Free
Writing Prospectus
Filed
Pursuant to Rule 433
Registration
No. 333−136666
February 4,
2008
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New
Issue
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Indicative
Terms
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THE
BEAR STEARNS COMPANIES INC.
Medium-Term
Notes
Linked
to a Portfolio of Indices
Due:
August [l],
2013
INVESTMENT
HIGHLIGHTS
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5.5
year term to maturity.
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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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The
Notes are linked to the potential positive performance of an
equally-weighted portfolio comprised of the following three equity
indices: (1) the S&P 500®
Index (the “SPX”); (2) the Dow Jones EURO STOXX 50®
Index (the “SX5E”); and (3) the Nikkei 225™ Stock Index (the “NKY”) (each
such index a “Component” and together the “Portfolio”). The weighting of
each Component within the Portfolio is fixed at 1/3 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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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 three Index Performances, where “Index Performance” means, as of the
Calculation Date and with respect to a Component, the quotient,
expressed
as a percentage, of (i) the Final Component Level for that Component
minus
its Initial Component Level divided by (ii) its Initial Component
Level.
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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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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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The
Participation Rate is
[100.00]%.
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BEAR, STEARNS & CO. INC.
(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 three
equity indices:
(1) the S&P 500® Index (the “SPX”); (2) the Dow Jones EURO STOXX
50® Index (the “SX5E”); and (3) the Nikkei 225™ Stock Index (the
“NKY”) (each such index a “Component” and together the “Portfolio”). The
weighting of each Component within the Portfolio is fixed at
1/3 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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0739282D4
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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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February
[l],
2008
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SETTLEMENT
DATE:
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February
[l],
2008
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MATURITY
DATE:
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August
[l],
2013 (for a term of approximately 66 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 three
equity indices: (1) the SPX; (2) the SX5E; and (3)
the NKY (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;
and Nihon
Keizai Shimbun, Inc. as the sponsor of the NKY 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 Calculation Date and with respect to a Component,
the quotient,
expressed as a percentage, of (i) the Final Component
Level for that
Component minus its Initial Component Level divided
by (ii) its Initial
Component Level.
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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; and (iii) [l]
with respect to the NKY, each as determined by the
Calculation Agent as of
the Pricing Date.
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FINAL
COMPONENT LEVEL:
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Means,
as of the Calculation Date and for each Component,
the closing index level
as reported by the relevant Component Sponsor and displayed
on Bloomberg
Page SPX <Index> <Go> with respect to the SPX, Bloomberg Page
SX5E <Index> <Go> with respect to the SX5E; and Bloomberg Page
NKY <Index> <Go> with respect to the
NKY.
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BEAR,
STEARNS & CO. INC.
2
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STRUCTURED
PRODUCTS
GROUP
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CALCULATION
DATE:
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August
[l],
2013; the Calculation Date is subject to adjustment
as described in the
Pricing Supplement.
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ISSUE
DATE:
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February
[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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February
[l],
2008
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BEAR,
STEARNS & CO. INC.
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 February 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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Pricing
Supplement dated February 4, 2008 (subject
to completion):
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Prospectus
Supplement, dated August 16, 2006:
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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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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
13,750.
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The
Participation Rate is 100.00%.
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All
returns are based on a 66-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.
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 Index Performance of each Component
is positive.
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SPX
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SX5E
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NKY
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Initial
Component Level
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1,400
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3,900
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13,750
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Final
Component Level
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1,950
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6,400
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22,500
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Index
Performance
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39.29%
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64.10%
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63.64%
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On
the
Calculation Date, the Index Performance for
the SPX would be 39.29%, the Index
Performance for the SX5E would be 64.10%,
and the Index Performance for the NKY
would be 63.64%, 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 $1,556,77.
Cash
Settlement Value
Example
2: The Portfolio Return might be less than
zero.
In
this
example, the Index Performance of each Component
is negative.
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SPX
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SX5E
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NKY
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Initial
Component Level
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1,400
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3,900
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13,750
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Final
Component Level
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1,000
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3,000
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9,000
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Index
Performance
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-28.57%
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-23.08%
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-34.55%
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On
the
Calculation Date, the Index Performance for
the SPX would be -28.57%, the Index
Performance for the SX5E would be -23.08%,
and the Index Performance for the NKY
would be -34.55%, each as calculated pursuant
to the below formula:
BEAR,
STEARNS & CO. INC.
5
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STRUCTURED
PRODUCTS GROUP
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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, two Components have a positive Index
Performance, while the other
Component has a negative Index Performance.
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SPX
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SX5E
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NKY
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Initial
Component Level
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1,400
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3,900
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13,750
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Final
Component Level
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1,950
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4,650
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10,000
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Index
Performance
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39.29%
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19.23%
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-27.27%
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On
the
Calculation Date, the Index Performance for
the SPX would be 39.29%, the Index
Performance for the SX5E would be 19.23%,
and the Index Performance for the NKY
would be -27.27%, 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 $1,104.16.
Cash
Settlement Value
BEAR,
STEARNS & CO. INC.
6
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STRUCTURED
PRODUCTS GROUP
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Summary
of Illustrative Examples
1-3 Reflecting the
Relevant Cash Settlement
Value
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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
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1,400
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1,400
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Hypothetical
Final Component Level for SPX
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1,950
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1,000
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1,950
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Hypothetical
Initial Component Level for SX5E
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3,900
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3,900
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3,900
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Hypothetical
Final Component Level for SX5E
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6,400
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3,000
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4,650
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Hypothetical
Initial Component Level for NKY
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13,750
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13,750
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13,750
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Hypothetical
Final Component Level for NKY
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22,500
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9,000
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10,000
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Portfolio
Return
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Positive
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Negative
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Positive
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Principal
protected?
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Yes
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Yes
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Yes
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Cash
Settlement Value per Note
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$1,556.77
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$1,000.00
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$1,104.16
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BEAR,
STEARNS & CO. INC.
7
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STRUCTURED
PRODUCTS GROUP
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SELECTED
RISK
CONSIDERATIONS
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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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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.
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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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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.
8