Filed Pursuant to Rule 424(b)(3)
Registration Statement No. 333-112367
PRICING SUPPLEMENT TO THE PROSPECTUS SUPPLEMENT NO. 371 DATED FEBRUARY 6, 2004
-- NO. 411
(GOLDMAN SACHS LOGO)
THE GOLDMAN SACHS GROUP, INC.
Medium-Term Notes, Series B
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$9,999,994.60
2.00% Mandatory Exchangeable Notes due January 2005
(Exchangeable for Common Stock of BMC Software, Inc.)
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This pricing supplement and the accompanying prospectus supplement no.
371, relating to the mandatory exchangeable notes, should be read together.
Because the mandatory exchangeable notes are part of a series of our debt
securities called Medium-Term Notes, Series B, this pricing supplement and the
accompanying prospectus supplement no. 371 should also be read with the
accompanying prospectus dated February 6, 2004, as supplemented by the
accompanying prospectus supplement dated February 6, 2004. Terms used here have
the meanings given them in the accompanying prospectus supplement no. 371,
unless the context requires otherwise.
The mandatory exchangeable notes offered by this pricing supplement, which
we call the "offered notes" or the "notes", have the terms described in the
accompanying prospectus supplement no. 371, as supplemented or modified by the
following:
ISSUER: The Goldman Sachs Group, Inc. STATED MATURITY DATE: January 14,
2005, unless extended for up to six
FACE AMOUNT: each offered note will business days
have a face amount equal to $16.82,
which is the initial index stock INTEREST RATE (COUPON): 2.00% per year
price; the aggregate face amount for
all the offered notes is $9,999,994.60 INTEREST PAYMENT DATES January 14 and
October 14, beginning on October 14,
ORIGINAL ISSUE PRICE: 100% of the face 2004
amount
REGULAR RECORD DATES: for the interest
NET PROCEEDS TO THE ISSUER: 99.95% of payment dates specified above January
the face amount 7 and October 6, respectively
TRADE DATE: July 7, 2004 INDEX STOCK AND INDEX STOCK ISSUER:
common stock of BMC Software, Inc.
SETTLEMENT DATE (ORIGINAL ISSUE DATE):
July 14, 2004 CUSIP NO.: 38143U317
Your investment in the notes involves certain risks. In particular,
assuming no changes in market conditions or any other relevant factors, the
value of your note on the date of this pricing supplement (as determined by
reference to pricing models used by Goldman, Sachs & Co.) is significantly less
than the original issue price. We encourage you to read "Additional Risk Factors
Specific to Your Note" beginning on page S-2 of this pricing supplement and on
page S-3 of the accompanying prospectus supplement no. 371 so that you may
better understand those risks. The offered notes are not principal-protected and
the payment amount is capped.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PRICING SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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Goldman Sachs may use this pricing supplement in the initial sale of the
offered notes. In addition, Goldman, Sachs & Co. or any other affiliate of
Goldman Sachs may use this pricing supplement in a market-making transaction in
an offered note after its initial sale. UNLESS GOLDMAN SACHS OR ITS AGENT
INFORMS THE PURCHASER OTHERWISE IN THE CONFIRMATION OF SALE, THIS PRICING
SUPPLEMENT IS BEING USED IN A MARKET-MAKING TRANSACTION.
GOLDMAN, SACHS & CO.
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PRICING SUPPLEMENT DATED JULY 7, 2004.
PRINCIPAL AMOUNT: On the stated maturity date, each
offered note will be exchanged for
index stock at the exchange rate or,
at the option of Goldman Sachs, for
the cash value of that stock based on
the final index stock price.
EXCHANGE RATE: If the final index stock price equals
or exceeds the threshold appreciation
price, then the exchange rate will
equal the threshold fraction times one
share of index stock for each $16.82
of the outstanding face amount.
Otherwise, the exchange rate will
equal one share of the index stock for
each $16.82 of the outstanding face
amount. The exchange rate is subject
to anti-dilution adjustment as
described in the accompanying
prospectus supplement no. 371.
Please note that the amount you
receive for each $16.82 of outstanding
face amount on the stated maturity
date will not exceed the threshold
appreciation price and that it could
be substantially less than $16.82. You
could lose your entire investment in
the offered notes.
INITIAL INDEX STOCK PRICE: $16.82 per share.
FINAL INDEX STOCK PRICE: The closing price of one share of the
index stock on the determination date,
subject to anti-dilution adjustment.
THRESHOLD APPRECIATION PRICE: The initial index stock price times
1.25, which equals $21.025 per share.
THRESHOLD FRACTION: The threshold appreciation price
divided by the final index stock
price.
NO LISTING: The offered notes will not be listed
on any securities exchange or
interdealer market quotation system.
ADDITIONAL RISK FACTORS SPECIFIC TO ASSUMING NO CHANGES IN MARKET
YOUR NOTE: CONDITIONS OR ANY OTHER RELEVANT
FACTORS, THE VALUE OF YOUR NOTE ON THE
DATE OF THIS PRICING SUPPLEMENT (AS
DETERMINED BY REFERENCE TO PRICING
MODELS USED BY GOLDMAN, SACHS & CO.)
IS SIGNIFICANTLY LESS THAN THE
ORIGINAL ISSUE PRICE
The value or quoted price of your note
at any time will reflect many factors
and cannot be predicted. If Goldman,
Sachs & Co. makes a market in the
offered notes, the price quoted by
Goldman, Sachs & Co. would reflect any
changes in market conditions and other
relevant factors, and the quoted price
could be higher or lower than the
original issue price, and may be
higher or lower than the value of your
note as determined by reference to
pricing models used by Goldman, Sachs
& Co.
If at any time a third party dealer
quotes a price to purchase your note
or otherwise values your note, that
price may be significantly different
(higher or lower) than any price
quoted by Goldman, Sachs & Co. You
should read "Additional Risk Factors
Specific to Your Note - The
Market Price of Your Note May Be
Influenced by Many Unpredictable
Factors" in
S-2
the accompanying prospectus supplement
no. 371.
Furthermore, if you sell your note,
you will likely be charged a
commission for secondary market
transactions, or the price will likely
reflect a dealer discount.
There is no assurance that Goldman,
Sachs & Co. or any other party will be
willing to purchase your note; and, in
this regard, Goldman, Sachs & Co. is
not obligated to make a market in the
notes. See "Additional Risk Factors
Specific to Your Note - Your Note May
Not Have an Active Trading Market" in
the accompanying prospectus supplement
no. 371.
BMC SOFTWARE, INC.: According to its publicly available
documents, BMC Software, Inc. is an
independent systems software vendor,
delivering enterprise management.
Information filed with the SEC by BMC
Software, Inc. under the Exchange Act
can be located by referencing its SEC
file number: 001-16393.
HISTORICAL TRADING PRICE The index stock is traded on the New
INFORMATION: York Stock Exchange under the symbol
"BMC". The following table shows the
quarterly high and low trading prices
and the quarterly closing prices for
the index stock on the New York Stock
Exchange for the four calendar
quarters in each of 2002 and 2003 and
for the three calendar quarters in
2004, through July 7, 2004. We
obtained the trading price information
shown below from Bloomberg Financial
Services, without independent
verification.
HIGH LOW CLOSE
2002
Quarter ended March 31 ... 22.29 15.5 19.45
Quarter ended June 30 .... 19.7 13.97 16.6
Quarter ended September 30 16.5 11.15 13.07
Quarter ended December 31 18.25 10.85 17.11
2003
Quarter ended March 31 ... 19.84 14.75 15.09
Quarter ended June 30 .... 18.82 14.44 16.33
Quarter ended September 30 16.6 13.4 13.93
Quarter ended December 31 18.75 13.18 18.65
2004
Quarter ended March 31 ... 21.87 17.81 19.55
Quarter ended June 30 .... 20.55 16.32 18.5
Quarter ending September 30
(through July 7, 2004) 18.6 16.6 16.67
Closing price on July 7, 2004 16.67
S-3
As indicated above, the market price
of the index stock has been highly
volatile during recent periods. It is
impossible to predict whether the
price of the index stock will rise or
fall, and you should not view the
historical prices of the index stock
as an indication of future
performance. See "Additional Risk
Factors Specific to Your Note - The
Market Price of Your Note May Be
Influenced by Many Unpredictable
Factors" in the accompanying
prospectus supplement no. 371.
HYPOTHETICAL PAYMENT AMOUNT: The table below shows the hypothetical
payment amounts that we would deliver
on the stated maturity date in
exchange for each $16.82 of the
outstanding face amount of your note,
if the final index stock price were
any of the hypothetical prices shown
in the left column. For this purpose,
we have assumed that there will be no
anti-dilution adjustments to the
exchange rate and no market disruption
events.
The prices in the left column
represent hypothetical closing prices
for one share of index stock on the
determination date and are expressed
as percentages of the initial index
stock price, which equals $16.82 per
share. The amounts in the right column
represent the hypothetical cash value
of the index stock to be exchanged,
based on the corresponding
hypothetical final index stock prices,
and are also expressed as percentages
of the initial index stock price.
Thus, a hypothetical payment amount of
100% means that the cash value of the
index stock that we would deliver in
exchange for each $16.82 of the
outstanding face amount of your note
on the stated maturity date would
equal 100% of the initial index stock
price, or $16.82, based on the
corresponding hypothetical final index
stock price and the assumptions noted
above.
HYPOTHETICAL FINAL INDEX HYPOTHETICAL PAYMENT
STOCK PRICE AS % OF AMOUNTS AS % OF
INITIAL INDEX STOCK PRICE INITIAL INDEX STOCK PRICE
------------------------- -------------------------
175% 125%
150% 125%
125% 125%
115% 115%
110% 110%
100% 100%
75% 75%
50% 50%
0% 0%
S-4
The payment amounts shown above are
entirely hypothetical; they are based
on market prices for the index stock
that may not be achieved on the
determination date and on assumptions
that may prove to be erroneous. The
actual market value of your note on
the stated maturity date or at any
other time, including any time you may
wish to sell your note, may bear
little relation to the hypothetical
payment amounts shown above, and those
amounts should not be viewed as an
indication of the financial return on
an investment in the offered notes or
on an investment in the index stock.
Please read "Additional Risk Factors
Specific to Your Note" and
"Hypothetical Payment Amounts on Your
Note" in the accompanying prospectus
supplement no. 371.
Payments on your note are economically
equivalent to the amounts that would
be paid on a combination of other
instruments. For example, payments on
your note are economically equivalent
to the amounts that would be paid on a
combination of an interest-bearing
bond bought, and an option sold, by
the holder (with an implicit option
premium paid over time to the holder).
The discussion in this paragraph does
not modify or affect the terms of the
offered notes or the United States
income tax treatment of the offered
notes as described under "Supplemental
Discussion of Federal Income Tax
Consequences" in the accompanying
prospectus supplement no. 371.
HEDGING: In anticipation of the sale of the
offered notes, we and/or our
affiliates have entered into hedging
transactions involving purchases of
the index stock on the trade date. For
a description of how our hedging and
other trading activities may affect
the value of your note, see
"Additional Risk Factors Specific to
Your Note - Our Business Activities
May Create Conflicts of Interest
Between You and Us" and "Use of
Proceeds and Hedging" in the
accompanying prospectus supplement no.
371.
S-5