Filed
Pursuant to Rule 433
Registration
No. 333−136666
December
11,
2007
 |
STRUCTURED
EQUITY PRODUCTS
|
| Indicative Terms | |
|
New
Issue
|
|
THE
BEAR STEARNS COMPANIES INC.
Note
Linked to the Philadelphia Housing SectorSM
Index
Due:
December [l],
2009
INVESTMENT
HIGHLIGHTS
|
·
|
24
month term to maturity.
|
|
·
|
The
Notes are linked to the performance of the Philadelphia Housing
SectorSM
Index and are
not principal protected.
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|
·
|
Issue
is a direct obligation of The Bear Stearns Companies Inc. (Rated
A1 by
Moody’s / A by S&P).
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|
·
|
Issue
Price: 100.00% of the Principal Amount (99.00% for investors who
purchase
a Principal Amount of $1,000,000 or
greater).
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|
·
|
If
the Index Return is greater than zero, the Cash Settlement Value
will be
equal to the $1,000.00 principal amount of the Note plus the product
of
(a) $1,000 multiplied by (b) the Upside Participation Rate (300.00%)
multiplied by (c) the Index Return; provided that in no event will
the
Cash Settlement Value payable at maturity exceed $[1,420-1,450] per
Note,
which represents a maximum return of [42-45]% on the
Notes.
|
|
·
|
If
Index Return is less than or equal to zero but greater than or equal
to
[-10.00]%, the Cash Settlement Value will be equal to the $1,000.00
principal amount of the Note.
|
|
·
|
If
the Index Return is less than [-10.00]%, then the Cash Settlement
Value
for each Note will be equal to the $1,000 principal amount minus
1% of the
$1,000 principal amount for each percentage point that the Index
Return is
less than [-10.00]%. For example, if the Index Return is -30%, you
will
suffer a 20% loss and, therefore, the Cash Settlement Value of each
Note
will be equal to 80% of the principal
amount.
|
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.
BEAR,
STEARNS & CO. INC.
STRUCTURED
PRODUCTS GROUP
(212)
272-6928
-1-
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|
STRUCTURED
PRODUCTS GROUP
|
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|
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|
TERMS
OF OFFERING
|
|
ISSUER:
|
The
Bear Stearns Companies Inc.
|
|
|
ISSUER’S
RATING:
|
A1
/ A (Moody’s / S&P)
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|
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CUSIP
NUMBER:
|
073928Y80
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|
ISSUE
PRICE:
|
100.00%
of the Principal Amount (99.00% for investors who purchase a Principal
Amount of $1,000,000 or greater). See “Supplemental Plan of Distribution”
in the Pricing Supplement.
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AGGREGATE
PRINCIPAL AMOUNT:
|
$[l].
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DENOMINATIONS:
|
$1,000.00
per Note and $1,000.00 multiples thereafter.
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SELLING
PERIOD ENDS:
|
December
[l],
2007.
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SETTLEMENT
DATE:
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December
[l],
2007.
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CALCULATION
DATE:
|
December
[l],
2009 unless such date is not an Index Business Day, in which case
the
Calculation Date shall be the next Index Business Day. The Calculation
Date is subject to adjustment as described in the Pricing Supplement
under
“Description of the Notes - Market Disruption Events.”
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|
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MATURITY
DATE:
|
The
Notes are expected to mature on December [l],
2009 unless such date is not a Business Day, in which case the Maturity
Date shall be the next Business Day. 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.
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|
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CASH
SETTLEMENT VALUE:
|
On
the Maturity Date, you will receive the Cash Settlement Value, an
amount
in cash that depends upon the Index Return. The Cash Settlement Value,
per
Note, will be calculated as follows:
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|
|
(i)
|
If
the Index Return is greater than zero, the Cash Settlement Value
will be
equal to the $1,000.00 principal amount of the Note plus the product
of
(a) $1,000 multiplied by (b) the Upside Participation Rate (300.00%)
multiplied by (c) the Index Return; provided that in no event will
the
Cash Settlement Value payable at maturity exceed $[1,420-1,450] per
Note,
which represents a maximum return of [42-45]% on the
Notes.
|
|
|
(ii)
|
If
the Index Return is less than or equal to zero but greater than or
equal
to [-10.00]%, the Cash Settlement Value will be equal to the $1,000.00
principal amount of the Note.
|
|
|
(iii)
|
If
the Index Return is less than [-10.00]%, then the Cash Settlement
Value
for each Note will be equal to the $1,000 principal amount minus
1% of the
$1,000 principal amount for each percentage point that the Index
Return is
less than [-10.00]%. For example, if the Index Return is -30%, you
will
suffer a 20% loss and, therefore, the Cash Settlement Value of each
Note
will be equal to 80% of the principal amount.
|
|
|
INDEX
RETURN:
|
Equals
the quotient of (a) the Final Index Level minus the Initial Index
Level,
divided by (b) the Initial Index Level.
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|
|
UPSIDE
PARTICIPATION
RATE:
|
300.00%.
|
|
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INITIAL
INDEX LEVEL:
|
Equals
[l],
the closing level of the Index on December [l],
2007, as determined by the Calculation Agent.
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|
|
FINAL
INDEX LEVEL:
|
The
Final Index Level will be determined by the Calculation Agent and
will
equal the closing level of the Index on the Calculation Date as determined
by the Calculation Agent.
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|
BEAR,
STEARNS & CO.
INC.
-2-
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|
STRUCTURED
PRODUCTS GROUP
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EXCHANGE
LISTING:
|
The
Notes will not be listed on any securities exchange or quotation
system.
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|
INDEX
BUSINESS DAY:
|
Means
any day on which the Primary Exchange (as defined in the Pricing
Supplement) and each Related Exchange (as defined in the Pricing
Supplement) are scheduled to be open for trading.
|
|
BUSINESS
DAY:
|
Any
day other than a Saturday or Sunday, on which banking institutions
in the
cities of New York, New York and London, England are not authorized
or
obligated by law or executive order to be closed.
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|
CALCULATION
AGENT:
|
Bear,
Stearns & Co. Inc.
|
|
INDEX:
|
Philadelphia
Housing SectorSM
Index (ticker “HGX”), as published by The Philadelphia Stock Exchange,
Inc. (the “Sponsor”).
|
BEAR
STEARNS & CO.
INC.
-3-
|
|
STRUCTURED
PRODUCTS GROUP
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ADDITIONAL
TERMS SPECIFIC TO THE
NOTES
|
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 December 11,
2007 (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:
|
·
|
Pricing
Supplement dated December 11,
2007 (subject to completion):
|
|
·
|
Prospectus
Supplement dated August 16, 2006:
|
|
·
|
Prospectus
dated August 16, 2006:
|
|
ILLUSTRATIVE
HYPOTHETICAL CASH SETTLEMENT VALUE
TABLE
|
The
following tables and graphs are for illustrative purposes and are not indicative
of the future performance of the Index or the future value of the
Notes.
Because
the level of the Index may be subject to significant fluctuation over the term
of the Notes, it is not possible to present a chart or table illustrating the
complete range of all possible Cash Settlement Values. Therefore, the examples
do not purport to be representative of every possible scenario concerning
increases or decreases in the Index during the term of the Notes. You should
not
construe these examples or the data included in any table or graph below as
an
indication or assurance of the expected performance of the Notes. Numbers used
in these examples may be rounded for ease of use.
You
can
review the historical levels of the Index in the section of the Pricing
Supplement called “Description of the Index.” The historical performance of the
Index included in the Pricing Supplement should not be taken as an indication
of
the future performance of the Index during the term of the Notes. It is
impossible to predict whether the Final Index Level will be greater than or
less
than the Initial Index Level.
The
examples demonstrating the hypothetical Cash Settlement Value of a Note are
based on the following assumptions:
|
·
|
Investor
purchases $1,000.00 aggregate principal amount of Notes at the initial
public offering price of $1,000.00.
|
|
·
|
Investor
holds the Notes to maturity.
|
|
·
|
The
Initial Index Level is equal to
150.00.
|
|
·
|
The
maximum return on the Notes is 44.00%, or $1,440.00 per Note.
|
|
·
|
The
Upside Participation Rate is
300.00%.
|
|
·
|
All
returns are based on a 24-month term; pre-tax
basis.
|
|
·
|
No
Market Disruption Events occur during the term of the
Notes.
|
Example
1: The Index Return is positive and the Cash Settlement Value is capped at
$1,440.00.
In
this
example, the Index rises over the term of the Notes. On the Calculation Date,
the Final Index Level is 225.00, representing an Index Return of 50.00%, as
calculated below:
BEAR
STEARNS & CO.
INC.
-4-
|
|
STRUCTURED
PRODUCTS GROUP
|
|
|
|
Because
the Index Return is positive, the Cash Settlement Value will be equal to the
$1,000.00 principal amount of the Notes plus the product of (a) $1,000.00
multiplied by (b) the Upside Participation Rate multiplied by (c) the Index
Return; provided that in no event will the Cash Settlement Value payable at
maturity exceed $1,440.00 per Note. In this example, since the Index Return
is
greater than 14.66%, the Cash Settlement Value on the Maturity Date would be
capped at $1,440.00, which provides the maximum return on the Notes of 44.00%.
This example illustrates the fact that the return on your Notes will be limited
to the maximum return on the Notes of 44.00%.
Example
2: The Index Return is positive.
In
this
example, the Index rises over the term of the Notes. On the Calculation Date,
the Final Index Level is 171.00, representing an Index Return of 14.00%, as
calculated below.
Because
the Index Return is equal to 14.00%, the Cash Settlement Value would be
$1,420.00, as calculated below.
In
this
example, the level of the Index rises 14.00% over the term of the Notes. Your
return on investment, however, would benefit from the Upside Participation
Rate
and would be 42.00%.
Example
3: The Index Return is negative, but is greater than
-10.00%.
In
this
example, the Index declines over the term of the Notes. On the Calculation
Date,
the Final Index Level is 138.00, representing an Index Return of -8.00%, as
calculated below.
Since
the
Index Return is negative but is greater than -10.00%, the Cash Settlement Value
would equal the $1,000.00 principal amount of the Note.
In
this
example, the level of the Index decreases 8.00% over the term of the Notes,
and
your return on investment would be 0.00%.
Example
4: The Index Return is negative and is less than -10.00%.
In
this
example, the Index declines over the term of the Notes. On the Calculation
Date,
the Final Index Level is 97.50, representing an Index Return of -35.00%, as
calculated below:
BEAR
STEARNS & CO.
INC.
-5-
|
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STRUCTURED
PRODUCTS GROUP
|
|
|
|
In
this
example, where the Index Return is less than -10.00%, the Cash Settlement Value
would be $750.00 because the Cash Settlement Value for each Note is equal to
the
$1,000 principal amount minus 1% of the $1,000 principal amount for each
percentage point that the Index Return is less than -10.00%. In this example,
the Index Return is -35.00%. Therefore, you will suffer a 25% loss and receive
75% of the principal amount of your investment at maturity. This example
demonstrates that if the Index Return is less than -10.00%, you will lose some
of your initial investment in the Notes.
BEAR
STEARNS & CO.
INC.
-6-
|
|
STRUCTURED
PRODUCTS GROUP
|
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|
Summary
of Examples 1 Through 4
Reflecting
the Cash Settlement Value
|
Example
1
|
Example
2
|
Example
3
|
Example
4
|
|
|
Initial
Index Level
|
150.00
|
150.00
|
150.00
|
150.00
|
|
Hypothetical
Final Index Level
|
225.00
|
171.00
|
138.00
|
97.50
|
|
Value
of Final Index Level relative to the Initial Index Level
|
Higher
|
Higher
|
Lower
|
Lower
|
|
Principal
fully repaid?
|
Yes
|
Yes
|
Yes
|
No
|
|
Cash
Settlement Value per Note
|
$1,440.00
|
$1,420.00
|
$1,000.00
|
$750.00
|
Table
of Hypothetical Cash Settlement Values
|
Initial
Index
Level
|
Final
Index
Level
|
Index
Return
|
Cash
Settlement
Value
Per
Note
|
Return
if
Held
to
Maturity
|
Initial
Index
Level
|
Final
Index
Level
|
Index
Return
|
Cash
Settlement
Value
Per
Note
|
Return
if
Held
to
Maturity
|
|
|
150.00
|
255.00
|
+70.00%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
146.25
|
-2.50%
|
1000.00
|
0.00%
|
|
150.00
|
251.25
|
+67.50%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
142.50
|
-5.00%
|
1000.00
|
0.00%
|
|
150.00
|
247.50
|
+65.00%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
138.75
|
-7.50%
|
1000.00
|
0.00%
|
|
150.00
|
243.75
|
+62.50%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
135.00
|
-10.00%
|
1000.00
|
0.00%
|
|
150.00
|
240.00
|
+60.00%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
131.25
|
-12.50%
|
975.00
|
-2.50%
|
|
150.00
|
236.25
|
+57.50%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
127.50
|
-15.00%
|
950.00
|
-5.00%
|
|
150.00
|
232.50
|
+55.00%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
123.75
|
-17.50%
|
925.00
|
-7.50%
|
|
150.00
|
228.75
|
+52.50%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
120.00
|
-20.00%
|
900.00
|
-10.00%
|
|
150.00
|
225.00
|
+50.00%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
116.25
|
-22.50%
|
875.00
|
-12.50%
|
|
150.00
|
221.25
|
+47.50%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
112.50
|
-25.00%
|
850.00
|
-15.00%
|
|
150.00
|
217.50
|
+45.00%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
108.75
|
-27.50%
|
825.00
|
-17.50%
|
|
150.00
|
213.75
|
+42.50%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
105.00
|
-30.00%
|
800.00
|
-20.00%
|
|
150.00
|
210.00
|
+40.00%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
101.25
|
-32.50%
|
775.00
|
-22.50%
|
|
150.00
|
206.25
|
+37.50%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
97.50
|
-35.00%
|
750.00
|
-25.00%
|
|
150.00
|
202.50
|
+35.00%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
93.75
|
-37.50%
|
725.00
|
-27.50%
|
|
150.00
|
198.75
|
+32.50%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
90.00
|
-40.00%
|
700.00
|
-30.00%
|
|
150.00
|
195.00
|
+30.00%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
86.25
|
-42.50%
|
675.00
|
-32.50%
|
|
150.00
|
191.25
|
+27.50%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
82.50
|
-45.00%
|
650.00
|
-35.00%
|
|
150.00
|
187.50
|
+25.00%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
78.75
|
-47.50%
|
625.00
|
-37.50%
|
|
150.00
|
183.75
|
+22.50%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
75.00
|
-50.00%
|
600.00
|
-40.00%
|
|
150.00
|
180.00
|
+20.00%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
71.25
|
-52.50%
|
575.00
|
-42.50%
|
|
150.00
|
176.25
|
+17.50%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
67.50
|
-55.00%
|
550.00
|
-45.00%
|
|
150.00
|
172.50
|
+15.00%
|
$ 1,440.00
|
44.00%
|
|
150.00
|
63.75
|
-57.50%
|
525.00
|
-47.50%
|
|
150.00
|
168.75
|
+12.50%
|
$ 1,375.00
|
37.50%
|
|
150.00
|
60.00
|
-60.00%
|
500.00
|
-50.00%
|
|
150.00
|
165.00
|
+10.00%
|
$ 1,300.00
|
30.00%
|
|
150.00
|
56.25
|
-62.50%
|
475.00
|
-52.50%
|
|
150.00
|
161.25
|
+7.50%
|
$ 1,225.00
|
22.50%
|
|
150.00
|
52.50
|
-65.00%
|
450.00
|
-55.00%
|
|
150.00
|
157.50
|
+5.00%
|
$ 1,150.00
|
15.00%
|
|
150.00
|
48.75
|
-67.50%
|
425.00
|
-57.50%
|
|
150.00
|
153.75
|
+2.50%
|
$ 1,075.00
|
7.50%
|
|
150.00
|
45.00
|
-70.00%
|
400.00
|
-60.00%
|
|
150.00
|
150.00
|
0.00%
|
$ 1,000.00
|
0.00%
|
|
150.00
|
41.25
|
-72.50%
|
375.00
|
-62.50%
|
BEAR
STEARNS & CO.
INC.
-7-
|
|
STRUCTURED
PRODUCTS GROUP
|
|
|
|
BEAR
STEARNS & CO.
INC.
-8-
|
|
STRUCTURED
PRODUCTS GROUP
|
|
|
|
|
SELECTED
RISK CONSIDERATIONS
|
|
·
|
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.
|
|
·
|
Possible
loss of principal -
The Notes are not principal protected. If, on the Maturity Date,
the Index
Return is less than [-10.00]%, there will be no principal protection
on
the Notes and the Cash Settlement Value you will receive will be
less than
the initial offering price in proportion to the percentage decline
in the
Index. In that case, you will receive less, and possibly significantly
less, than your initial investment in the Notes.
|
|
·
|
Maximum
return of [42-45]% -
You
will not receive more than the maximum return of [42-45]% at maturity,
regardless of the positive percentage increase of the Final Index
Level
over the Initial Index Level. Because the maximum return on the Notes
is
[42-45]%, the maximum Cash Settlement Value is
$[1,420-1,450].
|
|
·
|
No
interest, dividend or other payments -
You
will not receive any interest, dividend payments or other distributions
on
the stocks underlying the Index, nor will such payments be included
in the
calculation of the Cash Settlement Value you will receive at
maturity.
|
|
·
|
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.
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Concentration
—
Because the Index is comprised exclusively of companies whose primary
lines of business are directly associated with the United States
housing
construction market, the stocks underlying the Index are concentrated
in a
single industry.
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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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Taxes
- The
U.S. federal income tax consequences of an investment in the Notes
are
complex and uncertain. We intend to treat the Notes for all tax purposes
as pre-paid cash-settled executory contracts linked to the level
of the
Index and, where required, to file information returns with the Internal
Revenue Service in accordance with such treatment. Prospective investors
are urged to consult their tax advisors regarding the U.S. federal
income
tax consequences of an investment in the Notes. Assuming the Notes
are
treated as pre-paid cash-settled executory contracts, you should
be
required to recognize capital gain or loss to the extent that the
cash you
receive on the Maturity Date or upon a sale or exchange of the Notes
prior
to the Maturity Date differs from your tax basis on the Notes (which
will
generally be the amount you paid for 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-