EXHIBIT 4(b)(12)

                      Form of IncomeNotes(SM) (Fixed Rate)

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.



REGISTERED                                      $

No. FX                                          CUSIP #

                         THE BEAR STEARNS COMPANIES INC.

                                 IncomeNotes(SM)
                                  (FIXED RATE)


Interest Rate:

Interest Payment Dates:                   Redeemable On and After:

Original Issue Date:                      Optional Repayment Date(s):

Maturity Date:                            Survivor's Option:  Yes ___  No ___

Minimum Denominations: $1,000, increased in multiples of $1,000

<PAGE>

            THE BEAR STEARNS COMPANIES INC., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal amount stated above on the Maturity Date shown
above (the "Maturity Date") and to pay interest thereon at the rate per annum
equal to the Interest Rate shown above until the principal hereof is fully paid
or duly made available for payment. The Company will pay interest (computed on
the basis of a 360-day year of twelve 30-day months) [________] in arrears on
the [__] of each [___] (each an "Interest Payment Date") commencing with the
Interest Payment Date next following the Original Issue Date specified above
(the "Original Issue Date") provided that, if the Original Issue Date is later
than the Regular Record Date (as defined below) and prior to the next succeeding
Interest Payment Date, interest shall be so payable commencing with the second
Interest Payment Date following the Original Issue Date, and on the Maturity
Date, the Redemption Date, if any, the Optional Repayment Date, if any, or the
repayment date on exercise of a Survivor's Option (as defined on the reverse
hereof), if any, on said principal amount at the Interest Rate per annum
specified above. Interest on this Note will accrue from the most recent Interest
Payment Date to which interest has been paid or duly provided for or, if no
interest has been paid, from the Original Issue Date shown above until the
principal hereof has been paid or made available for payment. The interest so
payable, and punctually paid or duly provided for, on the Interest Payment Date
referred to above, will, as provided in the Indenture referred to below, be paid
to the Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the date, whether or not a Business Day (as defined
below), 15 calendar days immediately preceding such Interest Payment Date,
unless otherwise specified on the face hereof; provided, however, that interest
payable on the Maturity Date, Redemption Date, Optional Repayment Date or
repayment date on exercise of a Survivor's Option, will be payable to the Person
to whom the principal hereof shall be payable; and provided, further, however,
that if an Interest Payment Date, Maturity Date, Redemption Date, Optional
Repayment Date or repayment date on exercise of a Survivor's Option would fall
on a day that is not a Business Day, the related payment of principal, premium,
if any, or interest shall be made on the following day that is a Business Day
and, unless otherwise specified on the face hereof, no interest shall accrue for
the period from and after that Interest Payment Date, Maturity Date, Redemption
Date, Optional Repayment Date or repayment date on exercise of a Survivor's
Option, as the case may be, to the next Business Day. "Business Day" means any
day that is not a Saturday or Sunday, and that is not a day on which banking
institutions in New York City generally are authorized or required by law or
executive order to close. Any such interest which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date shall
forthwith cease to be payable to the Holder on such Regular Record Date, and may
be paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to the Holder of this Note not less than ten days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.

            Payment of the principal of and interest on this Note shall be made
at the office or agency of the Trustee maintained for that purpose in the
Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is


                                      -2-
<PAGE>

legal tender for the payment of public and private debt; provided, however, that
payment of interest on any Interest Payment Date (other than the Maturity Date,
Redemption Date, Optional Repayment Date or repayment date on exercise of a
Survivor's Option, if any) may be made at the option of the Company by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register, or by wire transfer of immediately available
funds, if the registered holder of at least $10,000,000 in principal amount (or
such other principal amount specified on the face hereof) of Notes entitled to
such interest has so requested by a notice in writing delivered to the Trustee
not less than 16 days prior to the Interest Payment Date on which such payment
is due, which notice shall provide appropriate instructions for such transfer.

            The principal hereof and interest due at maturity will be paid upon
maturity in immediately available funds against presentation of this Note at the
office or agency of the Trustee maintained for that purpose in the Borough of
Manhattan, The City of New York.

            REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH ON THE FACE HEREOF.

            This Note shall be governed by and construed in accordance with the
laws of the State of New York.

            This Note is one of the series of Medium-Term Notes, Series B, of
the Company.

            Unless the certificate of authentication hereon has been executed by
JPMorgan Chase Bank (formerly, The Chase Manhattan Bank), the Trustee under the
Indenture, or its successor thereunder by the manual signature of one of its
authorized signatories, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.


                                      -3-
<PAGE>

            IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.

Dated:


                                       THE BEAR STEARNS COMPANIES INC.



                                       By:____________________________________


ATTEST:



_________________________
Secretary

[Corporate Seal]



                          CERTIFICATE OF AUTHENTICATION

            This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.


                                       JPMORGAN CHASE BANK, as Trustee



                                       By:_____________________________
                                          Authorized Signature


                                      -4-
<PAGE>

                                [Reverse of Note]

                         THE BEAR STEARNS COMPANIES INC.

                                 IncomeNotes(SM)
                                  (FIXED RATE)

            This Note is one of a duly authorized issue of debentures, notes or
other evidences of indebtedness (hereinafter called the "Securities") of the
Company of the series hereinafter specified, all such Securities issued and to
be issued under the Indenture dated as of May 31, 1991, as amended (herein
called the "Indenture") between the Company and JPMorgan Chase Bank (formerly,
The Chase Manhattan Bank), as Trustee (herein called the "Trustee," which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and limitations of rights thereunder of the Company, the
Trustee and the Holders of the Securities, and the terms upon which the
Securities are, and are to be, authenticated and delivered. As provided in the
Indenture, Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest, if any, at different rates, may be subject
to different redemption provisions, if any, may be subject to different
repayment provisions, if any, may be subject to different sinking, purchase or
analogous funds, if any, may be subject to different covenants and Events of
Default and may otherwise vary as in the Indenture provided or permitted. This
Note is one of a series of the Securities designated as Medium-Term Notes,
Series B (the "Notes"). The Notes of this series may be issued at various times
with different maturity dates, redemption dates and different principal
repayment provisions, may bear interest at different rates and may otherwise
vary, all as provided in the Indenture.

            Redemption at the option of the Company. If so specified on the face
of this Note, this Note may be redeemed by the Company on and after the date so
indicated on the face hereof. If no such date is set forth on the face hereof,
this Note may not be redeemed prior to maturity. On and after such date, if any,
from which this Note may be redeemed, unless otherwise specified on the face
hereof, this Note may be redeemed in whole or in part in increments of $1,000
(provided, unless a different minimum denomination is set forth on the face
hereof, that any remaining principal amount of this Note shall be at least
$1,000) at the option of the Company, at a redemption price equal to 100% of the
principal amount to be redeemed, together with interest thereon payable to the
Redemption Date, on notice given, unless otherwise specified on the face hereof,
not more than 60 nor less than 30 days prior to the Redemption Date. If less
than all the Outstanding Notes having such terms as specified by the Company are
to be redeemed, the particular Notes to be redeemed shall be selected by the
Trustee not more than 60 days prior to the Redemption Date from the Outstanding
Notes having such terms as specified by the Company not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate. The
notice of such redemption shall specify which Notes are to be redeemed. In the
event of redemption of this Note, in part only, a new Note or Notes in
authorized denominations for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the surrender hereof.


                                      -5-
<PAGE>

            Repayment at the option of the Holder. If so specified on the face
of this Note, this Note will be subject to repayment at the option of the Holder
hereof on the Optional Repayment Date(s). Except as otherwise specified herein,
if no Optional Repayment Date is set forth on the face hereof, this Note may not
be repaid at the option of the Holder prior to maturity. Unless otherwise
specified on the face hereof, on and after the Optional Repayment Date, if any,
from which this Note may be repaid at the option of the Holder, this Note shall
be repayable in whole or in part in increments of $1,000 (provided, unless a
different minimum denomination is set forth on the face hereof, that any
remaining principal amount of this Note shall be at least $1,000) at a repayment
price equal to 100% of the principal amount to be repaid, together with interest
thereon payable to the Optional Repayment Date. For this Note to be repaid in
whole or in part at the option of the Holder hereof, the Trustee must receive
not less than 30 nor more than 60 days prior to the Optional Repayment Date (i)
this Note with the form entitled "Option to Elect Repayment," which appears
below, duly completed or (ii) a telegram, telex, facsimile transmission or a
letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company in
the United States of America setting forth the name of the Holder of this Note,
the principal amount of this Note, the certificate number of this Note or a
description of this Note's tenor or terms, the principal amount of this Note to
be repaid, a statement that the option to elect repayment is being exercised
thereby and a guarantee that this Note with the form entitled "Option to Elect
Repayment," which appears below, duly completed, will be received by the Trustee
no later than five Business Days after the date of such telegram, telex,
facsimile transmission or letter and this Note and such form duly completed are
received by the Trustee by such fifth Business Day. Exercise of the repayment
option shall be irrevocable.

            Repayment upon death of the Beneficial Owner. If so specified on the
face of this Note, unless this Note has been declared due and payable before its
Maturity Date by reason of an Event of Default under the Indenture, or has been
previously redeemed or otherwise repaid, the Authorized Representative (as
defined below) of a deceased Beneficial Owner (as defined below) of this Note
has the right to request repayment before the Maturity Date of all or part of
the deceased Beneficial Owner's interest in this Note, and the Company will be
obligated to repay that portion of this Note (the Survivor's Option"). If the
Survivor's Option is not set forth on the face hereof, this Note may not be
repaid upon death of the Beneficial Owner. The "Beneficial Owner" is a Person
who has the right, immediately prior to such Person's death, to receive the
proceeds from the disposition of this Note, as well as the right to receive
payment of the principal hereof. The "Authorized Representative" of the
Beneficial Owner is a Person who has the right to sell, transfer or otherwise
dispose of an interest in this Note and the right to receive the proceeds
hereof, as well as the interest and principal payable to the Beneficial Owner of
this Note, under the laws of the applicable jurisdiction. To validly exercise
the Survivor's Option, this Note must have been acquired by the deceased
Beneficial Owner at least six months prior to the date of the request.

            The Company will not be obligated to repay:

      o     On behalf of any individual deceased Beneficial Owner any interest
            or interests in this Note that in the aggregate exceeds $250,000 in
            any calendar year (the "Individual Limitation"), or


                                      -6-
<PAGE>

      o     in any calendar year, the greater of $2,000,000 or two percent of
            the outstanding aggregate principal amount of all IncomeNotes(SM)
            outstanding as of December 31 of the immediately preceding calendar
            year (the "Aggregate Limitation").

            If this tendered Note is not accepted in any calendar year due to
the application of either of the limitations set forth above, this Note will be
deemed to be tendered in the following calendar year in the order in which it
was originally tendered. If, despite being tendered through a valid exercise of
the Survivor's Option, this Note is not accepted, the Trustee will deliver a
notice by first-class mail to the Authorized Representative of the deceased
Beneficial Owner that states the reason that this Note has not been accepted for
repayment.

            The Company may, at its option, repay interests of a deceased
Beneficial Owner in excess of the Individual Limitation. Any optional repayment
by the Company of this kind, to the extent it exceeds the Individual Limitation
for any deceased Beneficial Owner, will not be included in the computation of
the Aggregate Limitation for repayment of this Note. The Company may also, at
its option, repay interests of the deceased Beneficial Owner in this Note in an
aggregate principal amount exceeding the Aggregate Limitation. Any optional
repayment by the Company of this kind, to the extent it exceeds the Aggregate
Limitation, will not reduce the Aggregate Limitation for such calendar year.
Upon any determination by the Company to repay this Note in excess of the
Individual Limitation or the Aggregate Limitation, this Note will be repaid in
the order of receipt of the repayment request by the Trustee.

            The Survivor's Option may only be exercised by the Authorized
Representative of the deceased Beneficial Owner. An Authorized Representative of
a deceased Beneficial Owner may initiate a request for repayment at any time,
provided that this Note was acquired by the deceased Beneficial Owner at least
six months prior to the date of the request, and in any principal amount, as
long as the principal amount is in integral multiples of $1,000, unless
otherwise specified on the face hereof. The Authorized Representative must
deliver its request to the Participant (as defined below) through which the
deceased Beneficial Owner owned an interest in this Note. "Participant" means an
institution that has an account with the depositary for this Note, which, unless
otherwise specified on the face hereof, will be The Depository Trust Company.
The request for repayment must be in a form satisfactory to the Participant and
must be accompanied by evidence of the death of the Beneficial Owner, evidence
that this Note was acquired by the deceased Beneficial Owner at least six months
prior to the request, evidence of the authority of the Authorized Representative
satisfactory to the Participant, any waivers, notices or certificates that may
be required under applicable state or federal law and any other evidence of the
right to the repayment that the Participant requires. The request must specify
the principal amount of the interest in this Note to be repaid, which amount
must be in integral multiples of $1,000, unless otherwise specified on the face
hereof. Subject to the rules and arrangements applicable to the depositary, the
Participant will then need to deliver to the depositary a request for repayment
substantially in the form attached hereto as Appendix A.

            On receipt of a valid repayment request, the depositary will need to
forward the request to the Trustee. The Trustee is required to maintain records
with respect to repayment requests received by it, including the date of receipt
and the name of the Participant filing the repayment request. The Trustee will
promptly file with the Company each repayment request it receives. The Company,
the depositary and the Trustee:


                                      -7-
<PAGE>

      o     may conclusively assume, without independent investigation, that the
            statements contained in each repayment request are true and correct;
            and

      o     will have no responsibility:

            o     for reviewing any documents submitted to the Participant by
                  the Authorized Representative or for determining whether the
                  applicable decedent is in fact the Beneficial Owner of the
                  interest in this Note to be repaid or is in fact deceased; and

            o     for determining whether the Authorized Representative is duly
                  authorized to request repayment on behalf of the applicable
                  Beneficial Owner.

            In addition, the Company and the Trustee have no responsibility for
the actions of the depositary or any Participant, or any other financial
institution through which any interest in this Note may be held, with regard to
repayment requests, including any failure to make, or any delay in making, such
a request on the part of the depositary, any Participant or any such other
institution. Any Authorized Representative wishing to request a repayment of
this Note will need to contact the relevant Participant through which the
Authorized Representative's interests in this Note are held or, if those
interests are held through a Participant indirectly through an account at
another financial institution, instruct that institution to contact the
Participant to make the necessary arrangements to ensure that the request is
made in a proper and timely manner.

            Subject to the Individual Limitation and the Aggregate Limitation,
the Company will, after the death of any Beneficial Owner, repay the interest of
the Beneficial Owner in this Note on the first Interest Payment Date that occurs
30 or more calendar days after its acceptance of a repayment request from the
Trustee, or as otherwise set forth on the face hereof. Subject to the
limitations set forth above, each requested repayment will be accepted in the
order that the requests are received by the Trustee. If repayment requests
exceed the Aggregate Limitation, then excess repayment requests will be applied,
in the order received by the Trustee, to successive subsequent periods,
regardless of the number of subsequent periods required to repay the interests.
The Company may at any time notify the Trustee that it will repay, on a date not
less than 30 nor more than 60 days after the date of the Company's acceptance of
such repayment request, all or any lesser amount of Notes for which repayment
requests have been received but that are not then eligible for repayment by
reason of the Individual Limitation or the Aggregate Limitation. If the Company
does so, Notes will be repaid in the order of receipt of repayment requests by
the Trustee.

            The Company will pay 100% of the principal amount plus any unpaid
interest accrued to (but excluding) the repayment date for the portion of this
Note it repays in accordance with a repayment request by the Authorized
Representative of a deceased Beneficial Owner. Subject to arrangements with the
depositary, payment for interests in this Note to be repaid will be made to the
depositary in the aggregate principal amount specified in the repayment requests
submitted to the Trustee by the depositary that are to be fulfilled in
connection with the payment upon presentation of this Note to the Trustee for
repayment. The principal amount of any portion of this Note redeemed or repaid
by the Company other than by repayment at the option of any Authorized
Representative of a deceased Beneficial Owner under the procedures described in
this Note will not be included in the computation of either the Individual
Limitation or the Aggregate Limitation.


                                      -8-
<PAGE>

            The death of a Person owning this Note in joint tenancy or tenancy
by the entirety with another or others will be deemed the death of the owner of
this Note, and the entire principal amount of this Note so owned will be subject
to repayment. The death of a Person owning this Note by tenancy in common will
be deemed the death of an owner of this Note only with respect to the deceased
owner's interest in this Note. However, if this Note is held by husband and wife
as tenants in common, the death of either spouse will be deemed the death of the
owner of this Note, and the entire principal amount of this Note so owned will
be subject to repayment.

            The death of a Person who, immediately prior to his or her death,
was entitled to substantially all of the rights of a Beneficial Owner of an
interest in this Note will be deemed the death of the Beneficial Owner,
regardless of the recordation of the interest on the records of the Participant,
if the decedent's rights are established to the satisfaction of the Participant.
Rights of this kind will be deemed to exist in typical cases of nominee
ownership, ownership under the Uniform Gifts to Minors Act or the Uniform
Transfers to Minors Act, community property or other similar joint ownership
arrangements, including individual retirement accounts or Keogh H.R. 10 plans
maintained solely by or for the decedent or by or for the decedent and any
spouse, and trust and certain other arrangements where one Person has
substantially all of the rights of a Beneficial Owner during that Person's
lifetime.

            If a repayment request is presented on behalf of a deceased
Beneficial Owner and has not been fulfilled at the time the Company gives notice
of its election to redeem this Note, the portion of this Note that is the
subject of the pending repayment request will be repaid before any other
remaining portion of this Note.

            Any repayment request may be withdrawn by the Authorized
Representative upon delivery of a written request for withdrawal given by the
Participant on behalf of the Person(s) to the depositary and by the depositary
to the Trustee not less than 30 days before the repayment.

            All questions as to the eligibility or validity of any exercise of
the Survivor's Option will be determined by the Company in its sole discretion.
The Company's determination will be final and binding on all parties.

            During any time in which this Note is not represented by a global
security and is issued in definitive form:

      o     all references in this Note to Participants and the depositary,
            including the depositary's governing rules, regulations and
            procedures, will be deemed deleted;

      o     all determinations that the Participants are required to make as
            described in this section will be made by the Company, including,
            without limitation, determining whether the applicable decedent is
            in fact the Beneficial Owner of the interest in this Note to be
            repaid or is in fact deceased and whether the Authorized
            Representative is duly authorized to request repayment on behalf of
            the applicable Beneficial Owner; and

      o     all repayment requests, to be effective, must

            o     be delivered by the Authorized Representative to the Trustee,
                  with a copy to the Company;


                                      -9-
<PAGE>

            o     if required by the Trustee and the Company, be substantially
                  in the form of the repayment request attached hereto as
                  Appendix A, with appropriate changes mutually agreed to by the
                  Trustee and the Company to reflect the fact that the repayment
                  request is being executed by an Authorized Representative,
                  including provision for signature guarantees; and

            o     be accompanied by this Note or, if applicable, a properly
                  executed assignment or endorsement, in addition to all
                  documents that are otherwise required to accompany a repayment
                  request. If the record interest in this Note is held by a
                  nominee of the deceased Beneficial Owner, a certificate or
                  letter from the nominee attesting to the deceased's ownership
                  of a beneficial interest in this Note must also be delivered.

                                      * * *

            If an Event of Default with respect to the Notes shall occur and be
continuing, the Trustee or the Holders of not less than 25% in principal amount
of the Outstanding Notes may declare the principal of all the Notes due and
payable in the manner and with the effect provided in the Indenture.

            The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66-2/3% in aggregate principal amount of the
Securities at the time Outstanding of each series affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of each series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.

            Holders of Securities may not enforce their rights pursuant to the
Indenture or the Securities except as provided in the Indenture. No reference
herein to the Indenture and no provision of this Note or the Indenture shall
alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and interest on this Note at the time,
place, and rate, and in the coin or currency, herein prescribed.

            As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note may be registered on the Security
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company in the Borough of Manhattan, The
City of New York, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company, and this Note duly executed by,
the Holder hereof or by his attorney duly authorized in writing and thereupon
one or more new Notes, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.


                                      -10-
<PAGE>

            Unless otherwise specified on the face hereof, the Notes are
issuable only in registered form without coupons in denominations of $1,000. As
provided in the Indenture and subject to certain limitations therein set forth,
this Note is exchangeable for a like aggregate principal amount of Notes of
different authorized denomination as requested by the Holder surrendering the
same.

            No service charge will be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

            Prior to the due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.

            The interest rate payable with respect to this Note shall in no
event be higher than the maximum rate, if any, permitted by applicable law.

            All capitalized terms used in this Note and not otherwise defined
herein shall have the meanings assigned to them in the Indenture.


                                      -11-
<PAGE>

                      ------------------------------------

                                  ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM          -            as tenants in common

TEN ENT          -            as tenants by the entireties

JT TEN           -            as joint tenants with right of survivorship and
                              not as tenants in common

UNIF GIFT MIN ACT -           ___________________ Custodian ___________________
                                    (Cust)                        (Minor)
                                    Under Uniform Gifts to Minors Act


                              _________________________________________________
                                                   (State)

Additional abbreviations may also be used though not in the above list.

                      ------------------------------------

                            OPTION TO ELECT REPAYMENT

            The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion thereof specified below) pursuant to its
terms on ____________, 20___ (the "Optional Repayment Date") at a price equal to
the principal amount thereof, together with interest to the Optional Repayment
Date, to the undersigned at

________________________________________________________________________________

________________________________________________________________________________
        (Please print or typewrite name and address of the undersigned.)

            For this Note to be repaid the Trustee must receive at 4 New York
Plaza, New York, New York 10004, Attention: Debt Operations -- 13th Floor, or at
such other place or places of which the Company shall from time to time notify
the Holder of this Note, not more than 60 days nor less than 30 days prior to
the Optional Repayment Date, this Note with this "Option to Elect Repayment"
form duly completed.


                                      -12-
<PAGE>

            If less  than the  entire  principal  amount of this Note is to be
repaid,  specify the portion  thereof  (which shall be  increments  of $1,000)
which the Holder  elects to have repaid:  $_________________;  and specify the
denomination or denominations  (which, unless a different minimum denomination
is set forth on the face  hereof,  shall be  $1,000) of the Notes to be issued
to the Holder for the  portion of this Note not being  repaid (in the  absence
of any such  specification,  one such Note will be issued for the  portion not
being repaid): $________________.

Date:_________________                       ________________________________
                                             Note: The signature to this Option
                                             to Elect Repayment must correspond
                                             with the same as written upon the
                                             face of this Note in every
                                             particular without alteration or
                                             enlargement.

                      ------------------------------------

                                   ASSIGNMENT

                      FOR VALUE RECEIVED, the undersigned
                      hereby sell(s), assign(s) and transfer(s) unto

________________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
PLEASE  PRINT OR  TYPEWRITE  NAME AND  ADDRESS  INCLUDING  POSTAL  ZIP CODE OF
ASSIGNEE

________________________________________________________________________________
the within Note and all rights  thereunder,  hereby  irrevocably  constituting
and appointing

________________________________________________________________________________

________________________________________________________________________________
Attorney to transfer said Note on the books of the Company, with full power of
substitution in the premises.

Dated:_______________________           ______________________________________



____________________________________
        (Signature Guarantee)


                                      -13-
<PAGE>

                                                                      Appendix A

                            Form of Repayment Request

                         THE BEAR STEARNS COMPANIES INC.

                              ____% Notes due 20__

                                CUSIP NO. ______

            The undersigned, [_______________________] (the "Participant"), does
hereby certify, pursuant to the provisions of the Indenture dated as of May 31,
1991, as amended, modified or supplemented from time to time (the "Indenture")
by and between The Bear Stearns Companies Inc. (the "Issuer") and JPMorgan Chase
Bank (formerly, The Chase Manhattan Bank), as trustee (the "Trustee"), to The
Depository Trust Company (the "Depositary"), to the Issuer and to the Trustee
that:

1. [Name of deceased Beneficial Owner] is deceased.

2. [Name of deceased Beneficial Owner] had a $[_____] interest in the
   above-referenced Notes.

3. [Name of Authorized Representative] is [Beneficial Owner's personal
   representative/other Person authorized to represent the estate of the
   Beneficial Owner/surviving joint tenant/surviving tenant by the
   entirety/trustee of a trust] of [Name of deceased Beneficial Owner] and has
   delivered to the undersigned a request for repayment in form satisfactory to
   the undersigned, requesting that $ [_____] principal amount of said Notes be
   repaid in accordance with the Indenture. The documents accompanying such
   request, all of which are in proper form, are in all respects satisfactory to
   the undersigned and [Name of Authorized Representative] is entitled to have
   the Notes to which this repayment request relates repaid.

4. The Participant holds the interest in the Notes with respect to which this
   repayment request is being made on behalf of [Name of deceased Beneficial
   Owner].

5. The Participant hereby certifies that it will indemnify and hold harmless the
   Depositary, the Trustee and the Issuer (including their respective officers,
   directors, agents, attorneys and employees), against all damages, loss, cost,
   expense (including reasonable attorneys' and accountants' fees), obligations,
   claims or liability incurred by the indemnified party or parties as a result
   of or in connection with the repayment of Notes to which this repayment
   request relates. The Participant will, at the request of the Issuer, forward
   to the Issuer a copy of the documents submitted by [name of Authorized
   Representative] in support of the request for repayment.

            IN WITNESS WHEREOF, the undersigned has executed this repayment
request as of [___ _, 20__].

            [Participant Name]

By:_________________________________
   Name:
   Title: