Filed Pursuant to Rule 433
Registration No. 333-121744
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BEAR STRUCTURED EQUITY PRODUCTS
STEARNS -----------------------------------------------------------------
Indicative Terms
New Issue January 20, 2006
--------- ----------------
The Bear Stearns Companies Inc.
Note linked to a Basket of Commodities
Due July [29], 2011
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Investment Highlights
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o 5.5 year term to maturity
o Principal protected if held to maturity
o Issue is a direct obligation of The Bear Stearns Companies Inc. (Rated A1
by Moody's / A by S&P)
o Issue Price: 100.00% of the Principal Amount ($1,000)
o Linked to Crude Oil, Natural Gas, Aluminum, Copper and Gold
o Depending upon the value of the Basket, potential [2.50% - 3.50%]
semi-annual Coupons, [5.00% - 7.00%] annualized
o 100% participation in the percentage gain, if any, in the value of the
Basket
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.
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[GRAPHIC OMITTED]
BEAR, STEARNS & CO. INC.
STRUCTURED EQUITY PRODUCTS
(212) 272-6928
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TERMS OF OFFERING
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Issuer: The Bear Stearns Companies Inc. ("BSC")
Issuer's Rating: A1 / A (Moody's / S&P)
CUSIP Number: 073928 N 41
Issue Price: 100.00% of principal (the "Principal Amount").
Agent's Discount [ ]%
Denominations: $1,000 per Note.
Selling Period Ends: January [25], 2006
Settlement Date: January [31], 2006
Calculation Date: July [25], 2011
Maturity Date: July [29], 2011 (for a term of approximately
5.5-years).
Interest Amount: If, on any Semi-Annual Interest Observation Date, the
Basket Level is greater than the Initial Basket Level,
the interest payment for that period will be [2.50% -
3.50%]. If the Basket Level is below the Initial
Basket Level, no interest will be paid for that
period.
Cash Settlement Value: Principal Amount + (100% x Basket Performance)
Basket Performance: The greater of zero and the formula below:
- -
| (Basket Level on Calculation Date - Initial Basket Level) |
100% x | --------------------------------------------------------- |
| Initial Basket Level |
- -
Initial Basket Level: 100
Basket Level: 100 x the sum of [Component Weight x Commodity Level]
Component Weight: 20% for each Component
Commodity Level: - -
| Individual Component Level |
| ------------------------------------ |
| Initial Individual Component Level |
- -
Individual Components: Crude Oil, WTI: CL1 (Comdty) on Bloomberg
Natural Gas: NG1 (Comdty) on Bloomberg
Aluminum: LOAHDY (Comdty) on Bloomberg
Copper: LOCADY (Comdty) on Bloomberg
Gold: GOLDLNPM (Comdty) on Bloomberg
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- 2 -
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ADDITIONAL TERMS SPECIFIC TO THE NOTES
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You should read this document together with the Prospectus, as supplemented by
the Prospectus Supplement, each dated February 2, 2005, and the more detailed
information contained in the Pricing Supplement, dated January 11, 2006. Please
note that the table and graph on pages 7-8 below supersede and restate the table
and graph on pages PS-28 and PS-29 in the Pricing Supplement dated January 11,
2006. 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. The Pricing Supplement, dated January 11, 2006, and the accompanying
Prospectus and Prospectus Supplement, each dated February 2, 2005 may be
accessed on the SEC Web site at www.sec.gov as follows:
o http://www.sec.gov/Archives/edgar/data/777001/
000104746906000332/a2166514z424b5.htm
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ILLUSTRATIVE EXAMPLES
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Illustrative Examples:
The following are illustrative examples demonstrating the hypothetical Cash
Settlement Value of a Note based on the five assumptions listed below. Actual
returns may be different.
Assumptions:
o Investor purchases $1,000 principal amount of Notes at the initial
offering price of $1,000.
o Investor does not sell the Notes and holds the Notes to maturity.
o All returns are based on a 5.5-year term; pre-tax basis.
o No Market Disruption Events or Events of Default occur during the term of
the Notes.
o Contingent interest rate is [3.00]% per semi-annual period.
Example 1: The five Components underlying the Basket each increase significantly
during the term of the Notes.
Semi-Annual
Interest Basket Performance
Observation at the end of each Coupon, if any,
Date for Period per Note
-----------------------------------------------------------
July 2006 15.00% $30
January 2007 17.50% $30
June 2007 18.50% $30
January 2008 24.70% $30
July 2008 36.50% $30
January 2009 47.00% $30
July 2009 49.00% $30
January 2010 55.00% $30
July 2010 62.00% $30
January 2011 67.00% $30
July 2011 69.00% $30
-----------------------------------------------------------
Basket Performance 69.00% $330
For each of the 11 periods, the Basket Level was greater than or equal to
Initial Basket Level. In this example, you would have received $330 in interest
payments over the term of the Notes. Additionally, because the Basket
Performance is greater than or equal to zero, the Cash Settlement Value will
equal:
- 3 -
= Principal Amount of Notes + (Principal Amount of Notes x Basket Performance)
= $1,000 + ($1,000 x 69%)
= $1,000 + $690
= $1,690
The total return on the Notes equals the Cash Settlement Value of $1,690 plus
interest payments of $330 or $2,020.
Example 2: The five Components underlying the Basket each remain relatively the
same during the term of the Notes.
Semi-Annual Basket Performance Coupon, if
Interest at the end of each any,
Observation Date Period per Note
----------------------------------------------------------
July 2006 0.01% $30
January 2007 0.01% $30
June 2007 0.01% $30
January 2008 0.01% $30
July 2008 0.01% $30
January 2009 0.01% $30
July 2009 0.01% $30
January 2010 0.01% $30
July 2010 0.01% $30
January 2011 0.01% $30
July 2011 0.01% $30
----------------------------------------------------------
Basket Performance 0.01% $330
For each of the 11 periods, the Basket Level was greater than or equal to
Initial Basket Level. In this example, you would have received $330 in interest
payments over the term of the Notes. Additionally, because the Basket
Performance is greater than or equal to zero, the Cash Settlement Value will
equal:
= Principal Amount of Notes + (Principal Amount of Notes x Basket Performance)
= $1,000 + ($1,000 x .01%)
= $1,000 + $0.10
= $1,000.10
The total return on the Notes equals the Cash Settlement Value of $1,000.10 plus
interest payments of $330 or $1,330.10.
Example 3: The five Components underlying the Basket each trade in a volatile
and choppy manner and then decrease substantially during the last two years of
the term of the Notes.
Semi-Annual
Interest Basket Performance Coupon, if
Observation at the end of each any,
Date for Period per Note
----------------------------------------------------------
July 2006 36.00% $30
January 2007 45.00% $30
June 2007 16.00% $30
January 2008 25.00% $30
July 2008 5.00% $30
January 2009 3.00% $30
July 2009 -10.00% $0
- 4 -
January 2010 -12.00% $0
July 2010 -22.00% $0
January 2011 -40.00% $0
July 2011 -25.00% $0
----------------------------------------------------------
Basket Performance -25.00% $180
For the first six periods, the Basket Level was greater than or equal to Initial
Basket Level. In this example, you would have received $180 in interest payments
over the term of the Notes. However, because the Basket Performance is less than
zero, the Cash Settlement Value will equal $1,000. The total return on the Notes
equals the Cash Settlement Value of $1,000 plus interest payments of $180 or
$1,180.
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HISTORICAL ANALYSIS
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Below is a table illustrating, hypothetically, how the Note would have performed
over the most recent 5.5-year period ending December 30, 2005. The table assumes
a periodic contingent Coupon rate of 3.00% for each semi-annual period. The Note
would have matured at 204.25%, or $2,042.50 per Note in addition to a total of
21% in aggregate coupon payments during the term of the Note. The total return
was 125.25% or a CAGR of 15.91%. Please be aware that past performance is no
indication of future performance.
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Basket
Observation Date Crude Oil Gold Natural Gas Aluminum Copper Basket Level Performance Coupon Paid
------------------ ---------- --------- ------------- ------------- ------------- ------------------- --------------- -------------
6/30/2000 32.50 288.15 4.476 1,564.0 1,773.5 100.00
--------------- -------------
12/29/2000 26.80 274.45 9.775 1,560.0 1,808.5 119.56 19.56% 3.00%
6/29/2001 26.25 270.60 3.096 1,437.0 1,550.5 84.63 -15.37% 0.00%
12/31/2001 19.84 276.50 2.570 1,335.0 1,462.0 76.44 -23.56% 0.00%
6/28/2002 26.86 318.50 3.245 1,364.5 1,654.0 89.24 -10.76% 0.00%
12/31/2002 31.20 347.20 4.789 1,344.5 1,536.0 99.21 -0.79% 0.00%
6/30/2003 30.19 346.00 5.411 1,389.0 1,644.0 103.07 3.07% 3.00%
12/31/2003 32.52 416.25 6.189 1,592.5 2,321.0 123.10 23.10% 3.00%
6/30/2004 37.05 395.80 6.155 1,698.5 2,664.5 129.54 29.54% 3.00%
12/31/2004 43.45 435.60 6.149 1,964.0 3,279.5 146.55 46.55% 3.00%
6/30/2005 56.50 437.10 6.981 1,716.0 3,597.0 158.81 58.81% 3.00%
12/30/2005 61.04 513.00 11.225 2,285.0 4,584.5 204.25 104.25% 3.00%
------------------ ---------- --------- ------------- ------------- --------------------------------- --------------- -------------
Value of Note at Maturity: 204.25%
--------------------------------- --------------- -------------
Total of Coupons Paid: 21.00%
--------------------------------- -----------------------------
Total Return of Note: 125.25%
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- 5 -
The table below depicts historical returns on the Basket that were less robust.
For the 5.5 year period ending May 31, 2002, the Note would have matured at
100.00%, or $1,000 per Note in addition to one coupon payment of 3% during the
term of the Note. The total return was 103.00% or a CAGR of 0.54%. Please be
aware that past performance is no indication of future performance.
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Basket
Observation Date Crude Oil Gold Natural Gas Aluminum Copper Basket Level Performance Coupon Paid
------------------- ---------- ---------- ------------- ------------- ------------ ------------------- --------------- ------------
11/29/1996 23.75 371.30 3.497 1,514.5 2,497.0 100.00
--------------- ------------
5/30/1997 20.88 345.60 2.239 1,603.0 2,605.0 91.04 -8.96% 0.00%
11/28/1997 19.15 296.80 2.578 1,583.5 1,861.0 82.67 -17.33% 0.00%
5/29/1998 15.20 293.60 2.170 1,342.0 1,685.0 72.24 -27.76% 0.00%
11/30/1998 11.22 294.70 1.976 1,298.5 1,557.5 66.25 -33.75% 0.00%
5/31/1999 16.84 268.60 2.358 1,239.0 1,357.0 69.37 -30.63% 0.00%
11/30/1999 24.59 291.35 2.304 1,515.5 1,744.5 83.56 -16.44% 0.00%
5/31/2000 29.01 272.25 4.356 1,440.0 1,735.5 96.92 -3.08% 0.00%
11/30/2000 33.82 269.10 6.589 1,498.0 1,814.5 114.97 14.97% 3.00%
5/31/2001 28.37 267.50 3.914 1,499.5 1,666.0 93.83 -6.17% 0.00%
11/30/2001 19.44 275.50 2.701 1,430.0 1,532.0 77.81 -22.19% 0.00%
5/31/2002 25.31 326.60 3.217 1,371.5 1,629.0 88.46 -11.54% 0.00%
----------------- ------------ ---------- ------------- ------------- -------------------------------- --------------- ------------
Value of Note at Maturity: 100.00%
-------------------------------- --------------- ------------
Total of Coupons Paid: 3.00%
-------------------------------- ----------------------------
Total Return of Note: 3.00%
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The Chart below tracks the performance of each Component in the Basket and the
Basket itself since January 31, 1995 through December 30, 2005.
[The following data is represented by a single graph
containing 6 line charts in the printed material.]
Date Crude Oil Gold Natural Gas Aluminum Copper Basket
-------------------------------------------------------------------------------
1/31/1995 100.000 100.000 100.000 100.000 100.000 100.000
2/28/1995 100.544 100.400 109.527 84.579 95.447 98.099
3/31/1995 104.241 104.561 124.446 88.553 99.600 104.280
4/28/1995 110.821 103.961 122.747 87.890 94.430 103.970
5/31/1995 102.719 102.507 126.883 85.525 95.097 102.546
6/30/1995 94.617 103.241 112.999 85.241 103.169 99.853
7/31/1995 95.487 102.254 119.202 88.505 100.233 101.136
8/31/1995 97.009 101.987 129.099 85.123 98.399 102.323
9/29/1995 95.378 102.427 129.247 83.113 98.199 101.673
10/31/1995 95.922 102.067 137.814 77.767 94.463 101.607
11/30/1995 98.858 103.441 149.040 77.980 97.398 105.343
12/29/1995 106.308 103.228 193.427 79.234 93.296 115.098
1/31/1996 96.465 108.176 196.307 73.936 85.757 112.128
2/29/1996 106.253 106.868 165.140 74.314 84.456 107.407
3/29/1996 116.748 105.722 172.526 77.342 84.973 111.462
4/30/1996 115.280 104.374 164.254 75.922 90.260 110.018
5/31/1996 107.450 104.174 177.696 73.723 84.857 109.580
6/28/1996 113.757 101.894 214.993 69.584 65.377 113.121
7/31/1996 111.039 102.774 159.749 70.766 68.012 102.468
8/30/1996 120.990 103.081 137.297 69.253 67.712 99.666
9/30/1996 132.572 101.094 163.516 64.096 64.643 105.184
10/31/1996 126.971 101.227 201.477 66.982 66.995 112.730
11/29/1996 129.146 99.040 258.272 71.641 83.289 128.278
12/31/1996 140.946 98.493 203.619 71.689 73.966 117.743
1/31/1997 131.321 92.158 176.145 75.284 79.520 110.886
2/28/1997 110.386 95.652 134.490 76.845 80.854 99.645
3/31/1997 110.984 92.865 142.245 75.993 80.454 100.508
4/30/1997 109.897 90.731 161.300 76.183 80.520 103.726
5/30/1997 113.540 92.185 165.362 75.828 86.891 106.761
6/30/1997 107.667 89.237 157.976 73.841 86.241 102.993
7/31/1997 109.516 87.050 160.783 79.494 77.718 102.912
8/29/1997 106.634 86.783 200.443 76.112 71.714 108.337
9/30/1997 115.171 88.584 227.622 77.247 71.648 116.054
10/31/1997 114.628 83.062 262.334 75.875 66.644 120.509
11/28/1997 104.133 79.168 190.399 74.905 62.075 102.136
12/31/1997 95.922 77.407 167.208 72.635 57.505 94.135
1/30/1998 93.583 81.315 166.691 71.665 58.039 94.259
2/27/1998 83.959 79.328 171.418 68.212 56.037 91.791
3/31/1998 84.883 80.288 186.263 67.313 58.205 95.391
4/30/1998 83.687 82.875 164.032 67.502 61.791 91.978
5/29/1998 82.654 78.314 160.266 63.482 56.204 88.184
6/30/1998 77.107 79.034 182.349 60.785 54.003 90.656
7/31/1998 77.270 77.047 136.189 63.221 56.604 82.066
8/31/1998 72.539 72.926 129.394 63.198 55.270 78.666
9/30/1998 87.765 78.381 179.690 62.252 54.520 92.521
10/30/1998 78.412 77.967 168.021 61.235 52.168 87.561
11/30/1998 61.011 78.608 145.938 61.424 51.951 79.786
12/31/1998 65.525 76.767 143.648 58.562 48.566 78.614
1/29/1999 69.331 76.127 131.241 56.481 46.664 75.969
2/26/1999 66.721 76.567 120.236 55.724 46.047 73.059
3/31/1999 91.136 74.540 148.671 57.261 45.747 83.471
4/30/1999 101.468 76.447 166.396 63.813 52.302 92.085
5/31/1999 91.572 71.646 174.151 58.609 45.264 88.248
6/30/1999 104.894 69.619 176.809 64.688 51.234 93.449
7/30/1999 111.637 68.178 187.814 65.397 53.336 97.272
8/31/1999 120.228 67.965 208.641 68.709 55.103 104.129
9/30/1999 133.279 79.755 202.659 70.009 58.639 108.868
10/29/1999 118.271 79.781 218.685 69.749 58.439 108.985
11/30/1999 133.714 77.714 170.162 71.689 58.189 102.294
12/31/1999 139.206 77.421 172.009 77.129 61.574 105.468
1/31/2000 150.299 75.567 196.603 81.126 60.440 112.807
2/29/2000 165.470 78.328 203.914 75.520 57.572 116.161
3/31/2000 146.275 73.820 217.504 72.044 57.655 113.459
4/28/2000 139.967 73.366 231.979 68.827 57.205 114.269
5/31/2000 157.749 72.619 321.713 68.117 57.889 135.617
6/30/2000 176.726 76.860 330.576 73.983 59.156 143.460
7/31/2000 149.157 73.820 278.730 72.990 61.691 127.277
8/31/2000 180.098 73.886 353.176 74.645 63.376 149.036
9/29/2000 167.700 72.993 383.013 74.693 65.977 152.875
10/31/2000 177.814 70.552 331.610 69.489 61.341 142.161
11/30/2000 183.904 71.779 486.632 70.861 60.524 174.740
12/29/2000 145.731 73.206 721.935 73.794 60.324 214.998
1/31/2001 155.846 70.552 421.492 82.167 60.223 158.056
2/28/2001 148.940 71.139 386.706 73.463 57.972 147.644
3/30/2001 142.958 68.738 371.123 69.489 55.570 141.576
4/30/2001 154.758 70.192 346.750 72.777 55.370 139.969
5/31/2001 154.269 71.352 289.069 70.932 55.570 128.239
6/29/2001 142.741 72.179 228.656 67.975 51.718 112.654
7/31/2001 143.284 70.926 243.427 65.184 48.999 114.364
8/31/2001 147.906 72.819 175.775 65.137 49.199 102.168
9/28/2001 127.406 78.181 165.731 62.417 47.498 96.247
10/31/2001 115.171 74.353 243.058 59.934 45.380 107.579
11/30/2001 105.710 73.486 199.483 67.644 51.101 99.485
12/31/2001 107.885 73.753 189.808 63.150 48.766 96.672
1/31/2002 105.927 75.300 157.903 64.096 50.534 90.752
2/28/2002 118.216 79.181 174.077 65.894 51.334 97.741
3/29/2002 143.067 80.395 242.467 65.563 54.136 117.125
4/30/2002 148.396 82.209 280.281 65.066 53.319 125.854
5/31/2002 137.629 87.117 237.592 64.877 54.336 116.310
6/28/2002 146.058 84.956 239.660 64.546 55.170 118.078
7/31/2002 146.928 81.262 218.168 61.968 50.384 111.742
8/30/2002 157.586 83.436 243.427 61.187 50.033 119.134
9/30/2002 165.579 86.343 305.613 60.572 47.849 133.191
10/31/2002 148.015 84.529 306.942 63.269 51.234 130.798
11/29/2002 146.221 85.103 310.192 65.184 54.236 132.187
12/31/2002 169.657 92.611 353.693 63.600 51.234 146.159
1/31/2003 182.219 98.026 413.959 67.502 57.155 163.772
2/28/2003 199.021 92.678 598.301 69.016 57.238 203.251
3/31/2003 168.787 89.317 373.708 63.860 52.952 149.725
4/30/2003 140.294 89.824 397.710 64.167 53.502 149.100
5/30/2003 160.740 96.399 461.669 67.408 56.137 168.471
6/30/2003 164.165 92.291 399.631 65.705 54.837 155.326
7/31/2003 166.069 94.625 348.449 69.536 59.006 147.537
8/29/2003 171.669 100.187 349.409 67.739 58.239 149.449
9/30/2003 158.782 103.494 356.721 66.580 59.840 149.083
10/31/2003 158.293 103.027 361.374 71.902 68.612 152.642
11/28/2003 165.362 106.255 363.737 72.517 69.163 155.407
12/31/2003 176.835 111.030 457.090 75.331 77.418 179.541
1/30/2004 179.717 106.628 398.597 77.271 83.022 169.047
2/27/2004 196.629 105.588 400.000 80.511 99.633 176.472
3/31/2004 194.454 113.017 438.183 79.872 102.318 185.569
4/30/2004 203.263 103.628 432.939 78.217 91.795 181.968
5/31/2004 216.857 104.895 475.775 78.548 94.413 194.098
6/30/2004 201.468 105.575 454.579 80.345 88.876 186.169
7/30/2004 238.173 104.401 451.403 79.801 96.731 194.102
8/31/2004 229.038 108.629 374.742 79.872 94.963 177.449
9/30/2004 269.929 110.870 501.846 86.235 104.736 214.723
10/29/2004 281.457 113.510 644.387 87.039 98.432 244.965
11/30/2004 267.156 120.939 562.777 87.677 108.806 229.471
12/31/2004 236.270 116.191 454.136 92.904 109.390 201.778
1/31/2005 262.099 112.603 466.839 88.269 109.256 207.813
2/28/2005 281.403 116.151 497.046 91.509 113.576 219.937
3/31/2005 301.251 114.030 565.214 93.330 113.676 237.500
4/29/2005 270.364 116.218 486.337 85.454 111.691 214.013
5/31/2005 282.599 110.549 471.123 81.197 107.205 210.535
6/30/2005 307.232 116.591 515.583 81.173 119.980 228.112
7/29/2005 329.364 114.431 582.349 87.110 125.917 247.834
8/31/2005 374.878 115.564 847.267 87.938 130.587 311.247
9/30/2005 360.196 126.234 1,028.139 87.843 131.721 346.826
10/31/2005 324.959 125.567 901.403 94.229 136.458 316.523
11/30/2005 311.691 132.209 929.616 102.152 146.915 324.517
12/30/2005 331.920 136.836 829.025 108.089 152.919 311.758
- 6 -
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HYPOTHETICAL DATA ON THE BASKET PERFORMANCE
--------------------------------------------------------------------------------
Note: The following table and graph supersede and restate the table and graph on
pages PS-28 and PS-29 in the Pricing Supplement dated January 11, 2006.
Hypothetical Cash Settlement Value Plus Interest Payments Using Historical Data
of the Components Underlying the Basket Assuming a 5.5-Year Holding Period
Hypothetical Hypothetical
Cash Cash
Settlement Settlement
Total Value Per Total Value Per
5.5-Year Coupons Note Plus 5.5-Year Coupons Note Plus
Period During Interest Period During Interest
Ending Basket 5.5-Year Payments, Ending Basket 5.5-Year Payments,
Date Performance Period if any Date Performance Period if any
-------------- ----------- -------- ------------ -------------- ----------- -------- ------------
July-2000 27.28% 21.00% $1,482.80 April-2003 9.40% 15.00% $1,244.00
August-2000 45.96% 24.00% $1,699.60 May-2003 39.81% 21.00% $1,608.10
September-2000 37.81% 15.00% $1,528.10 June-2003 43.04% 21.00% $1,640.40
October-2000 28.50% 18.00% $1,465.00 July-2003 40.31% 21.00% $1,613.10
November-2000 55.82% 18.00% $1,738.20 August-2003 47.57% 27.00% $1,745.70
December-2000 101.77% 21.00% $2,227.70 September-2003 41.84% 27.00% $1,688.40
January-2001 47.74% 18.00% $1,657.40 October-2003 50.27% 27.00% $1,772.70
February-2001 33.61% 15.00% $1,486.10 November-2003 60.00% 27.00% $1,870.00
March-2001 28.87% 21.00% $1,498.70 December-2003 77.56% 30.00% $2,075.60
April-2001 26.78% 24.00% $1,507.80 January-2004 86.51% 30.00% $2,165.10
May-2001 13.40% 18.00% $1,314.00 February-2004 106.53% 30.00% $2,365.30
June-2001 0.00% 9.00% $1,090.00 March-2004 85.12% 30.00% $2,151.20
July-2001 0.00% 12.00% $1,120.00 April-2004 90.70% 33.00% $2,237.00
August-2001 0.00% 9.00% $1,090.00 May-2004 124.90% 33.00% $2,579.00
September-2001 0.00% 6.00% $1,060.00 June-2004 116.33% 33.00% $2,493.30
October-2001 0.00% 9.00% $1,090.00 July-2004 134.64% 33.00% $2,676.40
November-2001 0.00% 12.00% $1,120.00 August-2004 129.28% 33.00% $2,622.80
December-2001 0.00% 9.00% $1,090.00 September-2004 132.40% 33.00% $2,654.00
January-2002 0.00% 18.00% $1,180.00 October-2004 127.55% 33.00% $2,605.50
February-2002 0.00% 15.00% $1,150.00 November-2004 134.74% 33.00% $2,677.40
March-2002 4.35% 21.00% $1,253.50 December-2004 101.22% 33.00% $2,342.20
April-2002 2.79% 12.00% $1,147.90 January-2005 97.66% 30.00% $2,276.60
May-2002 0.00% 3.00% $1,030.00 February-2005 96.50% 27.00% $2,235.00
June-2002 0.00% 6.00% $1,060.00 March-2005 95.01% 30.00% $2,250.10
July-2002 0.00% 6.00% $1,060.00 April-2005 82.06% 30.00% $2,120.60
August-2002 10.50% 15.00% $1,255.00 May-2005 85.59% 30.00% $2,155.90
September-2002 19.24% 21.00% $1,402.40 June-2005 94.23% 30.00% $2,242.30
October-2002 12.96% 18.00% $1,309.60 July-2005 96.50% 24.00% $2,205.00
November-2002 11.41% 15.00% $1,264.10 August-2005 126.57% 24.00% $2,505.70
December-2002 26.16% 18.00% $1,441.60 September-2005 148.07% 30.00% $2,780.70
January-2003 38.98% 18.00% $1,569.80 October-2005 133.47% 30.00% $2,634.70
February-2003 52.48% 15.00% $1,674.80 November-2005 114.47% 21.00% $2,354.70
March-2003 13.63% 12.00% $1,256.30 December-2005 104.25% 21.00% $2,252.50
The Chart below sets forth the information provided in the table above and
represents the ending date for the preceding 5.5-year period.
[The following data is represented by a single line chart in the printed
material.]
Hypothetical Cash
Date Settlement Value
--------------------------------------
July-2000 $ 1,482.80
August-2000 $ 1,699.60
September-2000 $ 1,528.10
October-2000 $ 1,465.00
November-2000 $ 1,738.20
December-2000 $ 2,227.70
January-2001 $ 1,657.40
February-2001 $ 1,486.10
March-2001 $ 1,498.70
April-2001 $ 1,507.80
May-2001 $ 1,314.00
June-2001 $ 1,090.00
July-2001 $ 1,120.00
August-2001 $ 1,090.00
September-2001 $ 1,060.00
October-2001 $ 1,090.00
November-2001 $ 1,120.00
December-2001 $ 1,090.00
January-2002 $ 1,180.00
February-2002 $ 1,150.00
March-2002 $ 1,253.50
April-2002 $ 1,147.90
May-2002 $ 1,030.00
June-2002 $ 1,060.00
July-2002 $ 1,060.00
August-2002 $ 1,255.00
September-2002 $ 1,402.40
October-2002 $ 1,309.60
November-2002 $ 1,264.10
December-2002 $ 1,441.60
January-2003 $ 1,569.80
February-2003 $ 1,674.80
March-2003 $ 1,256.30
April-2003 $ 1,244.00
May-2003 $ 1,608.10
June-2003 $ 1,640.40
July-2003 $ 1,613.10
August-2003 $ 1,745.70
September-2003 $ 1,688.40
October-2003 $ 1,772.70
November-2003 $ 1,870.00
December-2003 $ 2,075.60
January-2004 $ 2,165.10
February-2004 $ 2,365.30
March-2004 $ 2,151.20
April-2004 $ 2,237.00
May-2004 $ 2,579.00
June-2004 $ 2,493.30
July-2004 $ 2,676.40
August-2004 $ 2,622.80
September-2004 $ 2,654.00
October-2004 $ 2,605.50
November-2004 $ 2,677.40
December-2004 $ 2,342.20
January-2005 $ 2,276.60
February-2005 $ 2,235.00
March-2005 $ 2,250.10
April-2005 $ 2,120.60
May-2005 $ 2,155.90
June-2005 $ 2,242.30
July-2005 $ 2,205.00
August-2005 $ 2,505.70
September-2005 $ 2,780.70
October-2005 $ 2,634.70
November-2005 $ 2,354.70
December-2005 $ 2,252.50
--------------------------------------------------------------------------------
SELECTED RISK CONSIDERATIONS
--------------------------------------------------------------------------------
o 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 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.
o Principal Protected only if held to Maturity - If you sell the Note in the
secondary market (see Secondary Market below) prior to Maturity, you may
receive less, and possibly significantly less, than the amount you
originally invested.
o You May Not Receive Any Interest Payments - During the term of the Notes,
if, on any Semi-Annual Interest Observation Date, the Basket Level is less
than or equal to the Initial Basket Level, you will not receive any
interest for the immediately preceding six-month period.
o 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.
o Value at Maturity May Be Limited to the Principal Amount of the Note - The
Basket Performance at maturity may be negative, in which case the amount
you will receive at maturity will be limited to the amount you invested in
the Notes, even if the value of the Basket has increased at certain times
during the term of the Note before falling on the Calculation Date.
o Discontinuation of Component - If the relevant exchange for a Component or
successor Component ceases or otherwise fails to publish the prices for
such Component or discontinues trading in such Component, or some other
extraordinary circumstance occurs, Bear, Stearns & Co. Inc., as
Calculation Agent, will determine the Individual Component Level for such
Component and may in its sole discretion accelerate the Maturity Date of
the Notes, which may adversely affect the trading value of the Notes. The
Calculation Agent will have no responsibility for good faith errors or
omissions in its calculations.
o Taxes - For U.S. federal income tax purposes, the Issuer intends to treat
the Notes as contingent payment debt instruments. As a result, U.S.
Holders of the Notes will be required to include original issue discount
in income during their ownership of the Notes even though no cash payments
may be made with respect to the Notes until maturity. Additionally, U.S.
Holders of Notes will generally be required to recognize ordinary interest
income on the gain, if any, realized on a sale, upon maturity, or other
disposition of the Notes.
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