May 3, 2016
|
Registration Statement No.333-209682; Rule 424(b)(2)
|
JPMorgan Chase &
Co.
Structured Investments
$176,000
Auto Callable Contingent Interest Notes Linked
to the Lesser Performing of the S&P 500
®
Index and the Russell 2000
®
Index due April 30, 2026
Registration
Statement Update
The
prospectus and prospectus supplement, each dated February 19, 2016, and product supplement no. 4a-I and underlying supplement
no. 1a-I, each dated November 7, 2014, which were referenced in the preliminary pricing supplement dated April 1, 2016 relating
to the notes (filed under the registration statement no. 333-199966), have been superseded by the accompanying prospectus, accompanying
prospectus supplement, accompanying product supplement and accompanying underlying supplement, each dated April 15, 2016 and filed
under the registration statement no. 333-209682.
General
·
The notes are designed for investors who seek a Contingent Interest Payment with respect to
each Review Date for which the closing level of each of the S&P 500
®
Index and the Russell 2000
®
Index, which we refer to as the Indices, is greater than or equal to 75.00% of its Initial Value, which we refer to as an Interest
Barrier.
·
The notes will be automatically called if the closing level of each Index on any Review Date
(other than the first, second, third and final Review Dates) is greater than or equal to its Initial Value.
·
Investors in the notes should be willing to accept the risk of losing some or all of their
principal and the risk that no Contingent Interest Payment may be made with respect to some or all Review Dates.
·
Investors should also be willing to forgo fixed interest and dividend payments, in exchange
for the opportunity to receive Contingent Interest Payments.
·
The notes are unsecured and unsubordinated obligations of JPMorgan Chase & Co.
Any
payment on the notes is subject to the credit risk of JPMorgan Chase & Co.
·
Payments on the notes are not linked to a basket composed of the Indices. Payments on the
notes are linked to the performance of each of the Indices individually, as described below.
·
Minimum denominations of $1,000 and integral multiples thereof
·
The purpose of this reopening supplement no. 1 to pricing supplement no. 44 is to offer additional
notes with an aggregate principal amount of $176,000, which we refer to as the "reopened notes." $2,234,000 aggregate
principal amount of notes were originally issued on April 29, 2016, which we refer to as the "original notes." The reopened
notes will constitute a further issuance of, and will be consolidated with and form a single tranche with, the original notes.
·
The reopened notes will have the same CUSIP as the original notes and will trade interchangeably
with the original notes. References to the “notes” will collectively refer to the reopened notes and the original
notes. After the issuance of the reopened notes, the aggregate principal amount of the outstanding notes of this tranche will
be $2,410,000.
·
The reopened notes priced on May 3, 2016 (the “Reopening Pricing Date”) and are
expected to settle on or about May 4, 2016
·
CUSIP: 48128GVP2
|
Investing in the notes involves
a number of risks. See “Risk Factors” beginning on page PS-10 of the accompanying product supplement no. 4-I, “Risk
Factors” beginning on page US-2 of the accompanying underlying supplement no. 1-I and “Selected Risk Considerations”
beginning on page RS-6 of this reopening supplement.
Neither the Securities and Exchange
Commission (the “SEC”) nor any state securities commission has approved or disapproved of the notes or passed upon
the accuracy or the adequacy of this reopening supplement or the accompanying product supplement, underlying supplement, prospectus
supplement and prospectus. Any representation to the contrary is a criminal offense.
|
Price to Public (1)
|
Fees and Commissions (2)
|
Proceeds to Issuer
|
Per note
|
$1,000
|
$33.50
|
$966.50
|
Total
|
$176,000
|
$5,896
|
$170,104
|
(1) See
“Supplemental Use of Proceeds” in this reopening supplement for information about the components of the price
to public of the notes.
(2) J.P.
Morgan Securities LLC, which we refer to as JPMS, acting as agent for JPMorgan Chase & Co., will pay all of the selling
commissions of $33.50 per $1,000 principal amount note it receives from us to other affiliated or unaffiliated dealers.
See “Plan of Distribution (Conflicts of Interest)” beginning on page PS-88 of the accompanying product supplement
no. 4-I.
|
The estimated value of the reopened
notes on the Reopening Pricing Date as determined by JPMS was $951.10 per $1,000 principal amount note. See “JPMS’s
Estimated Value of the Notes” in this reopening supplement for additional information.
The notes are not bank deposits,
are not insured by the Federal Deposit Insurance Corporation or any other governmental agency and are not obligations of, or guaranteed
by, a bank.
Reopening supplement no. 1 to pricing supplement
no. 44 to product supplement no. 4-I dated April 15, 2016, underlying supplement no. 1-I dated April 15, 2016 and the prospectus
and prospectus supplement, each dated April 15, 2016
Key Terms
Indices:
The
S&P 500
®
Index (Bloomberg ticker: SPX) and the Russell 2000
®
Index (Bloomberg ticker: RTY)
Contingent Interest Payments:
If the notes have not been automatically called and the closing
level of each Index on any Review Date is greater than or equal to its Interest Barrier, you will receive on the applicable Interest
Payment Date for each $1,000 principal amount note a Contingent Interest Payment equal to $20.25 (equivalent to a Contingent Interest
Rate of 8.10% per annum, payable at a rate of 2.025% per quarter).
If the closing level of either Index on any Review Date is
less than its Interest Barrier, no Contingent Interest Payment will be made with respect to that Review Date.
Contingent Interest
Rate:
8.10% per annum, payable at a rate of 2.025% per quarter
Interest Barrier:
With respect to each Index, 75.00% of its Initial Value, which is 1,568.775
for the S&P 500
®
Index and 863.046 for the Russell 2000
®
Index
Trigger Value:
With respect to each Index, 60.00% of its Initial Value, which is 1,255.02
for the S&P 500
®
Index and 690.4368 for the Russell 2000
®
Index
Pricing
Date:
April 26, 2016
Reopening Pricing
Date:
May 3, 2016
Reopening Issue
Date (Settlement Date):
For the reopened notes, on or about May 4, 2016
Review Dates*:
July 26, 2016, October 26, 2016, January 26, 2017, May 2, 2017, July 26, 2017,
October 26, 2017, January 26, 2018, April 25, 2018, July 26, 2018, October 26, 2018, January 28, 2019, April 25, 2019, July 26,
2019, October 28, 2019, January 28, 2020, April 27, 2020, July 28, 2020, October 27, 2020, January 26, 2021, April 27, 2021, July
27, 2021, October 26, 2021, January 26, 2022, April 26, 2022, July 26, 2022, October 26, 2022, January 26, 2023, April 25, 2023,
July 26, 2023, October 26, 2023, January 26, 2024, April 25, 2024, July 26, 2024, October 28, 2024, January 28, 2025, April 25,
2025, July 28, 2025, October 28, 2025, January 27, 2026 and April 24, 2026
(final Review
Date)
Interest Payment
Dates*:
July 29, 2016, October 31, 2016, January 31, 2017, May 5, 2017,
July 31, 2017, October 31, 2017, January 31, 2018, April 30, 2018, July 31, 2018, October 31, 2018, January 31, 2019, April 30,
2019, July 31, 2019, October 31, 2019, January 31, 2020, April 30, 2020, July 31, 2020, October 30, 2020, January 29, 2021, April
30, 2021, July 30, 2021, October 29, 2021, January 31, 2022, April 29, 2022, July 29, 2022, October 31, 2022, January 31, 2023,
April 28, 2023, July 31, 2023, October 31, 2023, January 31, 2024, April 30, 2024, July 31, 2024, October 31, 2024, January 31,
2025, April 30, 2025, July 31, 2025, October 31, 2025, January 30, 2026 and the Maturity Date
Maturity Date*:
April 30, 2026
Call
Settlement Date*
:
If the notes are automatically called on any Review Date (other than the
first, second, third and final Review Dates), the first Interest Payment Date immediately following that Review Date
* Subject to postponement in the event of a market disruption
event and as described under “General Terms of Notes — Postponement of a Determination Date — Notes Linked to
Multiple Underlyings” and “General Terms of Notes — Postponement of a Payment Date” in the accompanying
product supplement no. 4-I
|
Automatic Call:
If the closing level of each Index on any Review Date (other than
the first, second, third and final Review Dates) is greater than or equal to its Initial Value, the notes will be automatically
called for a cash payment, for each $1,000 principal amount note, equal to (a) $1,000
plus
(b) the Contingent Interest Payment
applicable to that Review Date, payable on the applicable Call Settlement Date. No further payments will be made on the notes.
Payment at Maturity:
If the notes have not been automatically called and the Final
Value of each Index is greater than or equal to its Trigger Value, you will receive a cash payment at maturity, for each $1,000
principal amount note, equal to (a) $1,000
plus
(b) the Contingent Interest Payment, if any, applicable to the final Review
Date.
If the notes have
not been automatically called and the Final
Value of either Index is less than its Trigger
Value, your payment at maturity per $1,000 principal amount note will be calculated as follows:
$1,000 + ($1,000 × Lesser Performing
Index Return)
If the notes have not been automatically called and the Final
Value of either Index is less than its Trigger Value, you will lose more than 40.00% of your principal amount at maturity and could
lose all of your principal amount at maturity.
Lesser
Performing Index:
The Index with the Lesser Performing Index Return
Lesser Performing
Index Return:
The lower of the Index Returns of the Indices
Index Return:
With respect to each Index,
(Final Value – Initial Value)
Initial Value
Initial Value:
With respect to each Index, the closing level of that Index on the
Pricing Date, which was 2,091.70 for the S&P 500
®
Index and 1,150.728 for the Russell 2000
®
Index
Final Value:
With respect to each Index, the closing level of that Index on the
final Review Date
|
RS-
1
| Structured Investments
Auto Callable Contingent Interest Notes Linked to the Lesser Performing of the S&P 500
®
Index and the Russell 2000
®
Index
|
|
How
the Notes Work
Payment in Connection with the First, Second
and Third Review Dates
Payments in Connection with Review Dates
(Other than the First, Second, Third and Final Review Dates)
RS-
2
| Structured Investments
Auto Callable Contingent Interest Notes Linked to the Lesser Performing of the S&P 500
®
Index and the Russell 2000
®
Index
|
|
Payment at Maturity If the Notes Have Not
Been Automatically Called
Total Contingent Interest Payments
The table below illustrates the hypothetical total
Contingent Interest Payments per $1,000 principal amount note over the term of the notes based on the Contingent Interest Rate
of 8.10% per annum, depending on how many Contingent Interest Payments are made prior to automatic call or maturity.
Number of Contingent Interest Payments
|
Total Contingent Interest Payments
|
40
|
$810.00
|
39
|
$789.75
|
38
|
$769.50
|
37
|
$749.25
|
36
|
$729.00
|
35
|
$708.75
|
34
|
$688.50
|
33
|
$668.25
|
32
|
$648.00
|
31
|
$627.75
|
30
|
$607.50
|
29
|
$587.25
|
28
|
$567.00
|
27
|
$546.75
|
26
|
$526.50
|
25
|
$506.25
|
24
|
$486.00
|
23
|
$465.75
|
22
|
$445.50
|
21
|
$425.25
|
20
|
$405.00
|
19
|
$384.75
|
18
|
$364.50
|
17
|
$344.25
|
16
|
$324.00
|
15
|
$303.75
|
14
|
$283.50
|
13
|
$263.25
|
12
|
$243.00
|
11
|
$222.75
|
10
|
$202.50
|
RS-
3
| Structured Investments
Auto Callable Contingent Interest Notes Linked to the Lesser Performing of the S&P 500
®
Index and the Russell 2000
®
Index
|
|
Number of Contingent Interest Payments
|
Total Contingent Interest Payments
|
9
|
$182.25
|
8
|
$162.00
|
7
|
$141.75
|
6
|
$121.50
|
5
|
$101.25
|
4
|
$81.00
|
3
|
$60.75
|
2
|
$40.50
|
1
|
$20.25
|
0
|
$0.00
|
Hypothetical
Payout Examples
The following examples illustrate payments on
the notes linked to two hypothetical Indices, assuming a range of performances for the hypothetical Lesser Performing Index on
the Review Dates.
Each hypothetical payment set forth below assumes that the closing level of the Index that is not the Lesser
Performing Index on each Review Date is greater than or equal to its Initial Value (and therefore its Interest Barrier and Trigger
Value).
In addition, the hypothetical payments set forth
below assume the following:
|
·
|
an Initial Value for the Lesser Performing Index of 100.00;
|
|
·
|
an Interest Barrier for the Lesser Performing Index of 75.00 (equal to 75.00% of its hypothetical Initial Value);
|
|
·
|
a Trigger Value for the Lesser Performing Index of 60.00 (equal to 60.00% of its hypothetical Initial Value); and
|
|
·
|
a Contingent Interest Rate of 8.10% per annum (payable at a rate of 2.025% per quarter).
|
The hypothetical Initial Value of the Lesser Performing
Index of 100.00 has been chosen for illustrative purposes only and does not represent the actual Initial Value of either Index.
The actual Initial Value of each Index is the closing level of that Index on the Pricing Date and is specified under “Key
Terms — Initial Value” in this reopening supplement. For historical data regarding the actual closing levels of each
Index, please see the historical information set forth under “The Indices” in this reopening supplement.
Each hypothetical payment set forth below is for
illustrative purposes only and may not be the actual payment applicable to a purchaser of the notes. The numbers appearing in the
following examples have been rounded for ease of analysis.
Example 1 — Notes are automatically
called on the fourth Review Date.
Date
|
Closing Level of Lesser Performing Index
|
Payment (per $1,000 principal amount note)
|
First Review Date
|
105.00
|
$20.25
|
Second Review Date
|
110.00
|
$20.25
|
Third Review Date
|
105.00
|
$20.25
|
Fourth Review Date
|
105.00
|
$1,020.25
|
|
Total Payment
|
$1,081.00 (8.10% return)
|
Because the closing level of each Index on the
fourth Review Date is greater than or equal to its Initial Value, the notes will be automatically called for a cash payment, for
each $1,000 principal amount note, of $1,020.25 (or $1,000
plus
the Contingent Interest Payment applicable to the fourth
Review Date), payable on the applicable Call Settlement Date. The notes are not automatically callable before the fourth Review
Date, even though the closing level of each Index on each of the first, second and third Review Dates is greater than its Initial
Value. When added to the Contingent Interest Payments received with respect to the prior Review Dates, the total amount paid, for
each $1,000 principal amount note, is $1,081.00. No further payments will be made on the notes.
RS-
4
| Structured Investments
Auto Callable Contingent Interest Notes Linked to the Lesser Performing of the S&P 500
®
Index and the Russell 2000
®
Index
|
|
Example 2 — Notes have NOT been automatically
called and the Final Value of the Lesser Performing Index is greater than or equal to its Trigger Value and its Interest Barrier.
Date
|
Closing Level of Lesser Performing Index
|
Payment (per $1,000 principal amount note)
|
First Review Date
|
95.00
|
$20.25
|
Second Review Date
|
85.00
|
$20.25
|
Third through Thirty-Ninth Review Dates
|
Less than Interest Barrier
|
$0
|
Final Review Date
|
90.00
|
$1,020.25
|
|
Total Payment
|
$1,060.75 (6.075% return)
|
Because the notes have not been automatically
called and the Final Value of the Lesser Performing Index is greater than or equal to its Trigger Value and its Interest Barrier,
the payment at maturity, for each $1,000 principal amount note, will be $1,020.25 (or $1,000
plus
the Contingent Interest
Payment applicable to the final Review Date). When added to the Contingent Interest Payments received with respect to the prior
Review Dates, the total amount paid, for each $1,000 principal amount note, is $1,060.75.
Example 3 — Notes have NOT been automatically
called and the Final Value of the Lesser Performing Index is less than its Interest Barrier but is greater than or equal to its
Trigger Value.
Date
|
Closing Level of Lesser Performing Index
|
Payment (per $1,000 principal amount note)
|
First Review Date
|
95.00
|
$20.25
|
Second Review Date
|
85.00
|
$20.25
|
Third through Thirty-Ninth Review Dates
|
Less than Interest Barrier
|
$0
|
Final Review Date
|
65.00
|
$1,000.00
|
|
Total Payment
|
$1,040.50 (4.050% return)
|
Because the notes have not been automatically
called and the Final Value of the Lesser Performing Index is less than its Interest Barrier but is greater than or equal to its
Trigger Value, the payment at maturity, for each $1,000 principal amount note, will be $1,000.00. When added to the Contingent
Interest Payments received with respect to the prior Review Dates, the total amount paid, for each $1,000 principal amount note,
is $1,040.50.
Example 4 — Notes have NOT been automatically
called and the Final Value of the Lesser Performing Index is less than its Trigger Value.
Date
|
Closing Level of Lesser Performing Index
|
Payment (per $1,000 principal amount note)
|
First Review Date
|
60.00
|
$0
|
Second Review Date
|
55.00
|
$0
|
Third through Thirty-Ninth Review Dates
|
Less than Interest Barrier
|
$0
|
Final Review Date
|
40.00
|
$400.00
|
|
Total Payment
|
$400.00 (-60.00% return)
|
Because the notes have not been automatically
called, the Final Value of the Lesser Performing Index is less than its Trigger Value and the Lesser Performing Index Return is
-60.00%, the payment at maturity will be $400.00 per $1,000 principal amount note, calculated as follows:
$1,000 + [$1,000 × (-60.00%)] = $400.00
RS-
5
| Structured Investments
Auto Callable Contingent Interest Notes Linked to the Lesser Performing of the S&P 500
®
Index and the Russell 2000
®
Index
|
|
The hypothetical returns and hypothetical payments
on the notes shown above apply
only if you hold the notes for their entire term or until automatically called.
These hypotheticals
do not reflect the fees or expenses that would be associated with any sale in the secondary market. If these fees and expenses
were included, the hypothetical returns and hypothetical payments shown above would likely be lower.
Selected
Risk Considerations
An investment in the notes involves significant
risks. These risks are explained in more detail in the “Risk Factors” sections of the accompanying product supplement
and underlying supplement.
|
·
|
YOUR INVESTMENT IN THE NOTES MAY RESULT IN A LOSS —
|
The notes do not guarantee any return
of principal. If the notes have not been automatically called and the Final Value of either Index is less than its Trigger Value,
you will lose 1% of the principal amount of your notes for every 1% that the Final Value of the Lesser Performing Index is less
than its Initial Value. Accordingly, under these circumstances, you will lose more than 40.00% of your principal amount at maturity
and could lose all of your principal amount at maturity.
|
·
|
THE NOTES DO NOT GUARANTEE THE PAYMENT OF INTEREST AND MAY NOT PAY ANY INTEREST AT ALL —
|
If the notes have not been automatically
called, we will make a Contingent Interest Payment with respect to a Review Date only if the closing level of each Index on that
Review Date is greater than or equal to its Interest Barrier. If the closing level of either Index on that Review Date is less
than its Interest Barrier, no Contingent Interest Payment will be made with respect to that Review Date. Accordingly, if the closing
level of either Index on each Review Date is less than its Interest Barrier, you will not receive any interest payments over the
term of the notes.
|
·
|
CREDIT RISK OF JPMORGAN CHASE & CO. —
|
Investors are dependent on JPMorgan
Chase & Co.’s ability to pay all amounts due on the notes. Any actual or potential change in our creditworthiness or
credit spreads, as determined by the market for taking our credit risk, is likely to adversely affect the value of the notes. If
we were to default on our payment obligations, you may not receive any amounts owed to you under the notes and you could lose your
entire investment.
|
·
|
THE APPRECIATION POTENTIAL OF THE NOTES IS LIMITED TO THE SUM OF ANY CONTINGENT INTEREST PAYMENTS THAT MAY BE PAID OVER THE
TERM OF THE NOTES,
|
regardless of any appreciation in the
level of either Index, which may be significant. You will not participate in any appreciation in the level of either Index.
We and our affiliates play a variety
of roles in connection with the notes. In performing these duties, our economic interests are potentially adverse to your interests
as an investor in the notes. It is possible that hedging or trading activities of ours or our affiliates in connection with the
notes could result in substantial returns for us or our affiliates while the value of the notes declines. Please refer to “Risk
Factors — Risks Relating to Conflicts of Interest” in the accompanying product supplement.
|
·
|
WE ARE CURRENTLY ONE OF THE COMPANIES THAT MAKE UP THE S&P 500
®
INDEX,
|
but we will not have any obligation
to consider your interests in taking any corporate action that might affect the level of the S&P 500
®
Index.
|
·
|
YOU ARE EXPOSED TO THE RISK OF DECLINE IN THE LEVEL OF EACH INDEX —
|
Payments on the notes are not linked
to a basket composed of the Indices and are contingent upon the performance of each individual Index. Poor performance by either
of the Indices over the term of the notes may negatively affect whether you will receive a Contingent Interest Payment on any Interest
Payment Date and your payment at maturity and will not be offset or mitigated by positive performance by the other Index.
|
·
|
YOUR PAYMENT AT MATURITY MAY BE DETERMINED BY THE LESSER PERFORMING INDEX.
|
|
·
|
THE BENEFIT PROVIDED BY THE TRIGGER VALUE MAY TERMINATE ON THE FINAL REVIEW DATE —
|
If the Final Value of either Index
is less than its Trigger Value and the notes have not been automatically called, the benefit provided by the Trigger Value will
terminate and you will be fully exposed to any depreciation in the closing level of the Lesser Performing Index.
RS-
6
| Structured Investments
Auto Callable Contingent Interest Notes Linked to the Lesser Performing of the S&P 500
®
Index and the Russell 2000
®
Index
|
|
|
·
|
THE AUTOMATIC CALL FEATURE MAY FORCE A POTENTIAL EARLY EXIT —
|
If your notes are automatically called,
the term of the notes may be reduced to as short as one year and you will not receive any Contingent Interest Payments after the
applicable Call Settlement Date. There is no guarantee that you would be able to reinvest the proceeds from an investment in the
notes at a comparable return and/or with a comparable interest rate for a similar level of risk. Even in cases where the notes
are called before maturity, you are not entitled to any fees and commissions described on the front cover of this reopening supplement.
|
·
|
YOU WILL NOT RECEIVE DIVIDENDS ON THE SECURITIES INCLUDED IN EITHER INDEX OR HAVE ANY RIGHTS WITH RESPECT TO THOSE SECURITIES.
|
|
·
|
AN INVESTMENT IN THE NOTES IS SUBJECT TO RISKS ASSOCIATED WITH SMALL CAPITALIZATION
STOCKS WITH RESPECT TO THE RUSSELL 2000
®
INDEX —
|
Small capitalization companies may
be less able to withstand adverse economic, market, trade and competitive conditions relative to larger companies. Small capitalization
companies are less likely to pay dividends on their stocks, and the presence of a dividend payment could be a factor that limits
downward stock price pressure under adverse market conditions.
|
·
|
THE RISK OF THE CLOSING LEVEL OF AN INDEX FALLING BELOW ITS INTEREST BARRIER OR TRIGGER VALUE IS GREATER IF THE LEVEL OF THAT
INDEX IS VOLATILE.
|
The notes will not be listed on any
securities exchange. Accordingly, the price at which you may be able to trade your notes is likely to depend on the price, if any,
at which JPMS is willing to buy the notes. You may not be able to sell your notes. The notes are not designed to be short-term
trading instruments. Accordingly, you should be able and willing to hold your notes to maturity.
|
·
|
JPMS’S ESTIMATED VALUE OF THE NOTES IS LOWER THAN THE ORIGINAL ISSUE PRICE (PRICE TO PUBLIC) OF THE NOTES —
|
JPMS’s estimated value is only
an estimate using several factors. The original issue price of the notes exceeds JPMS’s estimated value because costs associated
with selling, structuring and hedging the notes are included in the original issue price of the notes. These costs include the
selling commissions, the projected profits, if any, that our affiliates expect to realize for assuming risks inherent in hedging
our obligations under the notes and the estimated cost of hedging our obligations under the notes. See “JPMS’s Estimated
Value of the Notes” in this reopening supplement.
|
·
|
JPMS’S ESTIMATED VALUE DOES NOT REPRESENT FUTURE VALUES OF THE NOTES AND MAY DIFFER FROM OTHERS’ ESTIMATES —
|
See “JPMS’s Estimated Value
of the Notes” in this reopening supplement.
|
·
|
JPMS’S ESTIMATED VALUE IS NOT DETERMINED BY REFERENCE TO CREDIT SPREADS FOR OUR CONVENTIONAL FIXED-RATE DEBT —
|
The internal funding rate used in the
determination of JPMS’s estimated value generally represents a discount from the credit spreads for our conventional fixed-rate
debt. The discount is based on, among other things, our view of the funding value of the notes as well as the higher issuance,
operational and ongoing liability management costs of the notes in comparison to those costs for our conventional fixed-rate debt.
If JPMS were to use the interest rate implied by our conventional fixed-rate credit spreads, we would expect the economic terms
of the notes to be more favorable to you. Consequently, our use of an internal funding rate would have an adverse effect on the
terms of the notes and any secondary market prices of the notes. See “JPMS’s Estimated Value of the Notes” in
this reopening supplement.
|
·
|
THE VALUE OF THE NOTES AS PUBLISHED BY JPMS (AND WHICH MAY BE REFLECTED ON CUSTOMER ACCOUNT STATEMENTS) MAY BE HIGHER THAN
JPMS’S THEN-CURRENT ESTIMATED VALUE OF THE NOTES FOR A LIMITED TIME PERIOD —
|
We generally expect that some of the
costs included in the original issue price of the notes will be partially paid back to you in connection with any repurchases of
your notes by JPMS in an amount that will decline to zero over an initial predetermined period. See “Secondary Market Prices
of the Notes” in this reopening supplement for additional information relating to this initial period. Accordingly, the estimated
value of your notes during this initial period may be lower than the value of the notes as published by JPMS (and which may be
shown on your customer account statements).
RS-
7
| Structured Investments
Auto Callable Contingent Interest Notes Linked to the Lesser Performing of the S&P 500
®
Index and the Russell 2000
®
Index
|
|
|
·
|
SECONDARY MARKET PRICES OF THE NOTES WILL LIKELY BE LOWER THAN THE ORIGINAL ISSUE PRICE OF THE NOTES —
|
Any secondary market prices of the
notes will likely be lower than the original issue price of the notes because, among other things, secondary market prices take
into account our secondary market credit spreads for structured debt issuances and, also, because secondary market prices (a) exclude
selling commissions and (b) may exclude projected hedging profits, if any, and estimated hedging costs that are included in the
original issue price of the notes. As a result, the price if any, at which JPMS will be willing to buy the notes from you in secondary
market transactions, if at all, is likely to be lower than the original issue price. Any sale by you prior to the Maturity Date
could result in a substantial loss to you.
|
·
|
SECONDARY MARKET PRICES OF THE NOTES WILL BE IMPACTED BY MANY ECONOMIC AND MARKET FACTORS —
|
The secondary market price of the notes
during their term will be impacted by a number of economic and market factors, which may either offset or magnify each other, aside
from the selling commissions, projected hedging profits, if any, estimated hedging costs and the values of the Indices. Additionally,
independent pricing vendors and/or third party broker-dealers may publish a price for the notes, which may also be reflected on
customer account statements. This price may be different (higher or lower) than the price of the notes, if any, at which JPMS may
be willing to purchase your notes in the secondary market. See “Risk Factors — Risks Relating to the Estimated Value
and Secondary Market Prices of the Notes — Secondary market prices of the notes will be impacted by many economic and market
factors” in the accompanying product supplement.
RS-
8
| Structured Investments
Auto Callable Contingent Interest Notes Linked to the Lesser Performing of the S&P 500
®
Index and the Russell 2000
®
Index
|
|
The
Indices
The S&P 500
®
Index consists
of stocks of 500 companies selected to provide a performance benchmark for the U.S. equity markets. For additional information
about the S&P 500
®
Index, see “Equity Index Descriptions — The S&P U.S. Indices” in the
accompanying underlying supplement.
The Russell 2000
®
Index consists
of the middle 2,000 companies included in the Russell 3000E™ Index and, as a result of the index calculation methodology,
consists of the smallest 2,000 companies included in the Russell 3000
®
Index. The Russell 2000
®
Index
is designed to track the performance of the small capitalization segment of the U.S. equity market. For additional information
about the Russell 2000
®
Index, see “Equity Index Descriptions — The Russell Indices” in the accompanying
underlying supplement.
Historical Information
The following graphs set forth the historical
performance of each Index based on the weekly historical closing levels from January 7, 2011 through April 29, 2016. The closing
level of the S&P 500
®
Index on May 2, 2016 was 2,081.43. The closing level of the Russell 2000
®
Index on May 2, 2016 was 1,140.920. We obtained the closing levels above and below from the Bloomberg Professional
®
service (“Bloomberg”), without independent verification. Although Russell Investments publishes the official closing
levels of the Russell 2000
®
Index to six decimal places, Bloomberg publishes the closing levels of the Russell 2000
®
Index to only three decimal places.
The historical closing levels of each Index should
not be taken as an indication of future performance, and no assurance can be given as to the closing level of either Index on any
Review Date. There can be no assurance that the performance of the Indices will result in the return of any of your principal amount
or the payment of any interest.
RS-
9
| Structured Investments
Auto Callable Contingent Interest Notes Linked to the Lesser Performing of the S&P 500
®
Index and the Russell 2000
®
Index
|
|
Tax
Treatment
You should review carefully the section entitled
“Material U.S. Federal Income Tax Consequences” in the accompanying product supplement no. 4-I. In determining our
reporting responsibilities we intend to treat (i) the notes for U.S. federal income tax purposes as prepaid forward contracts with
associated contingent coupons and (ii) any Contingent Interest Payments as ordinary income, as described in the section entitled
“Material U.S. Federal Income Tax Consequences — Tax Consequences to U.S. Holders — Notes Treated as Prepaid
Forward Contracts with Associated Contingent Coupons” in the accompanying product supplement. Based on the advice of Davis
Polk & Wardwell LLP, our special tax counsel, we believe that this is a reasonable treatment, but that there are other reasonable
treatments that the IRS or a court may adopt, in which case the timing and character of any income or loss on the notes could be
materially affected. In addition, in 2007 Treasury and the IRS released a notice requesting comments on the U.S. federal income
tax treatment of “prepaid forward contracts” and similar instruments. The notice focuses in particular on whether to
require investors in these instruments to accrue income over the term of their investment. It also asks for comments on a number
of related topics, including the character of income or loss with respect to these instruments and the relevance of factors such
as the nature of the underlying property to which the instruments are linked. While the notice requests comments on appropriate
transition rules and effective dates, any Treasury regulations or other guidance promulgated after consideration of these issues
could materially affect the tax consequences of an investment in the notes, possibly with retroactive effect. You should consult
your tax adviser regarding the U.S. federal income tax consequences of an investment in the notes, including possible alternative
treatments and the issues presented by this notice.
Non-U.S. Holders — Tax Considerations
.
The U.S. federal income tax treatment of Contingent Interest Payments is uncertain, and although we believe it is reasonable to
take a position that Contingent Interest Payments are not subject to U.S. withholding tax (at least if an applicable Form W-8 is
provided), a withholding agent may nonetheless withhold on these payments (generally at a rate of 30%, subject to the possible
reduction of that rate under an applicable income tax treaty), unless income from your notes is effectively connected with your
conduct of a trade or business in the United States (and, if an applicable treaty so requires, attributable to a permanent establishment
in the United States). If you are not a United States person, you are urged to consult your tax adviser regarding the U.S. federal
income tax consequences of an investment in the notes in light of your particular circumstances.
Non-U.S. holders should also note that, notwithstanding
anything to the contrary in the accompanying product supplement, recently promulgated Treasury regulations imposing a withholding
tax on certain “dividend equivalents” under certain “equity linked instruments” will not apply to the notes.
FATCA.
Withholding under legislation
commonly referred to as “FATCA” could apply to payments with respect to the notes that are treated as U.S.-source “fixed
or determinable annual or periodical” income (“FDAP Income”) for U.S. federal income tax purposes (such as interest,
if the notes are recharacterized, in whole or in part, as debt instruments, or Contingent Interest Payments if they are otherwise
treated as FDAP Income). If the notes are recharacterized, in whole or in part, as debt instruments, withholding could also
RS-
10
| Structured Investments
Auto Callable Contingent Interest Notes Linked to the Lesser Performing of the S&P 500
®
Index and the Russell 2000
®
Index
|
|
apply to payments of gross proceeds of a taxable
disposition, including an early redemption or redemption at maturity. However, under a recent IRS notice, this regime will
not apply to payments of gross proceeds (other than any amount treated as FDAP Income) with respect to dispositions occurring before
January 1, 2019. You should consult your tax adviser regarding the potential application of FATCA to the notes.
In the event of any withholding on the notes,
we will not be required to pay any additional amounts with respect to amounts so withheld.
JPMS’s
Estimated Value of the Notes
JPMS’s estimated value of the notes set
forth on the cover of this reopening supplement is equal to the sum of the values of the following hypothetical components: (1)
a fixed-income debt component with the same maturity as the notes, valued using our internal funding rate for structured debt described
below, and (2) the derivative or derivatives underlying the economic terms of the notes. JPMS’s estimated value does not
represent a minimum price at which JPMS would be willing to buy your notes in any secondary market (if any exists) at any time.
The internal funding rate used in the determination of JPMS’s estimated value generally represents a discount from the credit
spreads for our conventional fixed-rate debt. For additional information, see “Selected Risk Considerations — JPMS’s
Estimated Value Is Not Determined by Reference to Credit Spreads for Our Conventional Fixed-Rate Debt.”
The value of the derivative or derivatives underlying
the economic terms of the notes is derived from JPMS’s internal pricing models. These models are dependent on inputs such
as the traded market prices of comparable derivative instruments and on various other inputs, some of which are market-observable,
and which can include volatility, dividend rates, interest rates and other factors, as well as assumptions about future market
events and/or environments. Accordingly, JPMS’s estimated value of the reopened notes is determined on the Reopening Pricing
Date based on market conditions and other relevant factors and assumptions existing at that time.
JPMS’s estimated value does not represent
future values of the notes and may differ from others’ estimates. Different pricing models and assumptions could provide
valuations for notes that are greater than or less than JPMS’s estimated value. In addition, market conditions and other
relevant factors in the future may change, and any assumptions may prove to be incorrect. On future dates, the value of the notes
could change significantly based on, among other things, changes in market conditions, our creditworthiness, interest rate movements
and other relevant factors, which may impact the price, if any, at which JPMS would be willing to buy notes from you in secondary
market transactions.
JPMS’s estimated value of the notes is lower
than the original issue price of the notes because costs associated with selling, structuring and hedging the notes are included
in the original issue price of the notes. These costs include the selling commissions paid to JPMS and other affiliated or unaffiliated
dealers, the projected profits, if any, that our affiliates expect to realize for assuming risks inherent in hedging our obligations
under the notes and the estimated cost of hedging our obligations under the notes. Because hedging our obligations entails risk
and may be influenced by market forces beyond our control, this hedging may result in a profit that is more or less than expected,
or it may result in a loss. A portion of the profits, if any, realized in hedging our obligations under the notes may be allowed
to other affiliated or unaffiliated dealers, and we or one or more of our affiliates will retain any remaining hedging profits.
See “Selected Risk Considerations — JPMS’s Estimated Value of the Notes Is Lower Than the Original Issue Price
(Price to Public) of the Notes” in this reopening supplement.
Secondary
Market Prices of the Notes
For information about factors that will impact
any secondary market prices of the notes, see “Risk Factors — Risks Relating to the Estimated Value and Secondary Market
Prices of the Notes — Secondary market prices of the notes will be impacted by many economic and market factors” in
the accompanying product supplement. In addition, we generally expect that some of the costs included in the original issue price
of the notes will be partially paid back to you in connection with any repurchases of your notes by JPMS in an amount that will
decline to zero over an initial predetermined period. These costs can include projected hedging profits, if any, and, in some circumstances,
estimated hedging costs and our secondary market credit spreads for structured debt issuances. This initial predetermined time
period is intended to be the shorter of six months and one-half of the stated term of the notes. The length of any such initial
period reflects the structure of the notes, whether our affiliates expect to earn a profit in connection with our hedging activities,
the estimated costs of hedging the notes and when these costs are incurred, as determined by JPMS. See “Selected Risk Considerations
— The Value of the Notes as Published by JPMS (and Which May Be Reflected on Customer Account Statements) May Be Higher Than
JPMS’s Then-Current Estimated Value of the Notes for a Limited Time Period.”
RS-
11
| Structured Investments
Auto Callable Contingent Interest Notes Linked to the Lesser Performing of the S&P 500
®
Index and the Russell 2000
®
Index
|
|
Supplemental
Use of Proceeds
The notes are offered to meet investor demand
for products that reflect the risk-return profile and market exposure provided by the notes. See “How the Notes Work”
and “Hypothetical Payout Examples” in this reopening supplement for an illustration of the risk-return profile of the
notes and “The Indices” in this reopening supplement for a description of the market exposure provided by the notes.
The original issue price of the notes is equal
to JPMS’s estimated value of the notes plus the selling commissions paid to JPMS and other affiliated or unaffiliated dealers,
plus (minus) the projected profits (losses) that our affiliates expect to realize for assuming risks inherent in hedging our obligations
under the notes, plus the estimated cost of hedging our obligations under the notes.
Validity
of the Reopened Notes
In the opinion of Davis Polk & Wardwell LLP,
as our special products counsel, when the reopened notes offered by this reopening supplement have been executed and issued by
us and authenticated by the trustee pursuant to the indenture, and delivered against payment as contemplated herein, such reopened
notes will be our valid and binding obligations, enforceable in accordance with their terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of
general applicability (including, without limitation, concepts of good faith, fair dealing and the lack of bad faith),
provided
that such counsel expresses no opinion as to the effect of fraudulent conveyance, fraudulent transfer or similar provision of applicable
law on the conclusions expressed above. This opinion is given as of the date hereof and is limited to the laws of the State of
New York and the General Corporation Law of the State of Delaware. In addition, this opinion is subject to customary assumptions
about the trustee’s authorization, execution and delivery of the indenture and its authentication of the reopened notes and
the validity, binding nature and enforceability of the indenture with respect to the trustee, all as stated in the letter of such
counsel dated February 24, 2016, which was filed as an exhibit to the Registration Statement on Form S-3 by us on February 24,
2016.
Additional
Terms Specific to the Notes
You should read this reopening supplement no.
1 together with the prospectus, as supplemented by the prospectus supplement, each dated April 15, 2016, relating to our Series
E medium-term notes of which these notes are a part, and the more detailed information contained in product supplement no. 4-I
dated April 15, 2016 and underlying supplement no. 1-I dated April 15, 2016. This reopening supplement, together with the documents
listed below, contains the terms of the notes and supersedes all other prior or contemporaneous oral statements as well as any
other written materials including preliminary or indicative pricing terms, correspondence, trade ideas, structures for implementation,
sample structures, fact sheets, brochures or other educational materials of ours. You should carefully consider, among other things,
the matters set forth in “Risk Factors” in the accompanying product supplement no. 4-I and “Risk Factors”
in the accompanying underlying supplement no. 1-I, as the notes involve risks not associated with conventional debt securities.
We urge you to consult your investment, legal, tax, accounting and other advisers before you invest in the notes.
You may access these documents on the SEC
website at www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date on the SEC website):
Our Central Index Key, or CIK, on the SEC website
is 19617. As used in this reopening supplement, “we,” “us” and “our” refer to JPMorgan Chase
& Co.
RS-
12
| Structured Investments
Auto Callable Contingent Interest Notes Linked to the Lesser Performing of the S&P 500
®
Index and the Russell 2000
®
Index
|
|
JP Morgan Chase (NYSE:JPM)
Historical Stock Chart
From Mar 2024 to Apr 2024
JP Morgan Chase (NYSE:JPM)
Historical Stock Chart
From Apr 2023 to Apr 2024