|
Title
of Each Class of Securities Offered
|
|
Maximum
Aggregate Offering Price
|
|
Amount
of Registration Fee(1)
|
|
||
|
Medium-Term
Notes, Series B
|
|
$
|
2,300,000
|
|
$
|
70.61
|
|
______________
(1) Calculated
in accordance with Rule 457(r) of the Securities Act of 1933, as amended.
The filing fee of $70.61 is being paid in connection with the registration
of
these Reverse Convertible Notes.
Filed
pursuant to Rule 424(b)(5)
Registration
No. 333-136666
PRICING
SUPPLEMENT
(To
Prospectus Dated August 16, 2006 and
Prospectus
Supplement Dated August 16, 2006)
The
Bear Stearns Companies Inc.
$2,300,000
Reverse Convertible Notes
12.80%
Coupon Per Annum, Due November 26, 2007
Linked
to the American Depositary Receipts of CEMEX, S.A.B. de
C.V.
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
American Depositary Receipts (“ADRs”) of CEMEX, S.A.B. de C.V. (“CEMEX”),
traded on the New York Stock Exchange, Inc. (the “NYSE”) under the symbol
“CX”.
|
||
|
·
|
Principal
amount:
|
$2,300,000. | ||
|
·
|
Pricing
Date:
|
August 21, 2007. | ||
|
·
|
Original
Issue Date:
|
August 24, 2007. | ||
|
·
|
Calculation
Date:
|
November 21, 2007, subject to postponement in the event of certain Market Disruption Events. | ||
|
·
|
Maturity
Date:
|
November 26, 2007. | ||
|
·
|
Coupon
rate:
|
12.80%
per annum, payable as a single payment at maturity equal to 3.2%
times the
principal amount of the Notes, in arrears. Interest will be computed
using
a 360-day year of twelve 30-day months, unadjusted.
|
||
|
·
|
Interest
Payment Date:
|
The Maturity Date. | ||
|
·
|
Initial
Level:
|
$29.61, 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:
|
80.00%.
|
||
|
·
|
Contingent
Protection Level:
|
$23.69,
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: |
33;
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
the
difference between (x) $1,000 divided by the Initial Level (rounded
to the
nearest three decimal places), and (y) the Exchange Ratio.
|
||
|
·
|
CUSIP:
|
073902MD7 | ||
|
·
|
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%
|
$2,300,000
|
|
Agent’s
discount
|
0.75%
|
$17,250
|
|
Proceeds,
before expenses, to us
|
99.25%
|
$2,282,750
|
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 $345,000 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.
August
21, 2007
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:
|
|
·
|
Prospectus,
dated August 16, 2006:
|
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 Maturity Date. Interest will be
paid
to the person to whom principal is payable and will include interest accrued
to,
but excluding, the stated Maturity Date.
The
following scenarios and graphs generally illustrate how the Cash Settlement
Value of the Reverse Convertible Note Securities is determined:
PS-3
|
Scenario
1
The
price of the underlying shares generally increases 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 generally increased over the term of the
Note and never
breached the Contingent Protection
Level. 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 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. See
“Certain U.S. Federal Income Tax Considerations” below.
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.
PS-5
ADRs
of CEMEX, S.A.B. de C.V. ("CEMEX"), which are quoted and traded in the U.S.,
may
trade differently from CEMEX Ordinary Participation Certificates (Certificados
de Participacion Ordinarios, or “CPOs”), which are quoted and traded in Mexican
Pesos—
Fluctuations in the exchange rate between the Mexican Peso and the U.S. Dollar
may affect the U.S. Dollar equivalent of the Mexican Peso price of CEMEX CPOs
on
the Mexican Stock Exchange and, as a result, may affect the market price of
the
ADRs of CEMEX, which may consequently affect the market value of the
Notes.
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 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: $30.00
|
|
·
|
Contingent
Protection Percentage: 80%
|
|
·
|
Contingent
Protection Level: $24.00 ($30.00 x
80%)
|
|
·
|
Exchange
Ratio: 33 ($1,000/$30.00)
|
|
·
|
Coupon:
12.80% per annum, paid as a single payment at maturity equal to
one-quarter of the coupon, in
arrears.
|
|
·
|
The
reinvestment rate on any interest payments made during the term of
the
Notes is assumed to be 0%. The three-month 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:
Three months.
|
|
·
|
Dividend
and dividend yield on the Reference Asset: No dividend
distributed.
|
Example
1
- On the
Calculation Date, the Final Level of $36.00 is greater than the Initial Level,
resulting in a payment at maturity of the principal of $1,000, regardless of
whether the Contingent Protection Level was ever reached or breached, plus
one
interest payment of $32.00, for payments totaling $1,032.00. If you had invested
directly in the Reference Asset for the same three-month period, you would
have
received total cash payments of $1,200.00 (number of shares of the Reference
Asset multiplied by the Final Level), assuming liquidation of shares at the
Final Level. You would have earned a 3.20% return with an investment in the
Notes and a 20.00% return with a direct investment in the Reference
Asset.
Example
2
- On the
Calculation Date, the Final Level of $27.00 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
$1,032.00, earning a 3.20% return over the term of the Notes. A direct
investment in the Reference Asset during that same three-month time period
would
have generated a return of $900.00 (number of shares of the Reference Asset
multiplied by the Final Level), assuming liquidation of shares at the Final
Level. You would have earned a 3.20% return with an investment in the Notes
and
incurred a loss of 10.00% with a direct investment in the Reference
Asset.
Example
3
- On the
Calculation Date, the Final Level of $21.00 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 $700.00 plus one interest payment of
$32.00, for payments totaling $732.00. If you had invested directly in the
Reference Asset for the same three-month period, you would have received total
cash payments of $700.00 (number of shares of the Reference Asset multiplied
by
the Final Level), assuming liquidation of shares at the Final Level. An
investment in the Notes would have resulted in a loss of 26.80%, while a direct
investment in the Reference Asset would have resulted in a loss of
30.00%.
PS-6
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)
|
3-Month
Total Return
|
Percentage
Change in Value of Reference Asset
|
Dividend
Yield
|
3-Month
Total Return
|
|||
|
30.00
|
39.00
|
$1,000.00
|
3.20%
|
3.20%
|
|
30.00%
|
0.00%
|
30.00%
|
||
|
30.00
|
37.50
|
$1,000.00
|
3.20%
|
3.20%
|
|
25.00%
|
0.00%
|
25.00%
|
||
|
30.00
|
36.00
|
$1,000.00
|
3.20%
|
3.20%
|
|
20.00%
|
0.00%
|
20.00%
|
||
|
30.00
|
34.50
|
$1,000.00
|
3.20%
|
3.20%
|
|
15.00%
|
0.00%
|
15.00%
|
||
|
30.00
|
33.00
|
$1,000.00
|
3.20%
|
3.20%
|
|
10.00%
|
0.00%
|
10.00%
|
||
|
30.00
|
31.50
|
$1,000.00
|
3.20%
|
3.20%
|
|
5.00%
|
0.00%
|
5.00%
|
||
|
30.00
|
30.00
|
$1,000.00
|
3.20%
|
3.20%
|
|
0.00%
|
0.00%
|
0.00%
|
||
|
30.00
|
28.50
|
$1,000.00
|
3.20%
|
3.20%
|
|
-5.00%
|
0.00%
|
-5.00%
|
||
|
30.00
|
27.00
|
$1,000.00
|
3.20%
|
3.20%
|
|
-10.00%
|
0.00%
|
-10.00%
|
||
|
30.00
|
25.50
|
$1,000.00
|
3.20%
|
3.20%
|
|
-15.00%
|
0.00%
|
-15.00%
|
||
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)
|
3-Month
Total Return
|
Percentage
Change in Value of Reference Asset
|
Dividend
Yield
|
3-Month
Total Return
|
|||||||||
|
30.00
|
37.50
|
$1,000.00
|
3.20%
|
3.20%
|
|
25.00%
|
0.00%
|
25.00%
|
||||||||
|
30.00
|
36.00
|
$1,000.00
|
3.20%
|
3.20%
|
|
20.00%
|
0.00%
|
20.00%
|
||||||||
|
30.00
|
34.50
|
$1,000.00
|
3.20%
|
3.20%
|
|
15.00%
|
0.00%
|
15.00%
|
||||||||
|
30.00
|
33.00
|
$1,000.00
|
3.20%
|
3.20%
|
|
10.00%
|
0.00%
|
10.00%
|
||||||||
|
30.00
|
31.50
|
$1,000.00
|
3.20%
|
3.20%
|
|
5.00%
|
0.00%
|
5.00%
|
||||||||
|
30.00
|
30.00
|
$1,000.00
|
3.20%
|
3.20%
|
|
0.00%
|
0.00%
|
0.00%
|
||||||||
|
30.00
|
28.50
|
$950.00
|
3.20%
|
-1.80%
|
|
-5.00%
|
0.00%
|
-5.00%
|
||||||||
|
30.00
|
27.00
|
$900.00
|
3.20%
|
-6.80%
|
|
-10.00%
|
0.00%
|
-10.00%
|
||||||||
|
30.00
|
25.50
|
$850.00
|
3.20%
|
-11.80%
|
|
-15.00%
|
0.00%
|
-15.00%
|
||||||||
|
30.00
|
24.00
|
$800.00
|
3.20%
|
-16.80%
|
|
-20.00%
|
0.00%
|
-20.00%
|
||||||||
|
30.00
|
22.50
|
$750.00
|
3.20%
|
-21.80%
|
|
-25.00%
|
0.00%
|
-25.00%
|
||||||||
|
30.00
|
21.00
|
$700.00
|
3.20%
|
-26.80%
|
|
-30.00%
|
0.00%
|
-30.00%
|
||||||||
|
30.00
|
19.50
|
$650.00
|
3.20%
|
-31.80%
|
|
-35.00%
|
0.00%
|
-35.00%
|
||||||||
|
30.00
|
18.00
|
$600.00
|
3.20%
|
-36.80%
|
|
-40.00%
|
0.00%
|
-40.00%
|
||||||||
|
30.00
|
16.50
|
$550.00
|
3.20%
|
-41.80%
|
|
-45.00%
|
0.00%
|
-45.00%
|
||||||||
|
30.00
|
15.00
|
$500.00
|
3.20%
|
-46.80%
|
|
-50.00%
|
0.00%
|
-50.00%
|
||||||||
|
30.00
|
13.50
|
$450.00
|
3.20%
|
-51.80%
|
|
-55.00%
|
0.00%
|
-55.00%
|
||||||||
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.
PS-7
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.
CEMEX,
S.A.B. de C.V. (“CEMEX”)
The
Ordinary Participation Certificates (Certificados de Participacion Ordinarios,
or “CPOs”) of CEMEX, S.A.B. de C.V. (“CEMEX”) are traded in the U.S. market in
the form of American Depositary Receipts (“ADRs”) on the New York Stock Exchange
under the symbol “CX.” Each ADR represents ten CPOs, each of which in turn
represents two shares of CEMEX’s Series A common stock and one share of CEMEX’s
Series B common stock. CEMEX’s CPOs are traded on the Mexican Stock Exchange. A
holder of CEMEX’s ADRs has the right to obtain a number of CEMEX’s CPOs equal to
the product of ten and the number of his or her ADRs. CEMEX is a holding company
primarily engaged, through its operating subsidiaries, in the production,
distribution, marketing and sale of cement, ready-mix concrete, aggregates
and
clinker. CEMEX’s
SEC file number is 001-14946.
Historical
Performance of the Reference Asset
The
following table sets forth, on a per share basis, the high and low closing
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
|
Quarter
Ending
|
Quarterly
High
|
Quarterly
Low
|
Quarterly
lose
|
|
|
December
31, 2001
|
12.74
|
9.66
|
11.72
|
|
September
30, 2004
|
14.86
|
12.79
|
13.35
|
|
March
29, 2002
|
14.41
|
11.39
|
14.02
|
|
December
31, 2004
|
17.35
|
12.88
|
17.28
|
|
June
28, 2002
|
15.66
|
12.20
|
12.51
|
|
March
31, 2005
|
20.18
|
16.37
|
17.20
|
|
September
30, 2002
|
12.94
|
9.35
|
9.89
|
|
June
30, 2005
|
20.79
|
16.20
|
20.13
|
|
December
31, 2002
|
11.42
|
9.14
|
10.21
|
|
September
30, 2005
|
25.56
|
19.87
|
24.82
|
|
March
31, 2003
|
11.08
|
7.74
|
8.28
|
|
December
30, 2005
|
29.41
|
22.19
|
28.16
|
|
June
30, 2003
|
10.96
|
8.28
|
10.58
|
|
March
31, 2006
|
31.87
|
26.58
|
30.98
|
|
September
30, 2003
|
12.43
|
10.47
|
11.84
|
|
June
30, 2006
|
35.18
|
23.20
|
27.80
|
|
December
31, 2003
|
12.64
|
10.92
|
12.43
|
|
September
29, 2006
|
30.09
|
26.11
|
29.36
|
|
March
31, 2004
|
14.22
|
12.43
|
14.15
|
|
December
29, 2006
|
33.18
|
28.85
|
33.07
|
|
June
30, 2004
|
14.88
|
12.32
|
13.81
|
|
July
2, 2007 to August 15, 2007
|
37.99
|
29.65
|
29.95
|
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.
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.
|
Reference
Asset
|
Term
to Maturity
|
Coupon
Rate, per
Annum
|
Yield
on the Deposit, per Annum
|
Put
Premium, per
Annum
|
|
CEMEX,
S.A.B. de C.V.
|
3
months
|
12.80%
|
5.60%
|
7.20%
|
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.
PS-9
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 recently enacted Pension Protection Act of 2006 contains
a new 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 new 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
new
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 new exemption. Any purchaser
that is a Plan is encouraged to consult with counsel regarding the application
of the new 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.
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-10
|
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.
TABLE
OF CONTENTS
|
The
Bear Stearns
Companies
Inc.
$2,300,000
Medium-Term
Notes, Series B
Reverse
Convertible Notes, 12.80%
Coupon
Per Annum, due November 26, 2007
Linked
to the American Depositary Receipts of CEMEX, S.A.B. de
C.V.
August
21, 2007
PRICING SUPPLEMENT |
||
|
Pricing
Supplement
|
|||
|
Page
|
|||
|
Where
You Can Find More Information
|
PS-5
|
||
|
Return
on the Notes
|
PS-5
|
||
|
Risk
Factors
|
PS-7
|
||
|
Illustrative
Examples
|
PS-8
|
||
|
Reference
Asset
|
PS-9
|
||
|
Certain
U.S. Federal Income Tax Considerations
|
PS-11
|
||
|
Certain
ERISA Considerations
|
PS-11
|
||
|
|
|||
|
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
|
||
|
|
|||