to the 401(k) Savings Plan until they are distributed to you (along with any associated investment earnings). However, Social Security and Medicare taxes are withheld from your contributions. Roth 401(k) Contributions. You pay federal, state, and local income taxes on the Roth 401(k) contributions you make to the 401(k) Savings Plan. As a result, your Roth 401(k) contributions will be distributed to you tax-free. In addition, any associated investment earnings on those Roth 401(k) contributions will also be distributed tax-free, as long as your distribution is a qualified distribution. (See Roth 401(k) Qualified Distribution on page 40 for more information.) JPMorgan Chase Matching and Non-Matching Contributions. JPMorgan Chase will make matching contributions to the plan on behalf of eligible employees, and may make non-matching contributions on behalf of certain designated employees from time to time. These contributions, if any, will not be taxed at the time they are credited to your account. Instead, the company contributions, and any associated investment earnings, will be taxed as ordinary income at the time you withdraw them from the plan. Tax Consequences of a Distribution Made Payable to Yourself If you elect to have your account balance paid to you, the tax consequences are as follows: Taxable amounts, such as before-tax contributions, JPMorgan Chase matching and non-matching contributions, rollover contributions of before-tax amounts, and any associated investment earnings will be taxable as ordinary income. Mandatory 20% federal income tax will be withheld from your distribution, as will any applicable state tax withholding. A 10% early distribution penalty tax may also apply. Roth 401(k) contributions will be distributed tax-free. Any Roth 401(k) investment income will be distributed tax-free if your distribution is a qualified distribution (see Roth 401(k) Qualified Distribution on page 40 for more information). Otherwise, associated investment income will be taxable as ordinary income, with mandatory 20% Federal Income Tax withheld from your distribution, as will any applicable state tax withholding. A 10% early distribution penalty tax may also apply to the distribution of any investment earnings. For More Information For more information on all of these guidelines, please refer to the plan s Special Tax Notice, which is available through the 401(k) Savings Plan Web Center. You re also encouraged to consult with a professional tax advisor before electing to receive any payments from the plan because certain distributions may be eligible for favorable tax treatment. The overview provided in this document is not intended nor should it be considered as a substitute for professional advice. Certain individuals may receive a saver s credit of up to $1,000 (or $2,000 if filing jointly) for contributing to qualified tax-deferred retirement plans, such as the 401(k) Savings Plan. These income tax credits are limited to individuals whose adjusted gross income (AGI) is less than or equal to the following amounts: $53,000 for couples filing jointly; $39,750 for individuals who file as heads of household; and $26,500 for single taxpayers. Effective 1/1/08 The 401(k) Savings Plan 39

40 Tax Consequences of a Rollover Distribution Made Payable to Another Institution If you roll over your payment, you will continue to defer income taxes and will also avoid the early distribution penalty tax that may apply to your distribution. Taxable amounts, such as before-tax contributions, JPMorgan Chase matching and non-matching contributions, rollover contributions of before-tax amounts, and any associated investment earnings can be rolled over to a traditional Individual Retirement Account (IRA) or to another employer s qualified plan. Roth 401(k) amounts, both contributions and any associated investment earnings, can be rolled over to a Roth Individual Retirement Account (Roth IRA) or to another employer s qualified plan that accepts Roth 401(k) rollovers. (You should confirm with your new employer that the plan accepts Roth 401(k) rollovers prior to requesting this option.) Please see Rollovers on page 42 for more information on electing a rollover distribution. It is especially important for you to review this section as it relates to Roth 401(k) accounts. Roth 401(k) Qualified Distribution Your Roth 401(k) distribution will be a qualified distribution if: Your Roth 401(k) account has been in existence for at least five years. The five-year holding period begins with the first tax year for which you made a Roth 401(k) contribution to the plan and continues to run even if you stop making Roth 401(k) contributions; and Contributions and earnings are not withdrawn until you reach age , die, or become disabled. JPMorgan Chase Common Stock If you elect to receive your JPMorgan Chase Common Stock Fund balance attributable to your non-roth account in the form of shares of JPMorgan Chase common stock (rather than rolling it over), you may elect not to be taxed on any potential net unrealized appreciation on such stock (i.e., its increase in value while held in the plan) at the time the shares are distributed to you. Instead, you ll be taxed on the cost of such stock, and a subsequent sale of stock may result in capital gains treatment on any net unrealized appreciation. To use this special rule, the payment must either qualify as a lump sum distribution, or the JPMorgan Chase Common Stock included in the payment must be attributable to after-tax employee contributions, if any. For more information, please refer to the plan s Special Tax Notice which is available through the 401(k) Savings Plan Web Center and Call Center. You may also wish to consult a professional tax advisor. In certain circumstances, you may be able to reduce the amount of tax you owe as a result of a distribution from the plan. For instance, if you were age 50 prior to January 1, 1986, you may be entitled to have a lump-sum distribution taxed under 10-year forward averaging. Please see the plan s Special Tax Notice for more information. Effective 1/1/08 The 401(k) Savings Plan 40

41 Additional Income Tax If you receive a payment before you reach age and you don t roll it over, then in addition to the regular income tax, you may have to pay an extra tax equal to 10% of the taxable portion of the payment. The additional 10% tax does not apply if at least one of the following conditions is met. Your payment is: Paid to you because you terminate employment with your employer during or after the year you reach age 55; Paid because of a total and permanent disability; Paid to you as equal (or almost equal) payments over your life or life expectancy (or your and your beneficiaries lives or life expectancies) of at least 10 or more years; Used to pay certain deductible medical expenses; Directly paid from the plan to the federal government to satisfy a federal income tax levy; Paid to your spouse or other beneficiary following your death; Paid to you after age , even if you re still working; or Paid to an alternate payee according to a qualified domestic relations order (QDRO). In addition, if you ve elected to receive quarterly cash distributions of JPMorgan Chase Common Stock Fund dividends, these payments are not subject to the additional 10% tax. See IRS Form 5329 for more information on the additional 10% tax. Effective 1/1/08 The 401(k) Savings Plan 41

42 Rollovers There are two kinds of rollovers you can make from the 401(k) Savings Plan a direct rollover, or a traditional rollover. The following information explains what they are and how they work. Direct Rollovers If you have a vested account balance when your employment terminates, you ll receive a final distribution package that includes descriptions of your distribution options and a Special Tax Notice that explains the corresponding tax implications of the options in greater detail. However, as an overview, one way to defer immediate, mandatory federal income tax withholding on the taxable portions of lump-sum payments is to request a direct rollover. Generally, you can roll over the full vested value of your account. However, if you roll over Roth 401(k) and/or other after-tax contributions, the recipient plan or Individual Retirement Account (IRA) must agree to account separately for these types of contributions. If you choose to have your account balance paid in a direct rollover, the taxable portion of your payment will not be taxed in the current year and no federal income taxes will be withheld. The payment will be made payable for your benefit to your IRA or, if you choose, to another employer s qualified plan that accepts your rollover. Your check will be mailed to you at your home address. Your payment will be taxed later when you take it out of the IRA or the employer s plan. If you elect a distribution of your account balance in a single payment or a series of payments for a period of less than 10 years, you can choose a direct rollover of all or any portion of your payment other than any portion representing a mandatory distribution. Please see Mandatory Distributions on page 38. Please Note: If your employment with JPMorgan Chase terminates, you can also elect to roll over your vested lump-sum distribution from the JPMorgan Chase Retirement Plan to the 401(k) Savings Plan and continue to defer taxes, unless you re age or older. Information on how to request this will be included in your Retirement Plan Distribution Package. Direct Rollover to an IRA If you choose to have your payment made directly to an Individual Retirement Account (IRA), contact the IRA sponsor (usually a financial institution) to find out how to have your payment made in a direct rollover to an IRA at that institution. (As previously noted, the check will be mailed to your home address and not directly to the financial institution accepting the rollover.) If you want to receive your distribution from the JPMorgan Chase Common Stock Fund in the form of stock, you should verify with the financial institution that it will accept rollover of shares of stock. Please see Stock Distribution from the JPMorgan Common Stock Fund in the section Receiving Account Payments After You Retire or Terminate from JPMorgan Chase on page 37 for more information. If you roll over your Roth 401(k) account to a Roth IRA, the five-year period starts from the date of the rollover unless you had established the Roth IRA at an earlier date. (Please Note: If the adjusted gross income limitation on contributions to a Roth IRA applies to you, you may not qualify for tax-free treatment of the Roth investment earnings.) The five-year period is important, as it determines whether the investment earnings are taxable upon distribution. Effective 1/1/08 The 401(k) Savings Plan 42

43 Direct Rollover to Another Plan If your new employer has a qualified plan and you want to make a direct rollover to that plan, ask the administrator of that plan whether it will accept your rollover. In particular, ask whether it will accept a rollover of Roth 401(k) and/or other after-tax contributions, if applicable. (As previously noted, the check will be mailed to your home address and not directly to the plan accepting the rollover.) An employer plan is not legally required to accept a rollover. If you want to receive your distribution from the JPMorgan Chase Common Stock Fund in the form of stock, please note that the recipient plan probably will not accept stock. If your new employer s plan doesn t accept a rollover, you can choose a direct rollover to an IRA. If you roll over your Roth 401(k) account, the five-year holding period requirement for a qualified distribution is measured from the earliest year in which you made Roth 401(k) contributions to the plan. Direct Rollover of a Series of Payments If you elect to receive your account balance in the form of periodic distributions (for example, annual installments) for 10 years or more, then your distributions are not eligible for rollover treatment. On the other hand, if you elect to receive your account balance in the form of installments payable for a period of less than 10 years, you may roll over such payments. If you direct us to make a direct rollover of such a payment to an IRA or a qualified plan, then that election will apply to all later payments. You can change your election for any subsequent period. Traditional Rollover With a traditional rollover, the benefit payment is made to you, generally by check. You can then roll over your distribution into another qualified plan or an IRA within 60 days from your date of receipt. In this case, JPMorgan Chase is required to withhold 20% of your taxable distribution, which may be applied to your total federal income tax liability at the end of the year in which the payment is received. Please Note: If you want to roll over 100% of the payment, you ll need to replace the 20% that was withheld from your personal sources. If the 20% withholding is not rolled over, you ll be taxed on it. It also may be subject to a 10% early distribution penalty tax. If you roll over your Roth 401(k) account to a Roth IRA, the five-year period starts from the date of the rollover unless you had established the Roth IRA at an earlier date. (Please Note: If the adjusted gross income limitation on contributions to a Roth IRA were to apply to you, you may not be able to qualify for tax-free treatment of the Roth investment earnings.) The five-year period is important, as it determines whether the investment earnings are taxable upon distribution. However, if you roll over your Roth 401(k) account to another employer s plan, the five-year holding period requirement for a qualified distribution is measured from the earliest year in which you made Roth 401(k) contributions to the plan. Effective 1/1/08 The 401(k) Savings Plan 43

44 Additional Plan Information Your benefits as a participant in the JPMorgan Chase 401(k) Savings Plan are provided under the terms of the official plan text, policies, and/or contracts. If there is any discrepancy between the official plan documents and this summary, the official plan documents control. Please Note: Only the plan administrator for the JPMorgan Chase Benefits Program (named fiduciary of the plan) has any authority to interpret the JPMorgan Chase 401(k) Savings Plan (or official plan documents) or to make any promises to you about them. The plan administrator for the JPMorgan Chase Benefits Program has complete authority in their sole and absolute discretion to construe and interpret the terms of the JPMorgan Chase 401(k) Savings Plan and any underlying policies and/or contracts, including the eligibility to participate in the plan. All decisions of the plan administrator for the JPMorgan Chase Benefits Program are final and binding upon all affected parties. Right to Amend JPMorgan Chase reserves the right to amend, modify, reduce or curtail future benefits under, or terminate the 401(k) Savings Plan at any time for any reason by act of the Compensation and Benefits Executive, other authorized officers, or the Board of Directors. For example, a decision to amend or terminate the plan may be due to a change in federal or state laws governing benefit plans, the requirements of the Internal Revenue Code or the Employee Retirement Income Security Act (ERISA), the provisions of a contract with an insurance company, or for any other reason. No amendment or termination shall affect a benefit previously accrued. However, amendments may include retroactive amendments to the extent allowed by law. In accordance with the plan and applicable law, if the plan is terminated, all contributions to the plan will stop and you ll be entitled to the full amount in your account as of the date of termination (adjusted for investment experience), regardless of whether you re vested at the time of termination. All of the assets on hand in the trust on the date of termination will continue to be held by the Trustee and distributed in accordance with the terms of the plan and applicable laws. If you have any questions about this plan, please call the 401(k) Savings Plan Call Center. JPMorgan Chase also reserves the right to amend any of the plans and policies, to change the method of providing benefits, to change the eligibility requirements, to curtail or reduce future benefits, or to terminate at any time any of the plans and policies described in this Guide. Neither this Guide nor the benefits described in this Guide create a contract of employment or a guarantee of employment between JPMorgan Chase and any individual. Your employment is always on an at-will basis. JPMorgan Chase or you may terminate the employment relationship at any time. Official plan documents control the payment and accrual of benefits, not the Guide. Effective 1/1/08 The 401(k) Savings Plan 44

45 If You Become Divorced or Legally Separated Your 401(k) Savings Plan account cannot be sold, assigned, transferred, pledged, or garnished, under most circumstances. However, if you become divorced or legally separated, certain court orders could require that part of your account be paid to someone else your spouse or children, for example. This is known as a Qualified Domestic Relations Order (QDRO). JPMorgan Chase is legally required to recognize QDROs. If you re a party in a divorce settlement that involves the JPMorgan Chase 401(k) Savings Plan, you should have your attorney call the QDRO Unit of Corporate Benefits to make sure that the appropriate documents are filed and that the court order in question is actually a QDRO that complies with governing legislation. A participant or beneficiary may obtain a description of the procedures governing QDRO determinations, without charge, by contacting the QDRO Unit of Corporate Benefits at However, a sample QDRO will only be sent to the attorney provided you have completed the QDRO Authorization for Release of Qualified Plan Information form or provided a copy of the divorce decree. Voting of JPMorgan Chase Common Stock The JPMorgan Chase Common Stock Fund is a direct investment fund and also an Employee Stock Ownership Plan (ESOP). The Trustee holds all shares of JPMorgan Chase common stock credited to the JPMorgan Chase Common Stock Fund in your account. You are given the opportunity to instruct the Trustee how to vote shares allocated to your account at the annual shareholders meeting. The Trustee will vote unvoted shares in the same proportion as voted shares. Before the meeting, you ll receive voting instructions. The Board of Directors of JPMorgan Chase has adopted procedures that ensure the strict confidentiality of your voting instructions as a plan participant. These procedures provide that no inspector of elections can be an employee of JPMorgan Chase and that the entity tabulating the vote is annually advised of the confidential nature of the voting instructions and is required to so advise its employees. Information on voting instructions would be released only if required by law or authorized by a shareholder. Approved Quarterly Window Periods In order to ensure compliance with certain federal securities law requirements, certain plan participants cannot make elections that affect participation in the JPMorgan Chase Common Stock Fund, except during specified quarterly window periods. Each window period generally will be the period beginning the day after the release of quarterly earnings and ending on the 15 th day of the following month. You ll be notified if you re subject to these restrictions. If applicable, you should consult the Code of Conduct for any applicable limitation as to the timing of any investment elections you would like to make. If you have any questions, you should contact the Office of the Secretary at Top-Heavy Rules As required by law, alternate plan provisions go into effect if the 401(k) Savings Plan becomes top-heavy. The plan is considered top-heavy if more than 60% of accumulated account balances are payable to key employees. Key employees include employees who are highly paid stockholders, JPMorgan Chase officers, and their beneficiaries. The plan administrator is responsible for determining if the plan is a top-heavy plan each year. You ll be notified of the situation and your rights in the unlikely event the plan becomes top-heavy. Effective 1/1/08 The 401(k) Savings Plan 45

46 Pension Benefit Guaranty Corporation The JPMorgan Chase 401(k) Savings Plan is a defined contribution plan. Since benefits under the plan are fully funded, benefits are not insured through the Pension Benefit Guaranty Corporation (PBGC) under Title IV of ERISA because the insurance provisions are not applicable to this type of plan. The trustee of the JPMorgan Chase 401(k) Savings Plan has claimed an exclusion from the definition of the term commodity pool operator under the Commodity Exchange Act, and accordingly, is not subject to registration or regulation as a pool operator under that Act. Appeals Process If your claim for benefits under the JPMorgan Chase 401(k) Savings Plan is denied, either in whole or in part, you can appeal the denial by following the appropriate procedures described in the Plan Administration section of this Guide. Additional Information on Investment Funds Certain investment funds offered by the JPMorgan Chase 401(k) Savings Plan are operated by managers who have claimed an exclusion from the definition of the term commodity pool operator and, as a result, are not subject to registration or regulation as a pool operator under the Commodities Future Trading Act. Effective 1/1/08 The 401(k) Savings Plan 46

47 If Your Situation Changes The following information summarizes how your 401(k) Savings Plan participation may be affected in certain situations, for example, if you have a change in status. If Your Work Status Changes If You Have a Break in Service and Are Subsequently Rehired If your work status changes from salaried to hourly, you can generally continue to participate in the plan or elect to participate if you were eligible immediately prior to the status change. However, in any other situation, a change to an ineligible work status (such as a transfer to a non-participating company or non-u.s. payroll status) means you re no longer eligible to make contributions to the plan. You may continue to reallocate or transfer your existing vested account balance among the investment funds, but you may not take loans from your account. You cannot take a distribution from the plan until your employment ends. However, you may request withdrawals, subject to the plan s withdrawal rules. A break in service is the period beginning on the date your employment with JPMorgan Chase, or an affiliate that is a member of a controlled group, ends for any reason and ending on the date you re rehired. See Important Terms beginning on page 5 for the definition of Break in Service. A break in service may affect JPMorgan Chase matching contribution eligibility and vesting of JPMorgan Chase non-matching contributions, if any, under the plan. A one-year break in service is the 12-consecutive-month period beginning on the date your employment ends and ending with the first anniversary of that date. If you return to work before you ve been gone for one year, all service (including the period of your break) is counted toward total service. If you had a break in service prior to December 31, 2004 and were vested at the time, you don t forfeit any benefits. When you return to JPMorgan Chase or a participating affiliate, you re eligible to elect to participate in the plan again and are 100% vested in the value of JPMorgan Chase matching contributions including any investment experience earned after your return. If you had a break in service prior to December 31, 2004 and were not vested at the time, you do forfeit the value of JPMorgan Chase matching contributions made to your account. However, these amounts can be restored, according to these rules: If your break is less than five years, all service you earned before the break is counted toward service for matching contribution eligibility and vesting after your rehire (if your break is less than 12 months, the period of your break is also counted). The value of any forfeited JPMorgan Chase matching contributions is restored when you return provided that you repay any amounts distributed to you during your break in service. If your break is five years or more, all service you earned before the break is counted toward service for matching contribution eligibility and vesting after your rehire. Any forfeited JPMorgan Chase matching contributions, including investment experience, will not be restored when you return. If you had service with heritage Bank One and incurred a break in service prior to December 31, 2004, your total service will not include such prior Bank One service if it was not recognized by the heritage Bank One Savings and Investment Plan. For example, if you had a break in service that began prior to being vested and your break exceeded five years, then service prior to the break will not be part of total service nor will your account balance be restored. Effective 1/1/08 The 401(k) Savings Plan 47

48 If You Go on a Paid Leave If You Receive Long-Term Disability If You Go on an Unpaid Leave If You Leave JPMorgan Chase If You Become Divorced or Legally Separated If You Die As long as you re on authorized paid leave of absence under the Disability Leave Policy, your contributions to and participation in the 401(k) Savings Plan can continue uninterrupted. Please Note: If you re on a partially paid leave, your contributions and the JPMorgan Chase matching contributions, if eligible, will be based on the amount of benefits pay paid to you during your leave. If you receive long-term disability (LTD) benefits from the JPMorgan Chase LTD Plan or the Bank One LTD Plan, your contributions to the plan and any applicable matching contributions stop. Even though you will not be contributing to the plan, you may continue to reallocate or transfer your investments on a daily basis and request withdrawals, subject to plan provisions. However, loans are not available while receiving LTD benefits. To continue loan repayments for loans granted prior to your leave, you must authorize semi-monthly automatic electronic withdrawals from your bank account. Please see What Happens to Your Loan If You Terminate Employment with JPMorgan Chase in the Loans section on page 28 for more information. You ll be eligible to take a distribution of your account balance if you re totally disabled and have received benefits under the JPMorgan Chase LTD Plan for more than 18 months. While you re on unpaid leave, your contributions to the plan and any applicable matching contributions stop. Even though you may not be making contributions to the plan, you may continue to reallocate or transfer your vested account balance on a daily basis, request loans, and request withdrawals from the plan, subject to plan provisions. To continue loan repayments for loans granted prior to your leave, you must authorize semi-monthly automatic electronic withdrawals from your bank account. Please see What Happens to Your Loan If You Terminate Employment with JPMorgan Chase in the Loans section on page 28 for more information. Upon termination of employment, contributions stop when your benefits pay ends. (Severance payments do not constitute benefits pay.) You may request plan payment as described in Receiving Account Payments After You Retire or Terminate from JPMorgan Chase on page 37. Please see Payment Options on page 35 for information about how your plan account is paid. Your 401(k) Savings Plan account cannot be sold, assigned, transferred, pledged, or garnished, under most circumstances. However, if you become divorced or legally separated, certain court orders could require that part of your account be paid to someone else your spouse or children, for example. This is known as a Qualified Domestic Relations Order (QDRO). JPMorgan Chase is legally required to recognize QDROs. Please see If You Become Divorced or Legally Separated on page 45 for more information. If you die while in active employment status, your account is payable to your beneficiary. To ensure prompt payment, your beneficiary should contact the 401(k) Savings Plan Call Center concerning payment of your account. Please see Payments to a Beneficiary on page 38 for more information. Effective 1/1/08 The 401(k) Savings Plan 48

49 Appendix A Heritage Morgan and Heritage Bank One Plan Participants This Appendix A applies to those individuals who were active participants in the heritage Morgan Deferred Profit Sharing/401(k) Plan as of December 31, It also applies to certain participants in the heritage Bank One Savings and Investment Plan as of December 31, This section explains how your participation in one of the heritage plans listed above may affect certain features of your 401(k) Savings Plan: For former participants in the Deferred Profit Sharing Plan of Morgan Guaranty Trust Company of New York and Affiliated Companies for United States Employees Loans; and Withdrawals. For certain former participants in the Bank One Savings and Investment Plan, spousal consent for loans, withdrawals, and distributions. Former Participants in The Deferred Profit Sharing Plan of Morgan Guaranty Trust Company of New York and Affiliated Companies for United States Employees Loans Under the heritage Morgan Deferred Profit Sharing/401(k) Plan, all loans were treated as plan loans. This means that if you took a loan, it came from the plan and not your individual account balance. Also, all loan repayments were made to the Capital Preservation Fund (currently the Stable Value Fund), not your individual account. All plan loans taken before January 1, 2002 under the heritage Morgan Deferred Profit Sharing/401(k) Plan were grandfathered as plan loans. Any loans taken under the JPMorgan Chase 401(k) Savings Plan after December 31, 2001 are participant loans that is, your investment funds will be reduced on a pro rata basis from across all investment funds holding a balance by the amount of the loan, and future repayments will be credited to your account. If you have a grandfathered plan loan under the heritage Morgan Deferred Profit Sharing/401(k) Plan and a default occurs, the outstanding loan amount will be taken from the market value of your account (since the amount of the loan was never taken from the value of the account). See Loans on page 28 for additional information on the treatment of loans following termination of employment. Also, partial prepayment of grandfathered plan loans is permitted, provided the prepayment amount is greater than $500, subject to the following rules: For loans made prior to August 15, 1998, partial prepayments will be applied to principal only. The loan will be reamortized, which will reduce the loan s original interest obligation. Effective 1/1/08 The 401(k) Savings Plan 49

50 For loans made between August 15, 1998 and December 31, 2001, partial prepayments will be applied to principal and interest. This will cause the last payment date of the loan to be earlier than expected; however, the prepayment amount will not reduce the total amount of interest paid over the life of the loan. Partial loan prepayment is not permitted for loans made on or after January 1, See Borrowing or Withdrawing from Your Account on page 28 for more information about loans under the JPMorgan Chase 401(k) Savings Plan. Withdrawals If you have a heritage Morgan grandfathered plan loan (see above), your account balance may not be reduced by a plan withdrawal to an amount less than two times the plan loan balance. This is meant to secure the loan against adverse investment experience. If this applies, the amount available for withdrawal will be reduced. You can also take a non-hardship withdrawal from your account attributable to heritage Morgan deferred profit sharing contributions after the award is vested and has been in the plan for at least two years. Former Participants in the Bank One Savings and Investment Plan Spousal Consent A spousal consent requirement applies to any participant or former participant in the Bank One Savings and Investment Plan as of December 31, 2004 whose administrative records indicate that spousal consent was required by the legacy plan in which they participated at the time the plan was merged into the Bank One Savings and Investment Plan. Accordingly, if you are married and you participated in one of the plans listed below, which merged into the Bank One Savings and Investment Plan, you must have your spouse s written, notarized consent before a loan can be processed or before a withdrawal or distribution request can be approved. You will be notified if this applies to you. Bank One Indiana Thrift Plan a/k/a American Fletcher Thrift Plan First National Bank of Montrose 401(k) Employee Savings Plan First Commerce Bank Corporation Tax-Deferred Savings Plan Liberty Bancorp, Inc. Profit Sharing Salary Deferral and Stock Ownership Plan Parkdale Bank 401(k) Profit Sharing Plan & Trust for Employees in Parkdale, TX Federal Kemper Life Assurance Company Money Purchase Pension Plan Metropolitan Bancorp, Inc. The Farmer s Savings and Trust Company The Waverly State Bank Winters National Corporation Effective 1/1/08 The 401(k) Savings Plan 50

51 Appendix B Bank One Supplemental Savings and Investment Plan This Appendix B applies to those individuals who were eligible to participate in the heritage Bank One nonqualified Supplemental Savings and Investment Plan (the SSIP ) prior to January 1, This section includes information about your balances, if any, in the heritage Bank One SSIP, which were transferred to a new recordkeeper effective January 1, Please Note: Your SSIP benefits are considered nonqualified benefits under the Internal Revenue Code. As such, they do not offer the same tax advantages, flexibility, and protection available for qualified 401(k) Savings Plan benefits. For example, because all contributions to the plan both your deferrals and the company s matching contributions remain assets of JPMorgan Chase, your benefits are subject to claims by the general creditors of the company in the event of bankruptcy or insolvency. Nonqualified plans like the SSIP cannot be funded, and no assets are held in a special trust. Nor is any money set aside to pay benefits. In addition, you cannot roll over your money into another employer s qualified plan or Individual Retirement Account (IRA) when you receive it. Because your SSIP account contains a notional balance that remains an asset of JPMorgan Chase until distributed to you, your SSIP account cannot be anticipated, alienated, assigned or encumbered. If you become legally divorced or separated, Qualified Domestic Relations Orders are neither accepted nor applicable to your SSIP account. Contributions Deferrals and company matching contributions made to your SSIP account were discontinued effective January 1, SSIP deferrals and company matching contributions made before 2005 will remain in the plan until you receive a distribution. Investing Your SSIP Account Because the nonqualified SSIP cannot be funded, its investment choices are hypothetical. This means the value of your SSIP account is not actually invested in any funds, and references to your account balances are notional and are for recordkeeping purposes only. Instead, your SSIP benefits are credited with investment gains (and losses) while in the plan. The amount of investment gain (or loss) credited to your SSIP account will depend on your investment fund choices. You can direct the hypothetical investment of your SSIP account in any one or more of these funds described under Investment Funds on page 18. The Stable Value Fund and the JPMorgan Chase Common Stock Fund, however, are not available for hypothetical investing. Effective 1/1/08 The 401(k) Savings Plan 51

52 Transfers and Reallocations Generally, you can transfer or reallocate your SSIP account balance among other 401(k) Savings Plan funds on a daily basis. There is one exception. If you transfer and/or reallocate balances out of any of the investment funds that hypothetically invest in mutual funds or international funds, you will be restricted from transferring and/or reallocating any balances back into that same fund for 30 calendar days from the date of the initial reallocation/transfer. Please see Limits on Reallocations/Transfers Affecting the International Funds and Mutual Funds on page 27 for more information. Vesting You are always 100% vested in the value of your prior deferrals, including any hypothetical investment gains or losses credited to your account based on your investment choices. You will become 100% vested in the value of any company matching contributions in your SSIP account after three years of total service. Please see Important Terms beginning on page 5 for the definition of Total Service. You become vested in any prior Supplemental Money Purchase contributions from the Federal Kemper Life Assurance Company Supplemental Profit Sharing Plan based on the following schedule: Completed Years of Service Percent Vested Less than 2 0% 2 10% 3 20% 4 40% 5 60% 6 80% 7 100% Important Note The default payment option is a lump sum unless the installment election is on file with the recordkeeper at time of your termination of employment. Distributions You will receive your vested SSIP balance as a distribution after you leave the company. Your balance in the SSIP will be paid to you directly as taxable income with payments commencing in January of the year following the year of your effective termination of employment. Thus, with employment ending any time during 2008, payment would commence in January The default payment method is for your SSIP balance to be paid as a lump sum. You can make an election to receive periodic installments instead of a lump sum, but you must make this election before your employment termination date. You may elect to receive benefits in monthly, quarterly, or annual installments over a period ranging from three to 15 years. (Please Note: Any company matching contributions that were not 100% vested as of December 31, 2004 must be paid to you as a lump sum the January of the year following the year in which you terminate employment.) To elect payment in installments, return a completed Distribution Form indicating this option to the plan recordkeeper. Your completed form must be received prior to your termination date to be valid. Once your termination date is reached, you cannot change your payment method. You can obtain a Distribution Form from the 401(k) Savings Plan Web Center or Call Center. Effective 1/1/08 The 401(k) Savings Plan 52

53 Keep in mind that you cannot roll over your nonqualified SSIP benefits into a qualified plan (like the 401(k) Savings Plan or another employer plan) or an Individual Retirement Account (IRA). In the event that you die prior to receiving your entire SSIP balance, your beneficiary will receive your remaining balance in the form of a lump sum distribution as soon as administratively practicable. Accessing Your Account You can view your SSIP account balance and conduct transactions through the 401(k) Savings Plan Web Center and Call Center. You will receive a separate annual account statement for your account balances in the SSIP. Effective 1/1/08 The 401(k) Savings Plan 53

54 401(k) Savings Plan Prospectus In connection with the offering of $1 par value common stock of JPMorgan Chase & Co. under the 401(k) Savings Plan (the Plan ), the following constitute the prospectus meeting the requirements of Section 10(a) of the Securities Act relating to that common stock: 1. The information set forth in a document describing the Plan entitled Your Guide to Benefits at JPMorgan Chase, which can be found at Company Home > HR & Personal > Pay & Benefits. You may request a copy of the above, at no cost, by calling the accesshr Contact Center. 2. The 401(k) Savings Plan Investment Fund Profiles Brochure covering the JPMorgan Chase common stock fund of the Plan found on the 401(k) Savings Plan Web Center via My Work: From Work: Go to Company Home > My Work > 401(k) Savings Plan Web Center From Home: Go to MyRewardsAtWork.com via the Internet and follow the path above You may request a copy of the above, at no cost, by calling the 401(k) Savings Plan Call Center. 3. Any other written documents delivered to participants updating or revising the information in (1) above. Those documents will contain a legend indicating that they constitute a part of the prospectus covering the common stock being offered as permitted by the 401(k) Savings Plan. 4. Each of the following documents filed by JPMorgan Chase & Co. with the Securities and Exchange Commission, which are incorporated by reference in the prospectus: A. The most recent annual report on Form 10-K of JPMorgan Chase & Co.; B. All other reports filed by the Corporation under Section 13(a) or 15(b) of the Securities Exchange Act since the end of the fiscal year covered by the annual report on Form 10-K referred to above; and C. The description of common stock contained in the JPMorgan Chase & Co. Registration Statement on Form 10 (File No ), as amended, relating to the registration of common stock under Section 12(b) under the Securities Exchange Act. You may request a copy of our above filings, at no cost, by writing to the following address: Office of the Corporate Secretary JPMorgan Chase & Co. 270 Park Avenue, 39 th Floor Mail Code: NY1-K748 New York, New York The terms and conditions of this offer to you under the Plan are governed by the Plan. In connection with this prospectus, it is important to understand that it is not part of the summary plan description which it incorporates by reference. This prospectus has been prepared by JPMorgan Chase pursuant to its obligation under the United States securities laws to its shareholders and not pursuant to the fiduciary obligations of Employee Retirement Income Securities Act. Effective 1/1/08 The 401(k) Savings Plan 54

55 To: From: Subject: U.S. JPMorgan Chase Employees John Donnelly, Director Human Resources Upcoming Changes to the 401(k) Savings Plan March 2009 This Notice is being distributed to all U.S. JPMorgan Chase employees without a corporate address or on a leave of absence. An electronic version was distributed to active employees with a corporate address. The challenges of the current economic environment underscore the need to evaluate all our employee benefits programs. Effective this May, we have decided to make changes to the 401(k) Savings Plan s matching contribution feature. These changes will affect existing employees and new hires in slightly different ways, as described below. Annual Calculation and Crediting of Matching Contributions: Currently, matching contributions are credited to your account on a per-pay-period basis. Effective May 1, 2009, JPMorgan Chase will calculate and credit matching contributions to 401(k) accounts on an annual basis following the end of the calendar year. To be eligible to receive the annual matching contribution for a given year, you generally must be employed on December 31 of that year. The last per-pay-period allocation of matching contributions will be made with the April 30, 2009 pay. Matching Contributions: Effective May 1, 2009, employees whose total annual cash compensation is less than $50,000 will continue to be matched dollar for dollar up to the first 5% of benefits pay (generally base salary) contributed to the plan. For employees who earn total annual cash compensation of $50,000 or more, the firm will decide at the end of the year what, if any, employer contribution to make based on the firm s performance. Employees earning total annual cash compensation of $250,000 or more were not eligible for a match in the past, and this will not change. Employees Hired On or After May 1, 2009: In addition to the changes described above, any matching contributions for employees hired on or after May 1, 2009 will become 100% vested after they have completed three years of service. (Current employees will continue to be fully vested in the value of any matching contributions they receive.) As a reminder, eligible employees must have completed one year of service prior to receiving matching contributions. Matching contributions are invested in the JPMorgan Chase Common Stock Fund unless you elect otherwise. We discussed these matters at length, as we clearly recognize the impact of these changes on employees. In the end we decided that, in the current economic environment, we need full-year financial performance information before we decide the level of matching contributions. I would like to reinforce the firm s belief in the importance of saving for retirement and encourage you to take advantage of the tax-deferred benefits of the 401(k) Savings Plan to help you meet your long-term financial goals. For additional information, including contact details should you have any questions, please read the attached Q&A document. The JPMorgan Chase U.S. Benefits Program is available to most full-time and part-time U.S. dollar-paid salaried employees who are regularly scheduled to work 20 hours or more a week and who are employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the JPMorgan Chase U.S. Benefits Program. This information does not include all of the details contained in the applicable insurance contracts, plan documents, and trust agreements. If there is any discrepancy between this information and the governing documents, the governing documents will control. JPMorgan Chase & Co. expressly reserves the right to amend, modify, reduce, change, or terminate its benefits and plans at any time. The JPMorgan Chase U.S. Benefits Program does not create a contract or guarantee of employment between JPMorgan Chase and any individual. JPMorgan Chase or you may terminate the employment relationship at any time. This is a Summary of Material Modification to the Summary Plan Description for the JPMorgan Chase 401(k) Savings Plan.

56 401(k) Savings Plan Questions & Answers The following Questions & Answers highlight some important information regarding changes to the 401(k) Savings Plan effective May 1, Q: What is changing about the company match? A: Employee contributions made after April 30, 2009 will continue to be matched dollar for dollar up to the first 5% of benefits pay (generally base salary) contributed for participants whose total annual cash compensation is less than $50,000. Beginning May 1, 2009, matching contributions will be calculated and credited annually following the end of the year. For participants whose total annual cash compensation is $50,000 or more, the firm will decide at the end of the year what, if any, employer contribution to make based on the firm s performance. Employees earning total annual cash compensation of $250,000 or more were not eligible for a match in the past, and this will not change. 2. Q: What is changing about the calculating and crediting of matching contributions? A: Matching contributions for eligible participants will be calculated and credited to 401(k) accounts on an annual basis following the end of the year. (Currently, matching contributions are credited to your account on a per-pay-period basis.) To be eligible to receive the annual matching contribution for a given year, you generally must be employed on December 31 of that year. (Certain exceptions will apply, such as for employees whose positions are eliminated or who terminate during the year and qualify for retiree medical benefits. Please see Question #4 for more information.) 3. Q: When is the last per-pay-period allocation of matching contributions? A: The last per-pay-period allocation of matching contributions will be made with the April 30, 2009 pay. 4. Q: Who is eligible to receive a match on contributions made between May 1, 2009 and December 31, 2009? A: If you contribute to the 401(k) Savings Plan between May 1, 2009 and December 31, 2009, you will be eligible to receive matching contributions if you meet all of the following criteria: Your total annual cash compensation for purposes of determining match eligibility for the 2009 plan year is less than $50,000, and You had completed at least one year of service at the time of your contribution to the plan, and You are actively employed (or on an approved leave of absence) on December 31, If you satisfy the first two criteria above but your employment ends prior to December 31, 2009, you will still be eligible to receive matching contributions if: You experience an "eligible termination." An eligible termination generally occurs if it is determined that your employment is involuntarily terminated due to the permanent closing of a location, a reduction in force, or corporate downsizing You qualify for Retiree Medical coverage* You die while an active employee You terminate employment due to Disability 2

57 * Generally, you are eligible to participate in the Retiree Medical Plan if you are at least age 55 and have 15 or more years of service as of the date your employment with the company ends. Additional special criteria may apply if you are affected by a position elimination that qualifies for severance pay and related benefits. For additional information, please see the As You Retire Guide available on HR & Personal > Pay & Benefits > Library. Please Note: As discussed in Question #1, for participants whose total annual cash compensation is $50,000 or more (but less than $250,000), the firm will decide at the end of the year what, if any, employer contribution to make based on the firm s performance. 5. Q: When will 2009 matching contributions related to my contributions from May 1, 2009 to December 31, 2009 be made to my account? A: These matching contributions, if eligible, will be made to your 401(k) Savings Plan account in early February Q: What about new employees joining the plan? A: Subject to the changes described above, employees hired on or after May 1, 2009 will be become 100% vested in matching contributions, if eligible, after completing three years of service. As a reminder, existing employees will continue to be 100% vested in any matching contributions they are eligible to receive. 7. Q: Will I be subject to the new vesting schedule if I am employed prior to May 1, 2009 but do not join or become eligible to join the 401(k) Savings Plan until after May 1, 2009? A: No. If your hire date with JPMorgan Chase is prior to May 1, 2009, you will be fully and immediately vested in any future matching contributions once you become eligible to receive them under the plan. 8. Q: Will the matching contribution formula be re-evaluated in the future? A: For the population whose match has been discontinued, the firm will decide at the end of the year what, if any, employer contribution to make based on the firm s performance. 9. Q: Where will my matching contributions be invested in early 2010? A: Your matching contributions, if eligible, will be invested in the same manner that you have currently elected to invest your matching contributions. As a reminder, you can direct the investment of your matching contributions to any of the 25 investment funds offered under the 401(k) Savings Plan. However, matching contributions will be invested in the JPMorgan Chase Common Stock Fund unless you have elected otherwise. General Information 10. Q: How is benefits pay defined? A: Benefits pay is generally your annual base salary plus any applicable job differential pay (e.g., shift pay). It does not include any annual bonuses, overtime, special recognition, or other incentive awards you might receive. In certain situations, your benefits pay may include other cash earnings (e.g., commissions, draws, and overrides) paid under certain non-annual incentive plans that provide compensation in lieu of base salary. 3

58 11. Q: How is total annual cash compensation defined? A: Your total annual cash compensation for purposes of determining match eligibility in 2009 generally includes your rate of base salary plus any applicable job differential pay (e.g., shift pay) as of August 1, 2008 plus any cash earnings from any incentive plans (e.g., annual bonus, commissions, draws, overrides, and special recognition payments or incentives) that were paid to or deferred by you for the previous 12-month period ending July 31, Overtime is not included. For most employees hired on or after August 1, total annual cash compensation will be equal to base salary plus any job differential. 12. Q: Who is considered a U.S. benefits-eligible employee? A: You are a U.S. benefits-eligible employee if you are a full-time or part-time U.S. dollar-paid, salaried employee who is regularly scheduled to work 20 or more hours a week and who is employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the JPMorgan Chase U.S. Benefits Program. Contact Information 401(k) Savings Plan Call Center: JPMC401k ( ) TDD: Service Representatives are available from 8 a.m. to 8 p.m. Eastern Time, Monday through Friday, except New York Stock Exchange holidays. My Work, available at is your online resource for personalized pay and benefits information. The JPMorgan Chase U.S. Benefits Program is available to most full-time and part-time U.S. dollar-paid salaried employees who are regularly scheduled to work 20 hours or more a week and who are employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the JPMorgan Chase U.S. Benefits Program. This information does not include all of the details contained in the applicable insurance contracts, plan documents, and trust agreements. If there is any discrepancy between this information and the governing documents, the governing documents will control. JPMorgan Chase & Co. expressly reserves the right to amend, modify, reduce, change, or terminate its benefits and plans at any time. The JPMorgan Chase U.S. Benefits Program does not create a contract or guarantee of employment between JPMorgan Chase and any individual. JPMorgan Chase or you may terminate the employment relationship at any time. This is a Summary of Material Modification to the Summary Plan Description for the JPMorgan Chase 401(k) Savings Plan. 4

59 To: From: Subject: U.S. JPMorgan Chase Employees Bernadette Ulissi, U.S. Benefits Manager Changes to the JPMorgan Chase U.S. Retirement Savings Plans November 2009 This Notice is being distributed to all U.S. JPMorgan Chase employees without a corporate address or on a leave of absence. An electronic version was distributed to active employees with a corporate address. At JPMorgan Chase, we believe that it is very important to help our employees save for retirement, and we believe everyone has a responsibility to be actively engaged in retirement planning. We are making some changes to our retirement savings plans. Our plans will continue to provide meaningful benefits that grow with service and are competitive with the marketplace. Specifically: We re reinstating the full dollar-for-dollar 401(k) match for 2009 for eligible employees earning less than $250,000. All employees can contribute to the plan up to the annual limit of $16,500. We are committed to continuing a pension plan benefit that is fully paid for by the firm, even though many companies, including those in our industry, have frozen their pension plans in recent years. To support the plan s long-term viability, we will be offering Retirement Plan pay credits ranging from 3% to 5% of eligible compensation up to $100,000. Additionally, we recognize the tremendous amount of work that employees at all levels have done in these unprecedented times, which have contributed to our success in So, we will grant a one-time $500 Special Award to the 401(k) Savings Plan early next year for employees with total annual cash compensation of less than $60,000. Read on for more details of these changes and for additional resources to come. 401(k) Savings Plan One of the most effective ways to save for retirement is through the 401(k) Savings Plan. The 401(k) Savings Plan offers you a tax-effective way to save for your future through before-tax and/or Roth 401(k) contributions, company matching contributions for eligible employees, and the opportunity to invest in a diversified mix of funds according to your financial goals and risk tolerance. As a reminder, earlier this year we announced several changes to the 401(k) matching contribution formula in light of economic conditions, including calculation and crediting of matching contributions following the end of the calendar year generally, the following February. Further, we announced that we would decide later in the year what matching contribution, if any, employees with total annual cash compensation of $50,000 or more would receive, based on the firm s performance. We are now pleased to announce that there will be no change to the match formula, and the full matching contribution will be credited for 2009 for employees with total annual cash compensation between $50,000 and $250,000 who are employed at year end. This means that all employees with one year of service and total annual cash compensation of less than $250,000 will be eligible to receive dollar-for-dollar matching contributions up to 5% of eligible compensation (generally base salary) contributed to the plan for Please Note: Matching contributions will continue to be credited on an annual basis (i.e., in February 2010 for 2009). (continued) 1

60 Reminders: Matching contributions, if eligible, were credited to your account on a per-pay-period basis from January through April Heritage WaMu employees: Matching contributions, if eligible, were credited to your account on a per-pay-period basis based on the WaMu formula from January through April Matching contributions for May and June will be credited in February 2010 according to the WaMu formula and eligibility requirements except that, for employees earning $250,000 or more, matching contributions were discontinued after April Matching contributions for July through December 2009 will be calculated under the formula described above. Retirement Plan JPMorgan Chase has contributed $2.8 billion to the Retirement Plan trust this year alone and we are committed to helping ensure its long-term sustainability. The well-funded status of the trust not only offers security that pension benefits will be available to our employees and retirees, but also reflects our long-term commitment to this plan. All U.S. benefits-eligible employees are automatically enrolled in the Retirement Plan after completing one year of service. Your benefit, which is fully paid for by the firm, grows over time through pay credits and interest credits. Pay credits are a percentage of eligible compensation (generally base salary). The exact pay credit percentage credited to your account is based on your completed years of pay credit service. You become fully vested in the Retirement Plan after completing three years of service. The following changes to the Retirement Plan will be effective February 1, 2010: Pay credits will range from 3% to 5% of eligible compensation, instead of 3% to 9%, as shown below. This new schedule will also be applicable to employees who are currently receiving transition provisions under a prior heritage company plan (i.e., those receiving pay credits of more than 9% today). Schedule Effective February 1, 2010 Years of Pay Credit Service Pay Credit Percent 1 to 9 3% 10 to 19 4% 20 or more 5% To view your years of pay credit service, go to My Work > Retirement We will provide pay credits on eligible compensation up to $100,000. Currently, the firm recognizes eligible compensation up to $245,000 (the maximum annual legal limit). Your account balance will continue to grow according to the current formula through January 31, 2010 and there will be no impact to existing balances. (continued) 2

61 Understanding the Value of your Retirement Savings Finally, we have heard from you that you would like to better understand the full value of your retirement benefits, including Social Security. We know that we can do more to help you plan for your retirement, and we are in the process of developing a strategy to assist you. The Retirement Plan and 401(k) Savings Plan provide two important sources of retirement income in addition to Social Security benefits. It is more important than ever that you are aware of how essential it is to save for retirement and how each of these pieces will add up. Next year, we anticipate that we will be introducing tools that can help you better understand the full value of your retirement benefits and how to better prepare. In the meantime, you can access various calculators by clicking on Financial Tools on the 401(k) Savings Plan Web Center via My Work. You can also visit My Work to see the value of your retirement savings you can view monthly and year-to-date account activity, interest and pay credit rates, and contribution rates. If you have any questions, please refer to the contact information below. Contact Information To access My Work Go to My Work to access the 401(k) Savings Plan Web Center and your personal pay and benefits information: From Work: Go to Company Home > My Work From Home: Go to The accesshr Contact Center If you have questions about your Retirement Plan benefit, contact the accesshr Contact Center at JPMChase ( ). (Quick Path: Enter your Standard ID or Social Security number; press 1; enter your PIN; press 2.) Service Representatives are available Monday through Friday, from 8 a.m. to 8:30 p.m. Eastern Time, except certain U.S. holidays. (The TDD number for employees with a hearing impairment is ) The 401(k) Savings Plan Call Center If you have any additional questions about changes to the 401(k) Savings Plan or your 401(k) account, please contact the 401(k) Savings Plan Call Center at JPMC401k ( ). (The TDD number for participants with a hearing impairment is ) Participant Services Representatives are available from 8 a.m. to 9 p.m. Eastern Time, Monday through Friday, except New York Stock Exchange holidays. The JPMorgan Chase U.S. Benefits Program is available to most full-time and part-time U.S. dollar-paid employees who are regularly scheduled to work 20 hours or more a week and who are employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the JPMorgan Chase U.S. Benefits Program. This information does not include all of the details contained in the applicable insurance contracts, plan documents, and trust agreements. If there is any discrepancy between this information and the governing documents, the governing documents will control. JPMorgan Chase & Co. expressly reserves the right to amend, modify, reduce, change, or terminate its benefits and plans at any time. The JPMorgan Chase U.S. Benefits Program does not create a contract or guarantee of employment between JPMorgan Chase and any individual. JPMorgan Chase or you may terminate the employment relationship at any time. This is a Summary of Material Modification to the Summary Plan Descriptions for the JPMorgan Chase 401(k) Savings Plan and the JPMorgan Chase Retirement Plan. 3

62 This communication is being distributed electronically to all U.S. benefits-eligible employees beginning April 23, Paper copies are being delivered to employees without corporate accounts, employees on a leave of absence, individuals on long-term disability, and former employees with a balance in the plan. Investment Fund Changes in the JPMorgan Chase 401(k) Savings Plan Important Information Effective April 26, 2010 April 2010 Effective as of April 26, 2010, the JPMorgan Chase 401(k) Savings Plan will replace the fund manager and change the investment guidelines for the plan s International Small Cap Fund. Heritage Bank One Employees: The investment fund changes described in this Bulletin will also apply to the same hypothetical investment choices in the heritage Bank One Supplemental Savings and Investment Plan. The JPMorgan Chase 401(k) Savings Plan will replace the fund manager and change the investment guidelines for its International Small Cap Fund ( Fund ) beginning April 26, Fund Manager and Investment Guideline Changes The Fund, currently managed by AXA Rosenberg, LLC, will be managed by BlackRock Institutional Trust Company, N.A. ( BlackRock ) beginning April 26, Further, the new investment guidelines result in the Fund being passively managed as an index fund that invests directly or indirectly in stocks comprising the Morgan Stanley Capital International (MSCI) Europe Australasia Far East (EAFE) Small Cap Index. The change from active to passive management will result in lower investment management fees. The attached fund profile describes the investment strategy and objectives of the Fund in greater deal. Please Note: The Fund is one of the underlying holdings within the Moderately Aggressive Lifestyle Portfolio and the Aggressive Lifestyle Portfolio. Therefore, the changes described above will also apply to the assets in those portfolios. Transition Period For the period commencing April 26, 2010, and ending on or about May 7, 2010, BlackRock will employ a transition strategy that minimizes transaction costs while maximizing market efficiency. BlackRock will retain certain of the underlying securities in the Fund, while other securities will be sold and the proceeds used to purchase new securities on behalf of the plan, in accordance with its investment strategy for the Fund. Please Note: During this transition period, the performance of the Fund will not necessarily reflect its prior performance nor fully reflect its new investment guidelines, and transaction costs may be somewhat higher than normal until the transition is complete. After the end of the transition period, performance of the Fund is expected to reflect its new guidelines. How This May Affect You If you invest in the Fund, you should ensure it continues to satisfy your investment objectives. You do not need to take any action if you wish to remain invested in the Fund. However, if the Fund no longer meets your investment objectives, you should make any applicable changes. Important Note: The Plan imposes a 30-day trading restriction on the Fund. If you transfer and/or reallocate balances out of the Fund, then no subsequent amount can be transferred and/or reallocated back into the Fund for 30 calendar days from the date of the initial transfer/reallocation change. Other transactions, such as contributions and loan repayments, will not subject you to the 30-day restriction period. 1

63 Contact Information To access the 401(k) Savings Plan Web Center: You can access the 401(k) Savings Plan Web Center from work or from home via My Work: From Work: Go to Company Home > My Work From Home: Go to To contact the 401(k) Savings Plan Call Center: Call JPMC401k ( ). (The TDD number for participants with a hearing impairment is ) Participant Services Representatives are available from 8 a.m. to 9 p.m. Eastern Time, Monday through Friday, except New York Stock Exchange holidays. The JPMorgan Chase U.S. Benefits Program is available to most full-time and part-time U.S. dollar paid employees who are regularly scheduled to work 20 hours or more a week and who are employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the JPMorgan Chase U.S. Benefits Program. This information does not include all of the details contained in the applicable insurance contracts, plan documents, and trust agreements. If there is any discrepancy between this information and the governing documents, the governing documents will control. JPMorgan Chase & Co. expressly reserves the right to amend, modify, reduce, change, or terminate its benefits and plans at any time. The JPMorgan Chase U.S. Benefits Program does not create a contract or guarantee of employment between JPMorgan Chase and any individual. JPMorgan Chase or you may terminate the employment relationship at any time. Recordkeeping and administrative services for the plan are provided by J.P. Morgan Retirement Plan Services LLC (JPMRPS); securities transactions for the plan may be introduced by J.P. Morgan Institutional Investments Inc. (JPMII). Member FINRA/SIPC. JPMRPS and JPMII are affiliates of J.P. Morgan Chase & Co. 2

64 401(k) SAVINGS PLAN INTERNATIONAL SMALL CAP FUND Fund Facts Market Capitalization: Small Investment Style: Blend Risk Assessment: High Expense Ratio: 16 Basis Points Investment Style Value Blend Growth Investment Type and Investment Manager Small-cap common stock fund (other than that of U.S. companies) passively managed by BlackRock Institutional Trust Company, N.A. Investment Objective The investment objective of the Fund is to produce a total rate of return that approximates, as closely as practicable, the total rate of return achieved by the publicly traded common stock of the companies that comprise the Morgan Stanley Capital International (MSCI) Europe Australasia Far East (EAFE) Small Cap Index. Market Capitalization Large Medium Small Return Measures Annualized Performance* March 31, Year: 70.02% 3 Year: -8.27% 5 Year: 3.60% * The returns set forth above are for illustrative purposes only and represent the returns of the Index. They do not represent the performance of the Manager. As noted, actual performance of the Fund will likely be less than the Index because of cash flows, transaction costs and investment manager fees. The Index does not reflect those costs. Investment Strategy and Fees The Fund is passively managed as an indexed fund that invests directly or indirectly in stocks comprising the MSCI EAFE Small Cap Index and, from time to time, futures on such stocks. The Fund will invest in a collective trust fund that invests in such stocks and futures. Depending on market conditions, as well as anticipated participant requests for reallocations or transfers, loans, and withdrawals, the manager of the Fund is authorized to hold varying levels of cash or short-term liquid investments as cash reserves. Fees of the investment manager, inclusive of administrative fees, are charged to the Fund. The annual investment management fee is based on the value of assets under management and will be about 16 basis points (.16%). This fee would be about $16 annually for each $10,000 invested for a full year. Investment Points to Consider The MSCI EAFE Small Cap Index tracks the performance of approximately 2,200 stocks across approximately 21 countries. The issuers of these securities generally have a market capitalization of between $29 million and $4.9 billion and in aggregate account for approximately $1.3 trillion in total market capitalization. Only stocks that can be freely held by foreign investors are included in this Index. The MSCI EAFE Small Cap Index takes into account the common stock of companies incorporated in a particular country on the basis of the ratio of their market capitalization to the total market capitalization of all common stock tracked by the Index. The common stock of companies incorporated in the MSCI EAFE Small Cap Index Fund make up about 15% of the total Index. In addition, the Index is developed by a selection of stocks in a variety of industries in each country. Because the Fund incurs transaction costs and maintains cash reserves while the MSCI EAFE Small Cap Index does not have such costs and reserves, the Fund s performance is unlikely to exactly mirror the MSCI EAFE Small Cap Index. 1

65 401(k) SAVINGS PLAN INTERNATIONAL SMALL CAP FUND Investment Points to Consider, continued Furthermore, the Fund s manager employs Fair Value pricing when valuing the fund. Generally, the Fund manager will value securities of the Fund using market prices. However, if such market prices are not available or do not reflect current market values, the Fund manager will determine the value of the asset through a fair valuation process. Fair value pricing is also used if an event occurs after the close of an exchange that impacts market values, i.e., after the close of the European market but prior to the close of the U.S. market. The current fair value of an asset is the amount that a fund might reasonably expect to receive upon immediate sale of that asset. The offering is managed as a commingled fund. The value of an investment in the Fund increases or decreases depending on the value of securities owned by the commingled fund. Investment Risk and Return: High The primary risk and return factors to be considered in investing in the Fund are: Stock market volatility, which is the risk that the Fund s total return, like stock prices in general, will fluctuate within a wide range, so an investment in the Fund could lose money over short or long periods. Stock prices tend to move in cycles, with periods of rising prices and periods of falling prices. Foreign exposure risk, which is the possibility that foreign markets can be more volatile than the U.S. markets and can perform differently than the U.S. market. Additionally, risks associated with foreign investments may include increased risk of issuer, political, regulatory, market, or economic developments. Other factors that may contribute to this added volatility include: fluctuations in foreign currencies; withholding and other taxes; trading, settlement, custodial, and other operational risks; or less stringent investor protection in some countries. Investment style risk, which is the possibility that returns from small-capitalization stocks in non-u.s. markets will trail returns from other asset classes or the U.S. stock market. Index risk, which is the possibility that an index may underperform other funds that are actively managed. INVESTMENT REALLOCATION/TRANSFER LIMITS Investing in the 401(k) Savings Plan generally is intended for purposes of long-term financial objectives, and excessive daily fund transfers / reallocations are not permitted. If you transfer and/or reallocate balances out of the International Small Cap Fund, then no subsequent amount can be transferred and/or reallocated back into the International Small Cap Fund for 30 calendar days from the date of the initial transfer / reallocation transaction. Other transactions, such as contributions and loan repayments, will not subject you to the 30-day restriction period. Please Note: The 30-day restriction period described here applies to several other investment funds as well. Please see the individual investment fund profiles for more information. 2

66 Investment Fund Changes Under the JPMorgan Chase 401(k) Savings Plan Effective November 30, 2010 > Important Information About Upcoming Investment Fund Changes October 2010 Audience U.S. benefits-eligible employees and participants in the JPMorgan Chase 401(k) Savings Plan. Heritage Bank One Employees: The investment fund changes described in this Bulletin will also apply to the same hypothetical investment choices in the heritage Bank One Supplemental Savings and Investment Plan ( SSIP ). Effective as of 4 p.m. Eastern Time on November 30, 2010, the International Large Cap Core Fund will no longer be offered as an investment option in the JPMorgan Chase 401(k) Savings Plan. Any balance that you may have remaining in the International Large Cap Core Fund (the International Core Fund ) after 4 p.m. Eastern Time on November 30, 2010 will automatically be transferred to and invested in the International Large Cap Index Fund (the International Index Fund ). This change affects current balances in the plan, as well as future contributions and loan repayments. Current Fund Name International Large Cap Core Fund Current Gross Expense Ratio Replacement Fund Name 0.40% International Large Cap Index Fund Replacement Fund Gross Expense Ratio 0.08% Please Note: The International Core Fund is one of the underlying holdings within the Moderately Conservative Lifestyle Portfolio, Moderately Aggressive Lifestyle Portfolio, and Aggressive Lifestyle Portfolio. Effective as of 4 p.m. Eastern Time on November 30, 2010, the underlying International Core Fund holdings in these portfolios will be replaced with International Index Fund holdings. As a result, the expense ratios for these portfolios will be lower. The International Index Fund is passively managed as an indexed fund that invests directly or indirectly in stocks comprising the Morgan Stanley Capital International (MSCI) Europe, Australasia & Far East (EAFE) Index. The fund is passively managed by BlackRock Institutional Trust Company, N.A ( BlackRock ). The change from active to passive management will result in lower investment management fees. Transition Period November 15 through November 30 In preparation for the transition to the International Index Fund, BlackRock will become the manager of the International Core Fund for the period commencing November 15 and ending on November 30, BlackRock will employ a transition strategy that will attempt to align the underlying securities in that fund with those in the International Index Fund, with the goal of minimizing transaction costs while maximizing market efficiency. BlackRock will retain certain of the underlying securities in the International Core Fund, while other securities will be sold with the proceeds being used to purchase new securities on behalf of the plan in accordance with the investment strategy for the International Index Fund. Please Note: During this transition period, the performance of the International Core Fund will not necessarily reflect its prior performance, and transaction costs may be somewhat higher than normal until the transition is complete. Removal of the International Large Cap Core Fund Effective 4 p.m. Eastern Time on November 30 Any balances not transferred or reallocated from the International Core Fund prior to 4 p.m. Eastern Time on November 30, 2010 will automatically be transferred to and invested in the International Index Fund. Similarly, any future contributions or loan repayments to be invested in the International Core Fund will be invested in the International Index Fund following your November 30 pay unless you make an election to direct such future contributions and/or loan repayments to another fund(s). 1

67 As a reminder, the Plan imposes a 30-day trading restriction on the international funds in the Plan. If you transfer and/or reallocate balances out of any of the international funds, you will be restricted from transferring any assets back into that same fund for 30 calendar days from the date of the initial transfer/reallocation transaction. Please Note: Any balances that are automatically transferred to the International Index Fund due to the elimination of the International Core Fund will not be subject to this 30-day trading restriction. The characteristics of the International Core Fund are generally similar to those of the International Index Fund. If you choose not to make a different investment election and amounts are automatically transferred from the International Core Fund to the International Index Fund, you will be treated as having exercised control over the investment in the International Index Fund. This means that, under Section 404(c) of the Employee Retirement Income Security Act, if you directed the investment of your account balance into the International Core Fund, plan fiduciaries including your employer will not be responsible for any losses related to amounts reallocated to the International Index Fund. What You Need to Do You should regularly review your asset allocation in the plan to ensure it continues to meet your financial needs and objectives. In this instance, it is important for you to review whether continued investment in the International Core Fund and the Lifestyle Portfolios, including future contributions and loan repayments, is appropriate. And, if you do continue such investments, you should consider whether the subsequent transfer of those amounts (including future contributions and loan repayments) into the International Index Fund is right for you. Brief descriptions of both the International Index Fund and International Core Fund are provided on the following page, so that you can compare the funds. It is important to note that the International Index Fund is a passively managed fund, while the International Core Fund was an actively managed fund. The change from active to passive management will result in lower investment management fees. You are encouraged to read the attached fund profiles for more information on the affected holdings. Additional information on these funds and all of the funds in the plan, such as rates of return and standard deviation, is available through the 401(k) Savings Plan Web Center or Call Center. (See Contact Information on page 3.) Should you wish to remain invested in the affected funds through the transition described above, you do not need to take any action. However, if these funds no longer meet your investment objectives, you should make any applicable changes prior to 4 p.m. Eastern Time on November 30, If your International Core Fund balance, future contributions, and/or loan repayments are automatically redirected because you did not take action by the deadline, you can subsequently transfer these amounts from the International Index Fund to other funds in the plan at any time beginning December 1, If You Want to Take Action To make changes to your existing investments or to change how your future contributions and loan repayments will be invested, please access the JPMorgan Chase 401(k) Savings Plan Web Center or Call Center. (See Contact Information on page 3.) Types of Investment Funds The scale above provides a comparison of the risk and potential reward of different types of investment funds. Both the International Core Fund and the International Index Fund are stock funds. Stock funds have a higher reward potential, but also have a greater potential risk than cash alternatives, bonds, or asset allocation investments. Generally, asset classes represented on the left side of the scale seek to protect principal investment. These more conservative investments, however, may not have the same potential for long-term growth as the other investment types offered in the plan. As you move toward the middle and to the right side of the scale, growth potential for the investment types increases, but so does the potential relative risk of the investments. The above scale is not intended to be a precise indicator of future risk or return levels. The degree of risk within each category can vary significantly, and a fund s risk classification may change over time. Therefore, it is important that you read a fund s profile or if a mutual fund, its prospectus carefully before investing to ensure its objectives, policies, and risk potential are consistent with your goals. None of the funds discussed in this Bulletin are registered mutual funds. 2

68 Fund Description International Large Cap Core Fund ( International Core Fund ) Gross Expense Ratio 0.40% The fund seeks capital growth over the long term by investing primarily in the common stock of large capitalization non-u.s. companies considered to be prospects for appreciation. The fund manager seeks to identify fairly valued companies with reasonable growth opportunities from developed countries outside of the United States. The fund invests in common stock of corporations incorporated or doing business primarily in Europe, Australia, and Asia with market capitalization generally in excess of $3 billion. The fund may also invest in foreign currency contracts, equity futures, options, derivatives, and units in collective trusts that invest in equity securities. The fund is actively managed by Munder Capital Management. Inception Date January 1, 2002 Benchmark Index MSCI EAFE Index International Large Cap Index Fund ( International Index Fund ) Gross Expense Ratio 0.08% The fund seeks to produce a total rate of return that approximates, as closely as practicable, the total rate of return achieved by the publicly traded common stock of the companies that comprise the Morgan Stanley Capital International (MSCI) Europe, Australasia & Far East (EAFE) Index. The fund is passively managed as an indexed fund that invests directly or indirectly in stocks comprising the MSCI EAFE Index and, from time to time, futures on such stocks. The fund is currently invested in a collective trust fund that invests in such stocks and futures. The fund is passively managed by BlackRock Institutional Trust Company, N.A. Inception Date January 1, 2002 Benchmark Index MSCI EAFE Index Contact Information The 401(k) Savings Plan Call Center If you have any questions about the information contained in this Bulletin, please contact the JPMorgan Chase 401(k) Savings Plan Call Center at JPMC401k ( ) (The TDD number for participants with a hearing impairment is ) Participant Services Representatives are available from 8 a.m. to 9 p.m. Eastern Time, Monday through Friday, except New York Stock Exchange holidays. The 401(k) Savings Plan Web Center You can obtain information and conduct plan transactions by accessing the 401(k) Savings Plan Web Center through My Work. To access My Work: From Work: Go to Company Home > My Work From Home: Go to The investment funds are not deposits or obligations of nor guaranteed by JPMorgan Chase (or any of its respective affiliates). Nor are they insured by the Federal Deposit Insurance Corporation (FDIC) or any other governmental agency. Investment in these funds involves risks, including the possible loss of principal. Participants should also carefully consider the investment objectives, charges, and expenses of the funds. Therefore, it s important that you make informed investment decisions only after carefully reading all the plan information (including the mutual fund prospectuses and the 401(k) Savings Plan Investment Fund Profiles Brochure) available through the JPMorgan Chase 401(k) Savings Plan Web Center or Call Center. Those funds without underlying mutual funds are separate accounts created specifically for the JPMorgan Chase 401(k) Savings Plan. Separate accounts are not registered investment products and are not required to file a prospectus or registration statement with the SEC and accordingly neither is available. For the name of the fund advisor, please see the Investment Fund Profiles Brochure or call JPMC401k ( ). None of the fund advisors except JPMorgan Asset Management (USA) Inc. and JPMorgan Investment Management are affiliated with J.P. Morgan Retirement Plan Services LLC. Recordkeeping and administrative services for the plan are provided by J.P. Morgan Retirement Plan Services LLC (JPMRPS); securities transactions for the plan may be introduced by J.P. Morgan Institutional Investments Inc. (JPMII). Member: FINRA/SIPC. JPMRPS and JPMII are affiliates of J.P. Morgan Chase & Co. The lifestyle portfolio(s) is (are) a predetermined asset allocation among the core investment options available under the plan. The portfolio is not itself, nor is it intended to be, a security. International investing involves a greater degree of risk and increased volatility. Changes in currency exchange rates and differences in accounting and taxation policies outside the U.S. can raise or lower returns. Also, some overseas markets may not be as politically and economically stable as the U.S. or other nations. Expense ratios provided are the funds total annual operating expense ratios, gross of any fee waivers or expense reimbursements. The JPMorgan Chase U.S. Benefits Program is available to most employees on a U.S. payroll who are regularly scheduled to work 20 hours or more a week and who are employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the JPMorgan Chase U.S. Benefits Program. This information does not include all of the details contained in the applicable insurance contracts, plan documents, and trust agreements. If there is any discrepancy between this information and the governing documents, the governing documents will control. JPMorgan Chase & Co. expressly reserves the right to amend, modify, reduce, change, or terminate its benefits and plans at any time. The JPMorgan Chase U.S. Benefits Program does not create a contract or guarantee of employment between JPMorgan Chase and any individual. JPMorgan Chase or you may terminate the employment relationship at any time. 3

69 4 0 1 ( k ) S A V I N G S P L A N Fund Facts Market Capitalization: Large Investment Style: Blend Risk Assessment: High Expense Ratio: 8 Basis Points Market Capitalization Small Medium Large Investment Style Value Blend Growth INTERNATIONAL LARGE CAP INDEX FUND Investment Type and Investment Manager Large-cap common stock (other than that of U.S. companies) fund passively managed by BlackRock Institutional Trust Company, N.A. Investment Objective The investment objective of the Fund is to produce a total rate of return that approximates, as closely as practicable, the total rate of return achieved by the publicly traded common stock of the companies that comprise the Morgan Stanley Capital International (MSCI) Europe, Australasia & Far East (EAFE) Index. Investment Strategy and Fees The Fund is passively managed as an indexed fund that invests directly or indirectly in stocks comprising the MSCI EAFE Index and, from time to time, futures on such stocks. The Fund is currently invested in a collective trust fund that invests in such stocks and futures. Depending on market conditions, as well as anticipated participant requests for reallocations or transfers, loans, and withdrawals, the manager of the Fund is authorized to hold varying levels of cash or short-term liquid investments as cash reserves. Fees of the investment manager are charged to the Fund. The annual investment management fee will be about eight basis points (.08%) based on the value of assets under management. This fee would be about $8 annually for each $10,000 invested for a full year. Investment Points to Consider The MSCI EAFE Index tracks the performance of approximately 1,000 stocks across approximately 21 developed market countries located in Western Europe, Australasia, and the Far East (EAFE). The issuers of these securities generally have large market capitalization and in aggregate account for approximately 85% of the developed world s free float-adjusted market capitalization. Only stocks that can be freely held by foreign investors are included in this Index. The MSCI EAFE Index takes into account the common stock of companies incorporated in a particular country on the basis of the ratio of their market capitalization to the total market capitalization of all common stock tracked by the Index. The common stock of companies incorporated in the United Kingdom, Japan, France, and Germany make up about 62% of the total Index. In addition, the Index is developed by a selection of stocks in a variety of industries in each country. Because the Fund incurs transaction costs and maintains cash reserves while the MSCI EAFE Index does not have such costs and reserves, the Fund s performance is unlikely to exactly mirror the MSCI EAFE Index. Furthermore, the Fund s manager employs Fair Value pricing when valuing the Fund. Generally, the Fund manager will value securities of the Fund using market prices. However, if such market prices are not available or do not reflect current market values, the Fund manager will determine the value of the asset through a fair valuation process. Fair value pricing is also used if an event occurs after the close of an exchange that impacts market values, i.e., after the close of the European market but prior to the close of the U.S. market. The current fair value of an asset is the amount that a fund might reasonably expect to receive upon immediate sale of that asset. This offering is managed as a commingled fund. The value of an investment in the Fund increases or decreases depending on the value of securities owned by the commingled fund. (continued on next page) 4

70 4 0 1 ( k ) S A V I N G S P L A N INTERNATIONAL LARGE CAP INDEX FUND Investment Risk and Return: High The primary risk and return factors to be considered in investing in the Fund are: Stock market volatility, which is the risk that the Fund s total return, like stock prices generally, will fluctuate within a wide range, so an investment in the Fund could lose money over short or long periods. Stock prices tend to move in cycles, with periods of rising prices and periods of falling prices. Foreign exposure risk, which is the possibility that foreign markets can be more volatile than the U.S. market and can perform differently than the U.S. market. Additionally, risks associated with foreign investment may include increased risk of issuer, political, regulatory, market, or economic developments. Other factors that may contribute to this added volatility include: fluctuations in foreign currencies; withholding and other taxes; trading, settlement, custodial, and other operational risks; or less stringent investor protection in some countries. Investment style risk, which is the possibility that returns from non-u.s. stocks will trail returns from other asset classes or the U.S. stock market. Index risk, which is the possibility that an index may underperform other funds that are actively managed. INVESTMENT REALLOCATION/TRANSFER LIMITS Investing in the 401(k) Savings Plan generally is intended for purposes of long-term financial objectives, and excessive daily fund transfers / reallocations are not permitted. If you transfer and/or reallocate balances out of the International Large Cap Index Fund, then no subsequent amount can be transferred and/or reallocated back into the International Large Cap Index Fund for 30 calendar days from the date of the initial transfer / reallocation transaction. Other transactions, such as contributions and loan repayments, will not subject you to the 30-day restriction period. Please Note: The 30-day restriction period described here applies to several other investment funds as well. Please see the individual investment fund profiles for more information. For this fund s current performance, sector allocations, and top 10 holdings, visit My Work > 401(k) Savings Plan Web Center > Fund Information. 5

71 4 0 1 ( k ) S A V I N G S P L A N MODERATELY CONSERVATIVE LIFESTYLE PORTFOLIO Fund Facts Risk Assessment: Moderate Expense Ratio: 21 Basis Points Investment Objective The Moderately Conservative Lifestyle Portfolio seeks to provide higher returns than those provided by the fixed income funds by including an exposure to equities (i.e., potentially higher stock market volatility and risk). This exposure is based on a target asset allocation policy of investing 60% of the Portfolio s assets in specified fixed income funds and 40% of its assets in specified equity funds. Investment Strategy and Fees The Portfolio invests in funds according to the following target asset allocation policy: Fixed Income Funds Equity Funds Stable Value Fund 20.0% Growth and Income Fund 7.5% Intermediate Bond Fund 35.0% S&P 500 Index Fund 15.0% High Yield Bond Fund 5.0% Large Cap Growth Index Fund 7.5% Small Cap Core Fund 2.5% Small Cap Blend Fund 2.5% International Large Cap Index Fund 5.0% Total 60.0% Total 40.0% At the beginning of each quarter, the assets of the Portfolio will be invested in accordance with the percentages shown above. During a quarter, fluctuations in value may cause these percentages to change. There are no investment management fees directly associated with the Portfolio. However, based on its investment allocations to the Plan s funds and investment management fees of each fund, the Portfolio would indirectly incur annual investment management fees of about 21 basis points (.21%). This would amount to about $21 annually for each $10,000 invested for a full year. J.P. Morgan Retirement Plan Services (RPS) provides recordkeeping services to the Plan. Currently there are no direct charges to the Plan or to participants for such recordkeeping services. RPS does receive income from various mutual fund companies to compensate it for services to the Plan and its participants. Based on the investment allocations to the Moderately Conservative Lifestyle Portfolio of certain mutual fund choices provided by the Plan, RPS receives approximately 5 basis points of the total 21 basis points indirectly charged by the Moderately Conservative Lifestyle Portfolio. Temporary Investments On a daily basis, an investment fund may have a cash balance on hand in order to meet liquidity needs or to achieve the investment objectives of the underlying manager. To ensure that the daily cash balances of the Fund remain invested, at all times, those balances are temporarily invested in government money market mutual funds or collective trusts to provide additional return (net of the mutual fund s management and other expenses of 18 basis points). These types of funds, called a sweep vehicle, invest solely in short-term securities that are issued or guaranteed by the U.S. government or by its agencies. Investment Risk and Return: Moderate The return on the Portfolio will fluctuate based on the returns achieved by the various investment funds comprising the Portfolio. Participants are urged to review the Investment Risk and Return description for each fund comprising the Portfolio for a discussion of certain risks associated with those funds. In reviewing those descriptions, participants also should consider the percentage of the Portfolio that is represented by a particular fund. For this fund s current performance, sector allocations, and top 10 holdings, visit My Work > 401(k) Savings Plan Web Center > Fund Information. 6

72 4 0 1 ( k ) S A V I N G S P L A N MODERATELY AGGRESSIVE LIFESTYLE PORTFOLIO Fund Facts Risk Assessment: Moderate to High Expense Ratio: 34 Basis Points Investment Objective The Moderately Aggressive Lifestyle Portfolio seeks to provide higher returns with a larger exposure to stocks (i.e., potentially higher stock market volatility and risk) than the Moderately Conservative Lifestyle Portfolio. This is based on a target asset allocation policy of investing 40% of its assets in specified fixed income funds and 60% of its assets in specified equity funds. Investment Strategy and Fees The Portfolio invests in funds according to the following target asset allocation policy: Fixed Income Funds Equity Funds Intermediate Bond Fund 35.0% Growth and Income Fund 7.5% High Yield Bond Fund 5.0% S&P 500 Index Fund 10.0% Large Cap Growth Index Fund 7.5% Mid Cap Value Fund 5.0% Mid Cap Growth Fund 5.0% Small Cap Core Fund 5.0% Small Cap Blend Fund 5.0% International Large Cap Value Fund 5.0% International Large Cap Index Fund 7.0% International Small Cap Fund 3.0% Total 40.0% Total 60.0% At the beginning of each quarter, the assets of the Portfolio will be invested in accordance with the percentages shown above. During a quarter, fluctuations in value may cause these percentages to change. There are no investment management fees directly associated with the Portfolio. However, based on its investment allocations to the Plan s funds and investment management fees of each fund, the Portfolio would indirectly incur annual investment management fees of about 34 basis points (.34%). This would amount to about $34 annually for each $10,000 invested for a full year. J.P. Morgan Retirement Plan Services (RPS) provides recordkeeping services to the Plan. Currently there are no direct charges to the Plan or to participants for such recordkeeping services. RPS does receive income from various mutual fund companies to compensate it for services to the Plan and its participants. Based on the investment allocations to the Moderately Aggressive Lifestyle Portfolio of certain mutual fund choices provided by the Plan, RPS receives approximately 7 basis points of the total 34 basis points indirectly charged by the Moderately Aggressive Lifestyle Portfolio. Temporary Investments On a daily basis, an investment fund may have a cash balance on hand in order to meet liquidity needs or to achieve the investment objectives of the underlying manager. To ensure that the daily cash balances of the Fund remain invested, at all times, those balances are temporarily invested in government money market mutual funds or collective trusts to provide additional return (net of the mutual fund s management and other expenses of 18 basis points). These types of funds, called a sweep vehicle, invest solely in short-term securities that are issued or guaranteed by the U.S. government or by its agencies. Investment Risk and Return: Moderate to High The return of the Portfolio will fluctuate based on the returns achieved by the various investment funds comprising this Portfolio. Participants are urged to review the Investment Risk and Return description for each fund comprising this Portfolio for a discussion of certain risks associated with those funds. In reviewing those descriptions, participants also should consider the percentage of the Portfolio that is represented by a particular fund. For this fund s current performance, sector allocations, and top 10 holdings, visit My Work > 401(k) Savings Plan Web Center > Fund Information. 7

73 4 0 1 ( k ) S A V I N G S P L A N AGGRESSIVE LIFESTYLE PORTFOLIO Fund Facts Risk Assessment: Moderate to High Expense Ratio: 38 Basis Points Investment Objective The Aggressive Lifestyle Portfolio seeks to provide the highest returns with more exposure to stocks (i.e., potentially the highest stock market volatility and risk) than any of the other lifestyle portfolios. This is based on a target asset allocation policy of investing 20% of its assets in specified fixed income funds and 80% of its assets in specified equity funds. Investment Strategy and Fees The Portfolio invests in funds according to the following target asset allocation policy: Fixed Income Funds Equity Funds Intermediate Bond Fund 15.0% Growth and Income Fund 10.0% High Yield Bond Fund 5.0% S&P 500 Index Fund 15.0% Large Cap Growth Index Fund 10.0% Mid Cap Value Fund 7.5% Mid Cap Growth Fund 7.5% Small Cap Core Fund 7.5% Small Cap Blend Fund 7.5% International Large Cap Value Fund 5.0% International Large Cap Index Fund 7.0% International Small Cap Fund 3.0% Total 20.0% Total 80.0% At the beginning of each quarter, the assets of the Portfolio will be invested in accordance with the percentages shown above. During a quarter, fluctuations in value may cause these percentages to change. There are no investment management fees directly associated with the Portfolio. However, based on its investment allocations to the Plan s funds and investment management fees of each fund, the Portfolio would indirectly incur annual investment management fees of about 38 basis points (.38%). This would amount to about $38 annually for each $10,000 invested for a full year. J.P. Morgan Retirement Plan Services (RPS) provides recordkeeping services to the Plan. Currently there are no direct charges to the Plan or to participants for such recordkeeping services. RPS does receive income from various mutual fund companies to compensate it for services to the Plan and its participants. Based on the investment allocations to the Aggressive Lifestyle Portfolio of certain mutual fund choices provided by the Plan, RPS receives approximately 10 basis points of the total 38 basis points indirectly charged by the Aggressive Lifestyle Portfolio. Temporary Investments On a daily basis, an investment fund may have a cash balance on hand in order to meet liquidity needs or to achieve the investment objectives of the underlying manager. To ensure that the daily cash balances of the Fund remain invested, at all times, those balances are temporarily invested in government money market mutual funds or collective trusts to provide additional return (net of the mutual fund s management and other expenses of 18 basis points). These types of funds, called a sweep vehicle, invest solely in short-term securities that are issued or guaranteed by the U.S. government or by its agencies. Investment Risk and Return: Moderate to High The return of the Portfolio will fluctuate based on the returns achieved by the various investment funds comprising this Portfolio. Participants are urged to review the Investment Risk and Return description for each fund comprising the Portfolio for a discussion of certain risks associated with those funds. In reviewing those descriptions, participants also should consider the percentage of the Portfolio that is represented by a particular fund. For this fund s current performance, sector allocations, and top 10 holdings, visit My Work > 401(k) Savings Plan Web Center > Fund Information. 8

74 JPMorgan Chase Retirement Savings Program Newsletter November 2010 Home Financial Tools & Resources Dream Machine The Way Forward 401(k) Savings Plan News Roth Conversions in the News Maximum of Two Outstanding Loans in the Plan Rollovers into the Plan Reminders Retirement Plan News But Wait! There Are More Benefits to Remember Getting Information about Your Account Contact Information Disclosures Maximum of Two Outstanding Loans in the Plan It s good to know that if you are experiencing a financial need or hardship, you can access your 401(k) Savings Plan account by requesting an in-service withdrawal or loan. But balancing the ability to access funds for an immediate financial need with the importance of saving for retirement is always difficult. While the plan will continue to offer in-service withdrawals and loans, the number of loans you can have outstanding at any given time will be reduced. Currently, the plan allows you to have a maximum of six loans outstanding at any time. Beginning January 1, 2011, you will be limited to a maximum of two loans. Don t worry if you have more than two loans outstanding on January 1, you can continue to pay off those loans under their present terms. However, you won t be eligible to request an additional loan until you have fewer than two loans outstanding. Before you request a loan from your 401(k) account, first consider the consequences of borrowing from your retirement savings. These resources from The Way Forward can help: Listen to the podcast: Borrowing from your 401(k): It doesn't add up. Compare your ending nest egg with and without a loan by using the Borrowing from a 401(k) online calculator. Watch The Biggest Saver - Episode 2: Savings Survivor. This is a Summary of Material Modification to the Summary Plan Description for the JPMorgan Chase 401(k) Savings Plan. *Assumes a 6% rate of return. Source: David Bach, factor. The 401(k) Savings Plan Web Center Has a New Look Recently the 401(k) Savings Plan Web Center got a fresh new look and feel. The graphics are bigger and bolder, and more information can now be viewed without scrolling down the page. The new transaction bar tracks the progress of your transaction and how many steps remain. Check out the new market watch information and search features, and the improved real-time News and Quotes. Click here for a printable PDF of this e-newsletter, or contact the 401(k) Savings Plan Call Center to request a printed copy. Copyright J.P. Morgan 2010 All Rights Reserved 9:47:28 AM]

75 December 2011 Benefits Program Reminders for the New Year This Bulletin contains information about the JPMorgan Chase U.S. Benefits Program for 2012, such as reminders about the new Medical Plan that is effective January 1, 2012, and updates on annual legal limits applicable to contributions for certain benefits like the 401(k) Savings Plan. You are encouraged to review this information carefully in order to take full advantage of your benefits in the new year. YOUR NEW YEAR CHECKLIST In this Bulletin, you ll read about actions that you can take in the coming months with respect to your JPMorgan Chase benefits. Here s a quick checklist: Now: Complete the HealthWiz Quiz, register with your health care company, complete an online Wellness Assessment, and complete a Wellness Screening to earn funds in your Medical Reimbursement Account (MRA). Mid-December: Watch for your Medical Plan ID cards (and debit cards if you selected that option during Annual Benefits Enrollment). Please see page 2 for more information. January 1: Begin to earn money in your MRA with additional wellness activities. Please see page 2 for more information. Early February: Look for information about matching contributions credited to your 401(k) Savings Plan account, if you are eligible. Please see page 4 for more information. THE NEW MEDICAL PLAN The new JPMorgan Chase Medical Plan, which takes effect January 1, 2012, centers on the principle that we all need to take more responsibility for our health and motivates us to: Focus on the controllable aspects of our health, such as diet, exercise, and preventive care; Make better decisions about how we use our benefits, such as how we select doctors and hospitals; and Manage expenses. With the new plan, you pay nothing for in-network preventive care, including annual physical exams and recommended screenings. And although deductibles under the new plan are generally higher than under the plans offered today, you don t need to meet a deductible for visits to your in-network primary care doctor. You can use in-network or out-of-network providers, but the plan always pays more in-network. GO TO MY HEALTH FOR MORE INFORMATION My Health is your one-stop online resource to access your medical and wellness information all in one convenient place. You can access the Wellness Assessment, find out more about Wellness Screenings, and track your Wellness Rewards (beginning January 1). In addition, you can access information about the new Medical Plan with Online Tutorials and Tip Sheets. To access My Health: From work: My Health from the intranet From home: (also available for your covered spouse/domestic partner) 2011 Benefits Program Reminders 1

76 GET MONEY IN YOUR MEDICAL REIMBURSEMENT ACCOUNT (MRA) + FOR 2012 Under the new Medical Plan, JPMorgan Chase will also contribute tax-free money to a Medical Reimbursement Account (MRA), which can be used to help pay for your share of medical expenses (deductibles, coinsurance, and copays). For employees earning up to $250,000 in total annual cash compensation, Automatic Funds of $150 to $900 (depending on your pay tier and coverage level) will be automatically contributed to your MRA on January 1. For details about Automatic Fund amounts, go to the LEARN tab on My Health and access the Introduction to the 2012 Medical Plan. To learn more about how to fund your MRA, check out the Better Every Day newsletter that was recently mailed to your home, and is also posted on My Health. Here s a list of activities you can take now and beginning in 2012 to get additional funding in your MRA. What you can do now to earn more funds in your MRA: Start-Up Funds Complete the HealthWiz Quiz Register on health care company s web site Wellness Funds Complete the Wellness Assessment + Complete a Wellness Screening + Beginning January 1, there are even more activities that can help you earn money in your MRA: Age and gender appropriate preventive care exam/screenings (e.g., annual physical exam, mammogram, or colonoscopy) + Healthy body mass index (BMI) or weight management program + Telephonic health coaching + Online health coaching + Condition management Treatment decision support Maternity support + If you are enrolled in the Kaiser or GHC HMO, or have waived coverage in JPMorgan Chase Medical Plan for 2012, you will not receive an MRA. However, you are eligible to receive up to $400 in Wellness Rewards in 2012 for completing activities noted above with a +. Cigna will administer your Wellness Program. Go to the Wellness Web Center on My Health for more details. MEDICAL PLAN IDENTIFICATION (ID) CARDS Below is a summary of the ID cards that you should look for in the coming weeks: If you enrolled in the Medical Plan for 2012: You will receive a new Medical Plan ID card from your health care company in December. You will also receive a new debit card for your Medical Reimbursement Account/ Health Care Spending Account if you elected that payment method during Annual Benefits Enrollment. If you were either not enrolled in the Medical Plan in 2011 or you were enrolled in the Consumer Driven Health Option or an HMO (e.g., Kaiser, Blue Cross Blue Shield of Illinois), you will receive a new Prescription Drug ID card from Caremark. If you waived medical coverage or are enrolled in the Kaiser or GHC HMO: If you newly elected the Health Care Spending Account with the debit card option, you will receive a new Health Care Spending Account debit card from ADP, your Health Care Spending Account administrator. If you currently have a Health Care Spending Account debit card, you will receive a new card only if your current one is expiring (cards generally expire after three years) Benefits Program Reminders 2

77 2011 HEALTH CARE SPENDING ACCOUNT CLAIMS IRS rules require you to forfeit any balance left in your Health Care Spending Account after all claims incurred during the eligible period have been submitted. The period from January 1, 2012 through March 15, 2012 is considered a grace period under the 2011 Health Care Spending Account. This means that balances remaining in your 2011 Health Care Spending Account as of December 31, 2011 can be used for eligible expenses incurred through March 15, 2012 (for example, if you see a doctor in January 2012). The grace period only applies to the Health Care Spending Account, and note that the deadline to submit your claims for eligible expenses incurred during the eligible period is June 30, Important Note if You Are Enrolled in the 2012 JPMorgan Chase Medical Plan and have a 2011 Health Care Spending Account Balance Beginning January 1, 2012, if you are enrolled in the new JPMorgan Chase Medical Plan (Option 1 or 2) you must first use funds from your Medical Reimbursement Account (MRA) to pay for eligible medical and prescription drug expenses. After your MRA is exhausted, you may then use your Health Care Spending Account for these expenses. As a result: As a reminder, the March 15 grace period deadline for incurring expenses under the Health Care Spending Account will be eliminated for You will have to incur expenses by December 31, 2012 and at the end of each year following to be reimbursed from your account. If you elected the automatic claim payment method for your 2012 MRA/Health care Spending Account: Because medical and prescription drug expenses will automatically be paid from your MRA first, as long as you have funds in your MRA you will not be able to use your 2011 Health Care Spending Account to pay for eligible medical and prescription drug expenses during the grace period. You will, however, be able to use your 2011 Health Care Spending Account Funds to pay for dental and vision expenses incurred during the grace period, since MRA funds cannot be applied to these types of expenses. If you elected the debit card payment method: If you wish to use 2011 Health Care Spending Account funds to pay for eligible medical and prescription drug expenses, you would first pay for these expenses out of your pocket and then submit a paper claim form to ADP. You should not use your debit card to pay eligible medical and prescription drug expenses incurred during the grace period until you have exhausted any carry over amount in your 2011 Health Care Spending Account. If you did not elect debit card for your 2012 reimbursement method during Annual Benefits Enrollment, you may change your election before December 31, 2011 by contacting the Benefit Call Center (please see page 7 for contact information). NEW LONG-TERM CARE INSURANCE PLAN COMING IN 2012 JPMorgan Chase will introduce a new Long-Term Care Insurance Plan in spring 2012, which will be insured by Prudential. In addition to giving those who currently do not participate in the plan the opportunity to enroll in the new plan, current plan participants will be able to choose between their current plan and the new plan. Watch for more information and details on how to enroll in the new plan in the first quarter of EXPANDING THE HEALTH & WELLNESS CENTERS As described in the Annual Benefits Enrollment materials, JPMorgan Chase is increasing the availability of our on-site Health & Wellness Centers to more locations across the U.S. and adding physicians and more nurses. By the end of 2012, we ll have fully staffed Health & Wellness Centers in 29 locations. These Centers will offer you basic medical services along with educational resources. You pay nothing for these services. Our centers will provide medical care, treatment, and resources when you need them at work, to supplement the care and direction you get from your personal physician. Centers were recently opened at the 270 Park facility in New York, and Polaris Center in Ohio Benefits Program Reminders 3

78 401(K) SAVINGS PLAN MATCHING CONTRIBUTIONS AND $500 SPECIAL AWARD In early February 2012, the firm will credit the 2011 annual matching contributions to the 401(k) Savings Plan for eligible plan participants. To be eligible for 2011 matching contributions, you had to have completed at least one year of service at the time of your contribution to the plan and be actively employed on December 31, 2011 (certain exceptions apply). Also, your total annual cash compensation in effect for the 2011 plan year (determined as of August 1, 2010) must be less than $250,000. As a reminder, all matching contributions beginning with the 2011 match will automatically be invested in the same funds you ve elected for your future contributions. In addition, as recently announced in an from Jamie Dimon, the firm will grant a US$500 Special Award early next year to employees globally with at least one year of service as of December 31, 2011 and with total annual cash compensation of less than US$60,000 (determined as of August 1, 2011). In the United States, this will be made as a contribution to the 401(k) Savings Plan in late January You must be actively employed on the award date to receive the award. Confirmation statements for the 2011 matching contributions and the Special Award will be distributed to eligible participants in February DID YOU CONTRIBUTE TO ANOTHER EMPLOYER S 401(K) PLAN IN 2011? If you were hired in 2011 and participated in another employer s 401(k) plan prior to joining JPMorgan Chase, it's your responsibility to ensure that your before-tax, Roth 401(k), and catch-up contributions to all plans combined don't exceed the annual contribution limit for 2011 ($16,500, with an additional $5,500 if you were age 50 or older). If you exceeded the contribution limit, you may request a refund of the excess amount no later than April 1, If you don't request a refund, these contributions will be taxed twice. Remember, if you were hired on or after July 1, 2011 you may have been automatically enrolled in the 401(k) Savings Plan at a before-tax contribution rate of 3%, if you did not take any action LEGAL LIMITS FOR CERTAIN BENEFITS The following limits will apply in 2012: Good news! For those of you who have made an election to receive confirmation statements from the 401(k) Savings Plan via , your election for paperless confirmations took effect beginning on December 12, If you haven t made the election to go paperless, you can do so via the 401(k) Savings Plan Web Center. Annual 401(k) Savings Plan Limits: Monthly Transportation Spending Accounts Before-Tax Limits: Contributions: $17,000 Transit: $125* Catch-Up Contributions: $5,500 Parking: $240 * The current $230 monthly before-tax transit limit is scheduled to expire (and return to the previous limit of $125 per month) at the end of 2011 if Congress does not act to extend it or make the increased limit permanent. Therefore, any election amount over $125 will be deducted from your pay on an after-tax basis. You will be notified if Congress extends or makes permanent the current $230 monthly before-tax limit INTEREST CREDIT RATE UNDER THE RETIREMENT PLAN The Retirement Plan is a JPMorgan Chase-paid cash balance pension plan, in which you are automatically enrolled after you complete one year of service. Your account grows over time through pay credits and interest credits. The interest credit rate for 2012 will be 4.5%. PRIVACY NOTICE AVAILABLE ONLINE The Privacy Notice of Protected Health Information Under the JPMorgan Chase Health Care Plans describes how the JPMorgan Chase Medical Plan, Dental Plan, Vision Plan, Health Care Spending Account, and Employee Assistance Program may use and disclose protected health information about you and your covered family members, including your rights and certain obligations regarding the use and disclosure of this protected information. To access this Notice, go to My Health Benefits Program Reminders 4

79 GROUP PERSONAL EXCESS LIABILITY PLAN POLICIES If you enrolled in the Group Personal Excess Liability Plan for 2012, you will receive your Coverage Summary Certificate by from in December. If you do not receive this by December 31, 2011, please contact Arthur J. Gallagher & Co., the claims administrator, at , Monday through Friday, from 9 a.m. to 5 p.m. Eastern Time, except certain holidays. WHEN 2012 BENEFITS DEDUCTIONS BEGIN Payroll deductions for your participation in the 2012 JPMorgan Chase Health Care and Insurance Plans will generally be reflected in your first pay in January. However, if you were required to provide evidence of insurability for any coverage you elected under the Supplemental Term Life Insurance Plan, you won t have payroll deductions related to that election until it is approved by Prudential, the insurance carrier. Please Note: If your total annual cash compensation increased from less than $60,000 in 2011 to $60,000 or more for 2012, you must contribute toward your Long-Term Disability (LTD) coverage beginning in January. If you did not make any changes to your LTD coverage during Annual Benefits Enrollment, your coverage will automatically continue in 2012, and any related deductions will be reflected in your first pay of January. Note that total annual cash compensation is recalculated as of each August 1 to take effect the following January 1. REIMBURSEMENT FOR SAME-SEX DOMESTIC PARTNERS Beginning in 2012, we will offer eligible U.S. employees a payment to help offset additional required taxes related to health and wellness benefits for same-sex domestic partners. This enhancement is part of the firm s ongoing commitment to diversity and inclusion. Additional details will be communicated in first quarter of QUALIFIED STATUS CHANGES DURING THE YEAR If you experience a qualified change in benefits status (such as marriage, divorce, the birth or adoption of a child), you must make changes to your benefits coverage within 31 days of the qualifying event through the Benefits Web Center or Benefits Call Center for coverage to be effective on the date of the qualifying event. If you miss the 31-day deadline, coverage for certain benefits will be effective as of the date you contact the Benefits Call Center. In order to have retroactive coverage, you may be required to pay for your coverage on an after-tax basis for the period prior to the date you first contacted the Benefits Call Center. As a reminder, if your eligibility for benefits changes due to a spouse or domestic partner s benefits enrollment, this is considered a qualified change in benefits status, and you will be able to make changes to your benefits coverage as a result. For additional information, please go to My Health. CLAIMS FILING DEADLINES FOR 2011 JPMORGAN CHASE BENEFITS Claims forms are available online via My Health. Or, you can contact your 2011 plan administrator/insurance carrier directly for a claim form. Benefit Plan Medical, Prescription Drug, Dental, Vision, Group Legal Services Health Care Spending Account, Child/Elder Care Spending Account Transportation Spending Accounts Parking Account 2011 Benefits Program Reminders 2011 Claims Filing Deadline December 31, 2012 June 30, 2012 *Generally, the "Pay Me Back" feature applies only to the Parking Account. NOTE ON DEPENDENT ELIGIBILITY You are responsible for understanding JPMorgan Chase s dependent eligibility rules and abiding by them. Each year during your designated enrollment period, or within 31 days following a qualified status change, it is important that you review both the firm s dependent eligibility rules and the status of your 180 days (six months) following the end of any particular month that you participated in the Parking "Pay Me Back" Account. The outstanding balance after that point will be applied to future payroll deductions. A dependent eligibility audit will be conducted in early If you are selected, you will be required to provide proof (e.g., birth certificate or marriage license) that your dependents meet the eligibility rules under the JPMorgan Chase U.S Benefits Program. covered dependents, and make any necessary changes before confirming that your covered dependents are eligible for benefits coverage. You can access the dependent eligibility requirements online via My Health. 5

80 MAKE YOUR BENEFICIARY DESIGNATIONS ONLINE You are encouraged to review your beneficiary designations and keep them up to date. And now, designating beneficiaries is more convenient with the launch of the new Online Beneficiary Designations site. This web site, accessible through Single Sign-On, allows you to designate beneficiaries electronically and review and update those designations as needed, for instance in the event of a status change (divorce, marriage, or the birth/adoption of a child). You can access the site from work or from home: Beneficiary designations previously submitted using the paper Beneficiary Designation form are not accessible through the Online Beneficiary Designations site, but will remain valid until you make a change. If you have questions about the site or your existing beneficiary designations, please call the accesshr Contact Center. From Work: Go to HR & Personal > Health and Retirement Savings Benefits > Resources From Home: Go to Domestic Partners Will No Longer Be Automatic Beneficiaries Under The Life And Accident Insurance Plans Effective January 1, 2012, your domestic partner will no longer be your default beneficiary under the Life Insurance, Accidental Death and Dismemberment, and Business Travel Accident Insurance Plans. If you want your domestic partner to receive your benefit under any of those plans, you must name him or her as your beneficiary. If you do not name a beneficiary for those plans, your benefit will default first to any spouse, then to children, parents, siblings, and your estate. VERIFY YOUR PERSONAL INFORMATION In advance of tax season, make sure that your personal information is accurate on JPMorgan Chase systems so that your 2011 W-2 tax forms can be prepared correctly. To verify your name, home address, and Social Security number and make changes as needed, go to HR & Personal > My Personal Profile. If you need to make changes to your Social Security number, call the accesshr Contact Center. (See page 8 for contact information.) Changes must be received by December 31, 2011 in order to ensure that your W-2 is correct. FOR MORE INFORMATION The following pages provide an at-a-glance summary of how to access certain JPMorgan Chase Benefits Web Centers and Call Centers. For more information on the JPMorgan Chase U.S. Benefits Program, please refer to Your Guide to Benefits at JPMorgan Chase and the 2012 Annual Benefits Enrollment materials that were previously distributed to you and are available on My Health. This communication was sent electronically to all U.S. benefits eligible employees beginning the week of December 12, Paper copies are being delivered to employees without corporate e mail accounts via interoffice mail and to individuals on a leave of absence or on long term disability via U.S. mail. This Bulletin modifies and changes Your Guide to Benefits at JPMorgan Chase and is a summary of material modification for certain plans under the JPMorgan Chase U.S. Benefits Program. It supplements, clarifies, and amends various sections of the Guide and the Summary Plan Descriptions, and should be referred to as part of the Guide and the Summary Plan Descriptions. Please retain this information for your records. The JPMorgan Chase U.S. Benefits Program is available to most employees on a U.S. payroll who are regularly scheduled to work 20 hours or more a week and who are employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the JPMorgan Chase U.S. Benefits Program. This information does not include all of the details contained in the applicable insurance contracts, plan documents, and trust agreements. If there is any discrepancy between this information and the governing documents, the governing documents will control. JPMorgan Chase & Co. expressly reserves the right to amend, modify, reduce, change, or terminate its benefits and plans at any time. The JPMorgan Chase U.S. Benefits Program does not create a contract or guarantee of employment between JPMorgan Chase and any individual. JPMorgan Chase or you may terminate the employment relationship at any time Benefits Program Reminders 6

81 Benefits Web Centers/Call Centers You can access the various Web Centers from work or home, via My Health or My Work: To access My Health: From Work: My Health from the intranet From Home: To access My Work: From Work: Company Home > My Work From Home: Plan/Program Web Center Call Center MEDICAL PLAN Go to My Health and click View my Call the number on the back of your ID medical plan card If you are enrolled with the same health care company for your 2011 and 2012 Medical Plan benefits, only your 2011 Medical Plan information will currently be visible. Your 2012 coverage will be available beginning January 1, DENTAL, VISION, LIFE AND ACCIDENT, LONG-TERM DISABILITY, GROUP PERSONAL EXCESS LIABILITY INSURANCE, GROUP LEGAL SERVICES HEALTH CARE AND CHILD/ELDER CARE SPENDING ACCOUNTS TRANSPORTATION SPENDING ACCOUNTS (TRANSIT/PARKING) Go to My Health and click View my current benefits coverage If you are enrolled in the JPMorgan Chase Medical Plan (Option 1 or 2): Go to My Health and click View my medical plan If you are not enrolled in the JPMorgan Chase Medical Plan or are enrolled in Kaiser/GHC: Go to the Health Care and Child/Elder Care Spending Accounts Web Center via My Work Go to the Transportation Spending Accounts Web Center via My Work Benefits Call Center JPMChase ( ) TDD: Outside the U.S.: Quick path: Enter Standard ID or Social Security number; press 1; enter PIN; press 1 Representatives available 8 a.m. to 7 p.m. (ET), M F (except certain U.S. holidays) If you are enrolled in the JPMorgan Chase Medical Plan (Option 1 or 2): Call the number on the back of your ID card If you are not enrolled in the JPMorgan Chase Medical Plan or are enrolled in Kaiser/GHC, contact ADP: Representatives available 7 a.m. to 7 p.m. (ET), M F (except certain U.S. holidays) Transportation Spending Accounts Call Center TDD number: Representatives available 8 a.m. to 8 p.m. (ET), M F (except certain U.S. holidays) 2011 Benefits Program Reminders 7

82 Benefits Web Centers/Call Centers You can access the various Web Centers from work or home, via My Health or My Work: To access My Health: From Work: My Health from the intranet From Home: To access My Work: From Work: Company Home > My Work From Home: Plan/Program Web Center Call Center Go to the Long-Term Care Insurance Web Center via My Work LONG-TERM CARE INSURANCE Long-Term Care Call Center TDD number: Representatives available 8 a.m. to 11 p.m. (ET), M F (except certain U.S. holidays) RETIREMENT PLAN Approximately two months after becoming eligible for the plan, you ll be able to track your account balance online through My Work. Access My Personal Summary on My Rewards@ Work for monthly Retirement Plan account updates accesshr Contact Center JPMChase ( ) TDD: Outside the U.S.: Quick path: Enter Standard ID or Social Security number; press 1; enter PIN; press 2 Representatives available 8 a.m. to 8:30 p.m. (ET), M F (except certain U.S. holidays) WAMU PENSION PLAN Go to WaMu Pension Service Center Representatives available 5:30 a.m. to 5:30 p.m. (PT), M-F 401(k) SAVINGS PLAN (including participants in the Heritage Bank One SSIP) 401(k) Savings Plan Web Center via My Work 401(k) Savings Plan Call Center JPMC401k ( ) TDD number: Outside the U.S.: Representatives available 8 a.m. to 9 p.m. (ET), M F (except New York Stock Exchange holidays) BENEFICIARY DESIGNATIONS From Work: Go to HR & Personal > Health and Retirement Savings Benefits > Resources From Home: Go to online-forms/beneficiary-forms/login.csf Call the accesshr Contact Center for a paper form JPMChase ( ) TDD: Outside the U.S.: Representatives available 8 a.m. to 8:30 p.m. (ET), M F (except certain U.S. holidays) 2011 Benefits Program Reminders 8

83 Benefits Program Reminders for the New Year December 2010 This Bulletin contains year end benefits plan reminders and updates, such as an extension to enroll in the Long Term Disability Plan, crediting of matching contributions to the 401(k) Savings Plan, and 2011 annual legal limits applicable to contributions for certain benefit plans. 401(k) Savings Plan Matching Contributions and $500 Special Award In early February 2011, the firm will credit the 2010 annual matching contributions to the 401(k) Savings Plan for eligible plan participants. As a reminder, to be eligible for 2010 matching contributions, you had to have completed at least one year of service at the time of your contribution to the plan and generally be actively employed on December 31, Also, your total annual cash compensation in effect for the 2010 plan year (determined as of August 1, 2009) must be less than $250,000. In addition, the firm will grant a US$500 Special Award early next year to employees globally with at least one year of service as of December 31, 2010 and with total annual cash compensation of less than US$60,000 (determined as of August 1, 2010). In the United States, this will be made as a contribution to the 401(k) Savings Plan in late January You must be actively employed on the award date to receive the award. Confirmation statements for the 2010 matching contributions and the Special Award will be distributed to eligible participants in February Interest Credit Rate under the Retirement Plan The Retirement Plan is a JPMorgan Chase paid cash balance pension plan, in which you are automatically enrolled after you complete one year of service. Your account grows over time through pay credits and interest credits. The interest credit rate for 2011 will be 4.50%. Retirement Dream Machine Retirement Dream Machine is a new online retirement planning tool, powered by Financial Engines, available through the 401(k) Savings Plan Web Center on My Work. With Dream Machine, you can see an estimate of how much your individual 401(k) Savings Plan, Retirement Plan (the cash balance pension plan), and Social Security benefits might provide in retirement. You can also see how long that income might last, and how your personal financial forecast could be affected by decisions you make today about saving and investing. Reminder on In Plan Roth 401(k) Conversions Roth 401(k) contributions are made on an after tax basis meaning you ve already paid taxes on those contributions. One of the advantages of having a Roth account is that when you withdraw money from it, both the money you put into it and any investment earnings on those amounts are not considered taxable income to you, assuming the distribution meets certain criteria. Certain plan participants who are eligible to take an in service withdrawal now have the ability to convert non Roth account balances in the plan to Roth amounts. For more information, please see the In Plan Roth Conversion Frequently Asked Questions ( FAQs ) on the "Forms & Publications" section of the 401(k) Savings Plan Web Center. You can also request a copy of the FAQs through the 401(k) Savings Plan Call Center. Deciding on a Roth conversion is a complex financial decision, and you are strongly encouraged to consult with a tax advisor before making a decision Benefits Program Reminders 1

84 2011 Annual Legal Limits for Certain Benefits Plans 401(k) Savings Plan Contributions: 401(k) Savings Plan Catch Up Contributions: 401(k) Savings Plan Eligible Compensation: Transportation Spending Accounts Transit Parking $ 16,500 annually $ 5,500 annually $245,000 annually $120 monthly before tax* $230 monthly before tax * The current $230 monthly before tax transit limit is scheduled to expire (and return to the previous limit of $120 per month) at the end of 2010 if Congress does not act to extend it or make the increased limit permanent. Therefore, any election amount over $120 will be deducted from your pay on an after tax basis. You will be notified if Congress extends or makes permanent the current $230 monthly before tax limit. Long Term Disability (LTD) Enrollment Extended through March 15, 2011 During this fall s 2011 benefits enrollment period, we offered a one time opportunity for employees to elect LTD coverage for the first time or increase current coverage (from 50% to 60%) without providing evidence of good health. We are now extending this opportunity through March 15, If your total annual cash compensation is $60,000 or more, you can elect employee paid LTD coverage of 50% or 60% of your total annual cash compensation. (As a reminder, employees with total annual cash compensation of less than $60,000 will automatically receive LTD coverage of 60% of their total annual cash compensation fully paid by JPMorgan Chase effective January 1, 2011.) The premiums you pay for coverage will be made on an after tax basis. As a result, any benefits you receive if you become disabled are tax free. If a reduction of income due to a disability would create a financial hardship for you and your family, we urge you to carefully consider participating in this important benefit. To enroll for coverage, please contact the Benefits Call Center before March 15, Coverage will become effective as of January 1, 2011 and retroactive contributions will be taken. Changes to LTD Benefits under the Medical Plan and Retirement Plan For employees who commence a short term disability leave after December 31, 2010 and who subsequently qualify for LTD benefits, subsidized medical coverage and pay credits under the Retirement Plan will generally end after receipt of LTD benefits for two years. (Please Note: This is a change to the provisions of these plans and, as such, constitutes a summary of material modification to the Summary Plan Descriptions of these plans.) Continued medical coverage under COBRA will be available for 18 months when subsidized coverage ends. Health Care Spending Accounts Beginning January 1, 2011, over the counter medications, except for insulin, generally cannot be reimbursed from the Health Care Spending Account due to new health care regulations. If your doctor writes a prescription for drugs that are available over the counter such as Claritin and Prilosec they will be eligible for reimbursement through your Health Care Spending Account. Over the counter supplies, such as bandages and blood pressure monitors, can continue to be reimbursed Benefits Program Reminders 2

85 Reminder: Grace Period for Reimbursement of Health Care Spending Account Expenses If you participate in the 2010 Health Care Spending Account and have a balance remaining as of December 31, 2010 you are able to incur eligible expenses through March 15, 2011 and use balances from 2010 for reimbursement of eligible expenses. This grace period does not apply to over the counter medications, as described above. Important Note: The March 15 deadline only applies to the Health Care Spending Account, and specifically pertains to the incurring of eligible expenses not the submitting of claims for reimbursement. Claims for reimbursement under the Health Care Spending Account must be filed by June 30, Empire and Anthem Plans Consolidating Effective January 1, 2011, all Empire and Anthem Medical Plans will consolidate under the Anthem name. Participants in these plans will receive new ID cards and will be provided with additional information directly from Anthem. Beginning January 1, 2011, Empire participants who need to access prior claims information should contact Anthem using the phone number on the back of their new ID card. Health Care Plan Identification (ID) Cards In addition to Anthem and Empire Medical Plan participants, participants in the CIGNA EPO, HMO Illinois, and Blue Advantage Medical Plans will receive new ID cards by January 1 st for 2011 coverage. In addition, participants in the Vision Plan will receive new ID cards. Group Personal Excess Liability Plan Policies If you enrolled in the Group Personal Excess Liability Plan for 2011, you will receive your Coverage Summary Certificate by e mail from [email protected] in January. If you do not receive this e mail, please contact Arthur J. Gallagher & Co, the claims administrator, at , Monday through Friday, from 9 a.m. to 5 p.m. New York Time, except certain holidays. When 2011 Benefit Deductions Begin Payroll deductions for your participation in the 2011 JPMorgan Chase Health Care and Insurance Plans will generally be reflected in your first pay in January. However, if any coverage you elected under the Supplemental Term Life Insurance Plan required you to provide evidence of insurability, you won t have payroll deductions related to that election amount until it is approved by Prudential, the insurance carrier. Qualified Status Changes during the Year If you experience a qualified change in benefits status (such as marriage, divorce, the birth or adoption of a child), you must make changes to your benefits coverage within 31 days of the qualifying event through the Benefits Web Center or Benefits Call Center for coverage to be effective on the date of the qualifying event. If you miss the 31 day deadline, coverage for certain benefits will be effective as of the date you contact the Benefits Call Center. In order to have retroactive coverage, you may be required to pay for your coverage on an after tax basis for the period prior to the date you first contacted the Benefits Call Center. As a reminder, if your eligibility for benefits changes due to a spouse or domestic partner s benefits enrollment, this is considered a qualified change in benefits status, and you will be able to make changes to your benefits coverage as a result. For additional information, please refer to the Benefits Status Change Guide on HR & Personal > Benefits Benefits Program Reminders 3

86 Note on Dependent Eligibility You are responsible for understanding JPMorgan Chase s dependent eligibility rules and abiding by them. Each year during your designated enrollment period, or within 31 days following a qualified status change, it is important that you review both the firms dependent eligibility rules and the status of your covered dependents and make any necessary changes before confirming that your covered dependents are eligible for benefits coverage. You can access the dependent eligibility requirements online via HR & Personal > Benefits. Claims Filing Deadlines for 2010 JPMorgan Chase Benefits Claims forms are available online at HR & Personal > Benefits. Or, you can contact your 2010 plan administrator/insurance carrier directly for a claim form. Benefit Plan Medical Prescription Drug Dental Vision Group Legal Services Health Care Spending Account Child/Elder Care Spending Account Transportation Spending Accounts Parking Account 2010 Claims Filing Deadline December 31, 2011 June 30, 2011 *Generally, the "Pay Me Back" feature applies only to the Parking Account. 180 days (six months) following the end of any particular month that you participated in the Parking "Pay Me Back" Account.* If reimbursement is not claimed by then, the outstanding balance will be applied to future payroll deductions. Claims Appeal Process If you have filed a claim for benefits and your claim is denied, you have the right to appeal the decision. The current claims appeals process can involve two appeals with the claims administrator (e.g., Aetna, Anthem) followed by a final voluntary appeal to the JPMorgan Chase Appeals Committee. For more information on the current claims appeals process, please see the Plan Administration section of Your Guide to Benefits at JPMorgan Chase available on HR & Personal > Benefits. As a result of recently enacted Health Care Reform legislation, JPMorgan Chase is initiating a new process in 2011 for final level benefits appeals under the Medical Plan. Under the new process, a review panel that is independent of both the company and the Medical Plan claims administrators will decide final level appeals regarding coverage under the plan, replacing the voluntary final appeal process, described above, which is currently part of the plan. In addition, JPMorgan Chase will be discontinuing the current voluntary appeals process for the Dental Plan. Appeals that relate to eligibility of an individual to participate in a plan will continue to be heard by the Appeals Committee Benefits Program Reminders 4

87 Don t forget that Health Advocate can help! Health Advocate, the nation s leading health advocacy and assistance company, provides a range of services, including help in resolving claims issues. When you call Health Advocate, you will be assigned a personal health advocate who will work with you through the entire process, so you will have an advocate who is familiar with your case. You can contact Health Advocate at Service Representatives are available Monday through Friday, from 8 a.m. to 9 p.m. Eastern Time. Don t Forget Your Wellness Rewards Remember, when you complete certain health and wellness activities through July 31, 2011 like getting a wellness screening and completing your Wellness Assessment you ll earn up to 200 reward points that can be redeemed on a Wellness Rewards debit card. Each point equals $1! Please Note: Before you can redeem your Wellness Rewards points, you must complete your Wellness Assessment. Until then, any points you may have earned will appear in a "pending" status. To learn more or to redeem your points, go to the Wellness Web Center available on Company Home > My Work > Wellness Web Center and click on the Wellness Rewards tab. For More Information The following pages provide an at a glance summary of how to access certain JPMorgan Chase Benefits Web Centers and Call Centers. For more information on the JPMorgan Chase Benefits Program, please refer to Your Guide to Benefits at JPMorgan Chase and the 2011 annual benefits enrollment materials that were previously distributed to you and are available on HR & Personal > Benefits. This communication was sent electronically to all U.S. benefits eligible employees beginning the week of December 13, Paper copies are being delivered to employees without corporate e mail accounts via interoffice mail and to individuals on a leave of absence or on long term disability via U.S. mail. This Bulletin modifies and changes Your Guide to Benefits at JPMorgan Chase and is a summary of material modification for certain plans under the JPMorgan Chase U.S. Benefits Program. It supplements, clarifies, and amends various sections of the Guide and the Summary Plan Descriptions, and should be referred to as part of the Guide and the Summary Plan Descriptions. Please retain this information for your records. The JPMorgan Chase U.S. Benefits Program is available to most employees on a U.S. payroll who are regularly scheduled to work 20 hours or more a week and who are employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the JPMorgan Chase U.S. Benefits Program. This information does not include all of the details contained in the applicable insurance contracts, plan documents, and trust agreements. If there is any discrepancy between this information and the governing documents, the governing documents will control. JPMorgan Chase & Co. expressly reserves the right to amend, modify, reduce, change, or terminate its benefits and plans at any time. The JPMorgan Chase U.S. Benefits Program does not create a contract or guarantee of employment between JPMorgan Chase and any individual. JPMorgan Chase or you may terminate the employment relationship at any time. Financial Engines is a registered trademark of Financial Engines, Inc. All advisory services are provided by Financial Engines Advisors L.L.C. ( FEA ), a federally registered investment advisor and wholly owned subsidiary of Financial Engines, Inc. Financial Engines is an independent company that is not affiliated with J.P. Morgan Retirement Plan Services L.L.C. FEA does not guarantee future results Benefits Program Reminders 5

88 At a Glance: JPMorgan Chase Benefits Web Center/Call Center Contact Information PLAN/PROGRAM WEB CENTER CALL CENTER HEALTH CARE & INSURANCE PLANS (Medical, Dental, Life Insurance, etc.) HEALTH CARE AND CHILD/ELDER CARE SPENDING ACCOUNTS TRANSPORTATION SPENDING ACCOUNTS (TRANSIT/PARKING) LONG TERM CARE INSURANCE PLAN RETIREMENT PLAN Reminder: Annual account statements for 2010 will be distributed during 1st quarter Access the various Web Centers via My Work: From Work: Your Intranet Home Page > My Work From Home: Benefits Web Center Health Care and Child/Elder Care Spending Accounts Web Center Transportation Spending Accounts Web Center Long Term Care Insurance Web Center Access My Personal Summary on My Work for Monthly Retirement Plan Account Updates Heritage WaMu Employees: (this link is also available via My Work) Unless otherwise noted below, call: JPMChase ( ) Outside the U.S.: (GDP#: ) Representatives available: 8 a.m. to 7 p.m. (ET), M F (except certain U.S. holidays) TDD: Follow quick path below as applicable Benefits Call Center: Quick path: Enter Standard ID or Social Security number; press 1, enter PIN, press 1 Benefits Call Center: Quick path: Enter Standard ID or Social Security number; press 1, enter PIN, press 1 Transportation Spending Accounts Call Center: Representatives available: 8 a.m. to 8 p.m. (ET), M F TDD number: Long Term Care Insurance Call Center: Representatives available: 8 a.m. to 11 p.m. (ET), M F TDD number: accesshr Contact Center: Quick path: Enter Standard ID or Social Security number; press 1, enter PIN, press 2 Representatives available: 8 a.m. to 8:30 p.m. (ET), M F (except certain U.S. holidays) WaMu Pension Service Center Representatives available: 8:30 a.m. to 8:30 p.m. (ET), M F (except certain U.S. holidays) 2011 Benefits Program Reminders 6

89 At a Glance: JPMorgan Chase Benefits Web Center/Call Center Contact Information PLAN/PROGRAM WEB CENTER CALL CENTER 401(k) SAVINGS PLAN (and Supplemental Savings and Investment Plan for heritage Bank One employees only) Reminder: Annual account statements for 2010 will be distributed in late January EMPLOYEE STOCK PURCHASE PLAN (ESPP) Access the various Web Centers via My Work: From Work: Your Intranet Home Page > My Work From Home: 401(k) Savings Plan Web Center via My Work For Account Balances/ Statements/Selling Shares: ESPP Web Center To Change Contributions: Benefits Web Center Unless otherwise noted below, call: JPMChase ( ) Outside the U.S.: (GDP#: ) Representatives available: 8 a.m. to 7 p.m. (ET), M F (except certain U.S. holidays) TDD: Follow quick path below as applicable 401(k) Savings Plan Call Center JPMC401k ( ) Outside the U.S.: Representatives available: 8 a.m. to 9 p.m. (ET), M F (except New York Stock Exchange holidays) TDD number: For Account Balances/ Statements/Selling Shares: BNY Mellon Shareholder Services (BNY Mellon) Outside the U.S.: Representatives available: 8 a.m. to 7 p.m. (ET), M F (except New York Stock exchange holidays) TDD number: For Plan Provisions/Changing Contributions: Benefits Call Center Quick Path: Enter Standard ID or Social Security number; press 1, enter PIN, press 3 JPMorgan Chase & Co. All rights reserved. 12/ Benefits Program Reminders 7

90 This communication was sent electronically to all U.S. benefits-eligible employees beginning the week of December 14, Paper copies are being delivered to employees without corporate accounts via interoffice mail and to individuals on a leave of absence or on long-term disability via U.S. mail. Benefits Program Reminders for the New Year December 2009 This Bulletin contains year-end benefits plan reminders such as the 2010 annual legal limits applicable to contributions for certain benefit plans. Please read this Bulletin for more information on these updates Interest Credit Rate Under the Retirement Plan The interest credit rate for 2010 will be 4.50%. As a reminder, the Retirement Plan interest credit rate is based on the average one-year Treasury rate for October of the prior year, plus 1%, with a minimum annual rate of 4.50%. (Please Note: The IRS is expected to issue regulations on permissible interest credit rates for cash balance plans like the Retirement Plan. We are anticipating that we may need to make a change to how we determine the annual interest crediting rate as a result of the regulations, and you can expect to hear more in 2010 once guidance is provided by the IRS.) 2010 Annual Legal Limits for Certain Benefits Plans 401(k) Savings Plan Contributions: 401(k) Savings Plan Catch-Up Contributions: 401(k) Savings Plan Eligible Compensation: Retirement Plan Eligible Compensation (effective February 1, 2010): Transportation Spending Accounts (Transit and Parking) $16,500 annually $ 5,500 annually $245,000 annually $100,000 annually Get Well and Win! Please see page 7 for more details about how you can be entered into a monthly contest to win a Wii Fit or Amazon Kindle as well as other wellness incentives available beginning in $230 monthly before-tax (for each) 401(k) Savings Plan Matching Contributions and $500 Special Award As previously announced, the firm will provide the full (k) match for eligible Plan participants with at least one year of service and total annual cash compensation of less than $250,000 who are actively employed on December 31, Matching contributions for eligible plan participants will be credited to the 401(k) Savings Plan in early February In addition, the firm has granted a one-time US$500 special award early next year to employees globally with at least one year of service and with total annual cash compensation of less than US$60,000. In the United States, this will be made as a contribution to the 401(k) Savings Plan in late January For more information, please see Retirement Savings Plans Frequently Asked Questions on HR & Personal > Benefits > Library. Special Note for Heritage WaMu Pension Plan and Savings Plan Participants As a reminder, the WaMu Savings Plan and the WaMu Pension Plan remain separate from the 401(k) Savings Plan and Retirement Plan. You became eligible to participate in the JPMorgan Chase plans beginning July 1, As previously communicated, the WaMu Savings Plan will be consolidated into the JPMorgan Chase 401(k) Savings Plan, targeted for late in the first quarter of You will receive additional information about the transfer of your balances from the WaMu Savings Plan to the 401(k) Savings Plan early next year. The WaMu Pension Plan continues to be sponsored and controlled by Washington Mutual, Inc. As such, it will remain separate from the Retirement Plan until further notice Benefits Program Reminders 1

91 Health Care Plan Identification (ID) Cards Participants will receive a new ID card by January 1 st for 2010 coverage under all Medical and Dental Plan options, except: Kaiser HMO members who are located outside of Colorado and Georgia; Group Health HMO members whose ID card does not have specific copayments or coinsurance amounts noted; and Dental Maintenance Organization (DMO)/Dental Health Maintenance Organization (DHMO) Option. When 2010 Benefit Deductions Begin Payroll deductions for your participation in the 2010 JPMorgan Chase Health and Income Protection Plans will generally be reflected in your first pay in January. However, if any coverage you elected under the Long-Term Disability Plan and/or Supplemental Term Life Insurance Plan required you to provide evidence of insurability, you won t have payroll deductions related to that election amount until it is approved by the applicable insurance carrier. Qualified Status Changes During the Year If you experience a qualified change in benefits status (such as marriage, divorce, the birth or adoption of a child), you must make changes to your benefits coverage within 31 days of the qualifying event through the Benefits Web Center or Benefits Call Center for coverage to be effective on the date of the qualifying event. If you miss the 31-day deadline, coverage for certain benefits will be effective as of the date you contact the Benefits Call Center. In order to have retroactive coverage, you may be required to pay for your coverage on an after-tax basis for the period prior to the date you first contacted the Benefits Call Center. For additional information, please refer to the Benefits Status Change Guide on HR & Personal > Benefits > Library. Note on Dependent Eligibility You are responsible for understanding JPMorgan Chase s dependent eligibility rules and abiding by them. Each year during your designated enrollment period, or within 31 days following a qualified status change, it is important that you review both the firms dependent eligibility rules and the status of your covered dependents and make any necessary changes before confirming that your covered dependents are eligible for benefits coverage. You can access the dependent eligibility requirements online via HR & Personal > Benefits > Library. Annual In-Network Medical Plan Deductibles Required Under Most Options in 2010 Beginning January 1, 2010, if you are enrolled in the Point-of-Service (POS) High or Low Option or the Exclusive Provider Organization (EPO) Option, most covered services received from in-network providers require that you first meet an in-network annual deductible before the plan pays for services. In-network annual deductibles apply to services such as lab work, X-rays, and hospital stays. They do not apply to office visits, emergency room charges, and eligible preventive care services. In-network deductibles under the Consumer Driven Health Option (CDHO) will be increasing for 2010, and out-of-network deductibles and maximum out-of-pocket expenses will also be increasing for the POS Options and the CDHO. For more information, please refer to the 2010 annual benefits enrollment materials that were previously distributed to you and available on HR & Personal > Benefits > Enrollment Materials Benefits Program Reminders 2

92 Important Reminder: In-Network Preventive Care Services Fully Covered Under most Medical Plan options, in-network preventive care services are fully covered, subject to age and frequency guidelines. This means there is no annual deductible or copayment for eligible preventive care services. A service that is normally considered preventive may be classified and coded as diagnostic rather than preventive by your physician in certain circumstances. A medical service will only be covered at 100% if it is coded as preventive. Before receiving any services, you should check with your physician to be sure a procedure is considered, and will be submitted to the claims administrator, as preventive medical care rather than as a diagnostic service. Fill Long-Term Prescriptions through Caremark s Mail Service Program or at a CVS Pharmacy (Maintenance Choice Program) If you are taking a long-term medication such as Lipitor, Plavix, and Singulair, you must receive your 90-day supply by mail through Caremark s Mail Service Program. (Alternatively, you have the option of picking up your 90-day supply at a CVS pharmacy, where the same discounts are available.) Important Reminder: Beginning January 1, 2010, you may obtain only two 30-day prescriptions for a long-term medication at any network pharmacy before you will be required to receive a 90-day supply through Caremark s Mail Service Program (or at a CVS pharmacy). Please read the 2010 Prescription Drug Bulletin at for the details on all Prescription Drug Program changes for Additional Benefits Under the Basic Life Insurance Plan As part of your company-provided basic life insurance coverage (administered by The Prudential Insurance Company of America), beginning January 1, 2010, you have access to an array of services that can assist you in times of immediate need at no cost to you. Designed to safeguard your financial security, the following services are available to you and your family members: Identity (ID) Theft Assistance Program The ID Theft Assistance Program, provided by AXA Assistance, educates you about the threats of identity theft and how you and your dependents can ensure the security of your personal information. AXA Assistance will help guide you through the recovery process if your identity or that of your eligible dependents is compromised. The service can be accessed anytime. Please refer to contact information at right. (continued) JPMorgan Chase Basic Life Insurance Plan Number: Important Numbers Identity Theft Assistance Travel Assistance and Emergency Evacuation In the U.S.: Outside the U.S.: (call collect) Funeral Planning and Concierge Services Benefits Program Reminders 3

93 Travel Assistance and Emergency Evacuation Services Travel Assistance and Emergency Evacuation Services, administered by AXA Assistance, provide you and your covered family members with direct, worldwide access to prompt assistance in the event of an unexpected medical emergency when traveling 100 miles or more from home. These services can also provide you with domestic and international legal referrals. For more information about these services, or to reach the Travel Assistance and Emergency Evacuation Alarm Center, please refer to contact information on page 3. Please be sure to reference the JPMorgan Chase plan number when you call. Funeral Planning and Concierge Services Funeral concierge services offered by Everest, an independent consumer advocate firm, provides critical information and assistance you and your immediate family members may need in order to make informed decisions about funeral-related issues. Examples include creating a personalized funeral plan, gathering pricing information, and negotiating the costs of funeral services with local funeral homes. Everest s personalized planning and concierge services are available for your immediate family, however you may use Everest s online planning tools such as the PriceFinder Report for researching and planning funerals for any member of your family. This service is available anywhere in the United States. Please refer to contact information on page 3. SurvivorSupport Financial Counseling Financial counseling is available to your family if you were to die while actively employed or while receiving long-term disability (LTD) benefits. JPMorgan Chase provides your key adult survivor with these financialplanning services at no cost. These services are provided by the Ayco Company, a nationally recognized financial consulting firm, for a period of six months after your death. Ayco can help with estate settlement, cash-flow planning, income-tax counseling, and insurance and estate planning. The key adult survivor would be notified directly about this service upon reporting a death. Group Personal Excess Liability Insurance If you are enrolled in the Group Personal Excess Liability Insurance Plan for 2010, your Certificate of Insurance will be mailed to you at your home address by Arthur J. Gallagher & Co. If you do not receive your Certificate of Insurance by early February, please contact the plan administrator, Arthur J. Gallagher & Co. at , Monday through Friday from 9 a.m. to 5 p.m., New York Time, except certain U.S. holidays Benefits Program Reminders 4

94 Claims Filing Deadlines for 2009 JPMorgan Chase Benefits Claims forms are available online at HR & Personal > Benefits > Library. Or, you can contact your 2009 plan administrator/insurance carrier directly for a claim form (see pages 8-10 for contact information). Benefit Plan Medical Prescription Drug Dental Vision Group Legal Services Health Care Spending Account Child/Elder Care Spending Account Transportation Spending Accounts Parking Account 2009 Claims Filing Deadline December 31, 2010 April 30, 2010 *Generally, the "Pay Me Back" feature applies only to the Parking Account. 180 days (6 months) following the end of any particular month that you participated in the Parking "Pay Me Back" Account.* If reimbursement is not claimed by then, the outstanding balance will be applied to future payroll deductions. Reminder: Grace Period for Reimbursement of Health Care Spending Account Expenses If you participate in the 2009 Health Care Spending Account and have a balance remaining as of December 31, 2009 you are able to incur eligible expenses through March 15, 2010 and use balances from 2009 for reimbursement of eligible expenses. Important Note: The March 15 deadline only applies to the Health Care Spending Account, and specifically pertains to the incurring of eligible expenses not the submitting of claims for reimbursement, as noted in chart above. Claims for reimbursement under the Health Care Spending Account must be filed by April 30, Claims Filing Deadlines for 2009 Heritage WaMu Benefits If you participated in the heritage WaMu benefit plans between January 1, 2009 and June 30, 2009, you may submit claims for 2009 benefits as follows. Please Note: Claim forms are available online at HR & Personal > Benefits > Library. Benefit Plan Medical Prescription Drug Dental Flexible Spending Accounts (dependent day care and health care spending) 2009 Claims Filing Deadline You have up to one year from the date of the claim to file with your heritage WaMu provider. April 30, 2010 (extended from September 30, 2009) Continue to Do Your Part to Help the Environment Help the environment and save on administrative costs by visiting your option administrators web sites and decline paper statements, view your claims online, request reimbursements via direct deposit (instead of checks), and use online tools/resources whenever possible Benefits Program Reminders 5

95 WellnessWorks Nothing is more important than your health and the health of your family. That s why JPMorgan Chase offers the WellnessWorks program, designed to provide opportunities for you to get healthy and stay healthy with easy-to-use tools and services that are available to you and your family at no additional cost. The following provides an overview of the programs and services under the WellnessWorks program offered by our trusted wellness partner, CareAllies. Nurses and other health professionals are available 24 hours a day, seven days a week to answer your health questions. Here are just a few ways in which the program can help: Do you have 15 minutes to find out how to improve your health? Take the Wellness Assessment at (password: JPMC) and print out your Wellness Profile. It is helpful to have your cholesterol level, height, and weight, available so that you can provide the most accurate responses to these questions when completing the Wellness Assessment. Do you need your own health coach? Do you really need surgery? (You want to be prepared with the right questions for your next doctor s visit.) Do you need to take your new medication with food (or not)? What are the side effects (if any)? How do you keep yourself and your doctor informed about your health status? Do you need help finding health care solutions or do you have insurance-related billing issues? Do you need help striking a work/life balance? Yes! Talk to your health coach about health questions; your health coach can help you find ways to address stress or manage your weight and lots of other helpful information. Please see sidebar on page 7 for how you can be entered into a monthly contest if you talk to a health coach and establish a health goal. Your health coach can help prepare questions for your next doctor visit and provide information on alternative treatments. Help is a phone call away with the 24-hour Health Information Line at Beginning January 1, a new program will be introduced to provide you and your doctor with alerts for potential gaps in your care, along with reminders about appropriate tests or screenings, information about medications and other helpful tips. Health Advocate can help by finding solutions to your health care or insurance-related issues, such as resolution for your health care claims, scheduling appointments with specialists, facilitating the transfer of medical records, or help with understanding conditions and treatment options. Call to reach a personal health advisor at Health Advocate. Personal health advisors are available Monday through Friday, from 8 a.m. to 9 p.m. Eastern Time. Use the Employee Assistance and Work-Life Program. For more information, please see page 7. (continued) 2010 Benefits Program Reminders 6

96 Other WellnessWorks Programs JPMorgan Chase also provides smoking cessation and health education programs, blood pressure, blood sugar, and cholesterol screenings,* fitness discounts, wellness lectures,* and additional online tools. For more information, go to HR & Personal > Wellness. *Offered at major JPMorgan Chase locations. The Employee Assistance (EAP) and Work-Life Program is a professional counseling, consultation, and referral service available to help you and your family members find solutions to the many challenges faced in managing work and personal lives. The program includes referrals for professional, confidential, and free counseling, assistance with adoption services, adult and elder care professional management, parenting resources and information, financial and legal counseling, relocation resources, pet care, and more. EAP services are free, confidential, and available 24 hours a day, seven days a week. For more information: From Work: Go to HR & Personal > EAP & Work-Life From Home: Go to If you don t have web access from work or home, please call JPMC007 ( ). Get Well and Win! If you talk to a health coach and establish a goal, you ll be entered into a monthly contest to win a Wii Fit or an Amazon Kindle. Beginning in 2010, you can earn points for completion of various health-related activities and program participation, such as biometric screenings and preventive care visits. These points can then be eligible for redemption. Look for more details about these programs in For more information, go to HR & Personal > Wellness > Get Well and Win. For More Information The following pages provide an at-a-glance summary of how to access certain JPMorgan Chase Benefits Web Centers and Call Centers. For more information on the JPMorgan Chase Benefits Program, please refer to Your Guide to Benefits at JPMorgan Chase and the 2010 annual benefits enrollment materials that were previously distributed to you Benefits Program Reminders 7

97 At-a-Glance: JPMorgan Chase Benefits Web Center/Call Center Contact Information PLAN/PROGRAM WEB CENTER CALL CENTER HEALTH & INCOME PROTECTION PLANS (Medical, Dental, Life Insurance, etc.) Access the various Web Centers via My Work: From Work: Your Intranet Home Page > My Work From Home: Benefits Web Center Unless otherwise noted below, call: JPMChase ( ) Outside the U.S.: (GDP#: ) Representatives available: 8 a.m. to 7 p.m. (ET), M-F (except certain U.S. holidays) TDD: Follow quick path below as applicable Benefits Call Center: Quick path: Enter Standard ID or Social Security number; press 1, enter PIN, press 1 HEALTH CARE AND CHILD/ELDER CARE SPENDING ACCOUNTS TRANSPORTATION SPENDING ACCOUNTS (TRANSIT/PARKING) LONG-TERM CARE INSURANCE PLAN Health Care and Child/Elder Care Spending Accounts Web Center Transportation Spending Accounts Web Center Long-Term Care Insurance Web Center Benefits Call Center: Quick path: Enter Standard ID or Social Security number; press 1, enter PIN, press 1 Transportation Spending Accounts Call Center: Representatives available: 8 a.m. to 8 p.m. (ET), M-F TDD number: Long-Term Care Insurance Call Center: Representatives available: 8 a.m. to 11 p.m. (ET), M-F TDD number: Benefits Program Reminders 8

98 At-a-Glance: JPMorgan Chase Benefits Web Center/Call Center Contact Information PLAN/PROGRAM WEB CENTER CALL CENTER RETIREMENT PLAN Reminder: Annual account statements for 2009 will be distributed during 1st quarter (k) SAVINGS PLAN (and Supplemental Savings and Investment Plan for heritage Bank One employees only) Reminder: Annual account statements for 2009 will be distributed in late January Access the various Web Centers via My Work: From Work: Your Intranet Home Page > My Work From Home: Access My Personal Summary on My Work for Monthly Retirement Plan Account Updates Heritage WaMu Employees: (this link is also available via My Work) 401(k) Savings Plan Web Center via My Work Heritage WaMu Employees: Fidelity Investments at (this link is also available via My Work) Unless otherwise noted below, call: JPMChase ( ) Outside the U.S.: (GDP#: ) Representatives available: 8 a.m. to 7 p.m. (ET), M-F (except certain U.S. holidays) TDD: Follow quick path below as applicable accesshr Contact Center: Quick path: Enter Standard ID or Social Security number; press 1, enter PIN, press 2 Representatives available: 8 a.m. to 8:30 p.m. (ET), M-F, except certain U.S. holidays TDD: WaMu Pension Service Center Representatives available: 8:30 a.m. to 8:30 p.m. (ET), M-F (except certain U.S. holidays) 401(k) Savings Plan Call Center JPMC401k ( ) Outside the U.S.: Representatives available: 8 a.m. to 9 p.m. (ET), M-F (except New York Stock Exchange holidays) TDD number: Fidelity Investments (for Heritage WaMu participants) Representatives are available from 8:30 a.m. to midnight ET, M-F (except New York Stock Exchange holidays) TDD number: Benefits Program Reminders 9

99 At-a-Glance: JPMorgan Chase Benefits Web Center/Call Center Contact Information PLAN/PROGRAM WEB CENTER CALL CENTER EMPLOYEE STOCK PURCHASE PLAN (ESPP) Access the various Web Centers via My Work: From Work: Your Intranet Home Page > My Work From Home: For Account Balances/ Statements/Selling Shares: ESPP Web Center To Change Contributions: Benefits Web Center Unless otherwise noted below, call: JPMChase ( ) Outside the U.S.: (GDP#: ) Representatives available: 8 a.m. to 7 p.m. (ET), M-F (except certain U.S. holidays) TDD: Follow quick path below as applicable For Account Balances/ Statements/Selling Shares: BNY Mellon Shareholder Services (Mellon) Outside the U.S.: Representatives available: 8 a.m. to 7 p.m. (ET), M-F (except New York Stock exchange holidays) TDD number: For Plan Provisions/Changing Contributions: Benefits Call Center Quick Path: Enter Standard ID or Social Security number; press 1, enter PIN, press 4 This Bulletin modifies and changes Your Guide to Benefits at JPMorgan Chase and is a summary of material modification for certain plans under the JPMorgan Chase U.S. Benefits Program. It supplements, clarifies, and amends various sections of the Guide and the Summary Plan Descriptions, and should be referred to as part of the Guide and the Summary Plan Descriptions. Please retain this information for your records. The JPMorgan Chase U.S. Benefits Program is available to most full-time and part-time U.S. dollar-paid employees who are scheduled to work 20 hours or more a week and who are employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the JPMorgan Chase U.S. Benefits Program. This information does not include all of the details contained in the applicable insurance contracts, plan documents, and trust agreements. If there is any discrepancy between this information and the governing documents, the governing documents will control. JPMorgan Chase & Co. expressly reserves the right to amend, modify, reduce, change, or terminate its benefits and plans at any time. The JPMorgan Chase U.S. Benefits Program does not create a contract or guarantee of employment between JPMorgan Chase and any individual. JPMorgan Chase or you may terminate the employment relationship at any time. JPMorgan Chase & Co. All rights reserved. 12/ Benefits Program Reminders 10

100 This communication was sent electronically to all U.S. benefits-eligible employees beginning the week of December 8, Paper copies are being delivered to employees without corporate accounts via interoffice mail and to individuals on a leave of absence or on long-term disability via U.S. mail. Benefits Program Updates for the New Year December 2008 This Bulletin contains year-end benefits plan reminders as well as updates to certain plans for 2009 such as the 2009 annual legal limits applicable to contributions for other benefit plans. Please read this Bulletin for more information on these updates Interest Credit Rate Under the Retirement Plan The interest credit rate for 2009 will be 4.50%. As a reminder, the Retirement Plan interest credit rate is based on the average one-year Treasury rate for October of the prior year, plus 1%, with a minimum annual rate of 4.50% Annual Legal Limits for Certain Benefits Plans 401(k) Savings Plan Contributions: $16,500 annually (up from $15,500 in 2008) 401(k) Savings Plan Catch-Up Contributions: $ 5,500 annually (up from $5,000 in 2008) Maximum Recognizable Benefits Pay: $245,000 annually (up from $230,000 in 2008) (401(k) Savings Plan and Retirement Plan) Transportation Spending Accounts* Transit: Parking: $120 monthly before-tax (up from $115 in 2008) $230 monthly before-tax (up from $220 in 2008) *Participants who contribute on both a before-tax and after-tax basis and whose transportation spending account orders exceed the 2009 monthly before-tax limits will automatically have their before-tax amounts increased to the new limit. Since the increased limits apply to the January benefit month, this change will be reflected with your December payroll contributions, which are used to purchase January passes. If you have a Pay Me Back election, you will need to make a change to your election; it will not be automatic. 401(k) Savings Plan Catch-Up Contributions If you elected to make catch-up contributions in 2008, the dollar amount of your elected contribution for 2008 will automatically carry over to Please Note: If you want to take advantage of the increased catch-up contribution limit for 2009, you must change your contribution amount increases will not occur automatically. While you can make a change at any time, changes requested beginning December 17, 2008 and before 4 p.m. Eastern Time on January 2, 2009 will be effective with the first pay period in Please Note: Catch-up contributions are made as a fixed dollar amount per pay period. (For example, if you want to contribute the full $5,500 for 2009 and spread it equally over 24 semimonthly pay periods, you should elect: $5,500 divided by 24 semimonthly pay periods = $230 per pay period.) Catch-up contributions continue throughout the calendar year until you reach the $5,500 legal limit and do not stop if you reach the plan s limit of $245,000 of benefits pay. If you have questions, please contact the 401(k) Savings Plan Call Center (see pages 4-5 for contact information). Health Care Plan Identification (ID) Cards If there is a change to your health care coverage for 2009, you generally will receive a new ID card in late December for 2009 coverage. If you do not receive an applicable 2009 health care plan or prescription drug ID card by mid-january 2009, please contact your health care plan directly (see pages 4-5 for contact information). 1

101 When 2009 Benefits Deductions Begin Payroll deductions for your participation in the 2009 JPMorgan Chase Health and Income Protection Plans will generally be reflected in your first pay in January. However, if any coverage you elected under the Long-Term Disability (LTD) Plan and/or Supplemental Term Life Insurance Plan required you to provide evidence of insurability (EOI), you won t have payroll deductions for that amount until it is approved by the applicable insurance carrier. Qualified Status Changes During the Year If you experience a qualified change in benefits status (such as marriage, divorce, the birth or adoption of a child), you must make changes to your benefits coverage within 31 days of the qualifying event through the Benefits Web Center or Benefits Call Center for coverage to be effective on the date of the qualifying event. For additional information, please refer to the Benefits Status Change Guide on HR & Personal > Pay & Benefits > Library. In-Network Preventive Care Services Fully Covered Under most Medical Plan options including the Exclusive Provider Organization (EPO) Option (new for 2009), in-network preventive care services are fully covered, subject to age and frequency guidelines. There is no annual deductible or copayment. Important Reminder: A service that is normally considered preventive may be classified and coded as diagnostic rather than preventive medical care by your physician in certain circumstances. A medical service will only be covered at 100% if it is coded as preventive. Before receiving any services, you should check with your physician to be sure a procedure is considered, and will be submitted to the claims administrator, as preventive medical care rather than as a diagnostic service. Group Personal Excess Liability Insurance If you have enrolled for group personal excess liability insurance during the 2009 annual benefits enrollment period, your Certificate of Insurance will be ed to you by CertificatesNow on behalf of The Chubb Insurance Company. If you do not receive your Certificate of Insurance by mid-january, please contact the plan administrator, Arthur J. Gallagher & Co. at , Monday through Friday from 9 a.m. to 5 p.m., New York time, except certain holidays. 2

102 Claims Filing Deadlines for 2008 Benefits Claims forms are available online at HR & Personal > Pay & Benefits > HR Forms Library. Or, you can contact your 2008 plan administrator/insurance carrier directly for a claim form (see pages 4-5 for contact information). Benefits Plan Medical Prescription Drug Dental Vision Group Legal Services Health Care Spending Account Child/Elder Care Spending Account Transportation Spending Accounts Parking Account 2008 Claims Filing Deadline December 31, 2009 April 30, 2009 *Generally, the "Pay Me Back" feature applies only to the Parking Account. 180 days (6 months) following the end of any particular month that you participated in the Parking "Pay Me Back" Account.* If reimbursement is not claimed by then, the outstanding balance will be applied to future payroll deductions. Reminder: Grace Period for Reimbursement of Health Care Spending Account Expenses If you participate in the 2008 Health Care Spending Account and have a balance remaining as of January 1, 2009, you are able to incur eligible expenses through March 15, 2009 and use balances from 2008 for reimbursement of eligible expenses. Important Note: The March 15 deadline only applies to the Health Care Spending Account, and specifically pertains to the incurring of eligible expenses not the submitting of claims for reimbursement, as noted in chart above. Claims for reimbursement under the Health Care Spending Account must be filed by April 30, Filing 2008 Heritage Bear Stearns Medical, Dental, and Vision Plan Claims If you participated in the heritage Bear Stearns Medical, Dental, and/or Vision Plans, you may submit claims for 2008 benefits as follows: Benefits Plan 2008 Claims Filing Deadline Submit Claims To: Medical Dental December 31, 2009 UnitedHealthcare P.O. Box Salt Lake City, UT Vision August 31, 2009 VSP P.O. Box Health Care Spending Account Child/Elder Care Spending Account Transportation Spending Accounts Parking Account Sacramento, CA Please see the chart immediately above for the claims filing deadlines for these JPMorgan Chase benefit plans. Enhancements to WellnessWorks Introducing Health Advocate Program In early 2009, JPMorgan Chase will be enhancing the WellnessWorks Program by introducing a new Health Advocate Program. The program is designed to help you navigate the health care and insurance systems, including helping you understand conditions and treatment options, scheduling appointments with specialists, transferring medical records, and resolving claims and billing issues. More information will be provided to you in first quarter For More Information The following pages provide an at-a-glance summary of how to access certain JPMorgan Chase Benefits Web Centers and Call Centers. For more information on the JPMorgan Chase Benefits Program, please refer to Your Guide to Benefits at JPMorgan Chase and the 2009 annual benefits enrollment materials that were previously distributed to you. 3

103 At-a-Glance: JPMorgan Chase Benefits Web Center/Call Center Contact Information PLAN/PROGRAM WEB CENTER CALL CENTER HEALTH & INCOME PROTECTION PLANS (Medical, Dental, Life Insurance, etc.) Access the various Web Centers via My Work: From Work: Your Intranet Home Page > My Work From Home: Benefits Web Center Unless otherwise noted below, call: JPMChase ( ) Outside the U.S.: (GDP#: ) Representatives available: 8 a.m. to 7 p.m. (ET), M-F (except certain U.S. holidays) TDD: Follow quick path below as applicable Benefits Call Center: Quick path: Enter Standard ID or Social Security number; press 1, enter PIN, press 1 HEALTH CARE AND CHILD/ELDER CARE SPENDING ACCOUNTS TRANSPORTATION SPENDING ACCOUNTS (TRANSIT/PARKING) LONG-TERM CARE INSURANCE PLAN RETIREMENT PLAN Reminder: Annual account statements for 2008 will be distributed during 1st quarter Health Care and Child/Elder Care Spending Accounts Web Center Transportation Spending Accounts Web Center Long-Term Care Insurance Web Center Access My Personal Summary on My Work for Monthly Retirement Plan Account Updates Benefits Call Center: Quick path: Enter Standard ID or Social Security number; press 1, enter PIN, press 1 Transportation Spending Accounts Call Center: Representatives available: 8 a.m. to 8 p.m. (ET), M-F TDD number: Long-Term Care Insurance Call Center: Representatives available: 8 a.m. to 11 p.m. (ET), M-F TDD number: accesshr Contact Center: Quick path: Enter Standard ID or Social Security number; press 1, enter PIN, press 2 4

104 At-a-Glance: JPMorgan Chase Benefits Web Center/Call Center Contact Information PLAN/PROGRAM WEB CENTER CALL CENTER 401(k) SAVINGS PLAN (and Supplemental Savings and Investment Plan for heritage Bank One employees only) Reminder: Annual account statements for 2008 will be distributed in late January EMPLOYEE STOCK PURCHASE PLAN (ESPP) Access the various Web Centers via My Work: From Work: Your Intranet Home Page > My Work From Home: 401(k) Savings Plan Web Center For Account Balances/ Statements/Selling Shares: ESPP Web Center To Change Contributions: Benefits Web Center Unless otherwise noted below, call: JPMChase ( ) Outside the U.S.: (GDP#: ) Representatives available: 8 a.m. to 7 p.m. (ET), M-F (except certain U.S. holidays) TDD: Follow quick path below as applicable 401(k) Savings Plan Call Center JPMC401k ( ) Outside the U.S.: Representatives available: 8 a.m. to 8 p.m. (ET), M-F (except New York Stock Exchange holidays) TDD number: For Account Balances/ Statements/Selling Shares: BNY Mellon Shareholder Services (Mellon) Outside the U.S.: Representatives available: 8 a.m. to 7 p.m. (ET), M-F (except New York Stock exchange holidays) TDD number: For Plan Provisions/Changing Contributions: Benefits Call Center Quick Path: Enter Standard ID or Social Security number; press 1, enter PIN, press 4 The JPMorgan Chase U.S. Benefits Program is available to most full-time and part-time U.S. dollar-paid salaried employees who are regularly scheduled to work 20 hours or more a week and who are employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the JPMorgan Chase U.S. Benefits Program. This information does not include all of the details contained in the applicable insurance contracts, plan documents, and trust agreements. If there is any discrepancy between this information and the governing documents, the governing documents will control. JPMorgan Chase & Co. expressly reserves the right to amend, modify, reduce, change, or terminate its benefits and plans at any time. The JPMorgan Chase U.S. Benefits Program does not create a contract or guarantee of employment between JPMorgan Chase and any individual. JPMorgan Chase or you may terminate the employment relationship at any time. JPMorgan Chase & Co. All rights reserved. 12/2008 5

105 Retirement Savings Special Edition Issue 3: May 2011 TABLE OF CONTENTS What Do You Need to Do? Your Checklist for July 1, (k) Savings Plan Changes... 2 Two Ways to Invest... 3 A New Way to Think About Investing Choose the Investment Approach that Works for You Target Date Funds: No Assembly Required... 5 Target Date Funds 101 Your Target Date Fund Options Choosing a Target Date Fund Core Funds: Do It Yourself... 8 Pick Your Own Investments Changes to the Core Funds Elimination of the Lifestyle Portfolios Important Dates...12 Investment of Your Company Match...13 Increase Your Savings Automatically!...13 Legal Notice...14 Disclosures Contact Information Certain transactions and features described in this Newsletter, such as loans, withdrawals, and contributions to the plan (generally including matching contributions), are not applicable to 401(k) Savings Plan participants who are not actively employed. Retirement Savings Program Newsletter Exciting Changes to the JPMorgan Chase 401(k) Savings Plan A Message From John Donnelly Head of Human Resources In recent months, you ve learned how to use the Retirement Savings Program to get Well On Your Way to building a financially secure future. Retirement Dream Machine, an online tool introduced last November, is available to help you understand how much income you might expect to receive in retirement. And, the November 2010 and February 2011 Retirement Savings Program Newsletters were the first issues of an ongoing resource that will keep you updated on your JPMorgan Chase retirement savings benefits. These new tools and resources are a great step in the right direction, but we can t stop there. We know we have to continuously evaluate and enhance the features of the Retirement Savings Program. That s why we re excited to tell you about some additional improvements, effective July 1, that we think will make the 401(k) Savings Plan an even better way to help you save and invest! We know we have to continuously evaluate and enhance the features of the Retirement Savings Program. That s why we re excited to tell you about some additional improvements, effective July 1, that we think will make the 401(k) Savings Plan an even better way to help you save and invest! John Donnelly For those of you who may feel overwhelmed by your investment choices, we ll be adding Target Date Funds an alternative to our individual Core Funds which offer a diversified mix of investments within one single fund. And that s not all. We re also making some enhancements to the existing Core Fund lineup; adding convenient features that can automate your decisions about how much to save; and simplifying the investment of future company matching contributions. Together, these enhancements build on our existing plans. I encourage you to read this special edition of the Retirement Savings Program Newsletter to learn more. We hope these latest changes will help you take full advantage of our valuable retirement savings benefits. This is a Summary of Material Modification to the Summary Plan Description for the JPMorgan Chase 401(k) Savings Plan.

106 WHAT DO YOU NEED TO DO? Your Checklist for July 1, (k) Savings Plan Changes Read about the two ways to invest that will be offered under the JPMorgan Chase 401(k) Savings Plan beginning in July and determine what kind of investor you are (see pages 3-4). If you are a No Assembly Required investor (i.e., if you lack the time, interest, or expertise to research, manage, and monitor your investments in the plan), consider investing* in a Target Date Fund beginning July 2, 2011 (see page 5). If you prefer to Do It Yourself and manage your own investment portfolio, check out the Core Fund options that will be available for investment* beginning July 2, 2011 (see page 8). Keep in mind the changes to the existing Core Fund lineup that will occur in July (see page 9). If you currently have balances and/or future investment elections in the Lifestyle Portfolios, read about how they transfer to the Target Date Funds on July 1 (see pages 10-11). If you are satisfied with how your investments will be transferred, you do not need to take any action. If you have balances in the Lifestyle Portfolios that you do not want to be transferred to a Target Date Fund, request a transfer or reallocation* to other investment option(s) in the existing Core Fund lineup prior to 4 p.m. Eastern Time on June 30, If you have future investment elections in the Lifestyle Portfolios that you do not want directed to a Target Date Fund, elect to have your future contributions changed to other investment option(s)* in the existing Core Fund lineup prior to 4 p.m. Eastern Time on July 1, Keep in mind that the ability to request a loan, withdrawal, or distribution from your 401(k) Savings Plan account will be temporarily suspended beginning 4 p.m. Eastern Time on June 30, These transactions will again be available beginning on July 2, If you think you will need to access account balances during that time frame, you must make your request prior to 4 p.m. Eastern Time on June 30. (Please Note: Distributions are not available to individuals who are actively employed.) If you want your contribution rate to increase automatically each year, take advantage of the automatic contribution increase feature after July 1 (see page 13). If you are eligible for company matching contributions, remember that your match for 2011 (allocated in February 2012) will be invested in the same funds that you have elected for your own employee contributions (see page 13). *To change how your existing balances are invested, you can request either a Fund-to-Fund Transfer transaction or Fund Rebalance transaction. Separately, you can change how your future contributions are invested in the plan through the Change Future Investments transaction. You can do this via the 401(k) Savings Plan Web Center on My Work, or the 401(k) Savings Plan Call Center. 2

107 TWO WAYS TO INVEST A New Way to Think About Investing Beginning in July, the 401(k) Savings Plan will offer two distinct ways to invest. These two approaches give you the flexibility to choose how you make your investment decisions and the tools you need to build a balanced retirement portfolio. Of course, you may always transfer your savings out of the Target Date Funds if you decide later to take the Do It Yourself approach, or vice versa. As with all investments, the principal value of the fund(s) is not guaranteed at any time, including at the target date. Target Date Funds: No Assembly Required If you lack the time, interest, or expertise to research, manage, and monitor your investments in the plan, the new Target Date Funds might be a good choice for you. With this approach, you only need to select one Target Date Fund that is already diversified (each fund is made up of a mix of underlying investments from multiple asset classes) and this mix automatically adjusts over time to become more conservative. Core Funds: Do It Yourself If you want a more hands-on approach, the Core Funds might better fit your investment style. You can create your own diversified investment mix by choosing a combination of Core Funds that helps you meet your retirement goals. Want to know which strategy might be best for you? Or how your Target Date Fund and Core Fund options work? This issue of the Retirement Savings Program Newsletter has all the information you ll need. Beginning July 1, the Lifestyle Portfolios will no longer be a part of the Core Fund lineup. If you re currently invested in any of the Lifestyle Portfolios, your investments will automatically transfer to a Target Date Fund effective July 1, if you take no action. More information about that transfer can be found on page 10. 3

108 Choose the Investment Approach that Works for You So, are you a No Assembly Required type of investor or a Do It Yourself investor? Not sure which investment approach to use? You can follow the steps below to determine which approach might be best for you. Step 1: Determine what type of investor you are Creating a balanced or diversified portfolio is an important part of retirement planning, but how you achieve that goal depends on you. Knowing your investing personality can help you decide on the right approach. Which traits best describe you? Delegator You prefer to have someone else handle your portfolio You are a hands-off investor You lack the time, interest, or expertise to invest You don t feel comfortable attempting to diversify your account on your own Consider The No Assembly Required approach Invest in the new Target Date Funds Step 2: Make any changes to your investment elections Doer You like to actively manage your retirement account You understand diversification and want to pick and choose your investment options You like to review investments and track performance You regularly monitor the balance of the investments in your portfolio The Do It Yourself approach Create your own investment mix from the Core Funds You can change your investments at any time after the new funds are available (after July 1, 2011). To change how your existing balances are invested, you can request either a Fund-to-Fund Transfer transaction or Fund Rebalance transaction. Separately, you can change how your future contributions are invested in the plan through the Change Future Investments transaction. All of these transactions can be performed online under the Manage Investments section of the 401(k) Savings Plan Web Center through My Work. Alternatively, you can contact the JPMorgan Chase 401(k) Savings Plan Call Center (see page 20 for contact information). DIVERSIFICATION: ACHIEVE BALANCE IN YOUR INVESTMENTS When building your investment portfolio, the goal is to maximize your investment return given the amount of risk that is appropriate for your time horizon and your overall investment strategy. Diversification spreading money across a broad range of investments is a way to reduce your overall risk. Having a mix of stocks, bonds, and cash alternatives in your portfolio may help even out the effect of market swings by cushioning the impact of a drop in the value of any one security on your total account balance. Put another way, you might not want to put all of your eggs in one basket. 4

109 TARGET DATE FUNDS: No Assembly Required Target Date Funds 101 You shouldn t feel overwhelmed when choosing your 401(k) investments. That s why the 401(k) Savings Plan will offer Target Date Funds after July 1, Target Date Funds are designed to provide a diversified portfolio within only one fund so you don t have to choose your own mix of investments. How a Target Date Fund Works Each Target Date Fund has a date in its name that corresponds to an expected target year the date that you expect to start withdrawing money from your account (normally your retirement date). For example, the 2015 fund is designed for people who intend to start withdrawing from their account in the next few years, while the 2045 fund is for those who see retirement as a long way off. Investment professionals generally advise that, if saving for retirement, you should adjust your portfolio to become more conservative as you get closer to your assumed retirement date. This change in investment mix is already built into the Target Date Funds. Each fund is made up of multiple asset classes (including stocks, bonds, and cash alternatives). Those with dates furthest in the future have the most aggressive investment mix meaning they have a greater percentage invested in stocks, and smaller investments in bonds and cash alternatives. Then, as the target year approaches, the fund gradually becomes more and more conservative more bonds and cash alternatives, less stock. So the fund matures with you automatically! How a Target Date Fund Changes Over Time Risk Higher Lower Bond/Cash Alternatives Funds Stock Funds Early Years Middle Years Target Years (when you ll need the money) You may choose to invest in any of the Target Date Funds or any other investments in the lineup. As with all investments, the principal value of the fund(s) is not guaranteed at any time, including at the target date. 5

110 Your Target Date Fund Options The Global Multi-Asset Group (GMAG) at JPMorgan Asset Management has determined the asset allocation for each Target Date Fund meaning the percentages allocated to each of the underlying investments and how that mix will change over time. Use the chart below as a guide to see how each Target Date Fund will shift allocation over time (becoming more conservative as the target date approaches). More detailed information about each fund can be found in the Fund Fact Booklet. The funds will be available after July 1, The asset allocation of the Target Date Income Fund is designed to be the most conservative of the Target Date Funds. This fund is designed for people currently near or in retirement, or who have a low risk tolerance. Each Target Date Fund has a Different Mix of Investments Each Target Date Fund Has a Different Mix of Investments 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Target Date 2050 Fund more aggressive Target Date 2045 Fund Target Date 2040 Fund Target Date 2035 Fund Target Date 2030 Fund Target Date 2025 Fund Target Date 2020 Fund Target Date 2015 Fund more conservative Target Date Income Fund TIPs REITs Cash Alternatives Commodities Emerging Markets Debt High Yield Core Fixed Income Emerging Markets Equity International Equity US Small Cap Equity US Large Cap Equity ABOUT THE TARGET DATE FUNDS Investment professionals have determined the underlying investment mix. Each fund is made up of multiple asset classes (offers you diversification in a single fund). The investment mix automatically shifts for you over time (saves you time). The underlying investments of each Target Date Fund are mostly passively managed index funds, which allows you to focus on the asset allocation that is right for you. The investment management and administrative fees charged to participants for each Target Date Fund will range from nine to 10 basis points. 6

111 Choosing a Target Date Fund The Target Date Funds are designed so you can pick the fund closest to the year that you expect to start withdrawing money from your account (normally at your retirement age). For example, if you plan to begin withdrawing from your account in 24 years, then your target year is 2035 and you d probably choose the Target Date 2035 Fund. If your target year falls between two funds, you can invest in the one that most closely matches your desired asset allocation. If you are comfortable taking on more risk in your investments, you can dial up the risk by selecting a Target Date Fund further in the future. On the other hand, if you prefer a more conservative investment portfolio, consider dialing down the risk by selecting a Target Date Fund with a date in the near term. If You Were Born You Might Consider the Following Target Date Fund (Assumes Withdrawal at Age 65): December 31, 1948 or earlier Target Date Income Fund January 1, 1949 December 31, 1953 Target Date 2015 Fund January 1, 1954 December 31, 1958 Target Date 2020 Fund January 1, 1959 December 31, 1963 Target Date 2025 Fund January 1, 1964 December 31, 1968 Target Date 2030 Fund January 1, 1969 December 31, 1973 Target Date 2035 Fund January 1, 1974 December 31, 1978 Target Date 2040 Fund January 1, 1979 December 31, 1983 Target Date 2045 Fund January 1, 1984 or later Target Date 2050 Fund 7

112 CORE FUNDS : Do It Yourself Pick Your Own Investments If you prefer to manage your own portfolio, the Do It Yourself method may be right for you. With this approach, you pick your own blend of investments from the 401(k) Savings Plan s Core Funds, which include 22 funds across different asset classes with a varying range of risk and possible return. See below for the list of funds effective July 2, CONSERVATIVE AGGRESSIVE Cash Alternatives Bonds *Denotes a mutual fund Domestic Equity (Stock) International Equity (Stock) Emerging Market Company Stock Asset Class Short-Term Fixed Income Stable Value Treasury Inflation- Protected Securities Intermediate Bond High Yield Bond Large Cap Mid Cap Small Cap International Large Cap International Small Cap Emerging Market Equity Company Stock Fund Name Short-Term Fixed Income Fund Stable Value Fund Government Inflation-Protected Bond Fund Core Bond Fund* Intermediate Bond Fund High Yield Bond Fund Large Cap Value Index Fund Large Cap Value Fund Growth and Income Fund* S&P 500 Index Fund Large Cap Growth Index Fund Large Cap Growth Fund Mid Cap Value Fund Mid Cap Growth Fund* Small Cap Index Fund Small Cap Core Fund* Small Cap Blend Fund International Large Cap Value Fund International Large Cap Index Fund International Small Cap Index Fund** Emerging Market Equity Index Fund NEW JPMorgan Chase Common Stock Fund **The name of the International Small Cap Fund will change to the International Small Cap Index Fund effective July 1, Cash Alternative Fund The cash alternative fund is the most conservative in the investment lineup. Bond Funds The plan offers five bond funds. A major difference in these funds is the maturity (or duration) of the fund for example, a short-term, medium-term, or long-term maturity. Equity Funds The plan offers 15 equity (stock) funds. The stocks are categorized as Domestic Equity, International Equity, or Emerging Market Equity funds, depending on where the fund invests and what it invests in. Equity funds are also categorized by market capitalization, or company size. A fund s risk and return profile will vary depending on whether it invests in large-cap, mid-cap, or small-cap companies. Stocks of large-cap companies tend to be less risky than those of mid-cap companies, which in turn are generally less risky than those of small-cap companies. Company Stock The plan gives you the opportunity to invest in a fund that primarily holds JPMorgan Chase common stock. 8

113 Asset Classes: Stocks: Used for long-term growth. Stocks generally carry a higher potential risk of loss and a higher potential return. Bonds: Used for income. Bonds tend to have a moderate degree of potential risk of loss and a moderate degree of potential return. Cash Alternatives: Used for safety and stability. Cash alternatives are generally the most conservative in the investment lineup. Changes to the Core Funds Following is a summary of upcoming changes to the Core Fund lineup: Elimination of the Lifestyle Portfolios: After June 30, the three Lifestyle Portfolios currently offered under the 401(k) Savings Plan will no longer be available as investment options under the plan, and will be replaced by the Target Date Funds. (See pages for more information.) Addition of the Emerging Market Equity Index Fund: This new option allows you to invest in the stocks of companies located in emerging markets such as China, Brazil, and India. Gross Expense Ratio 0.18% Inception Date July 1, 2011 Benchmark Index MSCI Emerging Markets Index More detailed information on this fund can be found in the Fund Fact Booklet accompanying this newsletter. New Fund Manager for the High Yield Bond Fund: The High Yield Bond Fund is currently managed by Goldman Sachs Asset Management. The fund will transition to a new fund manager beginning July 15, The new manager of the fund will be Columbia Management Investment Advisors, and the investment management fee will be 36 basis points. Because the transition to the new fund manager will take several business days, the performance for that period will not reflect the performance of either the old or new portfolio. More detailed information on this fund can be found in the Fund Fact Booklet. The 401(k) Savings Plan will limit reallocations and transfers within the Emerging Market Equity Index Fund. Specifically, if you reallocate or transfer assets out of this fund, you will not be permitted to transfer any assets back into the fund for 30 calendar days from the date of your initial reallocation or transfer. 9

114 ELIMINATION OF THE LIFESTYLE PORTFOLIOS After June 30, the three Lifestyle Portfolios currently offered under the 401(k) Savings Plan will no longer be available as investment options, and will be replaced by the Target Date Funds. The Lifestyle Portfolios are the: Moderately Conservative Lifestyle Portfolio Moderately Aggressive Lifestyle Portfolio Aggressive Lifestyle Portfolio Balances and/or future investment elections you may have in any of the Lifestyle Portfolios will transfer to the Target Date Fund that most closely aligns with the year you will turn age 65. Use the table below to see how your assets and investment elections will transfer if you do not take any action by the deadlines listed on the next page. If You Were Born December 31, 1948 or earlier January 1, 1949 December 31, 1953 January 1, 1954 December 31, 1958 January 1, 1959 December 31, 1963 January 1, 1964 December 31, 1968 January 1, 1969 December 31, 1973 January 1, 1974 December 31, 1978 January 1, 1979 December 31, 1983 January 1, 1984 or later Your Account Balance and Future Investments Elections Directed to the Lifestyle Portfolios Will Transfer to the: Target Date Income Fund Target Date 2015 Fund Target Date 2020 Fund Target Date 2025 Fund Target Date 2030 Fund Target Date 2035 Fund Target Date 2040 Fund Target Date 2045 Fund Target Date 2050 Fund As a result of these fund changes, you may want to review your current investment elections to ensure your money is invested in the funds that most closely align with your savings goals. If you do not want your investments to be automatically transferred as shown above, you must transfer or reallocate your money out of the Lifestyle Portfolios, and/or elect to have your future contributions directed to other investment option(s) in the existing Core Fund lineup, by the deadlines on the next page. Of course, you can change your investments at any time after the transfer is complete. Important Note: Unless you take action, the Target Date Fund to which your balance will be transferred will be based solely on your age, and will not take into account your risk tolerance, investments, and assets outside the 401(k) Savings Plan or your individual preferences. For example, if you are 65 and are invested in the Aggressive Lifestyle Portfolio, your balance will automatically be transferred to the Target Date Income Fund, which has a significantly higher fixed income component than that of the Aggressive Lifestyle Portfolio. For more information about all of the funds currently available to you, visit the 401(k) Savings Plan Web Center through My Work. You can find information about the new Target Date Funds in the Fund Fact Booklet. If you are satisfied with how your balances and/or elections will be transferred, you do not need to take any action. 10

115 About the Transferring Investments If you choose not to make a different investment election and your balances are automatically transferred from the Lifestyle Portfolios to a Target Date Fund, you will be treated as having exercised control over the investment in the new Target Date Fund. This means that, under Section 404(c) of the Employee Retirement Income Security Act, plan fiduciaries, as well as JPMorgan Chase & Co., JPMorgan Chase Bank, N.A. (or any of their subsidiaries), are not responsible for any losses related to amounts reallocated to the Target Date Fund. Target Date Funds are made up of multiple asset classes. Their asset allocation is determined by a team of professionals utilizing various investment tools, and they offer a diversified investment in a single fund. The investment allocation will change over time. The funds will become increasingly more conservative as the target date approaches (i.e., when you plan to withdraw from your account). Participants may choose to invest in any of the other Target Date Funds or any other investments in the lineup. As with all investments, the principal value of the fund(s) is not guaranteed at any time, including at the target date. The investment funds are not deposits or obligations of nor guaranteed by JPMorgan Chase & Co, JPMorgan Chase Bank, N.A. (or any of their subsidiaries). Nor are they insured by the Federal Deposit Insurance Corporation (FDIC) or any other governmental agency. Investments in the funds involve risks, including the possible loss of principal. Therefore, it s important that you make informed investment decisions only after carefully reading all the plan information (including the mutual fund prospectuses). You may also want to consult with a financial planner regarding an investment strategy that s right for you. Beginning July 2, you can check online to see how your account balance transferred to the new Target Date Funds. Go to the 401(k) Savings Plan Web Center through My Work. Then click On Demand Statement and enter a date range of 07/01/11 to 07/02/11. The transferred balances will show in the Account Activity by Fund section of the statement in the column labeled Transfer In/Out. You will also receive a paper Confirmation Statement in the mail showing how your balances transferred. You could lose money investing in the investment funds offered by the plan. IMPORTANT DEADLINES 4 p.m. Eastern Time on June 30, 2011: Deadline to Transfer Balances Out of the Lifestyle Portfolios Your account balance in the Lifestyle Portfolios will transfer to a new Target Date Fund, based on your age and an assumed retirement age of 65, unless you transfer or reallocate your money out of the Lifestyle Portfolios before 4 p.m. Eastern Time on June 30, Any remaining balances in the Lifestyle Portfolios will remain fully invested in those funds through 4 p.m. Eastern Time on July 1. Following the close of business, balances in the Lifestyle Portfolios will be liquidated and invested in a new Target Date Fund. Additionally, you may need to make two elections one to change the investment of your existing balances and a separate election to change where your future contributions are invested. Unless you make another election, any future investment elections directed to the Lifestyle Portfolios will be directed to a Target Date Fund in the same manner after 4 p.m. Eastern Time on July 1. 11

116 IMPORTANT DATES Please use the calendar below as a quick reference to activities related to the upcoming changes to the 401(k) Savings Plan, which will be occurring over the next few weeks. June 30, p.m. Eastern Time June 30, 2011 After 4 p.m. Eastern Time July 1, 2011 After 4 p.m. Eastern Time July 2, 2011 July 15, 2011 Early February 2012 Deadline to Transfer Balances Out of the Lifestyle Portfolios You have until 4 p.m. Eastern Time on June 30 to move balances out of the Lifestyle Portfolios. Any balances remaining in the Lifestyle Portfolios after this deadline will be transferred to a Target Date Fund on July 1, as described below. July 1 Bi-Weekly Payroll Advance Crediting to the 401(k) Savings Plan In order to finalize the fund changes, 401(k) contributions for employees who are paid on a bi-weekly basis will be posted on June 30, 2011, instead of July 1, (However, July 1, 2011 will still be the actual pay date.) This is a one-time change and will not affect take-home pay or any other payroll deductions. Crediting of Payroll Deductions Invested According to Your Elections on File Investment of any employee 401(k) contributions posted on the evening of June 30 will be directed according to the investment elections you have on file including investments directed to the Lifestyle Portfolios. Lifestyle Portfolios No Further Transfers or Rebalances Allowed You will not be able to conduct any fund transfers or rebalances into the Lifestyle Portfolios after 4 p.m. Eastern Time. Loans, Withdrawals, and Distributions Temporarily Suspended The ability to request a loan, withdrawal, or distribution from your 401(k) Savings Plan account will be temporarily suspended beginning at 4 p.m. Eastern Time on June 30, These transactions will again be available beginning on July 2, (Please Note: Distributions are not available to individuals who are actively employed.) Balances and Investment Elections Transferred from the Lifestyle Portfolios to the Target Date Funds Any remaining balances in the Lifestyle Portfolios will remain fully invested in those funds through 4 p.m. Eastern Time on July 1. Following the close of business, balances in the Lifestyle Portfolios will be liquidated and invested in a new Target Date Fund, based on your age and an assumed retirement age of 65, unless you transfer or reallocate your money out of the Lifestyle Portfolios prior to 4 p.m. Eastern Time on June 30, Any future investment elections directed to the Lifestyle Portfolios will be directed to the Target Date Funds in the same manner unless you elect to have your future contributions directed to other investment options in the existing Core Fund lineup prior to 4 p.m. Eastern Time on July 1, See pages for more information. New Funds Available The following new funds are available to either transfer current balances or direct future investment elections. The Target Date Funds will be available as new investment options. See page 5 for more information about the funds. The Emerging Market Equity Index Fund will be available as a new investment in the Core Fund lineup. See page 9 for more information. Check Your Transferred Balances and Investment Elections Online If you had balances or future investment elections in the Lifestyle Portfolios on June 30, you can check online to see how they transferred to your new Target Date Fund at the 401(k) Savings Plan Web Center through My Work.* See page 11 for more information. Loans, Withdrawals, and Distributions Available Loans, withdrawals, and distributions will once again be available to all 401(k) Savings Plan participants. (Please Note: Distributions are not available to individuals who are actively employed.) Automatic Increase Feature Available Increase your savings automatically with this new feature. See page 13 for more information. New Fund Manager for High Yield Bond Fund The transition to a new investment manager in the High Yield Bond Fund will begin as of close of business on this date. See page 9 for more information. Changes to Investment of Company Match Beginning with the 2011 annual company matching contributions credited in February 2012, matching contributions will automatically be invested according to the investment elections on file for your own employee contributions. See page 13 for more information. *If you have balances in the Lifestyle Portfolios, you will receive a paper Confirmation Statement showing the transfer of your balances to one of the new Target Date Funds in late July. Your third quarter statement, available in October 2011, will show the transfer of investments from the Lifestyle Portfolio(s) to the new Target Date Fund. Your quarterly statements are available online at the 401(k) Savings Plan Web Center through My Work. 12

117 INVESTMENT OF YOUR COMPANY MATCH Currently, a separate election is required to have your matching contributions invested in the same manner as your future contributions. If you don t make this separate election, your company match is invested in the JPMorgan Chase Common Stock Fund. Beginning with the next annual matching contribution that will be credited in early 2012, no separate election will be required. Any future company match will automatically be invested in the same funds you ve elected for your future contributions. One single investment election will direct all of the contributions made to your account. Company Matching Contributions Credited Annually Remember, company matching contributions are credited to 401(k) Savings Plan accounts on an annual basis. For example, 2011 contributions will be allocated in early JPMorgan Chase matches contributions, dollar for dollar, up to the first 5% of eligible compensation (generally base pay) contributed to the plan for employees who complete one year of service and whose total annual cash compensation for the plan year is less than $250,000. INCREASE YOUR SAVINGS AUTOMATICALLY! Every step you take now toward building your retirement savings helps. Beginning July 2011, you ll have another way to help yourself reach your savings goals. With the new automatic increase feature, you can elect to have your before-tax and/or Roth 401(k) contribution rate increase annually by a certain percentage. You choose the percentage, as well as the month and year you wish the increase to begin. Once you elect automatic increase, your contribution increase will happen automatically at the same time each year. It continues until you reach the contribution limit set by you (the dollar amount of your contribution will be capped at the annual Internal Revenue Service (IRS) limit). You can turn the feature off when you wish or when you reach your savings goal. Example: Let s say you are currently contributing 3% to your 401(k) Savings Plan account. In July 2011, you elect to automatically increase your contributions by 1% each January until your contributions reach 7%. Your contribution rate will increase as follows: January 2012: 4% January 2013: 5% January 2014: 6% January 2015: 7% If you want to sign up for automatic increase, go to the 401(k) Savings Plan Web Center through My Work after July 1, 2011, and select Contribution Amount > Auto-Increase. Automatic Enrollment Added for New Hires JPMorgan Chase is committed to helping employees reach their retirement goals and the sooner you start saving, the better! With that in mind, beginning in July, newly hired or rehired eligible employees will be automatically enrolled in the 401(k) Savings Plan unless they elect otherwise within 60 days. The 2011 annual IRS limit for before-tax and/or Roth 401(k) contributions is $16,500. If you are at least age 50, or will reach age 50 at any time during the year, you may be eligible to make additional catch-up contributions of $5,

118 LEGAL NOTICE The new Target Date Funds have been designated the JPMorgan Chase 401(k) Savings Plan s qualified default investment funds. Please read below for more information about this designation and what it means if you have not made investment elections, or you enroll in the plan and do not make investment elections for future contributions. In particular, you should keep in mind that, unless you exercise investment discretion prior to 4 p.m. Eastern Time on June 30, 2011, any balance that you might have in any of the 401(k) Savings Plan s Lifestyle Portfolios which include the Moderately Conservative, Moderately Aggressive, and Aggressive Lifestyle Portfolios will be automatically invested in a Target Date Fund (as explained on the next page). Such fund may or may not satisfy your investment objectives. We urge you to read carefully the remainder of this notice. This notice is to inform you of your rights as a participant to make another investment election. Right to Direct Investments If you participate in the 401(k) Savings Plan, you have the right to direct the investment of any contributions made to the plan on your behalf. You can change your investment elections with respect to existing balances and future contributions on a daily basis. Failure to Direct Investments If you fail to make an investment election, the plan has designated its Target Date Funds as its default investment options in which such account balance and future contributions will be invested. These monies, along with associated investment experience, will remain invested in a default Target Date Fund until you elect to transfer your balance to another investment option or take a distribution. Please keep in mind that, even if you elect to transfer your balance from the default Target Date Fund to another investment option, you must separately make an election for the investment of future contributions. Further, after giving you prior notice and the opportunity to transfer your balance, should the 401(k) Savings Plan eliminate an investment option in the future and there is no comparable replacement fund, any balance in such option at the end of the notice period will be transferred to a default Target Date Fund. Similarly, your future contributions will also be directed to such Target Date Fund. As discussed above, these amounts will remain invested in such fund until you elect to transfer your balance, as well as change the future contributions, to a new investment option. Satisfy ERISA Target Date Funds used by the plan satisfy the Department of Labor s rules for a qualified default investment alternative (QDIA). The QDIA rules specify that, because you have an option to make an investment election, your employer and other plan fiduciaries are protected from liability under the Employee Retirement Income Security Act of 1974 (ERISA) for placing your contributions and balances in the default fund if you do not make an investment election. 14

119 Default Funds The design of the Target Date Funds is based on generally accepted investment theories, including the use of diversified asset classes with the objective to minimize the risk of large losses. They also are designed to provide varying degrees of long-term appreciation and capital preservation through a mix of equity and fixed income investments based on a target retirement year. The Target Date Funds change their asset allocations and associated risk levels over time with the objective of becoming more conservative as the target date approaches. You should note that the Target Date Funds do not take into account your risk tolerance, other investments and assets, or your individual preference. See the Target Date Funds investment objectives and risk and return characteristics below. Based on your age, you can identify which fund is your default investment fund in the chart below. Birth Year Range Fund Name Estimated Gross Expense Ratio % December 31, 1948 or earlier Target Date Income Fund 0.10% January 1, 1949 December 31, 1953 Target Date 2015 Fund 0.09% January 1, 1954 December 31, 1958 Target Date 2020 Fund 0.09% January 1, 1959 December 31, 1963 Target Date 2025 Fund 0.10% January 1, 1964 December 31, 1968 Target Date 2030 Fund 0.10% January 1, 1969 December 31, 1973 Target Date 2035 Fund 0.10% January 1, 1974 December 31, 1978 Target Date 2040 Fund 0.10% January 1, 1979 December 31, 1983 Target Date 2045 Fund 0.10% January 1, 1984 or later Target Date 2050 Fund 0.10% Investment Objective With the exception of the Target Date Income Fund, the remaining Target Date Funds seek total return as appropriate for the target date listed within the fund name (2015 through 2050). Each Target Date Fund invests in a mix of equity, fixed income, commodities, REITs, TIPS, and cash to a varying degree depending on the appropriate risk level for the average investor expecting to retire at each of the target dates. As a Target Date Fund approaches its target date, the portfolio s asset allocation will shift to a more conservative mix. The Target Date Income Fund seeks current income and some capital appreciation. It invests in similar investments to the other Target Date Funds but with an intended risk level appropriate for the average investor at or very near retirement. All Target Date Funds seek to closely replicate the results of their individual custom indices, net of fees. Investment Strategies To achieve the stated objective, each Target Date Fund invests in a series of underlying funds that make up its asset allocation. This is known as a fund of funds. Most of the underlying funds are index funds that attempt to replicate the associated index but will not necessarily have the same performance due to management fees, transaction costs, and cash flows. The high yield bond, emerging market debt, and cash alternative components are actively managed. Allocations for the Target Date Funds are continually monitored and rebalanced quarterly with the goal of maintaining an optimal portfolio given the stated investment objective. 15

120 Fees The gross expense ratio set forth on the previous page generally represents investment management and administrative fees that are charged to a particular Target Date Fund s investment performance. The percentages are based on each Target Date Fund s underlying targeted investment allocations and the investment management fees and administrative fees associated with each such underlying fund. Please Note: The investment management and administrative fees may change over time as the underlying investment mix changes. In addition to the operating expenses noted above, the Target Date Funds will pay transaction costs when the underlying funds buy or sell securities, such as commissions. These transaction costs are also charged to the Target Date Fund s investment performance. The Target Date Funds will not pay for expenses associated with the maintenance of the glidepath and the investment management fees for the emerging market debt component. These expenses will be paid by JPMorgan Chase. Fund Holdings All of the index fund holdings are passively managed by BlackRock Institutional Trust Company, N.A. The emerging market debt and cash alternatives funds are actively managed by JPMorgan Chase Bank, N.A. The high yield bond fund will be actively managed by Columbia Management Investment Advisors commencing in July. Risk and Return Characteristics Risk An investment in the Target Date Fund or any other investment choice under the plan may not provide a complete investment program. The suitability of any investment in a Target Date Fund should be considered based on its investment objective, strategies, and risks considered in light of all the other investments in your portfolio, as well as your risk tolerance, financial goals, and time horizons. The Target Date Funds have the following risks in varying degrees, depending on a fund s asset allocation. Asset Allocation Risk. The Target Date Funds risk level will directly correspond to the risk of the underlying funds in which it invests. By investing in many funds, the Target Date Funds have partial exposure to many different areas of the market. Income Risk / Prepayment Risk. Certain underlying funds invest in debt securities. As a result, it is possible that, during periods of falling interest rates, an issuer will repay a higher-yield bond before its due date. This could cause the underlying fund to reinvest the proceeds at lower rates, causing a decline in income and lost opportunity for additional price appreciation. Prepayment risk is generally higher for short-term debt securities and lower for long-term debt securities. Interest Rate Risk. Certain underlying funds invest in debt securities. As a result, it is possible that the value of the debt securities held by an underlying fund will decline due to rising interest rates. Interest rate risk is generally low for short-term debt securities. 16

121 Inflation-Protected Securities Risk. Certain underlying funds invest in inflation protected bonds ( TIPS ). Unlike conventional bonds, the principal or interest TIPS is adjusted periodically to a specified rate of inflation (e.g., Consumer Price Index for all Urban Consumers (CPI-U)). There can be no assurance that the inflation index used will accurately measure the actual rate of inflation. Credit Risk. Certain underlying funds invest in debt securities. As a result, it is possible that an issuer of a contract or security will fail to pay interest and/or principal in a timely manner due to its bankruptcy or insolvency, reducing the underlying fund s return or value as well as indirectly the value of the Target Date Funds. Mortgage-Related and Asset-Backed Securities Risk. Certain underlying funds invest in mortgage-related and/or asset-backed securities. Accordingly, the underlying funds are subject to certain other risks, including prepayment and call risks. During periods of difficult or frozen credit markets, significant changes in interest rates or deteriorating economic conditions, mortgage-related and asset-backed securities may decline in value, face valuation difficulties, become more volatile, and/or become illiquid. When mortgages and other obligations are prepaid and when securities are called, the underlying funds may have to reinvest in securities with a lower yield or fail to recover additional amounts (i.e., premiums) paid for securities with higher interest rates resulting in unexpected losses and a decline in the value of the Target Date Funds. Equity Securities Risk. Certain underlying funds invest in equity securities (such as stocks) that are more volatile and carry more risks than some other forms of investment. The price of equity securities may rise or fall because of economic or political changes or changes in a company s financial condition, sometimes rapidly or unpredictably. These price movements may result from factors affecting individual companies, sectors or industries selected for the underlying fund s portfolio or the securities market as a whole, such as changes in economic or political conditions. When the value of the underlying fund s securities goes down, the Target Date Funds investment in the underlying fund decreases in value. Index Risk. Most of the underlying funds are passively managed indexes. Index risk is the possibility that an index may underperform funds that are actively managed. Portfolio Risk. Certain underlying funds are actively managed. This creates the possibility that poor stock or security selection will cause the Target Date Funds to underperform versus comparable market indices. Market Risk. The possibility that credit markets become illiquid (i.e., an imbalance of buyers and sellers), resulting in significant declines in the underlying fund s value and indirectly the value of the Target Date Funds. Securities of Real Estate Companies and REITs Risks. Certain underlying funds are highly concentrated in real estate securities including REITs. These securities are subject to the same risks as direct investments in real estate and mortgages. The underlying funds will indirectly bear their proportionate share of expenses, including management fees, paid by each REIT in which they invest in addition to the expenses of the underlying funds. 17

122 Foreign Securities and Emerging Markets Risks. Underlying funds may invest in the securities of foreign issuers and may have foreign currency exposure. Such funds are subject to additional risks, including political and economic risks, greater volatility, civil conflicts and war, currency fluctuations, higher transaction costs, delayed settlement, possible foreign controls on investment, expropriation and nationalization risks, and less stringent investor protection and disclosure standards of foreign markets. These risks are magnified in countries in emerging markets. High Yield Securities Risk. Some of the underlying funds invest in securities and instruments that are issued by companies that are highly leveraged, less creditworthy, or financially distressed. These investments (known as junk bonds) are considered to be speculative and are subject to greater risk of loss, greater sensitivity to interest rate and economic changes, valuation difficulties, and potential illiquidity. Smaller Companies Risk. Some of the underlying funds invest in securities of smaller companies, which may be riskier, more volatile and vulnerable to economic, market, and industry changes than securities of larger, more established companies. Derivatives Risk. The underlying funds may use derivatives. Derivatives may be riskier than other investments because they may be more sensitive to changes in economic and market conditions and could result in losses that significantly exceed the original investment. Many derivatives create leverage thereby causing the Target Date Funds or an underlying fund to be more volatile than it would be if it had not used derivatives. Derivatives also expose the Target Date Funds and the underlying funds to counterparty risk (the risk that the derivative counterparty will not fulfill its contractual obligation), including credit risk of the derivative counterparty. Commodities Risk. Certain underlying funds have exposure to commodities. Exposure to commodities, commodity-related securities and derivatives may subject the underlying funds, as well as indirectly the Target Date Funds, to greater volatility than investments in traditional securities, particularly if the instruments involve leverage. The value of commodity-linked investments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity. Redemption Risk. The Target Date Funds could experience a loss when selling securities to meet redemption requests by participants if the redemption requests are unusually large or frequent or occur in times of overall market turmoil or declining prices. Securities Lending Risk. Certain underlying funds own securities which they loan to third parties. In return, the funds normally receive cash collateral equal to the value of the securities that have been loaned, and the cash collateral is invested. If the borrower fails to return the borrowed securities, the underlying funds may suffer a loss. Further, if the investment of the cash collateral results in losses to the underlying funds, those funds would be forced to return the cash collateral in full to the borrower and would suffer a loss. To the extent that the underlying funds suffer a loss, the value of the Target Date Funds would decline. 18

123 Returns The Target Date Funds do not have an operating history. They have been customized to provide participants with a low cost, mostly passively managed, diversified portfolio. The return, as well as the risk, of each Target Date Fund will be a function of its asset allocation. You should carefully review the asset allocation of each fund to see if it matches your investment objectives. Cash Alternatives Bonds Domestic Equity International Equity Emerging Market Equity Company Stock CONSERVATIVE AGGRESSIVE Generally, to the extent that a Target Date Fund has a significant allocation to the asset classes represented on the left side of the scale (for example, the Target Date Income Fund), it may better protect principal investment. These more conservative investments, however, may not have the same potential for long-term growth as the other investment types offered by the plan. To the extent that a Target Date Fund has significant allocations in asset classes on the right side of the scale, growth potential for higher return increases, but so does the potential relative risk of the investments. More Information About Your Investment Choices As noted, you have the right to choose where your account balance and future contributions will be invested. In addition to or instead of the default investment, you can choose any investment or combination of investments offered in the plan. This right exists at the time contributions are made to the plan on your behalf or at any later date. For instance, if you let your contributions be deposited into the default investment, you may choose to transfer all or any portion of your balance out of that investment at a later date, or choose to have your future contributions invested in a different investment option. Before you invest in a fund or transfer out of a fund, carefully read the fund information on the 401(k) Savings Plan Web Center accessible through My Work. Or, request the fund information from the JPMorgan Chase 401(k) Savings Plan Call Center at JPMC401k ( ). Some funds may have restrictions associated with transfers out of the fund. Additional Information If you have questions about any of the investments available in the plan, please contact the JPMorgan Chase 401(k) Savings Plan Call Center at JPMC401k ( ). (The TDD number for participants with a hearing impairment is ) Participant Services Representatives are available from 8 a.m. to 9 p.m. Eastern Time, Monday through Friday, except New York Stock Exchange holidays. 19

124 CONTACT INFORMATION To contact the 401(k) Savings Plan Call Center To access the 401(k) Savings Plan Web Center For questions about the 401(k) Savings Plan, please contact the JPMorgan Chase 401(k) Savings Plan Call Center at JPMC401k ( ). (The TDD number for participants with a hearing impairment is ) Participant Services Representatives are available from 8 a.m. to 9 p.m. Eastern Time, Monday through Friday, except New York Stock Exchange holidays. You can obtain information and conduct plan transactions by accessing the 401(k) Savings Plan Web Center through My Work: From Work: Go to Company Home > My Work From Home: Go to For more complete information about the underlying mutual funds of the Core Bond Fund, the Growth and Income Fund, the Mid Cap Growth Fund, and the Small Cap Core Fund available within the JPMorgan Chase 401(k) Savings Plan, please call JPMC401k ( ). Investors should carefully consider the investment objectives, risks, charges, and expenses of the fund. Please carefully read the prospectus that contains this and other important information before you invest. trust. The fund is not required to file a prospectus or registration statement with the SEC, and accordingly, neither is available. The fund is available only to certain qualified retirement plans and governmental plans and is not offered to the general public. Units of the fund are not bank deposits and are not insured or guaranteed by any bank, government entity, the FDIC or any other type of deposit insurance. You should carefully consider the investment objectives, risk, charges, and expenses of the fund before investing. Those funds without underlying mutual funds are separate accounts created specifically for the 401(k) Savings Plan. Separate accounts are not registered investment products and are not required to file a prospectus or registration statement with the SEC and accordingly neither is available. None of the fund advisors except J.P. Morgan Investment Management Inc. and J.P. Morgan Chase Bank, N.A. are affiliated with J.P. Morgan Retirement Plan Services LLC. Expense ratios provided are the funds total annual operating expense ratios, gross of any fee waivers or expense reimbursements. The Lifestyle Portfolios are a predetermined asset allocation among the core investment options available under the plan. The portfolios are not securities and are not intended to be securities. Certain underlying funds of the Target Date Funds may have unique risks associated with investments in foreign/emerging market securities, and/or fixed income instruments. International investing involves increased risk and volatility due to currency exchange rate changes, political, social or economic instability, and accounting or other financial standards differences. Fixed income securities generally decline in price when interest rates rise. Real estate funds may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographical sector, including but not limited to, declines in the value of real estate, risk related to general and economic conditions, changes in the value of the underlying property owned by the trust, and defaults by the borrower. The fund may invest in futures contracts and other derivatives. This may make the fund more volatile. The gross expense ratio of the fund includes the estimated fees and expenses of the underlying funds. A fund of funds is normally best suited for long-term investors. The Emerging Market Equity Index Fund is a common or collective trust fund established and maintained by BlackRock Institutional Trust Company, N.A. under a declaration of Diversification does not assure a profit nor does it protect against loss of principal. Diversification among investment options and asset classes may help to reduce overall volatility. This material has been prepared for informational purposes only. It is not intended to provide, and should not be relied on for, investment, accounting, legal, or tax advice. Recordkeeping and administrative services for the plan are provided by J.P. Morgan Retirement Plan Services LLC (JPMRPS); securities transactions for the plan may be introduced by J.P. Morgan Institutional Investments Inc. (JPMII). Member: FINRA/SIPC. JPMRPS and JPMII are affiliates of J.P. Morgan Chase & Co. The JPMorgan Chase U.S. Benefits Program is available to most employees on a U.S. payroll who are regularly scheduled to work 20 hours or more a week and who are employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the JPMorgan Chase U.S. Benefits Program. This information does not include all of the details contained in the applicable insurance contracts, plan documents, and trust agreements. If there is any discrepancy between this information and the governing documents, the governing documents will control. JPMorgan Chase & Co. expressly reserves the right to amend, modify, reduce, change, or terminate its benefits and plans at any time. The JPMorgan Chase U.S. Benefits Program does not create a contract or guarantee of employment between JPMorgan Chase and any individual. JPMorgan Chase or you may terminate the employment relationship at any time. This is a Summary of Material Modification to the Summary Plan Description for the JPMorgan Chase 401(k) Savings Plan. DC-JPC J.P. Morgan Retirement Plan Services LLC. All rights reserved 20

125 JPMorgan Chase Retirement Savings Program Newsletter November 2010 Home Financial Tools & Resources Dream Machine The Way Forward 401(k) Savings Plan News Roth Conversions in the News Maximum of Two Outstanding Loans in the Plan Rollovers into the Plan Reminders Retirement Plan News But Wait! There Are More Benefits to Remember Getting Information about Your Account Contact Information Disclosures Roth Conversions in the News You may have recently read or heard about Roth accounts in the news. If you are eligible to take an in-service withdrawal from the plan, you should consider certain Roth-related provisions that are either new in 2010 or that are only available during (Please Note: As an active employee, there are limited instances in which you can withdraw money from your 401(k) Savings Plan account.) Read below for a brief description of some of the changes and how they may affect you. Roth Accounts Balances you have in either a Roth Individual Retirement Account ( Roth IRA ) or a Roth account in the 401(k) Savings Plan are after-tax amounts meaning you ve already paid taxes on the money you ve put into them. One of the advantages of having a Roth account is that when you withdraw money from it, both the money you put into it and any investment earnings on those amounts are not considered taxable income to you if the distribution meets certain criteria. What s Changing? If you are eligible for an in-service withdrawal, you could elect to withdraw and subsequently roll those amounts over to a Roth IRA, subject to taxation as described below. The adjusted gross income limits from prior years no longer apply beginning in calendar year Recently passed legislation allows you to take amounts that were otherwise eligible for withdrawal and rather than roll those amounts to a Roth IRA convert those amounts to a Roth account within the 401(k) Savings Plan. In other words, the converted amounts remain in the plan. However, similar to a Roth IRA, you are limited to amounts that are eligible for an in-service withdrawal, and the converted amounts are subject to taxation as described below. More information about In-Plan Roth Conversions is available here. Tax Election As described above, if you decide to take a rollover distribution from the plan to either: (1) establish a Roth IRA, or (2) convert the amount of your distribution to a Roth account in the 401(k) Savings Plan, any taxable amounts included in that rollover distribution will be considered additional taxable income on which you will need to pay federal income taxes, and possibly state and local taxes as well. There is a special tax election available for distributions from the plan in 2010 alone that would allow you to either: Include the entire taxable distribution on your 2010 income tax return; or Spread that taxable income equally over your 2011 and 2012 income tax returns. Please be mindful of the administrative deadlines for the processing of rollover withdrawals and In-Plan Roth Conversions if you intend to take a distribution in calendar year Considerations Please keep in mind that deciding on a Roth conversion is a complex financial decision, and you are strongly encouraged to consult with a tax advisor before making a decision. If after reading the available materials and consulting a tax advisor you are interested in making an In-Plan Roth Conversion, you can access the In-Plan Roth Conversion Form on the Forms and Publications section of the 401(k) Savings Plan Web Center. For information on how to determine amounts eligible for withdrawal, please read the In-Plan Roth Conversions Frequently Asked Questions. *Assumes a 6% rate of return. Source: David Bach, factor. The 401(k) Savings Plan Web Center Has a New Look Recently the 401(k) Savings Plan Web Center got a fresh new look and feel. The graphics are bigger and bolder, and more information can now be viewed without scrolling down the page. The new transaction bar tracks the progress of your transaction and how many steps remain. Check out the new market watch information and search features, and the improved real-time News and Quotes. Click here for a printable PDF of this e-newsletter, or contact the 401(k) Savings Plan Call Center to request a printed copy. Copyright J.P. Morgan 2010 All Rights Reserved 9:49:28 AM]

126 JPMorgan Chase Retirement Savings Program Newsletter November 2010 Home Financial Tools & Resources Dream Machine The Way Forward 401(k) Savings Plan News Roth Conversions in the News Maximum of Two Outstanding Loans in the Plan Rollovers into the Plan Reminders Retirement Plan News But Wait! There Are More Benefits to Remember Getting Information about Your Account Contact Information Disclosures Rollovers into the Plan Have you recently joined JPMorgan Chase and are considering rolling over your prior employer s 401(k) plan into the 401(k) Savings Plan? Or have you been an employee for a while and just never got around to it? Rolling into the plan lets you: Cut down on clutter: Just one plan to keep track of and to receive notices about. Take advantage of what the 401(k) Savings Plan offers. Continue to save on a tax-deferred basis. If you re considering a rollover, you should know about a recent enhancement made to the plan. You can now also roll over Roth 401(k) after-tax contributions from a previous employer s 401(k) plan into our plan. With Roth 401(k) amounts, the contributions themselves are taken from your pay after taxes have been withheld. One of the advantages of this type of contribution is the ability to later withdraw those contributions and the investment earnings on them tax-free if you meet certain criteria. Since one of the criteria is that your Roth 401(k) account must be in existence for five years, the good news is the five-year clock does not start over when you directly roll over Roth 401(k) amounts from another employer s plan. Rollover forms are available in the Forms and Publications section of the 401(k) Savings Plan Web Center, accessible via My Work. This is a Summary of Material Modification to the Summary Plan Description for the JPMorgan Chase 401(k) Savings Plan. *Assumes a 6% rate of return. Source: David Bach, factor. The 401(k) Savings Plan Web Center Has a New Look Recently the 401(k) Savings Plan Web Center got a fresh new look and feel. The graphics are bigger and bolder, and more information can now be viewed without scrolling down the page. The new transaction bar tracks the progress of your transaction and how many steps remain. Check out the new market watch information and search features, and the improved real-time News and Quotes. Click here for a printable PDF of this e-newsletter, or contact the 401(k) Savings Plan Call Center to request a printed copy. Copyright J.P. Morgan 2010 All Rights Reserved 9:48:44 AM]