|
Title
of Each Class of Securities Offered
|
|
Maximum
Aggregate
Offering
Price
|
|
Amount
of
Registration
Fee(1)
|
|
||
|
Medium-Term
Notes, Series B
|
|
$
|
745,000
|
|
$
|
29.28
|
|
______________
| (1) |
Calculated
in accordance with Rule 457(r) of the Securities Act of 1933, as
amended. The filing fee of $29.28 is being paid in connection
with the
registration of these Reverse Convertible
Notes.
|
Registration
No. 333-136666
PRICING
SUPPLEMENT
(To
Prospectus Dated August 16, 2006 and
Prospectus
Supplement Dated August 16, 2006)
The
Bear Stearns Companies Inc.
$745,000
Reverse Convertible Notes
13.75%
Coupon Per Annum, Due March 5, 2009
Linked
to the Class A Common Stock of MasterCard Incorporated
Terms
used herein are defined in the prospectus supplement. The Notes offered
will
have the terms described in the prospectus supplement and the prospectus,
as
supplemented or modified by this pricing supplement. THE
NOTES DO NOT GUARANTEE ANY RETURN OF PRINCIPAL AT
MATURITY.
|
·
|
Reference
Asset:
|
The
Class A common stock of MasterCard Incorporated, traded on
the New York
Stock Exchange, Inc. (“NYSE”) under the symbol “MA.”
|
|
·
|
Principal
amount:
|
$745,000.
|
|
·
|
Pricing
Date:
|
February
29, 2008.
|
|
·
|
Original
Issue Date:
|
March
5, 2008.
|
|
·
|
Calculation
Date:
|
March
2, 2009, subject to postponement in the event of certain Market
Disruption
Events.
|
|
·
|
Maturity
Date:
|
March
5, 2009, provided
that if such date is not a Business Day, the Maturity Date
shall be the
next Business Day, and provided
further
that if the Calculation Date is adjusted due to the occurrence
of a Market
Disruption Event, the Maturity Date will be three Business
Days following
the adjusted Calculation Date.
|
|
·
|
Coupon
rate:
|
13.75%
per annum, payable as two semi-annual cash payments, each equal
to
one-half of the applicable Coupon Rate times the applicable
principal
amount of the Notes, in arrears. Interest will be computed
using a 360-day
year of twelve 30-day months, unadjusted.
|
|
·
|
Interest
Payment Dates:
|
September
5, 2008 and the Maturity Date.
|
|
·
|
Initial
Level:
|
$190.00,
the Closing Price of the Reference Asset on the Pricing
Date.
|
|
·
|
Final
Level:
|
The
Closing Price of the Reference Asset on the Calculation
Date.
|
|
·
|
Contingent
Protection Percentage:
|
60.00%.
|
|
·
|
Contingent
Protection Level:
|
$114.00,
equal to the product of the Contingent Protection Percentage
and the
Initial Level.
|
|
·
|
Payment
at maturity:
|
We
will pay you 100% of the principal amount of your Notes, in
cash, at
maturity if either
of
the following is true: (i) the Trading Level of the Reference
Asset never
equals or falls below the Contingent Protection Level at any
time from the
Pricing Date up to and including the Calculation Date; or (ii)
the Final
Level of the Reference Asset is equal to or greater than the
Initial Level
of the Reference Asset.
|
|
However,
if both
of
the following are true, the amount of principal you receive
at maturity
will be reduced by the percentage decrease in the Reference
Asset: (i) the
Trading Level of the Reference Asset ever equals or falls below
the
Contingent Protection Level at any time from the Pricing Date
up to and
including the Calculation Date; and
(ii) the Final Level of the Reference Asset is less than the
Initial Level
of the Reference Asset. In that event, we, at our option, will
either: (i)
physically deliver to you an amount of the Reference Asset
equal to the
Exchange Ratio plus the Fractional Share Cash Amount (which
means that you
will receive shares with a market value that is less than the
full
principal amount of your Notes); or (ii) pay you a cash amount
equal to
the principal amount you invested reduced by the percentage
decrease in
the Reference Asset. It is our intent to physically deliver
the Reference
Asset when applicable, but we reserve the right to settle the
Note in
cash.
|
||
|
·
|
Exchange
Ratio:
|
5;
i.e., $1,000 divided by the Initial Level (rounded down to
the nearest
whole number, with fractional shares to be paid in
cash).
|
|
·
|
Fractional
Share Cash Amount:
|
An
amount in cash per Note equal to the Final Level multiplied
by 0.263.
|
|
·
|
CUSIP:
|
073902QE1.
|
|
·
|
Listing:
|
The
Notes will not be listed on any U.S. securities exchange or
quotation
system.
|
INVESTMENT
IN THE NOTES INVOLVES CERTAIN RISKS. YOU SHOULD REFER TO “RISK FACTORS”
BEGINNING ON PAGE PS-4 BELOW.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of the Notes or determined that this pricing
supplement,
or the accompanying prospectus supplement and prospectus, is truthful
or
complete. Any representation to the contrary is a criminal
offense.
|
Per
Note
|
Total
|
||||||
|
Initial
public offering price
|
100.00%
|
|
|
$745,000
|
|||
|
Weighted
Average Agent’s discount
|
0%
|
|
$0
|
||||
|
Proceeds,
before expenses, to us
|
100.00%
|
$745,000
|
|||||
We
may
grant the agents a 30-day option from the date of the final pricing supplement,
to purchase from us up to an additional $111,750 of Notes at the public
offering
price, less the agent’s discount, to cover any over-allotments. We expect that
the Notes will be ready for delivery in book-entry form only through
the
book-entry facilities of The Depository Trust Company in New York, New
York, on
or about the Original Issue Date, against payment in immediately available
funds. The distribution of the Notes will conform to the requirements
set forth
in Rule 2720 of the National Association of Securities Dealers, Inc.
Conduct
Rules.
____________________
Bear,
Stearns & Co. Inc.
February
29, 2008
PS-2
WHERE
YOU CAN FIND MORE INFORMATION
We
have
filed a registration statement (including a prospectus, as supplemented
by a
prospectus supplement) with the SEC, for the offering to which this pricing
supplement relates. Before you invest, you should read the prospectus
and
prospectus supplement and any other documents relating to this offering
that we
have filed with the SEC for more complete information about us and this
offering. You should carefully consider, among other things, the matters
set
forth in “Risk Factors” in 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 get these documents without cost by visiting EDGAR on
the SEC web
site at www.sec.gov. Alternatively, the Agent will arrange to send you
the
prospectus and the prospectus supplement if you so request by calling
toll-free
866-803-9204.
You
may
access these documents on the SEC web site at www.sec.gov as
follows:
|
·
|
Prospectus
Supplement, dated August 16, 2006:
|
http://www.sec.gov/Archives/edgar/data/777001/000104746906011011/a2172742z424b5.htm
|
·
|
Prospectus,
dated August 16, 2006:
|
http://www.sec.gov/Archives/edgar/data/777001/000104746906011007/a2172711zs-3asr.htm
RETURN
ON THE NOTES
The
Notes are not principal protected and you may lose some or all of your
principal.
Payment
at Maturity
We
will
pay you 100% of the principal amount of your Notes, in cash, at maturity
if
either
of the
following is true: (i) the Trading Level of the Reference Asset never
equals or
falls below the Contingent Protection Level
at any
time from the Pricing Date up to and including the Calculation Date;
or (ii)
the Final Level of the Reference Asset is equal to or greater than the
Initial
Level of the Reference Asset.
However,
if both
of the
following are true, the amount of principal you receive at maturity will
be
reduced by the percentage decrease in the Reference Asset: (i) the Trading
Level
of the Reference Asset ever equals or falls below the Contingent Protection
Level at any time from the Pricing Date up to and including the Calculation
Date; and
(ii) the
Final Level of the Reference Asset is less than the Initial Level of
the
Reference Asset.
In
that
event, we, at our option, will either: (i) physically deliver to you
an amount
of the Reference Asset equal to the Exchange Ratio plus the Fractional
Share
Cash Amount (which means that you will receive shares with a market value
that
is less than the full principal amount of your Notes); or (ii) pay you
a cash
amount equal to the principal amount you invested reduced by the percentage
decrease in the Reference Asset. It is our intent to physically deliver
the
Reference Asset when applicable, but we reserve the right to settle the
Note in
cash.
We
will
(i) provide written notice to the Trustee and to the Depositary, on or
prior to the Business Day immediately prior to the Maturity Date of the
amount
of cash or number of shares of the Reference Asset, as applicable, to
be
delivered, and (ii) deliver such cash or shares of the Reference Asset (and
cash in respect of coupon and any fractional shares of the Reference
Asset), if
applicable, to the Trustee for delivery to you. The Calculation Agent
shall
determine the Exchange Ratio.
Interest
The
interest rate for the Notes is designated on the cover of this pricing
supplement. Interest will be computed using a 360-day year of twelve
30-day
months, unadjusted. The interest paid will include interest accrued from
the
Original Issue Date to, but excluding, the relevant Interest Payment
Date or
Maturity Date. Interest will be paid to the person in whose name the
Note is
registered at the close of business on the Record Date before each Interest
Payment Date. However, interest payable on the Maturity Date will be
payable to
the person to whom principal is payable. If the Interest Payment Date
is also a
day on which principal is due, the interest payable will include interest
accrued to, but excluding, the stated Maturity Date.
PS-3
The
following scenarios and graphs generally illustrate how the Cash Settlement
Value of the Reverse Convertible Note Securities is
determined:
|
Scenario
1
|
 |
 |
|
Outcome
The
Cash Settlement Value equals 100% of the principal amount of
the Notes.
The share price generally increased over the term of the Note
and never
breached the Contingent Protection
Level.
|
|
Scenario
2
The
price of the underlying shares generally declines over the
term of the
Note. The Contingent Protection Level is never breached.
|
|
 |
|
Outcome
The
Cash Settlement Value equals 100% of the principal amount of
the Notes.
The share price decreased over the term of the Note and at
maturity was
below the Initial Level, but never breached the Contingent
Protection
Level.
|
|
Scenario
3
The
price of the underlying shares declines over the term of the
Note. The
Contingent Protection Level is breached.
|
|
 |
|
Outcome
The
Cash Settlement Value is less than the principal amount of
the Notes,
reflecting the percentage decline in the underlying shares
below the
Initial Level. The Contingent Protection Level is breached
so there is no
principal protection.
|
|
Scenario
4
The
price of the underlying shares declines below the Contingent
Protection
Level, but ultimately recovers to finish above its Initial
Level.
|
|
 |
|
Outcome
The
Cash Settlement Value equals 100% of the principal amount of
the Notes.
Even though the share price decreased below the Contingent
Protection
Level during the term of the Note, by the Calculation Date
the underlying
share price was above the Initial Level.
|
PS-4
RISK
FACTORS
You
will
be subject to significant risks not associated with conventional fixed-rate
or
floating-rate debt securities. Prospective purchasers of the Notes should
understand the risks of investing in the Notes and should reach an investment
decision only after careful consideration, with their advisers, of the
suitability of the Notes in light of their particular financial circumstances,
the following risk factors and the other information set forth in this pricing
supplement and the accompanying prospectus supplement and
prospectus.
The
following highlights some, but not all, of the risk considerations relevant
to
investing in the Notes. The
following must be read in conjunction with the sections “Risk Factors” and “Risk
Factors - Additional Risks Relating to Notes with an Equity Security or Equity
Index as the Reference Asset,” beginning on pages S-7 and S-14,
respectively, in the Prospectus Supplement.
Suitability
of Note 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.
Not
Principal Protected —The
Notes are not principal protected. If both
of the
following are true, the amount of principal you receive at maturity will
be
reduced by the percentage decrease in the Reference Asset: (i) the Trading
Level
of the Reference Asset ever equals or falls below the Contingent Protection
Level at any time from the Pricing Date to and including the Calculation
Date;
and
(ii) the
Final Level of the Reference Asset is less than the Initial Level of the
Reference Asset. In that event, we, at our option, will either: (i) physically
deliver to you an amount of the Reference Asset equal to the Exchange Ratio
plus
the Fractional Share Cash Amount (which means that you will receive shares
with
a market value that is less than the full principal amount of your Notes);
or
(ii) pay you a cash amount equal to the principal amount you invested reduced
by
the percentage decrease in the Reference Asset.
Return
Limited to Coupon — Your
return is limited to the principal amount you invested plus the coupon payments.
You will not participate in any appreciation in the value of the Reference
Asset.
No
Secondary Market
— Because
the Notes will not be listed on any securities exchange, a secondary trading
market is not expected to develop, and, if such a market were to develop,
it may
not be liquid. Bear, Stearns & Co. Inc. intends under ordinary market
conditions to indicate prices for the Notes on request. However, there can
be no
guarantee that bids for outstanding Notes will be made in the future; nor
can
the prices of those bids be predicted.
No
Interest, Dividend or Other Payments —
You
will not receive any interest or dividend payments or other distributions
on the
stock comprising the Reference Asset; nor will such payments be included
in the
calculation of the Cash Settlement Value you will receive at
maturity.
Taxes
—
We
intend to treat each Note as a put option written by you in respect of the
Reference Asset and a deposit with us of cash in an amount equal to the
principal amount of the Note to secure your potential obligation under the
put
option, and we intend to treat the deposit as a short-term obligation for
U.S.
federal income tax purposes. Pursuant to the terms of the Notes, you agree
to
treat the Notes in accordance with this characterization for all U.S. federal
income tax purposes. However, because under certain circumstances the Notes
may
be outstanding for more than one year it is possible that the Notes may not
be
treated as short-term obligations, in which case the tax treatment of interest
payments on the Notes is described in “U.S. Federal Income Tax Considerations —
Tax Treatment of U.S. Holders — Tax Treatment of the Deposit on Notes with a
Term of More Than a Year” in the prospectus supplement. Moreover, because there
are no regulations, published rulings or judicial decisions addressing the
characterization for U.S. federal income tax purposes of securities with
terms
that are substantially the same as those of the Notes, other characterizations
and treatments are possible. Recently, the Internal Revenue Service (“IRS”) and
the Treasury Department issued Notice 2008-2 under which they requested comments
as to whether the purchaser of certain notes (which may include the
Notes) should be required to accrue income during its term under a
mark-to-market, accrual or other methodology, whether income and gain on
such a
note or contract should be ordinary or capital, and whether foreign holders
should be subject to withholding tax on any deemed income accrual. Accordingly,
it is possible that regulations or other guidance could provide that a U.S.
Holder of a Note is required to accrue income in respect of the Note prior
to
the receipt of payments under the Note or its earlier sale. Moreover, it
is
possible that any such regulations or other guidance could treat all income
and
gain of a U.S. holder in respect of a note as ordinary income (including
gain on
a sale). Finally, it is possible that a Non-U.S. Holder of the Note could
be subject to U.S. withholding tax in respect of the Note. It is unclear
whether any regulations or other guidance would apply to the Notes (possibly
on
a retroactive basis). Prospective investors are urged to consult with their
tax
advisors regarding Notice 2008-2 and the possible effect to them of the issuance
of regulations or other guidance that affects the federal income tax treatment
of the Notes. See
“Certain U.S. Federal Income Tax Considerations” below.
PS-5
The
Notes are Subject to Equity Market Risks — The
Notes
involve exposure to price movements in the equity securities to which they
are
linked. Equity securities price movements are difficult to predict, and equity
securities may be subject to volatile increases or decreases in
value.
The
Notes may be Affected by Certain Corporate Events and you will have Limited
Antidilution Protection —
Following certain corporate events relating to the underlying Reference Asset
(where the underlying company is not the surviving entity), you will receive
at
maturity, cash or a number of shares of the common stock of a successor
corporation to the underlying company, based on the Closing Price of such
successor’s common stock. The Calculation Agent for the Notes will adjust the
amount payable at maturity by adjusting the Initial Level of the Reference
Asset, Contingent Protection Percentage, Contingent Protection Level and
Exchange Ratio for certain events affecting the Reference Asset, such as
stock
splits and stock dividends and certain other corporate events involving an
underlying company. However, the Calculation Agent is not required to make
an
adjustment for every corporate event that can affect the Reference Asset.
If an
event occurs that is perceived by the market to dilute the Reference Asset
but
that does not require the Calculation Agent to adjust the amount of the
Reference Asset payable at maturity, the market value of the Notes and the
amount payable at maturity may be materially and adversely
affected.
ILLUSTRATIVE
EXAMPLES
The
following are illustrative examples demonstrating the hypothetical amount
payable at maturity based on the assumptions outlined below. These examples
do
not purport to be representative of every possible scenario concerning increases
or decreases in the Reference Asset or of the movements that are likely to
occur
with respect to the Reference Asset. You should not construe these examples
or
the data included in tables as an indication of the expected performance
of the
Notes. Some amounts are rounded and actual returns may be
different.
Assumptions:
|
·
|
Investor
purchases $1,000.00 principal amount of Notes on the Pricing Date
at the
initial offering price of 100% and holds the Notes to maturity.
No Market
Disruption Events or Events of Default occur during the term of
the
Notes.
|
|
·
|
Initial
Level: $ 200.00
|
|
·
|
Contingent
Protection Percentage: 60%
|
|
·
|
Contingent
Protection Level: $ 120.00 ($200.00 x
60%)
|
|
·
|
Exchange
Ratio: 5 ($1,000.00/$200.00)
|
|
·
|
Coupon:
13.75% per annum, paid semi-annually, in
arrears.
|
|
·
|
The
reinvestment rate on any interest payments made during the term
of the
Notes is assumed to be 0%. The one-year total return on a direct
investment in the Reference Asset is calculated below prior to
the
deduction of any brokerage fees or charges. Both a positive reinvestment
rate, or the incurrence of any brokerage fees or charges, would
increase
the total return on the Notes relative to the total return of the
Reference Asset
|
|
·
|
Assumes
cash settlement at maturity.
|
|
·
|
Maturity:
One year.
|
|
·
|
Dividend
and dividend yield on the Reference Asset: $0.60 and 0.30% per
annum.
|
Example
1
- On the
Calculation Date, the Final Level of $240.00 is greater than the Initial
Level,
resulting in a payment at maturity of $1,000.00, regardless of whether the
Contingent Protection Level was ever reached or breached, plus two interest
payments of $68.75, for payments totaling $1,137.50. If you had invested
directly in the Reference Asset for the same one-year period, you would have
received total cash payments of $1,203.00 (number of shares of the Reference
Asset multiplied by the Final Level, plus the dividend payments), assuming
liquidation of shares at the Final Level. You would have earned a 13.75%
return
with an investment in the Notes and a 20.30% return with a direct investment
in
the Reference Asset.
Example
2
- On the
Calculation Date, the Final Level of $180.00 is below the Initial Level,
but the
Trading Level never equaled or fell below the Contingent Protection Level.
As
discussed in example 1 above, an investor would receive total payments of
$1,137.50, earning a 13.75% return over the term of the Notes. A direct
investment in the Reference Asset during that same one-year time period would
have generated a return of $903.00 (number of shares of the Reference Asset
multiplied by the Final Level, plus the dividend payments), assuming liquidation
of shares at the Final Level. You would have earned a 13.75% return with
an
investment in the Notes and incurred a loss of 9.70% with a direct investment
in
the Reference Asset.
PS-6
Example
3
- On the
Calculation Date, the Final Level of $100.00 is below the Initial Level and
also
is below the Contingent Protection Level. At our election, an investor would
receive a cash payment in the amount of $500.00 plus two interest payments
of
$68.75, for payments totaling $637.50. If you had invested directly in the
Reference Asset for the same one-year period, you would have received total
cash
payments of $503.00 (number of shares of the Reference Asset multiplied by
the
Final Level, plus the dividend payments), assuming liquidation of shares
at the
Final Level. An investment in the Notes would have resulted in a loss of
36.25%,
while a direct investment in the Reference Asset would have resulted in a
loss
of 49.70%.
Table
of Hypothetical Cash Settlement Values
Assumes
the Trading Level Never
Equals
or Falls Below the Contingent Protection Level Before the Calculation
Date
|
Investment
in the Notes
|
Direct
Investment in the Reference Asset
|
|||||||
|
Initial
Level
|
Hypothetical
Final
Level
|
Cash
Settlement
Value
|
Total
Coupon
Payments
(in
%
Terms)
|
1-Year
Total
Return
|
Percentage
Change in
Value
of Reference
Asset
|
Dividend
Yield
|
1-Year
Total Return
|
|
|
200.00
|
260.00
|
$1,000.00
|
13.75%
|
13.75%
|
30.00%
|
0.30%
|
30.30%
|
|
|
200.00
|
250.00
|
$1,000.00
|
13.75%
|
13.75%
|
25.00%
|
0.30%
|
25.30%
|
|
|
200.00
|
240.00
|
$1,000.00
|
13.75%
|
13.75%
|
20.00%
|
0.30%
|
20.30%
|
|
|
200.00
|
230.00
|
$1,000.00
|
13.75%
|
13.75%
|
15.00%
|
0.30%
|
15.30%
|
|
|
200.00
|
220.00
|
$1,000.00
|
13.75%
|
13.75%
|
10.00%
|
0.30%
|
10.30%
|
|
|
200.00
|
210.00
|
$1,000.00
|
13.75%
|
13.75%
|
5.00%
|
0.30%
|
5.30%
|
|
|
200.00
|
200.00
|
$1,000.00
|
13.75%
|
13.75%
|
0.00%
|
0.30%
|
0.30%
|
|
|
200.00
|
190.00
|
$1,000.00
|
13.75%
|
13.75%
|
-5.00%
|
0.30%
|
-4.70%
|
|
|
200.00
|
180.00
|
$1,000.00
|
13.75%
|
13.75%
|
-10.00%
|
0.30%
|
-9.70%
|
|
|
200.00
|
170.00
|
$1,000.00
|
13.75%
|
13.75%
|
-15.00%
|
0.30%
|
-14.70%
|
|
Table
of Hypothetical Cash Settlement Values
Assumes
the Trading Level Does
Equal or
Fall Below the Contingent Protection Level Before the Calculation
Date
|
Investment
in the Notes
|
Direct
Investment in the Reference Asset
|
|||||||
|
Initial
Level
|
Hypothetical
Final
Level
|
Cash
Settlement
Value
|
Total
Coupon
Payments
(in
%
Terms)
|
1-Year
Total
Return
|
Percentage
Change in
Value
of Reference
Asset
|
Dividend
Yield
|
1-Year
Total Return
|
|
|
200.00
|
250.00
|
$1,000.00
|
13.75%
|
13.75%
|
25.00%
|
0.30%
|
25.30%
|
|
|
200.00
|
240.00
|
$1,000.00
|
13.75%
|
13.75%
|
20.00%
|
0.30%
|
20.30%
|
|
|
200.00
|
230.00
|
$1,000.00
|
13.75%
|
13.75%
|
15.00%
|
0.30%
|
15.30%
|
|
|
200.00
|
220.00
|
$1,000.00
|
13.75%
|
13.75%
|
10.00%
|
0.30%
|
10.30%
|
|
|
200.00
|
210.00
|
$1,000.00
|
13.75%
|
13.75%
|
5.00%
|
0.30%
|
5.30%
|
|
|
200.00
|
200.00
|
$1,000.00
|
13.75%
|
13.75%
|
0.00%
|
0.30%
|
0.30%
|
|
|
200.00
|
190.00
|
$950.00
|
13.75%
|
8.75%
|
-5.00%
|
0.30%
|
-4.70%
|
|
|
200.00
|
180.00
|
$900.00
|
13.75%
|
3.75%
|
-10.00%
|
0.30%
|
-9.70%
|
|
|
200.00
|
170.00
|
$850.00
|
13.75%
|
-1.25%
|
-15.00%
|
0.30%
|
-14.70%
|
|
|
200.00
|
160.00
|
$800.00
|
13.75%
|
-6.25%
|
-20.00%
|
0.30%
|
-19.70%
|
|
|
200.00
|
150.00
|
$750.00
|
13.75%
|
-11.25%
|
-25.00%
|
0.30%
|
-24.70%
|
|
|
200.00
|
140.00
|
$700.00
|
13.75%
|
-16.25%
|
-30.00%
|
0.30%
|
-29.70%
|
|
|
200.00
|
130.00
|
$650.00
|
13.75%
|
-21.25%
|
-35.00%
|
0.30%
|
-34.70%
|
|
|
200.00
|
120.00
|
$600.00
|
13.75%
|
-26.25%
|
-40.00%
|
0.30%
|
-39.70%
|
|
|
200.00
|
110.00
|
$550.00
|
13.75%
|
-31.25%
|
-45.00%
|
0.30%
|
-44.70%
|
|
|
200.00
|
100.00
|
$500.00
|
13.75%
|
-36.25%
|
-50.00%
|
0.30%
|
-49.70%
|
|
|
200.00
|
90.00
|
$450.00
|
13.75%
|
-41.25%
|
-55.00%
|
0.30%
|
-54.70%
|
|
PS-7
REFERENCE
ASSET
Additional
Information Regarding the Reference Asset
We
urge
you to read the section “Sponsors or Issuers and Reference Asset” on
page S-25 in the Prospectus Supplement. Companies with securities
registered under the Exchange Act are required to file periodically certain
financial and other information specified by the SEC. Information provided
to or
filed with the SEC electronically can be accessed through a website maintained
by the SEC. The address of the SEC’s website is http://www.sec.gov. Information
provided to or filed with the SEC pursuant to the Exchange Act by a company
issuing a Reference Asset can be located by reference to the SEC file number
provided below.
The
summary information below regarding the company issuing the stock comprising
the
Reference Asset comes from the issuer’s SEC filings and has not been
independently verified by us. We do not make any representations as to the
accuracy or completeness of such information or of any filings made by the
issuer of the Reference Asset with the SEC. Investors
are urged to refer to the SEC filings made by the issuer and to other publicly
available information (such as the issuer’s annual report) to obtain an
understanding of the issuer’s business and financial prospects. The summary
information contained below is not designed to be, and should not be interpreted
as, an effort to present information regarding the financial prospects of
the
issuer or any trends, events or other factors that may have a positive or
negative influence on those prospects or as an endorsement of the
issuer.
MasterCard
Incorporated (“MA”)
MasterCard
Incorporated (“MasterCard”) Class A common stock, par value $.0001 per share,
trades on the NYSE under the symbol “MA.” MasterCard is a global payment
solutions company that provides a variety of services in support of the credit,
debit and related payment programs of financial institutions. MasterCard’s
SEC file number is 001- 32877.
Historical
Performance of the Reference Asset
The
following table sets forth, on a per share basis, the quarterly high and
low
trading prices, as well as end-of-quarter closing prices, for the Reference
Asset during the periods indicated below. We obtained the information in
the
table below from Bloomberg Financial Markets, without independent
verification.
|
Quarter
Ending
|
Quarterly
High
|
Quarterly
Low
|
Quarterly
Close
|
|
|
June
30, 20061
|
50.63
|
39.00
|
48.00
|
|
|
September
29, 2006
|
70.45
|
43.67
|
70.35
|
|
|
December
29, 2006
|
108.60
|
68.28
|
98.49
|
|
|
March
30, 2007
|
118.07
|
95.30
|
106.24
|
|
|
June
29, 2007
|
169.40
|
105.93
|
165.87
|
|
|
September
28, 2007
|
174.60
|
120.00
|
147.97
|
|
|
December
31, 2007
|
227.18
|
143.15
|
215.20
|
|
|
January
2, 2008 to
February
26, 2008
|
222.25
|
160.82
|
195.77
|
|
___________________
1Shares
of MasterCard
commenced trading on May 25, 2006.
PS-8
CERTAIN
U.S. FEDERAL INCOME TAX CONSIDERATIONS
This
summary supplements the section entitled “Certain U.S. Federal Income Tax
Considerations” in the prospectus supplement and supersedes it to the extent
inconsistent therewith but is subject to the limitations and qualifications
set
forth therein. In the opinion of Cadwalader, Wickersham & Taft LLP, special
U.S. tax counsel to us, the following discussion, when read together with
the
section entitled, “Certain U.S. Federal Income Tax Considerations” in the
prospectus supplement, summarizes certain of the material U.S. federal income
tax consequences of the purchase, beneficial ownership, and disposition of
the
Notes.
There
are
no statutory provisions, regulations, published rulings or judicial decisions
addressing the characterization for U.S. federal income tax purposes of
securities with terms that are substantially the same as those of the Notes.
Under one approach, the Note should be treated as a put option written by
you
(the “Put Option”) that permits us to (1) sell the Reference Assets to you at
maturity for an amount equal to the principal amount of the Note, or (2)
“cash
settle” the Put Option (i.e., require you to pay to us at maturity the
difference between the principal amount of the Note and the value of the
Reference Assets otherwise deliverable under the Put Option), and a deposit
with
us of cash (the “Deposit”) in an amount equal to the “issue price” (as described
in the prospectus supplement) of your Notes to secure your potential obligation
under the Put Option. We intend to treat the Notes consistent with this approach
and pursuant to the terms of the Notes, you agree to treat the Notes under
this
approach for all U.S. federal income tax purposes. The description below
of the
Reference Asset includes a chart that indicates the portion of each interest
payment that represents the yield on the Deposit and the Put Premium, assuming
that the issue price of the Notes is par. You may contact Bill Bamber at
(212)
272-6635 for the issue price of the Notes.
We
also
intend to treat the Deposits as “short-term obligations” for U.S. federal income
tax purposes. See “Certain U.S. Federal Income Tax Considerations —Tax Treatment
of the Deposit on Notes with a Term of One Year or Less” in the prospectus
supplement for certain U.S. federal income tax considerations applicable
to
short-term obligations. However, because under certain circumstances the
Notes
may be outstanding for more than one year it is possible that the Notes may
not
be treated as short-term obligations, in which case the tax treatment of
interest payments on the Notes is described in “U.S. Federal Income Tax
Considerations — Tax Treatment of U.S. Holders — Tax Treatment of the Deposit on
Notes with a Term of More Than a Year” in the prospectus
supplement.
Because
there are no statutory provisions, regulations, published rulings or judicial
decisions addressing the characterization for U.S. federal income tax purposes
of securities with terms that are substantially the same as those of the
Notes,
other characterizations and treatments are possible and the timing and character
of income in respect of the Notes might differ from the treatment described
above. For example, the Notes could be treated as short-term obligations
rather
than a Put Option and a Deposit.
Recently,
the Internal Revenue Service ("IRS") and the Treasury Department issued Notice
2008-2 under which they requested comments as to whether the purchaser
of certain notes (which may include the Notes) should be required
to accrue income during its term under a mark-to-market, accrual or other
methodology, whether income and gain on such a note or contract should be
ordinary or capital, and whether foreign holders should be subject to
withholding tax on any deemed income accrual. Accordingly, it is possible
that
regulations or other guidance could provide that a U.S. Holder of a Note
is
required to accrue income in respect of the Note prior to the receipt of
payments under the Note or its earlier sale. Moreover, it is possible that
any
such regulations or other guidance could treat all income and gain of a U.S.
holder in respect of a note as ordinary income (including gain on a sale).
Finally, it is possible that a Non-U.S. Holder of the Note could be subject
to
U.S. withholding tax in respect of the Note. It is unclear whether any
regulations or other guidance would apply to the Notes (possibly on a
retroactive basis). Prospective investors are urged to consult with their
tax
advisors regarding Notice 2008-2 and the possible effect to them of the issuance
of regulations or other guidance that affects the federal income tax treatment
of the Notes.
|
Reference
Asset
|
Term
to Maturity
|
Coupon
Rate, per
Annum |
Yield
on the Deposit,
per
Annum
|
Put
Premium, per
Annum
|
|
MasterCard
Incorporated
|
1-year
|
13.75%
|
5.425%
|
8.325%
|
PS-9
CERTAIN
ERISA CONSIDERATIONS
Section
4975 of the Internal Revenue Code of 1986 (the “Code”) prohibits the borrowing
of money, the sale of property and certain other transactions involving the
assets of plans that are qualified under the Code ("Qualified Plans") or
individual retirement accounts ("IRAs") and persons who have certain specified
relationships to them. Section 406 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), prohibits similar transactions involving
employee benefit plans that are subject to ERISA ("ERISA Plans"). Qualified
Plans, IRAs and ERISA Plans are referred to as "Plans."
Persons
who have such specified relationships are referred to as "parties in interest"
under ERISA and as "disqualified persons" under the Code. "Parties in interest"
and "disqualified persons" encompass a wide range of persons, including any
fiduciary (for example, investment manager, trustee or custodian) of a Plan,
any
person providing services (for example, a broker) to a Plan, the Plan sponsor,
an employee organization any of whose members are covered by the Plan, and
certain persons related to or affiliated with any of the foregoing.
The
purchase and/or holding of securities by a Plan with respect to which we,
Bear,
Stearns & Co. Inc. (“Bear Stearns”) and/or certain of our affiliates is a
fiduciary and/or a service provider (or otherwise is a "party in interest"
or
"disqualified person") would constitute or result in a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code, unless such securities
are acquired or held pursuant to and in accordance with an applicable statutory
or administrative exemption. Each of us and Bear Stearns is considered a
"disqualified person" under the Code or "party in interest" under ERISA with
respect to many Plans, although neither we nor Bear Stearns can be a "party
in
interest" to any IRA other than certain employer-sponsored IRAs, as only
employer-sponsored IRAs are covered by ERISA.
Applicable
administrative exemptions may include certain prohibited transaction class
exemptions (for example, Prohibited Transaction Class Exemption ("PTCE")
84-14
relating to qualified professional asset managers, PTCE 96−23 relating to
certain in-house asset managers, PTCE 91-38 relating to bank collective
investment funds, PTCE 90−1 relating to insurance company separate accounts and
PTCE 95-60 relating to insurance company general accounts).
It
should
also be noted that the Pension Protection Act of 2006 contains a statutory
exemption from the prohibited transaction provisions of Section 406 of ERISA
and
Section 4975 of the Code for transactions involving certain parties in interest
or disqualified persons who are such merely because they are a service provider
to a Plan, or because they are related to a service provider. Generally,
the
exemption would be applicable if the party to the transaction with the Plan
is a
party in interest or a disqualified person to the Plan but is not (i) an
employer, (ii) a fiduciary who has or exercises any discretionary authority
or
control with respect to the investment of the Plan assets involved in the
transaction, (iii) a fiduciary who renders investment advice (within the
meaning
of ERISA and Section 4975 of the Code) with respect to those assets, or (iv)
an
affiliate of (i), (ii) or (iii). Any Plan fiduciary relying on this statutory
exemption (Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code)
and
purchasing securities on behalf of a Plan will be deemed to represent that
(x)
the fiduciary has made a good faith determination that the Plan is paying
no
more than, and is receiving no less than, adequate consideration in connection
with the transaction and (y) neither we, Bear Stearns nor any of our affiliates
directly or indirectly exercises any discretionary authority or control or
renders investment advice (as defined above) with respect to the assets of
the
Plan which such fiduciary is using to purchase the Notes, both of which are
necessary preconditions to utilizing this exemption. Any purchaser that is
a
Plan is encouraged to consult with counsel regarding the application of the
exemption.
A
fiduciary that causes a Plan to engage, directly or indirectly, in a non-exempt
prohibited transaction may be subject to a penalty under ERISA, and may be
liable for any losses to the Plan resulting from such transaction. Code Section
4975 generally imposes an excise tax on disqualified persons who engage,
directly or indirectly, in non-exempt transactions with the assets of Plans
subject to such Section. If an IRA engages in a prohibited transaction, the
assets of the IRA are deemed to have been distributed to the IRA
beneficiaries.
In
accordance with ERISA’s general fiduciary requirements, a fiduciary with respect
to any ERISA Plan who is considering the purchase of securities on behalf
of
such plan should consider the foregoing information and the information set
forth in the applicable prospectus supplement and any applicable pricing
supplement, and should determine whether such purchase is permitted under
the
governing plan document and is prudent and appropriate for the ERISA Plan
in
view of its overall investment policy and the composition and diversification
of
its portfolio. Fiduciaries of Plans established with, or for which services
are
provided by, us, Bear Stearns and/or certain of our affiliates should consult
with counsel before making any acquisition. Each purchaser of any securities,
the assets of which constitute the assets of one or more Plans, and each
fiduciary that directs such purchaser with respect to the purchase or holding
of
such securities, will be deemed to represent that the purchase, holding and
disposition of the securities does not and will not constitute a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code for which
an
exemption is not available.
PS-10
Certain
employee benefit plans, such as governmental plans (as defined in Section
3(32)
of ERISA) and, if no election has been made under Section 410(d) of the Code,
church plans (as defined in Section 3(33) of ERISA), are not subject to Section
406 of ERISA or Section 4975 of the Code. However, such plans may be subject
to
the provisions of applicable federal, state or local law ("Similar Law")
similar
to the foregoing provisions of ERISA or the Code. Fiduciaries of such plans
("Similar Law Plans") should consider applicable Similar Law when investing
in
the securities. Each fiduciary of a Similar Law Plan will be deemed to represent
that the Similar Law Plan’s acquisition and holding of the securities will not
result in a non-exempt violation of applicable Similar Law.
The
sale
of any security to a Plan or a Similar Law Plan is in no respect a
representation by us or any of our affiliates that such an investment meets
all
relevant legal requirements with respect to investments by Plans or Similar
Law
Plans generally or any particular Plan or Similar Law Plan, or that such
an
investment is appropriate for a Plan or a Similar Law Plan generally or any
particular Plan or Similar Law Plan.
PS-11
|
You
should only rely on the information contained in this pricing supplement,
the accompanying prospectus supplement and prospectus. We have
not
authorized anyone to provide you with information or to make any
representation to you that is not contained in this pricing supplement,
the accompanying prospectus supplement and prospectus. If anyone
provides
you with different or inconsistent information, you should not
rely on it.
This pricing supplement, the accompanying prospectus supplement
and
prospectus are not an offer to sell these securities, and these
documents
are not soliciting an offer to buy these securities, in any jurisdiction
where the offer or sale is not permitted. You should not under
any
circumstances assume that the information in this pricing supplement,
the
accompanying prospectus supplement and prospectus is correct on
any date
after their respective dates.
|
The
Bear Stearns
Companies
Inc.
$745,000
Medium-Term
Notes, Series B
Reverse
Convertible Notes
13.75%
Coupon Per Annum
Due
March 5, 2009
Linked
to the Class A Common Stock of
MasterCard
Incorporated
February
29, 2008
PRICING
SUPPLEMENT
|
||
|
____________________
|
|||
|
TABLE
OF CONTENTS
|
|||
|
Pricing
Supplement
|
|||
|
|
Page
|
||
|
Where
You Can Find More Information
|
3
|
||
|
Return
on the Notes
|
3
|
||
|
Risk
Factors
|
5
|
||
|
Illustrative
Examples
|
6
|
||
|
Reference
Asset
|
8
|
||
|
Certain
U.S. Federal Income Tax Considerations
|
9
|
||
|
Certain
ERISA Considerations
|
10
|
||
|
Prospectus
Supplement
|
|||
|
Summary
|
S-2
|
||
|
Illustrative
Examples
|
S-4
|
||
|
Risk
Factors
|
S-7
|
||
|
Pricing
Supplement
|
S-20
|
||
|
Description
of Notes
|
S-21
|
||
|
Sponsors
or Issuers and Reference Asset
|
S-25
|
||
|
Antidilution
Adjustments
|
S-26
|
||
|
Use
of Proceeds and Hedging
|
S-30
|
||
|
Certain
U.S. Federal Income Tax Considerations
|
S-31
|
||
|
Supplemental
Plan of Distribution
|
S-40
|
||
|
Validity
of the Notes
|
S-41
|
||
|
Definitions
|
S-41
|
||
|
Prospectus
|
|||
|
Where
You Can Find More Information
|
1
|
||
|
The
Bear Stearns Companies Inc.
|
2
|
||
|
Use
of Proceeds
|
4
|
||
|
Description
of Debt Securities
|
4
|
||
|
Description
of Warrants
|
16
|
||
|
Description
of Preferred Stock
|
21
|
||
|
Description
of Depositary Shares
|
25
|
||
|
Description
of Purchase Contracts
|
28
|
||
|
Description
of Units
|
31
|
||
|
Book-Entry
Procedures and Settlement
|
33
|
||
|
Limitations
on Issuance of Bearer Debt Securities and Bearer Warrants
|
43
|
||
|
Plan
of Distribution
|
44
|
||
|
ERISA
Considerations
|
48
|
||
|
Legal
Considerations
|
48
|
||
|
Experts
|
49
|
||