Filed by The Bear Stearns Companies Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934, as amended
Subject Company: The Bear Stearns Companies Inc.
(Commission File No. 001-8989)
Certain statements contained in this filing are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to risks and uncertainties, which could
cause actual results to differ materially from those discussed in the
forward-looking statements. For a discussion of the risks and uncertainties that
may affect the Company's future results, please see "Risk Factors" in the
Company's Annual Report on Form 10-K for the year ended November 30, 2007,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Risk Management" included in Exhibit 13 to the Company's Annual
Report on Form 10-K for the year ended November 30, 2007 and similar sections of
the Company's quarterly reports on Form 10-Q, which have been filed with the
Securities and Exchange Commission ("SEC").
Additional Information
In connection with the proposed merger, JPMorgan Chase & Co. will file with the
SEC a Registration Statement on Form S-4 that will include a proxy statement of
Bear Stearns that also constitutes a prospectus of JPMorgan Chase. Bear Stearns
will mail the proxy statement/prospectus to its stockholders. JPMorgan Chase and
Bear Stearns urge investors and security holders to read the proxy
statement/prospectus regarding the proposed merger when it becomes available
because it will contain important information. You may obtain these documents,
free of charge, from Bear Stearns' website (www.bearstearns.com) under the
heading "Investor Relations" and then under the tab "SEC Filings." You may also
obtain these documents, free of charge, from JPMorgan Chase's website
(www.jpmorganchase.com) under the tab "Investor Relations" and then under the
heading "Financial Information" then under the item "SEC Filings". You may also
obtain copies of all documents filed with the SEC regarding this transaction,
free of charge, at the SEC's website (www.sec.gov).
Participants in the Solicitation
Bear Stearns, JPMorgan Chase and their respective directors, executive officers
and certain other members of management and employees may be soliciting proxies
from Bear Stearns stockholders in favor of the merger. Information regarding the
persons who may, under the rules of the SEC, be deemed participants in the
solicitation of the Bear Stearns stockholders in connection with the proposed
merger will be set forth in the proxy statement/prospectus when it is filed with
the SEC. You can find information about Bear Stearns' executive officers and
directors in its definitive proxy statement filed with the SEC on March 27,
2007. You can find information about JPMorgan Chase's executive officers and
directors in its definitive proxy statement filed with the SEC on March 30,
2007. You can obtain free copies of these documents from JPMorgan Chase and Bear
Stearns as set forth above.
* * *
March 26, 2008
To our stockholders:
On March 24, 2008, The Bear Stearns Companies Inc. (the "Company" or
"Bear Stearns") announced that it had entered into an amendment to its merger
agreement with JPMorgan Chase & Co. ("JPMorgan Chase"). Pursuant to such
amendment, each share of the Company's common stock will be converted into the
right to receive 0.21753 shares of JPMorgan Chase common stock (up from 0.05473
shares), reflecting an implied value of approximately $10.02 per share of the
Company's common stock based on the closing price of JPMorgan Chase's common
stock on the New York Stock Exchange (the "NYSE") on March 25, 2008. The Company
also announced on March 24, 2008 that the operating guaranty issued by JPMorgan
Chase had been significantly enhanced and that JPMorgan Chase had issued an
additional guaranty of borrowings by the Company from the Federal Reserve Bank
of New York.
In consideration of the enhanced operating guaranty and the Federal
Reserve guaranty, and in connection with entering into the amendment to the
merger agreement, the Company has agreed to issue to JPMorgan Chase 95,000,000
shares of common stock, representing 39.5% of the outstanding common stock of
the Company after giving effect to the issuance, in exchange for the issuance to
the Company of 20,665,350 shares of JPMorgan Chase common stock. The substantial
share issuance was a necessary condition to the Company's ability to obtain the
benefits of the guaranties, as well as the amended merger agreement, which in
turn were essential to maintaining the Company's financial stability.
While the rules of the NYSE generally would require stockholder
approval prior to the issuance of the securities to be issued to JPMorgan Chase
as described above, the NYSE's Shareholder Approval Policy provides an exception
in cases where the delay involved in securing stockholder approval would
seriously jeopardize the financial viability of the listed company. In
accordance with the NYSE rule providing that exception, the Audit Committee of
the Company's Board of Directors determined that the delay necessary in securing
stockholder approval prior to the issuance of the common shares to JPMorgan
Chase would seriously jeopardize the financial viability of the Company and has
expressly approved, and the Board of Directors has unanimously ratified, the
Company's decision not to seek such stockholder approval in reliance on such
exception.
The Company, in reliance on the exception described above, hereby
notifies you that it will issue shares of common stock to JPMorgan Chase
pursuant to the transaction described above without seeking stockholder
approval. Such shares will be issued no earlier than ten days after the date of
mailing of this notice to the Company's stockholders.
Very truly yours,
/s/ Alan D. Schwartz
Alan D. Schwartz
President and Chief Executive Officer
Additional Information
In connection with the proposed merger, JPMorgan Chase will file with the SEC a
Registration Statement on Form S-4 that will include a proxy statement of Bear
Stearns that also constitutes a prospectus of JPMorgan Chase. Bear Stearns will
mail the proxy statement/prospectus to its stockholders. JPMorgan Chase and Bear
Stearns urge investors and security holders to read the proxy
statement/prospectus regarding the proposed merger when it becomes available
because it will contain important information. You may obtain these documents,
free of charge, from Bear Stearns' website (www.bearstearns.com) under the
heading "Investor Relations" and then under the tab "SEC Filings." You may also
obtain these documents, free of charge, from JPMorgan Chase's website
(www.jpmorganchase.com) under the tab "Investor Relations" and then under the
heading "Financial Information" then under the item "SEC Filings". You may also
obtain copies of all documents filed with the SEC regarding this transaction,
free of charge, at the SEC's website (www.sec.gov).
Participants in the Solicitation
Bear Stearns, JPMorgan Chase and their respective directors, executive officers
and certain other members of management and employees may be soliciting proxies
from Bear Stearns stockholders in favor of the merger. Information regarding the
persons who may, under the rules of the SEC, be deemed participants in the
solicitation of the Bear Stearns stockholders in connection with the proposed
merger will be set forth in the proxy statement/prospectus when it is filed with
the SEC. You can find information about Bear Stearns' executive officers and
directors in its definitive proxy statement filed with the SEC on March 27,
2007. You can find information about JPMorgan Chase's executive officers and
directors in its definitive proxy statement filed with the SEC on March 30,
2007. You can obtain free copies of these documents from JPMorgan Chase and Bear
Stearns as set forth above.