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Free
Writing Prospectus
Filed
Pursuant to Rule 433
Registration
No. 333−136666
March 4, 2008 STRUCTURED
EQUITY
PRODUCTS
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New
Issue
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Indicative
Terms
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THE
BEAR STEARNS COMPANIES INC.
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Medium-Term
Notes
Linked
to a Portfolio of Indices
Due:
September
[1], 2011
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INVESTMENT
HIGHLIGHTS
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·
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3.5
year term to maturity.
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·
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The
Notes are 100% principal protected if held to maturity.
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Issue
is a direct obligation of The Bear Stearns Companies Inc.
(Rated A2 by
Moody’s / A by S&P).
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Issue
Price: 100.00% of the principal amount ($1,000 per Note)
([99.00]% for
investors who purchase a principal amount of at least
$1,000,000).
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·
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The
Notes are linked to the potential positive performance of
an
equally-weighted portfolio comprised of the following four
equity indices:
(1) the S&P 500®
Index (the “SPX”); (2) the Dow Jones EURO STOXX 50®
Index (the “SX5E”); (3) the Nikkei 225™ Stock Index (the “NKY”); and (4)
the FTSE/Xinhua China 25 Index™ (the “XIN0I”) (each such index a
“Component” and together the “Portfolio”). The weighting of each Component
within the Portfolio is fixed at 1/4, or 25.00%, and will
not change
during the term of the Notes unless one or more Components
is modified
during the term of the Notes.
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·
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The
Cash Settlement Value will be based on the appreciation,
if any, in the
Portfolio over the term of the Notes as measured by the Portfolio
Return.
The “Portfolio Return” is calculated as the equally-weighted average of
the four Index Performances, where “Index Performance” means, as of the
Final Observation Date and with respect to a Component, the
quotient,
expressed as a percentage, of (i) the arithmetic average
of the
Observation Levels for that Component minus its Initial Component
Level
divided by (ii) its Initial Component Level.
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·
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If
the Portfolio Return is greater than zero, then the Cash
Settlement Value
for each Note will be equal to the principal amount of the
Note, plus the
product of (a) $1,000 multiplied by (b) the Portfolio Return
multiplied by
(c) the Participation Rate.
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·
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If the
Portfolio Return is equal to or less than zero, the Cash
Settlement Value
for each Note will be $1,000. Because the Notes are principal
protected if
held to maturity, in no event will the Cash Settlement Value
for each Note
be less than $1,000.
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·
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The
Participation Rate is
[100.00]%.
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BEAR,
STEARNS & CO. INC.
STRUCTURED
PRODUCTS GROUP
(212)
272-6928
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The
issuer has filed a registration statement (including
a prospectus) with
the SEC for the offering to which this free
writing prospectus relates.
Before you invest, you should read the prospectus
in that registration
statement and other documents the issuer has
filed with the SEC for more
complete information about the issuer and this
offering. You may get these
documents for free by visiting EDGAR on the
SEC Web site at
www.sec.gov.
Alternatively, the issuer, any underwriter
or any dealer participating in
the offering will arrange to send you the prospectus
if you request it by
calling toll free 1-866-803-9204.
The
Notes will not be listed on any U.S. securities
exchange or quotation
system. Neither the Securities and Exchange
Commission nor any state
securities commission has approved or disapproved
of these securities or
determined that this free writing prospectus
is truthful or complete. Any
representation to the contrary is a criminal
offense.
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1
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STRUCTURED
PRODUCTS
GROUP
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GENERAL
TERMS
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This
free
writing prospectus relates to a Note offering linked
to
the performance of an equally-weighted portfolio comprised of the following
four
equity indices: (1) the S&P 500®
Index
(the “SPX”); (2) the Dow Jones EURO STOXX 50®
Index
(the “SX5E”); (3) the Nikkei 225™ Stock Index (the “NKY”); and (4) the
FTSE/Xinhua China 25 Index™ (the “XIN0I”) (each such index a “Component” and
together the “Portfolio”). The weighting of each Component within the Portfolio
is fixed at 1/4, or 25.00%, and will not change during the term of the
Notes
unless one or more Components is modified during the term of the Notes.
We
reserve the right to withdraw, cancel or modify the offering and to reject
orders in whole or in part.
Defined
terms not defined herein shall have the same meaning as in the Pricing
Supplement discussed below.
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ISSUER:
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The
Bear Stearns Companies Inc.
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ISSUER’S
RATING:
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A2
/ A (Moody’s / S&P)
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CUSIP
NUMBER:
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0739282Z5
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ISSUE
PRICE:
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100.00%
of the Principal Amount (99.00% for investors who purchase
a Principal
Amount of at least $1,000,000).
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PRINCIPAL
AMOUNT:
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$[l]
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DENOMINATIONS:
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$1,000
per Note and $1,000 multiples thereafter
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SELLING
PERIOD ENDS:
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March
[l],
2008
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SETTLEMENT
DATE:
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March
[l],
2008
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MATURITY
DATE:
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September
[l],
2011 (for a term of approximately 42 months). The Maturity
Date is subject
to adjustment as described in the Pricing Supplement.
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COMPONENTS:
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The
Notes are linked to the performance of an equally-weighted
portfolio
comprised of the following four
equity indices: (1) the S&P 500®
Index (the “SPX”); (2) the Dow Jones EURO STOXX 50®
Index (the “SX5E”); (3) the Nikkei 225™ Stock Index (the “NKY”); and (4)
the FTSE/Xinhua China 25 Index™ (the “XIN0I”) (each such index a
“Component” and together the “Portfolio”).
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COMPONENT
SPONSORS:
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Standard
& Poor’s, a division of The McGraw-Hill Companies, Inc. as the
sponsor
of the SPX; STOXX Limited, a partnership of Deutsche
Börse AG, Dow Jones
& Company and the SWX Group as the sponsor of the SX5E;
Nihon Keizai
Shimbun, Inc. as the sponsor of the NKY; and FTSE/Xinhua
Index Limited, a
joint venture of FTSE International Limited and Xinhua
Financial Network
Limited as the sponsor of the XIN0I are hereinafter referred
to as
“Component Sponsors.”
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CASH
SETTLEMENT VALUE:
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An
amount in cash that depends upon the Portfolio Return.
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If the
Portfolio Return is greater than zero, the Cash Settlement
Value for each
Note will be equal to the principal amount of the Notes,
plus: the product
of (a) $1,000 multiplied by (b) the Portfolio Return
multiplied by (c) the
Participation Rate.
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If the
Portfolio Return is equal to or less than zero, the Cash
Settlement Value
for each Note will be equal to the principal amount of
the Note. Because
the Notes are principal protected if held to maturity,
in no event will
the Cash Settlement Value for each Note held to maturity
be less than
$1,000.
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PORTFOLIO
RETURN:
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An
amount determined by the Calculation Agent and equal
to the arithmetic
average of the Index Performance for each Component.
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INDEX
PERFORMANCE:
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Equals,
as of the Final Observation Date and with respect to
a Component, the
quotient, expressed as a percentage, of (i) the arithmetic
average of the
Observation Levels for that Component as of each Observation
Date minus
the Initial Component Level of that Component divided
by (ii) the Initial
Component Level of that Component.
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INITIAL
COMPONENT LEVEL:
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Equals
(i) [l]
with respect to the SPX; (ii) [l]
with respect to the SX5E; (iii) [l]
with respect to the NKY; and (iv) [l]
with respect to the XIN0I, each as determined by the
Calculation Agent as
of the Pricing Date.
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BEAR,
STEARNS & CO.
INC.
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2
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STRUCTURED
PRODUCTS
GROUP
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OBSERVATION
LEVEL:
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Means,
as of any Observation Date and for each Component, the
closing index level
as reported by the relevant Component Sponsor and displayed
on the
Bloomberg Professional®
service (“Bloomberg”) Page SPX <Index> <Go> with respect to
the SPX, Bloomberg Page SX5E <Index> <Go> with respect to the
SX5E; Bloomberg Page NKY <Index> <Go> with respect to the NKY;
and Bloomberg Page XIN0I <Index> <Go> with respect to the
XIN0I.
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OBSERVATION
DATES:
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September
[l],
2008, September [l],
2009, September [l],
2010 and September [l],
2011 (the “Final Observation Date”); the Observation Dates are subject to
adjustment as described in the Pricing Supplement.
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ISSUE
DATE:
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March
[l],
2008.
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INTEREST:
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The
Notes will not bear interest.
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PARTICIPATION
RATE:
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[100.00]%
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PRICING
DATE:
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March
[l],
2008
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BEAR,
STEARNS & CO.
INC.
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3
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STRUCTURED
PRODUCTS
GROUP
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ADDITIONAL
TERMS SPECIFIC TO THE
NOTES
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You
should read this document together with the prospectus and
prospectus
supplement, each dated August 16, 2006 (the “Prospectus” and “Prospectus
Supplement,” respectively), and the more detailed information contained
in the
Pricing Supplement, dated March 4,
2008 (subject to completion) (the “Pricing Supplement”). You should carefully
consider, among other things, the matters set forth in “Risk Factors” in the
Prospectus Supplement and the Pricing Supplement, 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 the Pricing Supplement, the Prospectus
Supplement and the
Prospectus on the SEC web site as follows:
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·
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Pricing
Supplement dated March
4, 2008 (Subject to Completion):
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·
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Prospectus
Supplement dated August 16, 2006:
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·
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Prospectus
dated August 16, 2006:
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ILLUSTRATIVE
EXAMPLES
OF CASH SETTLEMENT VALUE
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The
following hypothetical examples are for illustrative
purposes and are not
indicative of the future performance of the Components,
the Portfolio or the
future value of the Notes. The following hypothetical
examples demonstrate the
hypothetical Cash Settlement Value of a Note based
on the assumptions outlined
below. The hypothetical examples do not purport to
be representative of every
possible scenario concerning increases or decreases
in the Components or the
Portfolio Value. You should not construe these examples
as an indication or
assurance of the expected performance of the Notes.
Actual returns may be
different. Numbers may be rounded for ease of use.
The examples demonstrating
the hypothetical Cash Settlement Value of a Note
are based on the following
assumptions:
ASSUMPTIONS:
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·
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Investor
purchases $1,000 aggregate principal amount
of Notes at the initial public
offering price of $1,000.
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Investor
holds the Notes to maturity.
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The
Initial Component Level for the SPX is
equal to 1,400.
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The
Initial Component Level for the SX5E is
equal to 3,900.
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The
Initial Component Level for the NKY is
equal to
14,000.
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The
Initial Component Level for the XIN0I is
equal to
21,500.
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The
Participation Rate is 100.00%.
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All
returns are based on a 42-month term, pre-tax
basis.
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No
Market Disruption Events or Events of Default
occur during the term of the
Notes.
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BEAR,
STEARNS & CO.
INC.
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4
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STRUCTURED
PRODUCTS
GROUP
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Example
1: The Portfolio Return is greater than zero.
In
this
example, the average Observation Levels of all four Components
increase relative
to their Initial Component Levels on the related Observation
Dates. This example
illustrates how holders of the Notes would benefit from the
increase in the
Observation Level of each Component relative to its respective
Initial Component
Level on each related Observation Date.
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SPX
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SX5E
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NKY
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XIN0I
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Initial
Component Level
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1,400
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3,900
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14,000
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21,500
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September
2008 Observation Level
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1,621
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5,082
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15,613
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26,233
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September
2009 Observation Level
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1,956
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4,800
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18,431
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33,217
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September
2010 Observation Level
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1,956
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5,626
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23,067
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44,832
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September
2011 Observation Level
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2,143
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5,540
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28,774
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56,550
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Average
Observation Level
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1,919.00
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5,262.00
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21,471.25
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40,208.00
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Index
Performance
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37.07%
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34.92%
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53.37%
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87.01%
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On
the
Final Observation Date, the Index Performance for the SPX would
be On
the
Final Observation Date, the Index Performance for the SPX would
be 37.07%, the
Index Performance for the SX5E would be 34.92%, the Index Performance
for the
NKY would be 53.37%, and the Index Performance for the XIN0I
would be 87.01%,
each as calculated pursuant to the below formula:
In
this
example, using the formula below, the Portfolio Return would
be greater than
zero.
Portfolio
Return
The
Cash
Settlement Value, using the formula below, would equal $1,530.94.
Cash
Settlement Value
Example
2: The Portfolio Return might be less than zero.
In
this
example, the average Observation Levels of all four Components
decrease relative
to their Initial Component Levels on the related Observation
Dates. As a result,
the Portfolio Return would be less than zero, and holders of
the Notes would
therefore have received only the principal amount of each Note
at
maturity.
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BEAR,
STEARNS & CO.
INC.
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5
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STRUCTURED
PRODUCTS
GROUP
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SPX
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SX5E
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NKY
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XIN0I
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Initial
Component Level
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1,400
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3,900
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14,000
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21,500
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September
2008 Observation Level
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1,223
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3,193
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11,317
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15,563
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September
2009 Observation Level
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1,224
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2,722
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10,135
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10,046
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September
2010 Observation Level
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1,078
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2,630
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9,014
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11,674
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September
2011 Observation Level
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1,121
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2,579
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8,377
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10,878
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Average
Observation Level
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1,161.50
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2,781.00
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9,710.75
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12,040.25
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Index
Performance
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-17.04%
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-28.69%
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-30.64%
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-44.00%
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On
the
Final Observation Date, the Index Performance for the SPX
would be -17.04%, the
Index Performance for the SX5E would be -28.69%, the Index
Performance for the
NKY would be -30.64%, and the Index Performance for the
XIN0I would be -44.00%,
each as calculated pursuant to the below formula:
In
this
example, using the formula below, the Portfolio Return
would be greater than
zero.
Portfolio
Return
Since
the
Portfolio Return would be less than zero, the Cash Settlement
Value for each
Note would be the principal amount of $1,000.
Example
3: Some Components move higher while others move lower.
In
this
example, the average Observation Levels for some of the
Components increase
relative to the initial Component Levels for those Components,
while the average
Observation Levels for other of the Components decrease
relative to the Initial
Component Levels for those Components.
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SPX
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SX5E
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NKY
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XIN0I
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Initial
Component Level
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1,400
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3,900
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14,000
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21,500
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September
2008 Observation Level
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1,385
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4,160
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15,376
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17,921
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September
2009 Observation Level
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1,368
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4,606
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15,108
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14,685
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September
2010 Observation Level
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1,219
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5,563
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19,282
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14,737
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September
2011 Observation Level
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1,276
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5,380
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19,201
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16,332
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Average
Observation Level
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1,312.00
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4,927.25
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17,241.75
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15,918.75
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Index
Performance
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-6.29%
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26.34%
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23.16%
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-25.96%
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BEAR,
STEARNS & CO.
INC.
|
6
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STRUCTURED
PRODUCTS
GROUP
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On
the
Final Observation Date, the Index Performance for the SPX
would be -6.29%, the
Index Performance for the SX5E would be 26.34%, the Index
Performance for the
NKY would be 23.16%, and the Index Performance for the XIN0I
would be -25.96%,
each as calculated pursuant to the below formula:
In
this
example, using the formula below, the Portfolio Return would
be greater than
zero.
Portfolio
Return
The
Cash
Settlement Value, using the formula below, will equal $1,043.13.
Cash
Settlement Value
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BEAR,
STEARNS & CO.
INC.
|
7
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STRUCTURED
PRODUCTS
GROUP
|
Summary
of Illustrative Examples 1-3 Reflecting the Relevant Cash
Settlement
Value
|
Example
1
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Example
2
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Example
3
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Hypothetical
Initial Component Level for SPX
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1,400.00
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1,400.00
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1,400.00
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Hypothetical
average Observation Level for SPX
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1,919.00
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1,161.50
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1,312.00
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Hypothetical
Initial Component Level for SX5E
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3,900.00
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3,900.00
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3,900.00
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Hypothetical
average Observation Level for SX5E
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5,262.00
|
2,781.00
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4,927.25
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Hypothetical
Initial Component Level for NKY
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14,000.00
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14,000.00
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14,000.00
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Hypothetical
average Observation Level for NKY
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21,471.25
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9,710.75
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17,241.75
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Hypothetical
Initial Component Level for XIN0I
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21,500.00
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21,500.00
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21,500.00
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Hypothetical
average Observation Level for XIN0I
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40,208.00
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12,040.25
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15,918.75
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Portfolio
Return
|
Positive
|
Negative
|
Positive
|
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Principal
protected?
|
Yes
|
Yes
|
Yes
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|
Cash
Settlement Value per Note
|
$1,530.94
|
$1,000.00
|
$1,043.13
|
|
BEAR,
STEARNS & CO.
INC.
|
8
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STRUCTURED
PRODUCTS
GROUP
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|
SELECTED
RISK
CONSIDERATIONS
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|
·
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Suitability
of Notes for Investment —A
person should reach a decision to invest
in the Notes after carefully
considering, with his or her advisors,
the suitability of the Notes in
light of his or her investment objectives
and the information set out in
the Pricing Supplement. Neither the
Issuer nor any dealer participating
in
the offering makes any recommendation
as to the suitability of the Notes
for investment.
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|
|
·
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No
current income—We
will not pay any interest on the Notes.
The yield on the Notes, therefore,
may be less than the overall return
you would earn if you purchased a
conventional debt security at the same
time and with the same Maturity
Date from an issuer with a comparable
credit rating.
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|
|
·
|
No
interest, dividend or other payments—You
will not receive any interest, dividend
payments or other distributions on
the stocks underlying the Components;
nor will such payments be included
in the calculation of the Cash Settlement
Value you will receive at
maturity.
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|
|
·
|
Not
exchange-listed—The
Notes will not be listed on any securities
exchange or quotation system
and we do not expect a trading market
to develop, which may affect the
price that you receive for your Notes
upon any sale prior to maturity. If
you sell the Notes prior to maturity,
you may receive less, and possibly
significantly less, than your initial
investment in the
Notes.
|
|
|
·
|
Liquidity—Because
the Notes will not be listed on any
securities exchange or quotation
system, we do not expect a trading
market to develop, and, if such a
market were to develop, it may not
be liquid. Our subsidiary, Bear,
Stearns & Co. Inc. has advised us that they intend
under ordinary
market conditions to indicate prices
for the Notes on request. However,
we
cannot guarantee that bids for outstanding
Notes will be made in the
future; nor can we predict the price
at which those bids will be made. In
any event, Notes will cease trading
as of the close of business on the
Maturity Date.
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|
|
·
|
The
Components may not move in tandem—At
a time when the level of one or more
of the Components increases, the
level of one or more of the other Components
may decline. Therefore, in
calculating the Portfolio Return, increases
in the level of one or more of
the Components may be moderated, or
wholly offset, by lesser increases
or
declines in the level of one or more
of the other
Components.
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|
|
·
|
Taxes —For
U.S. federal income tax purposes, we
intend to treat the Notes as
contingent payment debt instruments.
As a result, you will be required to
include original issue discount (“OID”) in income during your ownership of
the Notes even though no cash payments
will be made with respect to the
Notes until maturity. Additionally,
you will generally be required to
recognize ordinary income on the gain,
if any, realized on a sale, upon
maturity, or other disposition of the
Notes. You should review the
discussion under the section entitled
“Certain U.S. Federal Income Tax
Considerations” in the Pricing
Supplement..
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|
BEAR,
STEARNS & CO.
INC.
|
9